Red Cross builds just six houses with $500 million after Haiti quake

Haiti Update 2012

On November 15, 2012, two Red Cross officials review a map of Campeche, a neighborhood targeted by the American Red Cross for a community regeneration project. (Photo: Talia Frenkel/American Red Cross)

PORT-AU-PRINCE, Haiti, Monday June 8, 2015 – The Red Cross has been called to account for its operation in Haiti, after reports emerged claiming that the charity had built just six houses in the impoverished country since the January 2010 earthquake, despite raising almost half a billion dollars in donations.

The Red Cross was among the many organisations to take part in the relief effort following the devastating 7.0 magnitude quake that killed over 220,000 people and displaced thousands more.

Now, a damning report by the investigative journalism website ProPublica and US radio network NPR has accused the charity of wasting money through poor management and leaving Haitian families homeless and struggling to survive.

ProPublica and NPR’s investigation has sparked a backlash that has called the charity’s transparency and effectiveness into question, with emails from worried top officers and accounts of frustrated insiders indicating that the charity has broken promises, squandered donations, and made dubious claims of success.

While the Red Cross has built only six permanent homes in Haiti, the charity says it has provided homes to more than 130,000 people.

And despite Red Cross CEO Gail McGovern’s ambitious plans to “develop brand-new communities,” not one has ever been built.

Many international aid organizations have struggled after the earthquake mauled Haiti, the Western Hemisphere’s poorest country. ProPublica and NPR’s investigation nevertheless shows that many of the Red Cross’s failings in Haiti are of its own making, and are part of a pattern in which the organization has botched delivery of aid after disasters such as Superstorm Sandy.

The Huffington Post reports that when the earthquake struck Haiti five years ago, the Red Cross was facing a crisis of its own.

McGovern had become chief executive just 18 months earlier, inheriting a deficit and an organization that had faced scandals after 9/11 and Katrina.

Inside the Red Cross, the Haiti disaster was seen as “a spectacular fundraising opportunity,” recalled one former official who helped organize the effort. Michelle Obama, the NFL and a long list of celebrities appealed for donations to the group.

The Red Cross kept soliciting money well after it had enough for the emergency relief that is the group’s stock in trade. Doctors Without Borders, in contrast, stopped fundraising off the earthquake after it decided it had enough money. The donations to the Red Cross helped the group erase its more-than $100 million deficit.

The Red Cross ultimately raised far more than any other charity.

Shortly after the quake, McGovern said the Red Cross would make sure donors knew exactly what happened to their money.

The Red Cross would “lead the effort in transparency,” she pledged. “We are happy to share the way we are spending our dollars.”

But according to the report, that hasn’t happened. The Red Cross offers only broad categories about where US$488 million in donations has gone. The biggest category is shelter, at about $170 million. The others include health, emergency relief and disaster preparedness.

It has declined repeated requests to disclose the specific projects, to explain how much money went to each or to say what the results of each project were.

The report says there is reason to doubt the Red Cross’ claims that it helped 4.5 million Haitians. An internal evaluation found that in some areas the Red Cross reported helping more people than even lived in the communities.

Jean-Max Bellerive, Haiti’s prime minister at the time of the earthquake, is one of the prominent persons who doubts the figure, pointing out the country’s entire population is only about 10 million.

“No, no,” Bellerive said of the Red Cross’ claim, “it’s not possible.”

Indeed, given the results produced by the Red Cross’ projects in Haiti, Bellerive said he has a hard time fathoming what’s happened to donors’ money.

“Five hundred million dollars in Haiti is a lot of money,” he said. “I’m not a big mathematician, but I can make some additions. I know more or less the cost of things. Unless you don’t pay for the gasoline the same price I was paying, unless you pay people 20 times what I was paying them, unless the cost of the house you built was five times the cost I was paying, it doesn’t add up for me.”

The American Red Cross responded to the report by saying it had made a difference in the lives of millions of Haitians, and dismissed the report as lacking “balance, context and accuracy.”

“Despite the most challenging conditions, including changes in government, lack of land for housing, and civil unrest, our hardworking staff – 90 percent of whom are Haitians – continue to meet the long-term needs of the Haitian people,” the organisation said in a statement on its website.

“While the pace of progress is never as fast as we would like, Haiti is better off today than it was five years ago.”

The Red Cross also said that donations had helped build eight hospitals and clinics, stem a cholera outbreak, provide clean water and sanitation, repair roads and schools, and move more than 100,000 people out of makeshift tents into housing.

“When land was not available for new homes, the Red Cross provided a range of housing solutions including rental subsidies, repairs and retrofitting of existing structures, fulfilling our promise to ensure tens of thousands of Haitians are back in homes,” it said.

In a separate probe, the Thomson Reuters Foundation found that the Red Cross had spent at least 17 percent of funds on expenses in Haiti, even though it had stated that 91 cents on each dollar goes to humanitarian programmes and services.

The American Red Cross declined to respond to any further questions from the Thomson Reuters Foundation.

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