Controversial Clinton-Tied Moroccan Mining Firm Supported by Ex-Im Bank

From Politico magazine.

‘Hillary Clinton Sold Her Soul When They Accepted That Money’

The king of Morocco, the Clintons and a problem that just won’t go away.
By KENNETH P. VOGEL
May 15, 2015

LAAYOUNE, Western Sahara—A day after Bill Clinton feted donors and dignitaries at an extravagant Moroccan feast under a warm Marrakech night sky, a group of local Sahrawi Arabs gathered for tea in a far more humble setting here to share their outrage that Clinton’s family foundation had accepted millions of dollars from a company owned by a government accused of repressing their people.

The four men used to work as miners for a subsidiary of OCP, the state-owned phosphate company that paid more than $1 million to sponsor the lavish outdoor gala and the concurrent two-day meeting of the Bill, Hillary and Chelsea Clinton Foundation headlined by the former U.S. president. Its purpose was to highlight efforts by the foundation, its donors and the Moroccan government to improve the lives of marginalized people in North Africa and the Middle East, and Bill Clinton opened the event by praising OCP, King Mohammed VI and “Morocco’s longstanding friendship to my family and to the United States.”
The former miners have seen a very different side of Morocco’s government and OCP. They say the company, formerly called the Office Chérifien des Phosphates, forced them to retire early and slashed their pensions, leaving them struggling to scrape by while hiring ethnic Moroccans for more senior jobs. The miners also told me how they had witnessed firsthand multiple examples of the “arbitrary and prolonged detention” and “physical and verbal abuse” that the U.S. State Department says Moroccan authorities mete out to Sahrawis advocating for independence in Moroccan-occupied Western Sahara.

“Hillary Clinton sold her soul when they accepted that money,” declared Mohamed Lahwaimed, who gathered with the other former miners in a second floor walk-up in the Western Sahara capital of Laayoune, a modern-looking desert town with a population of 200,000 people about 500 miles southeast of Marrakech. Wearing traditional Sahrawi dara’a robes and lounging on worn pillows, they sipped green tea and spoke Arabic. “And now we are concerned that if Hillary Clinton wins the presidency of the United States of America, she will take the side of Moroccans even more,” Lahwaimed said through an interpreter.

Added fellow former miner Lahbib Salhi, “All the tainted money that Morocco has gathered from taking away our rights has been used to bribe the Clinton Foundation and the international community.”

The miners—and human rights activists interviewed in Laayoune—put real faces on abstract criticisms swirling half a world away around Hillary Clinton’s presidential campaign. The runaway favorite for the Democratic nomination, Clinton has found herself scrambling to answer suggestions that donations to the family’s sprawling $2 billion global charity influenced her actions as secretary of state and could compromise her objectivity if elected as president.

It’s certainly true that the Clintons have had a long—and lucrative—relationship with Morocco. Moroccan King Mohammed VI, who was traveling abroad during last week’s CGI meeting in Marrakech, nonetheless loaned one of his palaces to Bill and Chelsea Clinton to stay in during the meeting, according to attendees. The king was listed on a donor roll as having pledged as much as $500,000 to the Clinton Foundation to help build Bill Clinton’s presidential library (though the foundation says the donation never came through), while the state firm OCP has donated as much as $6 million over the years to the Clinton Foundation’s efforts. Both Clintons have publicly embraced the king in recent years as an example of an Arab moderate ruler with whom the U.S. should partner, and leaked Moroccan diplomatic cables show that Hillary Clinton during her tenure as secretary of state was seen by Rabat as among its most ardent supporters in the Obama administration.

There is no evidence that she tailored her official positions to suit Morocco’s preferences because of personal or financial relationships. But the overlap between her diplomatic portfolio and the funding for her family’s philanthropy illustrates the way nearly any foreign donations to the Clinton Foundation can be viewed through the prism of U.S. policy. And it highlights why countries, companies and individuals that could benefit from her past and possibly future public service might be inclined to support the foundation.

