Former New York official smuggling diamonds? Damn! (5)
I believe the answer is:
ruddy
'damn' is the definition.
(both are mild expletives)
'former new york official smuggling diamonds?' is the wordplay.
'former new york official' becomes 'Rudy' (Rudy Giuliani, former mayor of New York).
'smuggling' indicates putting letters inside (some letters smuggled inside).
'diamonds?' becomes 'd' (abbreviation in bridge say).
'rudy' enclosing 'd' is 'RUDDY'.
(Other definitions for ruddy that I've seen before include "Reddish; -- duck" , "Bright" , "blasted" , "Rosy" , "Healthily red; sort of duck" .)