The Moroccan Cash Machine

On March 3, 2022, journalist Omar Radi was sentenced to six years in prison on unrelated charges of “rape” and “espionage.” At the time of his arrest, the Moroccan journalist, whose phone was infected with Pegasus in 2020, had been working on an investigation into land expropriations. Radi had already received threats for this work and had started to collect some documents: a notary act, videos, photos. Forbidden Stories was able to access these elements and after months of investigation can reveal how expropriated tribal lands were used to enrich close associates of the King of Morocco.

Forbidden Stories - The Moroccan Cash Machine - Pursuing Omar Radi's Investigation

By Cécile Andrzejewski
with Hicham Mansouri
Translation by: Phineas Rueckert
Reading time: 20m

September 19, 2022

The soothing voice of Ihsane El Kadi wraps its listener in. El Kadi is the director of several independent radio stations focused on North Africa and host of the interview segment “The Live Guest” on Radio M, which calls itself “the little radio of greater North Africa.” On December 22, 2019 he spoke excitedly as he announced the day’s guest: Omar Radi, an independent journalist from Morocco.

A longtime critic of the King who had investigated links between the Moroccan state and shady business interests, Radi spoke about the challenges of investigative journalism in Morocco and North Africa. His most recent work, he told El Kadi, was about the Ouled Sbita tribe, who for years have been fighting an uphill battle against expropriation.

The forest was razed and replaced by a golf course and a private beach,” he explained in his typically direct fashion. “There are hundreds of luxury villas. We are looking at land predation.”

Radi didn’t know it at the time, but that interview – and the investigation behind it – may have played a role in sparking the aggressive campaign that culminated in his targeting and arrest.

Days after the interview with El Kadi, now back in Morocco, Radi was summonsed by the police, arrested and placed under detention, on the pretext of a tweet critical of a local judge. A week later, he was released on bail – an experience he would later call a “descent into hell” in an interview with Forbidden Stories.

The worries didn’t end there for Radi. In June 2020, Amnesty International and Forbidden Stories revealed that his phone had been infected with the sophisticated Pegasus spyware. Two years later, the investigative journalist was again arrested and sentenced to six years in prison for “jeopardizing state security” and “rape,” two entirely separate cases that were nonetheless piled together in a kangaroo court trial.

Omar Radi

From London, Omar Radi gives an interview to "Democracy Now!" in 2020 (Photo: democracynow.org).

In the first of these legal cases, a former colleague at the media outlet Le Desk accused Radi of raping her at a party at the house of their editors on the night of July 12, 2020. Radi, for his part, acknowledges a sexual encounter occurred but claims it was consensual.

In a second legal case – for espionnage – Radi was accused of meeting with Dutch officials the court recognized as “intelligence officers,” as well as completing freelance auditing jobs for two British consulting firms, for whom, Morocco claims, Radi was “providing highly-sensitive information.”

“The espionage charges were based on nothing at all,” said Ahmed Benchemsi, the director of communications and advocacy for the Middle East and North Africa at the NGO Human Rights Watch. “As for the rape charges, they need to be investigated in a fair trial, for the benefit of both the accused and the accuser.”

Human rights organizations and journalistic investigations alike have denounced the instrumentalization of rape and sexual violence charges by the Moroccan regime, which they say have been used for repressive purposes and to restrict freedom of speech. Other journalists have been accused of adultery, abortion, sexual relations outside of marriage and other crimes. According to the latest Reporters Without Borders tally, nine journalists and three media workers are currently imprisoned in Morocco.

“I was punished for the body of my work,” Radi said in an interview with Forbidden Stories shortly before his arrest.

Radi may have been silenced for his work, but over the past six months, Forbidden Stories has pursued Radi’s leads, investigating how colonial laws were manipulated to dispossess members of the Ouled Sbita tribe of their land – a process, Forbidden Stories has found, that was also rooted in a presumed case of insider trading.

“An exceptional lifestyle in summer and winter alike”

Thirty kilometers north of Rabat, a stone’s throw from the paradisaic beaches of the North Atlantic Ocean, live the Ouled Sbita.