In fact, Hillary Clinton’s relationship with Morocco’s government was pivotal in brokering last week’s Clinton Global Initiative meeting in Marrakech, according to sources familiar with the foundation’s inner workings. They say that, as CGI was considering options including Hong Kong and Singapore for possible international meetings, the former secretary of state, then serving on the foundation’s board, talked to the king about the Moroccan option, which emerged as the frontrunner. Mrs. Clinton herself originally was listed as a meeting host, but she backed out as her presidential campaign approached, resigning from the foundation soon after officially entering the race.

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Laid-off phosphate miner Mohamed Lahwaimed, right, at an apartment in Laayoune, Western Sahara, alleges mistreatment at the hands of the Moroccan government and a mining company that donated to the Clinton Foundation. "Hillary Clinton sold her soul when she accepted that money," he says. | Kenneth P. Vogel/Politico

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As the campaign kickoff neared, the foundation proceeded with plans to hold the meeting in Marrakech with funding from OCP despite concerns of some foundation staffers about the political optics of affiliating with a state company tied to the occupation of Western Sahara and the controversial mining of a valuable natural resource, which some observers say violates international law. The approach the staffers settled on was “just to avoid using the word ‘Western Sahara’ and stay out of it,” said one source involved in the planning. “It’s not polite to your host.”

In a statement, the foundation said that it doesn’t have a stance on the Western Sahara dispute and suggested that the issue didn’t factor into the planning of the CGI meeting or the meeting itself. “CGI is not a political or diplomatic organization. CGI does not take political positions on issues and it’s critical to our mission that we do not,” said the statement. “The purpose of the CGI Middle East & Africa meeting—like all CGI meetings—is to encourage meaningful Commitments to Action that address many issues, and that will ultimately expand access to clean water, create new employment opportunities for young people, and empower women and girls.”

The foundation has not facilitated any projects in Western Sahara, officials said, and the plight of the territory was not mentioned at all during the official proceedings last week in Marrakech.

When Politico broached the issue with one CGI meeting participant who works in the region, he stalked off. Another participant who witnessed the exchange urged Politico to refer to “the Southern Provinces” of Morocco, not the Western Sahara, explaining “you don’t use those words here. Those are fighting words.”

***
Western Sahara, a vast but sparsely populated desert expanse along North Africa’s Atlantic coast, has one of the world’s largest reserves of phosphate, a fertilizer ingredient that has spiked in value in recent years, boosted by rising demand from international fertilizer manufacturers.

Sandwiched between Morocco, Algeria and Mauritania, the area had been occupied since the late 1800s by Spain. And local Sahrawis mined phosphate for a company owned by the Spanish government called Phosboucraâ that offered what were considered generous pay scales and pensions. Then in the 1970s, Sahrawi activists mounted an armed independence struggle against the Spanish, who began withdrawing in 1975. They were replaced by Moroccan and Mauritanian invaders, and the subsequent fighting scattered tens of thousands of Sahrawi refugees to desert camps. Mauritania soon backed out, but Morocco remained.

OCP, owned almost entirely by the Moroccan government, bought Phosboucraâ from the Spanish and began investing in its mining operations, while the Moroccan military took control of 85 percent of the Western Sahara territory, fortified by a huge, heavily guarded sand wall.

Periodic bloody clashes continued for years, until the United Nations brokered a 1991 cease-fire agreement. It included a provision to give the Sahrawi people a vote for independence from Morocco’s constitutional parliamentary monarchy. But in the two decades since, Morocco has stymied the referendum vote and resisted efforts to include human rights monitoring in the U.N. peacekeeping mission. The Moroccan government has built alliances with permanent members of the U.N. Security Council, including successive U.S. presidential administrations, which have regarded Morocco as a stable ally in a turbulent region.

As president, Bill Clinton attended the 1999 funeral of Moroccan King Hassan II, then welcomed his son and successor King Mohammed VI to the White House, where they had what was described as “a serious discussion of Western Sahara.” Clinton praised the young monarch, then 36, as “one of the voices of a new generation of Arab leaders … promoting democracy, lifting those left behind, touching the hearts of your people.”

It was the beginning of a close relationship.

