“In their biggest project, the Clintons used $400 million in aid and U.S. taxpayer funds to build what amounted to a massive sweatshop. And guess who set it up? Cheryl Mills.”
— Donald Trump, campaign rally in Panama City, Fla., Oct. 11, 2016
Trump’s attack against the Clintons’ involvement with a factory in Haiti has emerged as a new talking point in recent weeks. We previously awarded Four Pinocchios to a claim from Trump’s supporters and a surrogate about the Clintons’ role in Haiti, so we wanted to check out this new talking point.
Trump is referring to a garment factory that was built in a town called Caracol, located north of the Haitian capital of Port-au-Prince, after the devastating earthquake in 2010. What did the Clintons have to do with the garment factory, and did they use $400 million in aid and U.S. taxpayer funds?
The Clintons played a major role in Haiti earthquake recovery efforts, and Bill Clinton was the public face of U.S. efforts in Haiti. He was the United Nations special envoy to Haiti, co-leader of the Clinton-Bush Haiti Fund (with former president George W. Bush) and co-chairman of the Interim Haiti Recovery Commission (IHRC), a quasi-government planning body that approved hundreds of millions of dollars in U.S. government-funded recovery projects.
In 2011, the U.S. government entered into an agreement for an economic recovery project with the government of Haiti, the Inter-American Development Bank and Sae-A Trading Co., a South Korean garment manufacturing company. The IHRC approved the project, called Caracol Industrial Park. It included a power plant and a Sae-A garment factory, built on 600 acres of farmland, and officials said it would create tens of thousands of jobs.
The Clintons were enthusiastic supporters of the project. They connected Haitian government officials with Sae-A. Then-Secretary of State Hillary Clinton and top aide Cheryl Mills lobbied South Korean officials and hosted Sae-A executives to press for the project, The Washington Post reported. Bill Clinton appeared at a contract-signing ceremony with Sae-A and laid the first stone when construction began. The Clintons attended the ribbon-cutting in October 2012.
“This team — Cheryl Mills, who is absolutely formidable, and both Clintons, who were so deeply committed — managed to coordinate the zoo of donors to provide the infrastructure, and they managed to convince this firm [Sae-A] that it should come to Haiti and create jobs,” said Paul Collier, the Oxford University development specialist who helped create the plan for Caracol Industrial Park.
Collier had concluded that a garment factory in northern Haiti would be a worthwhile investment. The apparel industry was a stable and major source of employment, and having a global garment firm there would help jump-start the economy and improve U.S.-Haiti trade relations, he found. Collier had proposed such a plan even before the earthquake, as shown in his January 2009 report to the United Nations.
But the project has produced mixed results. Planners set unrealistic time frames, and there were delays, the Government Accountability Office found. The project was criticized for displacing farmers who lived on the land on which the park was built and for underdelivering on jobs. The park provides jobs for nearly 10,000 people, of which 8,900 are Haitians, according to the State Department. The project’s supporters have called it a work in progress.
The Trump campaign pointed to an Oct. 11, 2016, ABC News report about Haitian workers’ allegations of bullying and sexual harassment from managers.
ABC News found that Clinton Foundation donors “surfaced in many facets of the project.” Sae-A, the Inter-American Development Bank and large U.S. retailers like Walmart and Gap, which bought clothes shipped from Haiti to the United States, had donated to the foundation, ABC News reported. But there was no evidence that Clinton Foundation donors directly benefited from the project, other than an analyst saying the donors benefited “writ large.”
The foundation lists the park as one of its programs in Haiti. Its website says the development of the project was a collaboration between the foundation, the Haitian government, Inter-American Development Bank and the State Department. “ President Clinton did not stand to gain personally from these projects, and no decisions were made to benefit Clinton Foundation donors,” the foundation said in a lengthy statement. The foundation had no role in constructing or funding the park or the factory, spokesman Craig Minassian said.
ABC News reported that the project was financed with $400 million of global aid. It was planned as a $300 million project financed through U.S. tax money via the U.S. Agency for International Development and the Inter-American Development Bank, with USAID paying 40 percent and the bank paying 60 percent.
The U.S. government committed $170 million as an initial estimate, but $97.9 million was budgeted, and $70.2 million has been spent so far on the Caracol Industrial Park, the State Department said. The bank has provided $200.5 million in grants for the park and the factory. If the United States contributes up to $170 million, the project would add up to close to $400 million.
Did the factory “amount to a sweatshop”? As our friends at PolitiFact found, Sae-A does not have a perfect record with workers. But the latest inspection by Better Work Haiti, a project of the International Labor Organization, raised no issues that would amount to a sweatshop environment. Sae-A adequately handled health and safety responsibilities. It has an anti-harassment policy and does training to reinforce the policy for supervisors and workers.