Before his legal troubles began, Radi – whose research was supported by a grant from the UK-based Bertha Foundation aimed at supporting “activists, storytellers and lawyers working for social justice and human rights” – had embarked on an ambitious project: documenting human rights violations and land expropriations conducted under the guise of reclaiming land for “public utility” in this region.

“It’s an unusual place that crystallizes – at once – the failure of development, as well as injustice and predation,” Radi wrote in an unpublished draft of an article.

The independent journalist had already launched a website, Aradi – meaning land in Arabic – and begun the arduous work of documenting these expropriations, matching field data from his ground reporting to publicly available documents.

Omar Radi took this photo of a protest by the Ouled Sbita tribe against land grabbing near Rabat in 2019 (Photo: Omar Radi).

Following up on Radi’s leads, Forbidden Stories was able to trace the links of one particular company back to Morocco’s royal circle.

This company, Addoha, which describes itself as a housing promotion company, began buying up land used by the Ouled Sbita as early as Fall 2006. The goal? A development project called the “Beach of Nations,” which sold buyers the dream of “an exceptional lifestyle in summer and winter alike.” Contacted by Forbidden Stories, neither the agency nor their lawyer responded to multiple interview requests.

The "Beach of Nations" project, presented by Prestigia.

At the time, Addoha’s director was Anas Sefrioui, one of the richest men in Morocco and a member of King Mohammed VI’s inner circle. Sefrioui is believed to have been a close confidant of Mounir Majidi, the king’s personal secretary and manager of the royal fortune. The latter, whose name notably appeared in the Panama Papers, administered two offshore companies, which, he insisted through his lawyer, “were created in a totally legal and transparent fashion vis-a-vis Moroccan and foreign authorities.”

Anas Sefrioui, CEO of Addoha Group (Photo: Prestigia).

For competitors in Morocco’s real estate market, Sefrioui’s close relationship with the royal palace rang alarm bells. One Moroccan businessman, Miloud Chaâbi, since deceased, went as far as accusing Addoha of directly benefiting from state favors. In a thinly-veiled comment, he called out “those who offer lands at symbolic prices.” In 2013, King Mohammed VI’s own cousin, Prince Hicham, admitted that Sefrioui was closely linked to the royal palace.

Sefrioui fell from grace two years later, but in 2007, when the “Beach of Nations” project was launched, his popularity within royal circles was at its apex. That was the same year that Addoha started buying up lands used by the Ouled Sbita, according to Mohamed Boudouma, a member of the tribe, who spoke with France 24 in February 2017. He explained how the Ouled Sbita had been approached by “representatives of the state” looking to buy up beach properties. Without community approval, he said, “delegates that we didn’t choose negotiated in our name with the Interior Ministry, which is the owner of these lands according to an inherited colonial law.”

Image taken from a video shot by Omar Radi on the "Plage des Nations" golf course near Rabat in 2019.

Image taken from a video shot by Omar Radi on the "Plage des Nations" golf course near Rabat in 2019 (Photo: Omar Radi).

“These delegates pulled the wool over our eyes by saying that the lands along the coast would be sold to the King,” he said. “In reality they were sold to Addoha.”

In 2020, just before he was arrested, Radi was already hinting at a large-scale manipulation of local tribes by the palace’s cronies. In a 2020 video filmed internally by the Bertha Foundation to showcase the work of its research fellows, he echoed Boudouma’s claims:

The inhabitants believed that the King wanted that land for the benefit of Morocco. They discovered that in the end it was a private company that had recovered the lands.”

Female members of the Oulad Sbita Douar were also at the forefront of the protests. They have even more to lose than the men and their allowances are often lower than those of their counterparts. - May 2017 (Photo: Houda Outarahout).

A colonial legacy

The lands where the Ouled Sbita lived for decades have a special status. Known as “collective lands,” they are governed by a colonial era law called the “dahir” of April 27, 1919. This royal decree states that the lands are “non-transferable,” and that they belong to the Ministry of the Interior. The local tribes that live there – thus – can use the lands but never own them.

