Alan Grayson’s rough week just got a bit rougher.
A week after Senate Minority Leader Harry Reid called on the Florida congressman to drop his Senate bid amid scrutiny surrounding his hedge fund, BloombergPolitics reports that Grayson’s family has cashed in a long-held investment in a mining company that derives its revenue almost entirely from Eritrea, a small East African country.
Human Rights Watch labeled Eritrea “a pariah state,” in part, for its system of forced labor.
Grayson is pushing back, however, saying that he wasn’t aware of the Human Rights Watch report from 2013 that criticized the mining company in question, Nevsun Resources, Ltd.
“The fact is I didn’t know, I couldn’t have known, and I did nothing wrong, nor did my children,” Grayson told Bloomberg last week when asked about his investment in the company. “If I had known, then I would have divested,” he said. “I did actually divest, but I didn’t know when I divested, nor would I have any reason to know that, given the fact that literally thousands of different investments are involved, given the fact that nobody brought it to my attention until I’m in the midst of a competitive campaign.”
Grayson Senate campaign spokesman David Damron went even further in disputing the report, telling Bloomberg that in an email that “Representative Grayson has long actively opposed labor abuses of any kind, both here and abroad. It is irresponsible and offensive to seek to trivialize that lengthy record because of a single stock purchase, made several years before any allegations were made against the company’s subcontractor, which have been heavily disputed, and before the project even began.”
The Human Rights Watch Report wrote this in 2013:
Nevsun’s experiences show that by developing projects in Eritrea, mining firms are walking into a potential minefield of human rights problems. Most notably they risk getting entangled in the Eritrean government’s uniquely abusive program of indefinite forced labor—the inaptly-named national service program. Through this program, the Eritrean government keeps an enormous number of Eritreans under perpetual government control as conscripts. Originally conceived as an 18-month program, the national service scheme now requires all able-bodied men and most women to serve indefinitely, often for years and with no end in sight, under harsh and abusive conditions. Those who try to flee risk imprisonment, torture, and even reprisals directed against their families.
Grayson sold his stock in Nevsun in May, in a reported range from $15,000 to $50,000. It’s not known when he first purchased it, but she reported his family owned somewhere between $50,000 to $100,000 of the stock in his 2007-2008 disclosure forms. Grayson also reported dividends in other years, as well as family income of between $100,000 and $1 million from selling Nevsun stock in 2011.
Bloomberg reports that last year Grayson “made a passionate speech denouncing trade with dictatorships or countries that employ forced labor.”
“When we buy an item that’s imported from a country that has slave labor, that has forced labor, we’re saying to that world we are OK with that,” Grayson said last June. “Well, I’m not OK with that. And I think that if we’re going to have trade rules at all, we should have a rule against forced labor. That would seem to me to be a bare minimum of what we should expect of other countries if they want to trade with us.”
Grayson’s top challenger for the Democratic nomination for Senate, Patrick Murphy, hasn’t commented yet about the story. His campaign emailed the story to reporters early Friday morning, approximately two hours after it was posted on the Bloomberg site.
Last weekend, Murphy held a conference call with reporters two days after The New York Times reported on Grayson’s offshore hedge fund. He said Grayson should resign his seat from Congress “if all of these allegations are true.”