Venturing for Gold in Caribbean

KINGSTON, Jamaica —  No one disputes that there’s gold in the Pedro Bank--millions of dollars’ worth, most likely. Billions, some say.

It’s been there for nearly three centuries, ever since Spanish galleons carrying the loot from the New World to Spain crashed into the shallow reefs and sank.

Technology’s shortcomings and Jamaica’s commitment to archeological and environmental preservation have long rendered it off limits. But a high-tech, end-of-millennium gold rush is quietly sweeping the Caribbean. Fueled by the nexus of adventurism and venture capital at a time when the region is desperate for cash, it has the Pedro Bank, an undersea shelf off the island’s south coast, in its sights.

Enter Admiralty Corp., an Atlanta-based group of investment bankers, financial analysts, speculators and a physicist that claims to have invented the ultimate technology in the quest for sunken treasure. The company calls it ATLIS, which Admiralty bills as a NASA-tested device that can do what none has done before: electronically pinpoint gold and silver buried beneath the sea.

Never mind that there’s no independent confirmation of that claim. Admiralty’s urbane chief executive, Herbert Leeming, and a handful of respectable corporate officers--including a financial planning consultant, a real estate developer, a securities broker and Jamaica’s former consul general in Atlanta--already have raised millions of dollars simply on the promise that ATLIS works.

And in August, they used it to make treasure-hunting history, securing the first official license to explore the Pedro Bank for profit, promising a 50-50 split with Jamaica--after Admiralty’s expenses.

The president of Jamaica’s National Heritage Trust, a government body that signed off on the project, resigned within days along with another board member, asserting that their cash-strapped government had sold out Jamaica’s archeological heritage for the prospect of profit from a company with high claims and big bank accounts but no track record of treasure hunting. Admiralty doesn’t even own a boat, they noted.

Experts Fear New Trend in Caribbean

Marine archeologists say the Admiralty license epitomizes a worrisome trend afoot in the region.

Admiralty won its license to hunt the Pedro Bank at a time when it is negotiating similar licenses with other financially troubled Caribbean island states and with Mexico--formal agreements that the company can use to raise millions more in capital when it expects to take its stock public early next year.

Cuba, which has kept its trove of treasure-laden 18th century galleons off limits for four decades, recently signed profit-sharing treasure licenses with two Canadian firms to hunt its waters, and other veteran treasure hunters are negotiating similar agreements with Colombia and Central American nations.

The archeologists maintain that treasure hunters destroy history and marine life in their quest for riches. But the Jamaican government and Admiralty’s directors respond that the license--which is under investigation by Jamaica’s contractor general for possible irregularities--includes strict regulations that allow the government to police the project and ensure sound archeology when Admiralty begins the hunt early next year. And the company asserts that “good archeology” will only enhance its profits when it sells what it recovers at auction.

“We’re not against archeology. We’re for archeology,” Leeming said in a recent interview at Admiralty’s Atlanta offices. “The more archeology there is, the better it is for our business. And that’s what makes us different: This is a business, not a treasure hunt.”

He asserted that ATLIS, the company’s “revolutionary” new technology, will minimize damage to historical sites because it can precisely locate gold and silver up to 10 feet beneath sand and coral--a claim that Jamaican officials concede they never tested.

“Because of this technology, we are not forced, as almost all other salvors are, to engage in fairly destructive [search techniques], where you’re just blowing holes for the hell of it,” said David Bederman, an Emory University law professor who negotiated Admiralty’s license here and also represents a new pro-salvaging lobby group called the Professional Shipwreck Explorers Assn.

But does ATLIS really work? The answer, it appears, is as elusive as the identities of Admiralty’s investors, which are protected by corporate privacy laws.

“It is sufficient to do what we are attempting to do--discriminate in an underwater environment among different metals,” said Leeming, a soft-spoken former real estate developer and oil-and-gas speculator. He said he formed Admiralty as a private company in 1988 solely to develop a technology that could differentiate between buried nonferrous metals such as gold and silver coins and the ferrous metal in less profitable iron cannons and anchors.

NASA records obtained by The Times show that in October 1997, Admiralty contracted with NASA’s Lyndon B. Johnson Space Center to test ATLIS under a program designed to encourage innovation in the private sector. NASA confirmed that its scientists did the tests, for which Admiralty agreed to pay NASA $30,000, on Dec. 17, 1997.

“They found it worked as we required it to work,” Leeming said.

NASA wasn’t so certain.

“They were very mixed results,” said Robert Dotts, NASA’s assistant director of technology transfer and commercialization in Houston. “Our guys said, ‘You’re not ready to do any underwater work.’ ”

Dotts said a highly technical NASA test report that remains confidential found that the device showed promise but that it had several shortcomings and defects that limited its effectiveness.