In 2002, Bill and Chelsea Clinton attended Mohammed VI’s wedding, and in 2004, Mohamed VI was listed in a display of donors at Bill Clinton’s presidential library in Little Rock, according to a story by Josh Gerstein published in November 2004 by the New York Sun, which said the monarch was included in a section with donors who had pledged or given $100,000 to $500,000 to the foundation, which funded library construction. Foundation officials said Mohammed VI never actually donated to the foundation (though the New York Times has reported that he did) possibly suggesting that the king made a pledge but did not follow through.

President George W. Bush’s administration continued the strong backing for Morocco, expressing support for a plan the country introduced in 2007 that would allow additional self-governance in Western Sahara, despite criticism from the international community that it made no mention of the possibility of independence.

In 2009, President Barack Obama appeared to stray from that stance, when he wrote to Mohammed VI supporting U.N. efforts to settle the Sahara dispute. Five months later, though, Hillary Clinton asserted herself on the issue as secretary of state, telling the Moroccan government during a visit “it is important for me to reaffirm here in Morocco that there has been no change in policy.”

While the U.S. condemned other Arab governments for cracking down on protestors during the pro-democracy street demonstrations that swept the Arab world in 2011 and 2012, the Obama administration—with Clinton leading the way—stood by Morocco, even as the country’s justice minister later admitted “cases of abuse” by police against protesters.

Yet, even as protests raged on Moroccan streets, Hillary Clinton in a joint 2011 appearance with Morocco’s foreign minister praised the king for introducing constitutional reforms and said his country was “well-positioned to lead in this area because it is on the road to achieving democratic change.” She also called Morocco’s so-called autonomy plan a “serious, realistic, and credible ” proposal—a slight but notable step beyond the U.N. Security Council, which had called the plan “serious and credible.”

In 2012, in fact, even as the State Department continued to include Morocco in human rights reports and to flag concerns about government corruption, Clinton launched an ongoing U.S.-Morocco strategic dialogue, praising the country “as a leader and a model,” while reiterating support for Morocco’s autonomy plan, She said it represented “a potential approach that could satisfy the aspirations of the people in the Western Sahara to run their own affairs in peace and dignity.”

When contacted for this article, an official with Clinton’s presidential campaign rejected the idea that Clinton, as secretary of state, had tried to bring U.S. policy into closer alignment with Morocco. “The State Department’s position has been consistent for years, starting in the Bush administration and continuing to the present,” the official said. “To suggest otherwise would be wrong.”

But Rep. Joe Pitts (R-Pa.), who has advocated on behalf of Western Sahara for years, said that under Clinton, the State Department became less sympathetic to the Sahrawis. “She never has been receptive to this concern,” said Pitts, who co-wrote a letter to the Clinton Foundation last month flagging human rights concerns with OCP’s mining operation. He urged the foundation "to discontinue its coordination with OCP and return any accepted money from the enterprise.”

And, when Clinton stepped down as secretary of state in February 2013, Morocco considered itself to have lost “an ally who will be difficult to replace,” according to a Moroccan diplomatic cable that was leaked and posted online. The Moroccan Embassy in Washington did not dispute the accuracy of the document, which is written in French. It raises concerns about her successor John Kerry, noting that in 2001 when he was in the Senate he had signed a letter to the State Department expressing support for an independence referendum in Western Sahara and asserting that “the personal dispensation remains a major element that can sometimes weigh in our favor or disfavor.” Another cable in late 2012 predicted “there will be changes at the State Department after the departure of Hillary Clinton that will require the implementation of a new strategy, both aggressive and enterprising in order to confirm the current U.S. position on the Sahara issue and also strengthen the position of our country as a privileged interlocutor of the United States.”

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Former President Bill Clinton waves to the crowd, with former ambassador Stuart Eizenstat, left, before speaking, at the 16th Annual Leo and Berry Eizenstat Memorial Lecture, on Thursday, Feb. 13, 2003, at the Ahavath Achim Synagogue in Atlanta. Eizenstat has been part of a team at the powerhouse law firm Covington & Burling LLP that has been paid more than $1.5 million since 2008 to lobby for OCP. | AP Photo

Not long after stepping down in 2013, Clinton joined her family foundation’s board, and that same year OCP donated between $1 million and $5 million to the philanthropy. (The Clinton Foundation also in 2013 received $500,000 from the Algerian government, which is one of the biggest supporters of Western Saharan independence and is home to refugee camps of Sahrawis displaced by the Moroccan invasion.)

