A Red Cross on Charity

The Red Cross remains the charity of choice for ordinary Americans and corporations alike after natural disasters.

The neighborhood of Campeche sprawls up a steep hillside in Haiti’s capital city, Port-au-Prince. In late 2011, the Red Cross launched a multimillion-dollar project to transform the desperately poor area, which was hit hard by the earthquake that struck Haiti the year before. The Red Cross received an outpouring of donations after the quake, nearly half a billion dollars. After the earthquake, Red Cross CEO Gail McGovern unveiled ambitious plans to “develop brand-new communities.” None has ever been built. The main focus of the project — called LAMIKA, an acronym in Creole for “A Better Life in My Neighborhood” — was building hundreds of permanent homes. Today, not one home has been built in Campeche. Many residents live in shacks made of rusty sheet metal, without access to drinkable water, electricity or basic sanitation. When it rains, their homes flood and residents bail out mud and water. The Red Cross’ initial plan said the focus would be building homes — an internal proposal put the number at 700. Each would have finished floors, toilets, showers, even rainwater collection systems. The houses were supposed to be finished in January 2013. None of that ever happened. The project has since been reshaped and downscaled. A road is being built. Some existing homes have received earthquake reinforcement and a few schools are being repaired. Some solar street lights have been installed, though many broke and residents say others are unreliable. The Red Cross said it has to scale back its housing plans because it couldn’t acquire the rights to land. No homes will be built.

The Red Cross says it has provided homes to more than 130,000 people. But the actual number of permanent homes the group has built in all of Haiti: six. The Red Cross won’t disclose details of how it has spent the hundreds of millions of dollars donated for Haiti. But reporting shows that less money reached those in need than the Red Cross has said. While the group won’t provide a breakdown of its projects, the Red Cross said it has done more than 100. The projects include repairing 4,000 homes, giving several thousand families temporary shelters, donating $44 million for food after the earthquake, and helping fund the construction of a hospital. In other promotional materials, the Red Cross said it has helped “more than 4.5 million” individual Haitians “get back on their feet.” It has not provided details to back up the claim.

And Jean-Max Bellerive, Haiti’s prime minister at the time of the earthquake, 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.” 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.”

Jean Jean Flaubert, the head of a community group in Campeche explained “What the Red Cross told us is that they are coming here to change Campeche. Totally change it. Now I do not understand the change that they are talking about. I think the Red Cross is working for themselves.” Flaubert was stunned to learn of the project’s $24 million budget — and that it is due to end next year.

According to an internal Red Cross budgeting document for the project in Campeche, the project manager – a position reserved for an expatriate – was entitled to allowances for housing, food and other expenses, home leave trips, R&R four times a year, and relocation expenses. In all, it added up to $140,000. Compensation for a senior Haitian engineer — the top local position — was less than one-third of that, $42,000 a year. Shelim Dorval, a Haitian administrator who worked for the Red Cross coordinating travel and housing for expatriate staffers, recalled thinking it was a waste to spend so much to bring in people with little knowledge of Haiti when locals were available. “For each one of those expats, they were having high salaries, staying in a fancy house, and getting vacation trips back to their countries,” Dorval said. “A lot of money was spent on those people who were not Haitian, who had nothing to do with Haiti. The money was just going back to the United States.”

Other Red Cross infrastructure projects also fizzled. In January 2011, they announced a $30 million partnership with the U.S. Agency for International Development, or USAID. The agency would build roads and other infrastructure in at least two locations where the Red Cross would build new homes. But it took more than two and a half years, until August 2013, for the Red Cross just to sign an agreement with USAID on the program, and even that was for only one site. The program was ultimately canceled because of a land dispute. The USAID project’s collapse left the Red Cross grasping for ways to spend money earmarked for it.

“Any ideas on how to spend the rest of this?? (Besides the wonderful helicopter idea?),” McGovern wrote to Meltzer in a November 2013 email obtained by ProPublica and NPR. “Can we fund Conrad’s hospital? Or more to PiH[Partners in Health]? Any more shelter projects?”

Another   project, known as “A More Resilient Great North,” is supposed to rehabilitate roads in poor, rural communities and to help them get clean water and sanitation. But two years after it started, the $13 million effort has been faltering badly. An internal evaluation from March found residents were upset because nothing had been done to improve water access or infrastructure or to make “contributions of any sort to the well being of households,” the report said. So much bad feeling built up in one area that the population “rejects the project.” Instead of making concrete improvements to living conditions, the Red Cross has launched hand-washing education campaigns. The internal evaluation noted that these were “not effective when people had no access to water and no soap.”

A cholera epidemic raged through Haiti nine months after the quake. Throughout that year, cholera was a steady killer. By September 2011, when the death toll had surpassed 6,000. The Red Cross’ plan to distribute soap and oral rehydration salts was crippled by “internal issues that go unaddressed,” wrote the director of the Haiti program in her May 2011 memo. By September 2011 the project was still listed as “very behind schedule” according to another internal document. “None of these people had to die. That’s what upsets me,” said Paul Christian Namphy, a Haitian water and sanitation official who helped lead the effort to fight cholera. He says early failures by the Red Cross and other NGOs had a devastating impact. “These numbers should have been zero.”

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. Soon after the earthquake, McGovern, the Red Cross CEO, said the group 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.” That hasn’t happened. The Red Cross’ public reports offer only broad categories about where $488 million in donations has gone. The biggest category is shelter, at about $170 million. In describing its work, the Red Cross also conflates different types of aid, making it more difficult to assess the charity’s efforts in Haiti.

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