A representative assembly called the “nouab” – an unelected body designated by local authorities – manages the collective lands. But in practice, this assembly has little ability to push back against the governing authority, in this case the Ministry of the Interior.

“With its authority, the state can use a part of these collective lands for ‘general interest’ projects,” Ahmed Bendella, a Moroccan lawyer, told Forbidden Stories.

This law has barely changed since 1919. Worse, over time the law has been used by the so-called Makhzen (TLDR; a Moroccan term referring to the state’s administrative apparatus) to build up a low-cost land base when its own land resources are dwindling.

“With an estimated 15 million hectares, this category of land is particularly affected by intensified land grabbing of agricultural and pastoral lands for the benefit of large-scale development projects,” the political historian Yasmine Berriane wrote in a 2015 journal article.

Bendella agreed with Berriane’s assessment. “With the advent of urban sprawl, these previously non-valuable lands suddenly had a lot of potential,” he said, cautioning that, until recently, “the ability to hand over these lands relied on one condition: that they benefit the public, such as through the construction of schools, administrative buildings, or roads.”

In 2019, the law was changed to remove the public utility requirement, but in 2007 at the very beginning of the expropriations of the Ouled Sbita, that condition was still in place – meaning that, in theory, a private entity could not take over those lands.

Allou (left) visits her neighbour Karima. She too has received several eviction notices but has nowhere to go. She refuses to leave her home despite its insalubrity. - May 2017 (Photo: Houda Outarahout).

An ambush on public institutions

The Moroccan government, through its supervisory authority, found a way around this rule. First, it sold the land to a public establishment, as authorized by law. Then, the latter would hand over the domain to a company that had already advanced the sale price, making a deal normally banned by the law completely legal.

One specialist on land ownership laws who requested anonymity for fear of reprisals agreed that this sort of maneuver did indeed take place – confirming Radi’s reporting.

“Since it would be illegal for the transfer to take place directly in favor of the private sector, it was done in favor of state institutions that then transferred the land to investors,” the source said in an interview with Forbidden Stories.

A land requisition act that Radi had obtained before his arrest clearly show this pattern:

On October 21, 2010, the Ouled Sbita ethnic collectivity, represented by the Minister of the Interior, sold the “entirety of the Bled Ouled Sbita property in Salé, Bouknadel, Beach of Nations, consisting of an uninhabited parcel of land comprising 355 hectares” to a public institution, the Caisse de Dépôt et de Gestion (Depository and Management Fund, or CDG by its French initials).

According to “a deed received the same day by the notary,” the property in question was “acquired by the company Douja Promotion Groupe Addoha, which already advanced the entire price of the sale,” the document accessed by Forbidden Stories shows.

While the document does not include a sale price, it clearly shows that the state transferred the land to the CDG, which then immediately sold it to Addoha. The CDG did not respond to multiple requests for comment.

Before his arrest, Omar Radi sent to the Bertha Foundation this central document for the investigation: a land requisition act, revealing the subterfuge that allowed Addoha to get its hands on the Ouled Sbita lands (Photo: Omar Radi).

According to a high-level finance ministry source, who also preferred to remain anonymous, this was standard practice at that time: “Since this was regarding a specific type of lands – collective lands – the CDG as a public establishment played the role of middleman,” the source said. “That was a common way of getting around the law, all with the end goal of dispossessing the tribal people of their lands.”

A public institution created in 1959, the CDG’s mission was to centralize and manage the savings funds of the social security system, the national savings bank and the state pension agency. Financially independent, the CDG also benefited from a privileged relationship with certain “groups and private enterprises known for their proximity to power,” according to researchers Mohamed Oubenal and Abdellatif Zeroual, who wrote a paper on the topic.

This included Addoha, which took advantage of its close relationship with the CDG to position itself as the middleman in the transaction, according to the same finance ministry source.

“They needed a third party to launder the affair,” the source said. According to them, the documents obtained by Radi “clearly showed that these different parties colluded in order to bypass the law.”

“The Minister of the Interior knew,” the source added. “It’s worse than expropriation – these people were dispossessed of their lands.”