Morocco and OCP ramped up their Washington lobbying and public relations spending in 2013, including payments to lobbyists and advisers closely tied to the Clintons. And Justin Gray, a member of the board of the pro-Clinton Priorities USA Action super PAC, was brought on in 2009 at $25,000 a month to lobby for a Moroccan-government funded nonprofit group, according to Justice Department filings. (In a statement, Grayson said his Priorities USA Action work was not related in any way to his lobbying.) Former Clinton diplomat Stuart Eizenstat is on OCP’s international advisory board and has been part of a team at the powerhouse law firm Covington & Burling that has been paid more than $1.5 million since 2008 to lobby for OCP, according to Senate filings.

Eizenstat—who has donated a total of more than $8,000 to Hillary Clinton’s 2008 presidential campaign, another super PAC that laid the groundwork for her 2016 campaign and the Clinton Foundation—in an interview last month said he helped connect OCP and the Clinton Global Initiative at some point before the planning of the Marrakech meeting got going. Both were doing work on sustainable agriculture, and, he said, “I thought there might be some marriage.” He dismissed criticisms of the Clintons’ relationship with Morocco. He said the country had just received a second round of Millennium Challenge Corporation grants that require recipients to meet key government transparency metrics that would seem counter to the State Department’s assessment of Morocco’s government as being riddled with corruption “in all branches of government”—language included in the agency’s human rights reports before, during and after Clinton’s tenure there.

“If it’s in the State Department report, it’s in the State Department report. But they’ve got hundreds of millions of dollars and now a second round of MCC grants, which have criteria dealing with transparency,” Eizenstat said. And he called OCP “an absolutely world-class company” that is “clean as a whistle.”

Asked about the claims made over tea by the former miners, an OCP representative said the company paid standard Moroccan wages and pensions to the Sahrawi employees it inherited from the Spanish-government enterprise that previously owned Phosboucraâ, and only brought in Moroccan employees for specific types of mining expertise. And in response to scrutiny around OCP’s donation to the Clinton Foundation, the company this week issued a news release highlighting its investments in the Western Sahara, and characterizing its mining operations there as a public service. The mine there represents only 2 percent of the total phosphate reserves that OCP develops, and it wasn’t even profitable until 2007, according to the release. It states: “Since then, all of Phosboucraâ’s profits are retained by the subsidiary and reinvested in its local operations and in the local community."

There’s no doubt the Western Sahara issue remains a contentious one for the Moroccans—and a thorn in the relationship with the United States. After Clinton left the State Department and was succeeded by Kerry, the U.S. in 2013 pushed to add human rights monitoring to the mandate of the U.N. peacekeeping mission in Western Sahara. That angered Rabat, which called the proposal an “attack on the national sovereignty of Morocco” and prompted it to cancel an annual military exercise with the U.S.
U.N. Secretary-General Ban Ki-moon also suggested human rights monitoring last year, but U.N. special envoys weren’t allowed to enter for nearly a year, delaying negotiations for months.

The State Department, under Clinton and Kerry, has flagged human rights concerns in Morocco, including use of excessive force to quell protests, discrimination against women, human trafficking, child labor, torture and other abuses by the security forces, poor prison and detention conditions, political prisoners and detainees and infringements of freedoms of speech, the press and religion.

Maria Bensaid, a press attaché for the Moroccan Embassy in Washington, suggested U.N. human rights monitoring wasn’t necessary because of Morocco’s own oversight, as well as that of the U.S. State Department and international NGOs. “Given the breadth and depth of human rights reporting, we believe that it is critical that (the U.N. peacekeeping mission) focuses on its mandate, which is enforcing the cease-fire between the parties,” she told Politico in a written statement.

But international NGOs differ, and also have blasted restrictions on press freedom. Reporters Without Borders warned in March that “media freedom has been in retreat in the past few months in Morocco” with crackdowns on journalists by kingdom authorities and stalled efforts in parliament to pass bills that could improve the environment for the media. In its 2015 World Press Freedom Index , the group ranked Morocco 130 out of 180 countries.