Among a list of recommendations NASA gave Admiralty was that the company pursue another agreement with the Energy Department’s Sandia National Laboratories to perfect ATLIS. Dotts said no such agreement was signed.

Leeming and his company’s literature do boast of a cooperative agreement with Sandia, the U.S. government’s weapons-research laboratories in New Mexico. Leeming asserted in the interview that the Sandia contract was to develop a second- and third-generation version of ATLIS. But a Sandia official said its 23-month-old agreement with Admiralty is to develop sophisticated new software that “isn’t really fundamental to their ATLIS system.”

“We’re not really improving the ATLIS system at all,” said the official, who asked not to be identified by name. He added that the research agreement, which makes no mention of treasure hunting, was signed Oct. 23, 1997--two months before NASA recommended that Admiralty use Sandia to improve ATLIS.

Leeming said that the company independently perfected the system and that its own subsequent tests conclusively proved that it works. But he said the company is closely guarding the results of those studies to protect its intellectual property. He added that Admiralty is now patenting ATLIS--an acronym he had difficulty explaining. A company overview dated October 1997 said it stands for “Admiralty’s Treasure-Locating Instrument System.” Leeming, after consulting company documents, defined it as “Acousto-electrical Transceiver for Localized Induction Sensing.”

This lack of precision apparently was unknown to the Jamaican officials who investigated the company and recommended signing the license after determining that Admiralty was a well-funded, legitimate corporate concern, officials in Kingston said.

But archeologists say the company is merely an ultramodern version of treasure-hunting enterprises that have targeted the Caribbean for decades.

Salvors’ Rule: ‘Never Use Your Own Money’

In a 1990 doctoral thesis that for nearly a decade formed the basis for anti-treasure hunter policies in Jamaica and other Caribbean island states, Professor James Parrent of Texas A&M; University detailed salvors’ traditional methods and approaches, warning at the time that “in some areas of the Caribbean, activities reminiscent of the era of the privateers have been rekindled by the promise of gold.”

“Treasure salvors can make substantial profits without ever finding treasure,” Parrent wrote. “This is accomplished first and foremost by following the golden rule of treasure hunting: Never use your own money.

“Attracting investors is the first priority of any treasure-hunting scheme. In order to attract investors, treasure hunters must first obtain a contract with a government that allows them to search for and excavate a treasure ship. . . . Some groups are less scrupulous than others, but all have one thing in common: They destroy our marine heritage for the sake of personal gain.”

Leeming’s defense: “You’re talking about the same thing real estate syndicators do. You’re talking about the same thing oil-field developers do. You’re talking about a process that’s used in many, many businesses and industries.” He added that he stands to lose if no treasure is found because his own money is invested in the company.

Professor Donny Hamilton, head of Texas A&M;’s Nautical Archeology Program, said that “Admiralty really does think there’s hundreds of millions of dollars on the Pedro Bank. And I’m sure they believe in their technology. But to me, it’s a bunch of hogwash.”

Even veteran treasure hunter Robert “Frogfoot” Weller, author of eight books on the trade who calls the Pedro Bank “a plum,” said he remained skeptical.

“None of the people in the Admiralty group are salvagers. They’re businessmen,” he said. “All they want to do is get out of the office, go to the bottom of the ocean and look for sunken treasure. It’s something to talk about at cocktail parties.”

Jamaican Education and Culture Minister Burchell Whiteman, who approved the license, has defended it as strongly as Admiralty, while acknowledging his government’s inability to test or confirm Admiralty’s technological claims.

“In the final analysis, what works is what works,” he said during a television talk show in August. “If at any point from Day One Jamaica is satisfied that the technology is not delivering, the license is immediately revoked. That’s the ultimate protection.”

‘The Treasure Isn’t in the Gold’

Critics remain unconvinced.

Some question the size of the potential haul. Although the Genovesa--the Pedro Bank’s showcase shipwreck, which sank with a cargo of 3 million pesos in gold coins in 1731--is just one of many treasure-laden galleons known to be there, historical documents in Spanish and British archives show that much of its riches were salvaged by the British navy soon after it went down. Although some historians estimate its cargo’s current value at up to $400 million, others say only a tenth of that remains beneath the sea.

“But that’s not the point. The treasure isn’t in the gold,” said former Jamaican Heritage Trust Chairman Ainsley Henriques. “These shipwrecks are like a house that’s been left to you. It’s your collateral. It’s your legacy, and we have to learn how to use that before we even think about what’s in it.

“The real gold is not in the coins or the bullion. It’s in the story they tell.”