Saida, torchbearer of the struggle against the real estate giant Addoha, chants the slogans taken up in chorus by the demonstrators in the Douar of Oulad Sbita. - May 2017 (Photo: Houda Outarahout).

Behind the expropriations, a trading scandal

This dispossession was at the heart of Omar Radi’s work – as was the struggle of the Ouled Sbita tribe against Addoha. But Forbidden Stories discovered that the scandal goes even further and after months of investigation can reveal that the “Beach of Nations” project was most likely linked to a case of insider trading.

This scandal predates the expropriations of the Ouled Sbita from their lands.

Tribal leaders were first approached by Addoha in 2007, but the “Beach of Nations” project had already been announced a year earlier – to much pomp and circumstance. On November 11, 2006, a press release announced that the King had signed two memoranda of understanding “relating to tourism and real estate investments in Rabat.”

The project would cost nearly 11 billion dirhams (about 1 million euros) and included the creation of a zoo, a beach, thousands of residences, hotels, restaurants, and more. “These memoranda were concluded between the state and the Addoha group,” the press release stated.

The signing of two memoranda relating to tourism and real estate investments in Rabat, including the one concerning the development of the Plage des Nations, under the eyes of the king, in November 2006 (Photo: Le Matin).

Before the residents of Ouled Sbita had even been informed of their expropriation, the rights to their land had already essentially been signed away, right before the eyes of the King. But the affair – it turns out – was even more advantageous for Addoha.

For months, the value of Addoha’s shares on the stock exchange had been steadily rising. The company’s success began in July when the company publicly traded 35 percent of its capital on the stock exchange, an operation that brought in 2.7 billion dirhams (270 million euros). Sefrioui, several concordant sources confirmed, was initially reticent about this action, but ultimately ceded after receiving pressure from high places. From that point on, Addoha’s value rose quickly until on November 10 – the day before the press release about the “Beach of Nations” – it suddenly exploded.

The Journal hebdomadaire, a weekly that was later forced to close in 2010 due to government pressure, described that day in lively terms: “The Casablanca square is ebullient. In the stock exchange, orders to buy and sell have been raining down since opening. The crowd favorite, Addoha, surpassed 2,000 dirhams. Excited traders don’t know what to do with themselves.”

For many observers, the reason for this explosion became clear the following day with the signature of the two different memoranda of understanding between Addoha and the government of Morocco, presided over by Mohammed VI himself.

Noreddine El Ayoubi, general manager of Addoha in 2006, at the launch of the "Beach of Nations" project (Photo: Aujourd'hui Le Maroc).

One week later, Adohha’s general manager, Noreddine El Ayoubi, detailed the group’s ambitions for the land they had purchased, which was still occupied by the Ouled Sbita tribe. “We will turn the Beach of Nations into a touristic center across more than 450 hectares,” he explained.

Although the deal later signed with the representatives of the tribe would only include 350 hectares, the ambitions were nonetheless enormous. “This project will consist of a residential zone, hotels, a 18-hole golf course, leisure services, as well as a shopping mall.”

Promotional video for the "Beach of Nations" in August 2018 (YouTube / Prestigia Luxury Homes).

“If it wasn’t insider trading, it sure looks like it”

Despite the auspicious start, the “Beach of Nations” project quickly found itself in the middle of a political firestorm – at the heart of insider trading suspicions at the Casablanca stock market. How else to explain the company’s explosion on the stock exchange on November 10, some specialists asked, if not for the memoranda of understanding announced the next day? Were certain investors aware of the upcoming MOUs?

In the aftermath of the announcement, Addoha’s stock action was widely questioned. “If it wasn’t insider trading, it sure looks like it,” one trader told Journal hebdomadaire.

The affair, however, was not sufficiently investigated by the governing body of the Moroccan stock exchange, the Deontological Land Value Council, or CDVM by its French initials. In fact, only in one brief reference in the 600-page 2010 annual report by the Court of Auditors is any investigation even mentioned, albeit indirectly.

In that report, the officer tasked with investigating financial crimes classified several cases of insider trading as “not needing further instruction,” including – mysteriously – the “AD affair,” short for Addoha.

