Oh Hell, Haiti

01.16.10 8 years ago 48 Comments

For years, no one gave a damn about Haiti. When Wyclef took a further interest in his homeland and set up the Yele Haiti organization, no one gave a damn still. Now that disaster has struck and Wyclef’s call for aid to the country has yielded $2 million in a short amount of time, everyone cares. Including The Smoking Gun, who broke the news that Clef’s foundation may have funny money practices.


The Cliff Notes go that the Yele Haiti Foundation, which has been in existence reportedly for twelve years, didn’t file taxes until five months ago. When they did, the organization filed three years worth – 2005, 2006 and 2007 – all at once. Furthermore, it looks like portions of the money supposedly went to businesses Wyclef and other business partners have stakes in. (Aside: Even though it may have been “in existence” for twelve years, I can’t find anything showing activity before 2004.)

“It’s questionable. There’s no way to get around that,” said Art Taylor, president and chief executive of the Better Business Bureau’s Wise Giving Alliance, based in Arlington, Va.

Taylor reviewed Internal Revenue Service tax returns for the organization also known as Yele Haiti Foundation from 2005 through 2007. He said the first red flag of poor accounting practices was that three years of returns were filed on the same day — Aug. 10 of last year.

In 2007, the foundation’s spending exceeded its revenues by $411,000. It brought in just $79,000 that year.

“Here’s the bottom line: for an earthquake of catastrophic proportions, do people really believe that this organization is in a position to do anything right now?” he said.

Of course, what happens as a result? Reportedly, the text message campaign for donations have netted $10 million bucks thus far (that’s combined, not just to Yele Haiti). When reports like this come along, people feel deceived, hoodwinked and start calling their banks to cancel their donations. $10 million seems like quite a lot. But when you have hundreds of thousands dead and a country virtually destroyed, it’s going to take much more to rebuild. Anything done to deter those efforts is unwise @ this point.

I am not a philanthropist or community activist. I can’t claim to know the inner-workings of all charitable, non-profit foundations but I have worked with a few. A couple were vetted by those with more than enough means and created as tax writeoffs. Most I’ve known were smaller, community-centered efforts. The shared commonalities included that each had genuinely good intentions starting out and most did not have accountants or the detailed knowledge to handle all of the paperwork involved. The part about Jean’s foundation doing business with and directing money to business he owns, I’m comfortable with that. I know that’s how it works.

When Athlete A starts a foundation and hires his sister to run it, do you genuinely think it was because she was the most diligent and capable? Nope. The fact that the same athlete’s other business, for example a car wash, may do contracted cleaning of all the vans used to pick up kids in Athlete A’s after school program? Hell’s no. Yeah, it sounds foul but “non-profit” doesn’t mean “we’re nuns, taking a vow of poverty and doing this out of the kindness of our hearts.” Skimming a little money is part of how non-profit organizations work. As long as no one’s being greedy I’m okay with it.

We all know taxes have spelled the death of many, from the vilest of criminals like Al Capone to other less than harmful guys like Ron Isley and Wesley Snipes. Surely, the organization saw the error of their ways, hence the multiple filings all @ once. Why bring this up now?

The key thing is people are donating to people and a country that have been underserved for decades. Haiti is the world’s first Black-led republic and the first Caribbean state to achieve independence. And the country’s suffered for years without the rest of the world batting an eye until now. During that time, Wyclef and Yele have been there in the trenches doing their share of work and using the bit of stature and connections available in attempts to gain attention.

That’s still not to say “give all your petty earnings to Wyclef. He can save Haiti!” because I, too, don’t know if his organization can do all that’s needed right now.

In a nutshell, the source says, “Yele Haiti is not a disaster relief organization.” According to MTV, Jean’s pleas for money via Twitter and television appearances asking people to text “yele” 501501 for a $5 contribution had brought in more than $1 million to the organization as of yesterday. But large first-responders usually have the resources to move money quickly to where it’s needed, either by virtue of prepositioned disaster fund, large pools of money that they can shift among accounts as circumstances warrant, or access to a bridge loan to get money flowing. Yele Haiti, which as of 2007 had no paid staffers and currently, according to the source, has one employee who works out of the kitchen in Jean’s Manhattan recording studio, has no such capacity. So it can spend whatever money it has on hand—at the end of 2007, it had roughly $500,000 in cash and liabilities of more than $900,000—but after that it has to wait for any donations made over the last three days to actually clear and show up in its bank account. And again, because it is a small player and uses a small firm to process its online donations, the source says, that process can take “two weeks to a month.”

“There are groups you can give to right now that have already spent the money before they received it,” the source says. “Yele Haiti is just not set up for a huge campaign like this. It’s great that Wyclef is there—he should be there. But there’s no need to position his charity the way they’re doing right now. It’s not right.” Yele Haiti is will be one of the beneficiaries of George Clooney’s “Hope for Haiti” telethon to be broadcast next week, and “there’s no reason for that,” the source says. [Via]

For the most part, nobody cared about the country, Clef or Yele Haiti until tragedy struck. And now, at the most crucial time, media outlets decide to sling mud. So while the media’s interest is fleeting, my senses tell me Wyclef’s aren’t and I don’t think they’re motivated by money either. He seems to have a vested interest and been involved with more than his fair share of beneficial projects in his homeland. Click the link, pick a project (any project) and make your own deductions.

At the end of the day, if you’re scared of Yele Haiti, there’s a few dozen other ways to donate and there’s still the American Red Cross, which is also doing a similar “text to donate” campaign. BUT, it could be equally as dirty…it’s just that no one has the time to peel back all the layers. Whereas Clef’s organization had, maybe, ten layers, we’ll assume the Red Cross has hundreds so finding scoundrels might be a little harder.

But hey, angels with dirty faces are still angels, no? And Haiti still needs everyone’s help with disaster relief.

Wyclef Jean Charity’s Funny Money [TSG]

Groups Raise Doubts About Wyclef Jean’s Charity [AP]

EDIT — Yele Haiti just released a statement addressing the accusations against the foundation, including a list of “Financial Facts.” Also, they made note that Wyclef nor his associates have directly profited from the organization. Another fact of note is that they did indeed suspend activities from 2000 through 2005, thus no need to file taxes.

Fact: Yéle Haiti, originally called the Wyclef Jean Foundation, filed a tax return in 2000 and then suspended activities until 2005 and so was not required by law to file a tax return until it resumed operation.

Fact: Yéle Haiti received a clean bill of health in independent external audits conducted in 2005, 2006, 2007 and 2008 by the firm of Tempesta & Farrell, P.C..

Fact: Yéle Haiti was guided by the firm of Grant Thornton LLP to ensure that all transactions involving board members Wyclef Jean and Jerry Duplessis were conducted to fully comply with both the spirit and letter of the law governing such matters.

Fact: Yéle Haiti offices are located in Platinum Sound, the recording studio owned by Wyclef and Jerry Duplessis in order to save money. The organization pays only $2,600 a month for the space and a shared reception service, instead of considerably more for the same arrangement in midtown Manhattan.

Fact: Wyclef Jean was paid $100,000 in connection with a benefit concert in Monte Carlo in 2006, which was organized by a for-profit organization. The vast majority of that amount went towards costs related to the performance, including the hiring of backing musicians and other costs related to the production.

Fact: Yéle Haiti purchased $250,000 of airtime on the commercial television station Telemax in Haiti that is owned by Wyclef and Jerry. We have documentation allocating the hundreds of hours of Yéle programming, over several years, that addressed a wide range of development and social issues in Haiti.

Wyclef Defends Yele Allegations Of Fiscal Inconsistency [AHH]

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