Where did the money go? An NPR and Propublica investigation has raised troubling questions about what happened to the hundreds of millions of dollars raised by the American Red Cross for earthquake relief in Haiti.
Goats and Soda posed a few questions to NPR correspondent Laura Sullivan about her work on this investigation.
What made you decide to look into the American Red Cross's earthquake recovery spending in Haiti?
I spent a lot of time last fall with Justin Elliott and Jesse Eisinger from ProPublica looking at some of the problems the American Red Cross ran into in their disaster response to Superstorm Sandy and Hurricane Isaac and found the charity had put this inordinate focus on public relations that really hurt their effort to provide disaster relief. We found in one case the Red Cross diverted 40 percent of its emergency vehicles to press conferences and in another case drove empty trucks around to make it appear as though services were being delivered. After those stories, we started to hear from people about things that went down in Haiti. At the same time we started noticing that the numbers they were giving the public about how they spent donors' money didn't make sense. Since then the Red Cross has changed the language it uses around those figures. So with that in mind, we really started looking at the spending the Red Cross did in Haiti.
While you were working on this investigation, if someone asked you over dinner "What's going on with all that money raised by the Red Cross to rebuild Haiti?" was there one anecdote that just immediately jumped to mind for you?
I found myself saying the same thing over and over again: The Red Cross spent five years and almost half a billion dollars in Haiti – and built six homes. That seemed to sum up the situation a bit. The Red Cross told us that they provided homes for more than 130,000 thousand people. So we thought, great, it shouldn't be hard to find tens of thousands of homes. Well, it turned out, after a lengthy series of email exchanges, that the vast majority of that number is made up of people who went to a seminar on how to fix their own homes, people who got temporary rental assistance and people who received temporary shelters that, according to the Red Cross, start to disintegrate after three to five years.
I think for me personally, though, it was really about meeting the people in the neighborhood of Campeche. Justin and I went there in February. They told us the Red Cross came three years earlier and told them they would build new homes and a new neighborhood. They didn't understand why that hadn't happened yet. We ended up showing them a Red Cross press release on the project which confirmed that they weren't getting new homes or a new neighborhood but some smaller projects. Their disappointment was hard to watch. This was one of the poorest neighborhoods in the world. And they saw on the press release the whole project was costing $24 million. They just couldn't figure out where the Red Cross was spending that money because they couldn't see it. Neither could we.
To give the Red Cross some credit, Haiti is an incredibly difficult place to work for a lot of reasons. How much of the trouble in delivering new homes to earthquake survivors was the result of the lack of clear title to land in Haiti and other endemic issues in that country?
Without question, it is extremely difficult to build anything in Haiti. The land title system is archaic and almost nonexistent. And many people don't realize the government lost almost a third of its work force by some estimates the day of the earthquake. The government was in disarray. But still, in the years since, other charities have managed to do it. Other NGOs have built more than 9,000 permanent homes so far. We saw a project by Global Communities and PCI that's built over 300 homes so far and is now doing multifamily homes with running water.
What could the Red Cross have done differently to get more bang for their buck in Haiti?
All the internal documents we read suggested that a lot of the Red Cross's problems were of their own making. They had huge bureaucratic delays not just in Haiti but at headquarters in Washington. We saw problems with high turnover and indecision. But what many of the people who worked there — and some who still do — told us is that the Red Cross simply lacked the expertise and know-how to rebuild in a developing country. They have long been known for their work in disaster relief, and they certainly spent millions of dollars in Haiti providing immediate food and water. They also gave millions to hospitals and other projects. But building brand-new communities as the charity's CEO promised is just not something they have any experience in.
Also, they ended up outsourcing most of the hands-on work to other charities. That meant that a lot of administrative fees got paid. First the Red Cross took its admin fee, then the other charities that did the work took theirs, and then what we found in the documents is that the Red Cross then took an additional cut on top of those fees to pay for what it called the management costs of running these third party projects. In one case we looked at, all those fees meant a third of the money donors gave never made it to Haitians.