“We don’t reveal names in these reports,” a court magistrate told Forbidden Stories. “But we allude to the organism and the year. If you pay attention, you can understand who’s involved.”

The "Beach of Nations" project presented by Prestigia.

Care is taken that these affairs never see the light of day. In fact, other than journalists at the independent media outlet Lakome, nobody else had previously been able to establish a link between the “AD” in the report and Addoha.

With this acronym decrypted, it is clear that the CDVM indeed opened an investigation into Addoha “on account of the massive changes in the valuation of the company leading up to the company’s two press releases.” However, according to the Court of Auditors, which oversees the functioning of public institutions, that investigation received “special treatment” and was ultimately dropped.

“The dossier was not discussed,” at the CDVM administrative council meeting, the court writes, “and the director made his decision, on September 26, 2008, without specifying a rationale.”

Contacted by Forbidden Stories, Dounia Taârji, the general director of the CDVM at the time, refused to be interviewed, specifying that since the agency’s “investigations are covered by a confidentiality clause, [she] could not respond to our specific questions.”

The Court of Auditors wrote in its report that five individuals – whose names were anonymized – were indeed suspected of insider trading. In particular, “people with family connections to the leadership team or key roles in the company” were believed to have “cleared significant revenues, in the millions of dirhams.”

More precisely, one of these individuals was suspected of having earned nearly 200 million dirhams (about 20 million euros), while the others would have benefited to the tune of two, six, 11, and 29 million dirhams (between €200,000 and €2.9 million), respectively.

Promotional video of the "Plage des Nations" in March 2018 (YouTube / Prestigia Luxury Homes)

But experts and journalists who spoke with Forbidden Stories cautioned that finding out their identities would be nearly impossible.

“You will never find the identity of those who the CDVM investigated,” said Aboubakr Jamai, a Moroccan journalist and founder of the Journal Hebdomadaire, who for the past 15 years has lived in exile outside of Morocco and now teaches at the University of Aix-en-Provence in southern France.

In Morocco, journalists, whistleblowers and activists are routinely harassed, spied on and imprisoned by the Makhzen – meaning that sources are very unwilling to come forward, even for an affair dating back 15 years. Many sources would only speak on the condition of anonymity.

The CDVM report only names Addoha employees and people close to Sefrioui. But according to Jamai, the real benefactors were “people close to the royal family.”

Another source, an expert on Moroccan royalty, confirmed that land predation was a cash machine for the royal family, but did not name specific beneficiaries.

“At first the King’s associates bought Addoha; then there were all of the announcements that catapulted the company: the ‘Beach of Nations,’ the zoo,” the source said. “The palace itself presided over the signature and then they were able to profit from the value added when the shares exploded. They made a lot of money on that affair.”

“The best way to make money is to take a bit of earth that’s worth nothing and turn it into a plot of land that’s worth a fortune,” the source added.

The lands that were once home to the Ouled Sbita are a case in point. Noreddine El Ayoubi, the former CEO of Addoha, told Morocco Today in 2006 that the company had acquired some of its lands for about 50 dirhams (or about 5 euros) per square meter. Today, a typical parcel – “upon which you can build the home of your dreams, next to a golf course in an idyllic setting,” per the company website – is sold for 3,500 dirhams (350 euros) per square meter, a 70-fold increase.

In an interview with La Libre Belgique, Anas Sefrioui’s nephew Saad, who ran the company until last March, justified the prices by noting that the company had put some work into the infrastructure of the area: “The lands were barren, and we needed to invest in connecting the water and sanitary systems, in addition to construction.”

But how did lands in such an exceptional location end up being sold off for pennies on the dollar?

“In the majority of cases, there is no ‘public utility’ in expropriations”

According to Radi, Moroccan authorities have primarily used expropriation as a way to “obtain lands nearly for free.”

“A large amount of the land obtained that way only serves to enrich the private sector,” he told the Bertha Foundation before his arrest and sentencing.

Experts say that this type of land predation is common. “The same administration can tell me my land is worth 20,000 dirhams per meter squared when I am audited, but then turn around and give me just 30 dirhams per meter when I’m expropriated,” one expert caustically remarked in an interview with Forbidden Stories.