Full-time workers are paid at least the minimum wage. The factory provides paid vacation, paid sick leave, paid maternity leave and free transportation to and from the park and surrounding communities for all employees. Sae-A opened a school that provides free education to workers’ children, and it organizes soccer tournaments for the workers and supervisors. The inside of the factory, based on the promotional video below and a Haitian news report, doesn’t resemble anything close to a sweatshop.
“More broadly, there seems to be an erroneous implication that any factory amounts to a sweatshop. That is simply false and especially ironic since the very person who made these misstatements has spoken about bringing manufacturing back to the United States,” Sae-A spokesman Lon Garwood said.
The United States was not involved in building the factories, and USAID funds helped build the power plant that provides reliable electricity to the park and surrounding communities, Garwood said.
Under legislation governing U.S.-Haiti trade relations, the government of Haiti and individual apparel producers must comply with International Labor Organization standards and related Haitian labor law, the State Department said. The U.S. Labor Department has not identified any apparel producers operating in the park as noncompliant with required labor standards, according to the State Department.
[Update: After our fact-check published, the Republican National Committee and the Trump campaign disputed our rating and our definition of a “sweatshop.” They pointed to problems over working conditions found at Sae-A’s factory in Guatemala, and complaints of low pay and allegations of sexual harassment raised prior to the July 2016 inspection of the factory at Caracol. Among other sources, the RNC pointed us to reporting from Jonathan Katz, former Associated Press correspondent in Port-au-Prince from 2007 to 2011 who covered earthquake recovery efforts, including by the Clintons. Katz authored a book based on his reporting: “The Big Truck That Went By: How the World Came to Save Haiti and Left Behind a Disaster.”
We spoke with Katz, who has visited the industrial park and the factory. He did not weigh in on the definition of a “sweatshop,” but described the Sae-A factory as an official operation that fares much better other garment factories in Haiti with poor working conditions that people think of when they hear the term “sweatshop.” Katz raised a technical issue with our description of the location of Caracol Industrial Park, but did not dispute our analysis of the “sweatshop” comment or our rating. He added Trump was portraying an “incredibly inaccurate view” of Caracol as “a personal Clinton project or even that prioritizing cheap exports to the U.S. is a personal Clinton strategy.”
Katz underscored that worker complaints of long hours and low wages are reflective of how the garment industry operates, where employers get the maximum amount of labor at the minimum expense, and keep clothing prices low for consumers. The industry can be exploitative, and is not always perfect, but Sae-A is being run “as well as it can get, and people are complying with the laws and regulations that are out there.”
“This is not people chained to a table, buzzsaws flying across the room, people sitting there passing out at their desk. That’s not what I saw. What I did see was a garment production process,” Katz said.
“This is not a fly-by-night operation. Everything is very official. The inspections are being done by ILO [International Labor Organization] and Better Work Haiti. There are constant reviews being done. This is as legitimate an operation as exists in this kind of world. There’s a sort of liminal space: It’s an in-between kind of thing because it’s a Korean company operating in Haiti with Central American middle management, with Americans looking over their shoulder. But people are dotting the I’s and crossing the T’s. They are doing this to the letter of the law,” Katz said.
But Katz noted that the job is “pretty unpleasant,” and recalled talking to workers who were sore from standing all day or sitting all day, and to workers who lived outside the route of the free transportation service and had to pay for that extra expense. There is “abuse that’s built into the official system, but we’re all part of it,” he said.]
The Pinocchio Test
The Clintons, including Mills, were supporters of this project and helped facilitate the planning. But Trump goes much too far in saying that the “Clintons used $400 million in aid and U.S. taxpayer funds to build what amounted to a massive sweatshop.”
The Caracol Industrial Park project, which includes a garment factory run by a South Korean manufacturer, was financed through U.S. tax money via USAID and grants from the Inter-American Development Bank. So far, $270 million have been paid — for the whole park, not just the factory. [Update: In the quote we fact-checked, Trump did not attribute the $400 million figure to ABC News, which would have indicated to the public that he was citing a report rather than stating it as fact. He also inaccurately said $400 million paid for the park. But the RNC noted that on at least one occasion, Trump mentioned that the $400 million figure was a direct reference to the figure cited in the ABC News report, which carefully notes that this was funding for the whole park, not just the factory.]
While some workers have raised concerns about the working environment at the factory, there were no findings in the latest inspection that it would “amount to a massive sweatshop.” In fact, the company pays at least minimum wage for all full-time workers and provides paid time off and free transportation to and from the factory. Trump earns Four Pinocchios for distorting the facts.
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