The international NGO Freedom House in its annual Freedom of the Press report last year noted that Morocco’s new constitution, passed in 2011, guarantees “the press in Moroccan-occupied Western Sahara is free, but this is not the case in practice. … Moroccan authorities are sensitive to any reporting that is not in line with the state’s official position on the territory’s status, and they continue to expel, detain, or harass Sahrawi, Moroccan, and foreign reporters who write critically on the issue.”

***
Questions about the potential corrupting effect of philanthropic contributions were not far from the surface of the foundation’s Clinton Global Initiative meeting last week in Marrakech, distracting from efforts to spotlight good works. The meeting came at the end of a nine-day African tour Bill and Chelsea Clinton took with donors to review and participate in foundation projects, helping fit children for hearing aids in Nairobi and examining efforts to boost crop yields in Tanzania.

Participants in the Marrakech meeting made 29 new financial commitments to improve the lives of more than 800,000 people, including pledge by OCP to supply small African farmers in six countries—though not in Western Sahara—with $5 million worth of fertilizer over the next three years.

Foundation supporters—up to and including the former president– repeatedly expressed annoyance at the idea that the foundation and its donations had anything to do with politics, or that they could damage Hillary Clinton’s presidential campaign.

Yet that campaign was an inescapable backdrop and an endless source of conversation, as when Zainab Salbi, a women’s rights activist who sat on a panel moderated by Chelsea Clinton, told the former first daughter, “I am incredibly excited about your mother hopefully becoming the president of the United States.”

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A factory of the national Moroccan phosphates company, OCP, near Laayoune, the captial of Western Sahara. | Getty Images

During a Tuesday evening cocktail reception featuring a saxophonist playing smooth jazz, one former American diplomat chatted about the race with Saudi Prince Turki Al Faisal, the director of Saudi intelligence. Marveling at the possibility of a Clinton-vs.-Jeb Bush general election matchup, the retired diplomat quipped, “We’re becoming just like you: Bush, Clinton, Bush, Clinton.” Afterward, Politico asked the prince what he thought of Hillary Clinton’s presidential campaign. “I wish her all the best. I think she would make a fine president,” said Turki, a friend of the former president’s going back to their college days together at Georgetown University.

Another high-profile CGI participant, Sudanese-British telecom billionaire Mo Ibrahim, said America’s status as a world leader on women’s progress will be in jeopardy if Clinton doesn’t win. “It’s time for you guys to have a woman president,” he told reporters. “In Africa, we have women presidents. India had women presidents. You guys pretend to be evolved and leading the charge of women liberation, etc. It’s time to have a woman maybe to move forward a little bit. You are behind.”

Foundation officials—in a departure from past CGI meetings where journalists had to be escorted everywhere (even the bathroom)—mostly allowed the press to roam freely around the luxury golf resort.

But they went to lengths to exclude journalists from the most lavish event—the al fresco dinner reception held alongside a hundred-yard pool at The Selman Hotel, a five-star resort on the outskirts of Marrakech featuring Arabian horses and abundant antique crystal.

As they descended staircases toward the outdoor festivities, guests were greeted by young women in billowing red silk blouses with ornate gold embroidered necklines stationed in rows of three on either side of the pool lined by hundreds of candles and lanterns. At the far end of the pool, four women in colorful full-length tunic dresses, backed a 9-piece band playing traditional Moroccan Gnawa music, serenaded the roughly 300 invited dignitaries, donors, NGO officials and foundation staff. Dozens of waiters in black tuxedos and red fezes circulated attentively among at least 40 large round dinner tables. As this reporter surveyed the scene, foundation press officers Craig Minassian and Angel Urena approached, and announced that the event was closed to the press.

Earlier, Bill Clinton, who sat at a head table with Prince Turki and top sponsors including OCP’s CEO Mostafa Terrab, had given a short speech thanking King Mohammed VI, who did not attend the dinner because he was traveling, and the meeting’s top sponsors, according to sources who were there.

That morning, Clinton had opened the public portion of the CGI conference by praising Mohammed VI and his government and subjects “for their commitment to human development and women’s rights, for cooperation and progress in the region and the world and for Morocco’s longstanding friendship to my family and to the United States.”

