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Cablegate: Palace Coercion Plagues Morocco's Real Estate Sector

VZCZCXRO3969
RR RUEHBC RUEHDE RUEHDH RUEHKUK RUEHROV RUEHTRO
DE RUEHCL #0226 3451742
ZNY SSSSS ZZH
R 111742Z DEC 09
FM AMCONSUL CASABLANCA
TO RUEHC/SECSTATE WASHDC 8575
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RUCNMGH/MAGHREB COLLECTIVE
RUEHRB/AMEMBASSY RABAT 0013
RUCPDOC/DEPT OF COMMERCE WASHDC

S E C R E T CASABLANCA 000226

SIPDIS

STATE FOR NEA AND NEA/MAG

E.O. 12958: DECL: 12/10/2019
TAGS: ECON EINV EFIN MO PGOV
SUBJECT: PALACE COERCION PLAGUES MOROCCO'S REAL ESTATE SECTOR

Classified By: Consul General Millard for reasons 1.4 (b) and (d).
1. (C) SUMMARY: At a December 9 meeting, one of Morocco's leading business entrepreneurs XXXXXXXXXXXX, told EconOff that
major institutions and processes of the Moroccan state are being used
by the Palace to coerce and solicit bribes in the country's real
estate sector. XXXXXXXXXXXX made clear to his XXXXXXXXXXXX interlocutors that Morocco's major investment decisions were in reality made by three individuals in the Kingdom: Fouad El Himma the former Deputy Minister of Interior who now heads the Party of Authenticity and Modernity, Mohamed Mounir Al Majidi who is the head of the King's private secretariat, and the King himself. "To have discussions with anyone else would be a waste of time", XXXXXXXXXXXX said that,
contrary to popular belief, corruption in the real estate sector
during the reign of King Mohammed VI is becoming more, not less,
pervasive. END SUMMARY.

---------------------------
A TALE OF ROYAL PROPORTIONS
---------------------------

2. (C) XXXXXXXXXXXX major institutions and processes of the Moroccan state are used by the
Palace to coerce and solicit bribes in the real estate sector. While
corrupt practices existed during the reign of King Hassan II,
XXXXXXXXXXXX, they have become much more institutionalized
with
King Mohammed VI. Institutions such as the royal family's holding
company, Omnium Nord Africaine (ONA), which now clears most large
development projects, regularly coerce developers into granting
beneficial rights to ONA, XXXXXXXXXXXX

3. XXXXXXXXXXXX

4. (C) XXXXXXXXXXXX ONA's XXXXXXXXXXXX
reportedly told his interlocutors that Morocco's major investment
decisions were effectively made by three individuals: the King,
Fouad El Himma the former Deputy Minister of Interior who now leads
the Palace-backed Party
of Authenticity and Modernity, and Mohamed Mounir Al
Majidi, who is the head of the King's private secretariat and his
principal financial advisor.
XXXXXXXXXXXX

-------
Comment
-------

5. (C) XXXXXXXXXXXX's experience demonstrate a reality, of which most Moroccans dare only whisper -- the influence and commercial interest of the King and some of his advisors in virtually every major real estate project here. A former U.S. Ambassador to the Morocco, who remains closely connected to the Palace, separately lamented to us what he termed the appalling greed of those close to King Mohammed VI. This phenomenon seriously undermines the good governance that the Moroccan government is working hard to promote.

MILLARD

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