"O Judge, O Cadi, Sefrioui has taken my land," read the banners of the angry demonstrations. The inhabitants of the Douar of Ouled Sbita gather regularly on the side of the main road to protest against Anas Sefrioui (whose portrait is crossed out on the banner), CEO of the Addoha group and responsible, according to them, for all their ills. - May 2017 (Photo: Houda Outarahout).

In a 2016 speech in front of Parliament, King Mohammed VI himself admitted that “many citizens are complaining about expropriations,” and criticized the fact that “the indemnities are lower than the sale prices.”

In effect, the reference prices used by tax authorities for audits and the finance minister when it determines the value of an expropriated land are not the same.

Speaking at a public meeting about “expropriations for public utility,” held last March, Lahcen Maazizi, the director of administrative and legal affairs at the Ministry for Public Works and Water, also recognized that the “indemnity amounts do not reflect the reality.” At that same meeting, Khalid Sbia, a finance inspector at the Ministry of the Economy, demonstrated how the price of land fixed by the authorities during an expropriation can be anywhere from eight to 20 to even 40 times lower than those decided by a judge.

“There’s a real problem,” he said. “Either the committees are completely detached from reality, or the judicial decisions are.”

At that meeting, some attendees went even further – questioning the very idea of expropriating lands for ‘public utility.’ That idea was never defined by law, Hamid Oulad Leblad, a counselor at the Court of Cassation, one of the country’s highest appeals courts, said.

Sbia, the finance inspector, called out the “lack of a juridical definition” of “public utility.” “In the majority of cases, there is no ‘public utility’ in expropriations,” he concluded.

This same line of argument was originally put forward by the Ouled Sbita themselves.

“We were told that the developer came for the common good. But is building golf courses and villas acting for the common good?” Seqqat, the aforementioned leader of the protest movement against Addoha, said in a 2017 interview with the French magazine Liberation.

Ironically, 15 years after its launch, the project has still not been completed.

Difference between the ground plan of the "Plage des Nations" project and an aerial view in 2022 (Photos: Prestigia / Google Earth).

Difference between the ground plan of the "Plage des Nations" project and an aerial view in 2022 (Photos: Prestigia / Google Earth).

“The planned commercial area never saw the light of day,” Michel*, the owner of a €350,000, 450-square-meter villa with a private pool and garden, said. “Many people have bought properties, but do not live on site.”

“They only come in the summer or rent it for vacations,” he added. “This prevents businesses from being established. There’s a small grocery store, but that’s it. Outside the summer months, you can’t do anything without a car. We’re a long way from the project’s goal.”

In the meantime, Omar Radi is still waiting for his case to be judged by the court of Cassation. Of his six year prison sentence, four years remain.


*Name has been changed to protect the identity of the individual.

 


 

 
 
 
OMAR RADI’S SCOOPS
 
 
 

  • In 2013, Omar Radi was awarded the IMS-AMJI Investigative Journalism Award for his investigation into the exploitation of sand quarries. He denounced the opacity of the system of approvals that allows the exploitation of these quarries and in particular the involvement of companies in tax havens that he identified by combing through trade registers.
  • In 2016, the affair known as “servants of the State” is a scandal in Morocco. Omar Radi does not sign the investigation but he is at the origin of the data leak that caused the scandal. The documents he manages to obtain show that very expensive land was offered free of charge to personalities close to the Moroccan authorities.
  • In October 2017, his work on the protest movement of the Rif known as the “Hirak” lead to 48-hour police custody. That year, Omar Radi directed – with ATTAC Morocco – a documentary film on the subject, “Death Over Humilitation”, which tells the story the uprising of the inhabitants of the Al Hoceima region in the north of the country. The story begins with the death of Mohsen Fikri, a fish seller who was crushed in a garbage dumpster while trying to oppose the seizure of his merchandise. In Morocco, the event triggered a protest movement that became increasingly political as the months went by. In March 2020, Omar Radi was sentenced to a 4-month suspended prison term for castigating the sentencing of Hirak members.