And he referred, though not by name, to OCP’s phosphate mining as a great success: “The Moroccans who are here will tell you that in the last several years, they have become the Saudi Arabia of phosphate. And what they have done with it to diversify their economy and to make it part of comprehensive strategies, instead of another example of a resource curse, is very impressive indeed.”

Neither Clinton, nor OCP’s CEO Terrab, who spoke on a panel about fertilizer, mentioned Western Sahara.

***
During a daylong trip to Laayoune last week, Politico got a firsthand taste of the Moroccan authorities’ preference for controlling coverage of Western Sahara. Three vehicles—two cars and one motorcycle—tailed the car carrying this reporter and his guide, a Sahrawi activist named Lakhal Mohamed Salem. They waited outside a coffee shop, a restaurant and the apartment where I met with the former OCP miners.

Salem, an official with a nonprofit called Collective of Sahrawi Human Rights Defenders (CODESA) that tracks beatings, arrests and detentions in Western Sahara (he said more than 748 people were injured in independence demonstrations last year), identified the men driving the tail vehicles as members of the Moroccan intelligence service, the Directorate of Surveillance of the National Territory.

“I know some of them of course, because of the daily work we do,” explained Salem, as he gave a driving tour of Laayoune. A 46-year old father of four, Salem said he has been beaten two times and was detained in 1992 for more than two months without trial. “Here, it is very, very difficult to meet with journalists and also with foreign observers. The Moroccan secret service follow us in the car and sometimes they stop us and sometimes they take our cars off and they kick the foreigners who are with us out of Western Sahara,” he said.

The men tailing Salem’s car stood sentry outside this reporter’s Laayoune hotel late into the night. The next morning, three women identified themselves to the hotel front desk attendant as being from “civil society,” and asked to see this reporter. They explained they were alerted to his location by one of his friends from college, who they identified only as “Bashir” though I did not have a friend in college named Bashir, and had not made my hotel accommodations known to anyone other than Salem.

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Bill and Chelsea Clinton applaud Moroccan King Mohammed VI during a parade of gifts and well wishes offered by representatives from all of Morocco's provinces during celebrations for the King's wedding in Rabat in July 2002. | AP Photo

The women proffered business cards identifying themselves as executives at think tanks that analyze the situation in Western Sahara. The organizations, the Sahara Media Center and Sahara Reflexion, are against independence. They present the occupation as a positive for Sahrawis, asserting that the Moroccan government has brought stability, security and prosperity to Western Sahara.

Sahrawi activists say both groups are funded by the Moroccan government and work closely with its intelligence and security services. The president of the Sahara Media Center, Mahjouba Daoudi, responded to a follow-up email asking about her funding by replying, “Sure, we are pro-Morocco and for the union of our country, but also we are fully autonomous and work with our own ideas and auto-direction.”

The purpose of their visit, they said at the hotel, was to offer information about the phosphate and fishing industries, as well as the safety and prosperity in the region. They urged me to report “what you see,” and vaguely warned against spreading “lies.”
Bensaid, the press attaché for the Moroccan Embassy, said she was “not familiar with these think tanks,” and did not directly answer a question about whether Politico was followed by Moroccan government agents in Laayoune and, if so, why.
“We are pleased to hear that you traveled to Sahara and hope you had an enjoyable experience in Morocco,” she said in the statement. “We are an open country, and it is certainly not Morocco’s policy to follow visitors.”

She also dismissed a question about whether the donations to the Clinton Foundation were an effort to influence Hillary Clinton’s views on Morocco or Western Sahara.

“The recent donation to Clinton Foundation was made by OCP not by His Majesty the King Mohammed VI and did not happen during the mandate of Mrs. Hillary Clinton as Secretary of State. In addition to that, the United States and Morocco have been close friends and strong allies for more than 200 years and share common views on many regional and international issues.”

Kenneth P. Vogel is chief investigative reporter at Politico and author of Big Money: 2.5 Billion Dollars, One Suspicious Vehicle, and a Pimp—on the Trail of the Ultra-Rich Hijacking American Politics (PublicAffairs).

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