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Wyclef Jean charity fiasco: Two articles from UK Independent and one from New York Times (Deborah Sontag)
Submitted by Roger on October 13, 2012 - 01:54
Wyclef Jean faces criminal probe over Haiti charity
Rapper will have to explain how fund backed by celebrities managed to burn through $16m in two years
By Guy Adams, The Independent (UK), Saturday 13 October 2012
Wyclef Jean, the hip-hop artist and former candidate for the presidency of Haiti, said yesterday he was "committed to ensuring that things are made right" amid news of a criminal investigation into the finances of his personal charity.
The musician's lawyer, Avi Schick, confirmed that Jean's Haitian aid organisation, Yele, went out of business in August, leaving a trail of legal disputes and unpaid debts. Regulators in the US, where it was registered, are now attempting to establish how the non-profit organisation burned through $16m (£10m) in public donations in just over two years.
A report in yesterday's New York Times [that lengthy article is below--ed.] alleged that much of the money was spent on administration, public relations and consultants, or was funnelled to outside businesses owned by friends and relations of Jean. In one mysterious transaction, detailed in Yele's tax returns, the singer's brother-in-law was given $600,000 for helping with the "rebuilding of Haiti".
In 2010, the charity devoted more than half of its $9m budget to travel, staff salaries, consultant fees and expenses related to its property portfolio, the newspaper revealed. It spent $37,000 to rent space at a Manhattan recording studio owned by Jean, and another $375,000 went on "landscaping" for its offices.
Yele was founded in 2004 by Jean, who spent much of his childhood in Haiti. Although initially low-profile, it was propelled to prominence in January 2010 when the country was devastated by an earthquake which left almost 300,000 people dead and an estimated 1.5 million homeless.
In the aftermath of the disaster, $16m was donated into its coffers. All of that money now appears to have been spent. Some was used to distribute food and water to earthquake victims, or to give temporary jobs to young Haitians. But the rest appears to have been frittered away in a manner which did little to improve the lives of earthquake victims.
Jean's day-to-day involvement in Yele appears to have been on the wane since August 2010, when Haiti's electoral council ruled him ineligible to run for president, on grounds that he had not been a permanent resident for the previous five years.
Last year, after reporters began wondering what had become of Yele's cash reserves, the New York Attorney General began a forensic audit of its finances. So far, its investigation has covered only the years 2004-2009, before the earthquake struck. But its findings are already damning.
According to the auditors, Jean and fellow board members improperly benefitted to the tune of at least $256,580 during that period. That figure includes $24,000 on Jean's chauffeur and $30,000 on a private jet to transport the actress Lindsay Lohan to a fundraiser.
Investigators have also established that Jean was paid $100,000 by Yele to perform at a fundraiser in Monaco. Another $125,000 was used to transport him to interviews for an episode of the TV show 60 Minutes which detailed his charitable activities. They concluded that both of those items of expenditure were legal.
As an alternative to a costly trial, prosecutors have offered Jean a plea deal in which he would pay $600,000 in restitution to "remedy the waste of the foundation's assets" between 2004 and 2009, and agree to a full audit of its post-earthquake expendidure. The singer has refused the deal.
Mr Jean's lawyer has insisted that he is "committed to ensuring that things are made right". Meanwhile, in a recent autobiography which details his rise to fame during the 1990s as a member of the Fugees, the singer denied wrongdoing. He had no need to improperly benefit from Yele's funds, he wrote, because he was already wealthy. "I have a watch collection worth $500,000," he declared.
There's little to show for $15m – just broken promises
Wyclef Jean spoke passionately about the failures of established aid agencies
By Guy Adams , The Independent (UK), Saturday 13 October 2012
In August 2010, I sat down for dinner with Wyclef Jean in the garden of a sprawling bungalow in La Plaine, an upmarket suburb of Port-au-Prince, to discuss his career as a celebrity humanitarian. We ate chicken and rice. It was just six months after swathes of the city were shaken to the ground, filling the streets with corpses and making millions homeless. Less than a mile away, thousands of earthquake victims were settling down for another night under the canvas of a tent city.
The singer, who at the time was running for Haiti's presidency, spoke passionately about the failures of established aid agencies to solve his country's ongoing problems. "S*** is f***ed up here, man!" he declared. "I arrived here 24 hours after the quake and I would say that minus the bodies on the floor and minus the smell, it looks exactly the same today as it did then. Nothing has changed and people are getting frustrated."
Mr Jean's assistant, from an expensive New York PR firm, showed off Yele's assets: some prototype emergency dwellings, a yurt full of food supplies, a water purification plant, and 21 trucks being used – or so she claimed – to distribute clean water to disaster victims.
When I asked about Yele's finances, he told me the charity had received $15m in donations since the January earthquake, and that some 60 percent of that money had already been spent helping victims. When I checked the figures against official paperwork the next day, it emerged that the actual figure was 16 percent.
Two years later, the rest of the money has been frittered away, with little to show for it. Those houses Mr Jean promised to build are nowhere to be seen. The water trucks are no longer in use. And the sprawling bungalow where we'd met, which the charity turns out to have purchased for $600,000, stands empty; a monument to empty promises.
In Haiti, Little Can Be Found of a Hip-Hop Artist’s Charity
By DEBORAH SONTAG, The New York Times, October 11, 2012
PORT-AU-PRINCE, Haiti — In a new memoir, Wyclef Jean, the Haitian-born hip-hop celebrity, claims he endured a “crucifixion” after the Jan. 12, 2010, earthquake when he faced questions about his charity’s financial record and ability to handle what eventually amounted to $16 million in donations.
Portraying himself as persecuted like Jesus and Martin Luther King Jr., Mr. Jean, 40, writes with indignation about insinuations that he had used his charity, Yéle, for personal gain. He says he did not need to — “I have a watch collection worth $500,000”— and that doubters will someday understand “Yéle is Haiti’s greatest asset and ally.”
But on his book tour for “Purpose: An Immigrant’s Story,” Mr. Jean, who made an aborted bid for the presidency of Haiti after the earthquake, neglects to mention two key facts: a continuing New York attorney general’s investigation has already found financial improprieties at Yéle, and the charity effectively went out of business last month, leaving a trail of debts, unfinished projects and broken promises.
“If I had depended on Yéle,” said Diaoly Estimé, whose orphanage features a wall painting of Mr. Jean and his wife, “these kids would all be dead by now.”
Even as Yéle is besieged by angry creditors, an examination of the charity indicates that millions in donations for earthquake victims went to its own offices, salaries, consultants’ fees and travel, to Mr. Jean’s brother-in-law for projects never realized, to materials for temporary houses never built and to accountants dealing with its legal troubles.
On the ground in Haiti, little lasting trace of Yéle’s presence can be discerned. The walled country estate leased for its headquarters, on which the charity lavished $600,000, is deserted. Yéle’s street cleaning crews have been disbanded. The Yéle-branded tents and tarps have mostly disintegrated; one camp leader said they had not seen Yéle, which is based in New York, since Mr. Jean was disqualified as a presidential candidate because he lives in Saddle River, N.J., not Haiti.
This summer, the charity foundered. At the end of August, Derek Q. Johnson, Yéle’s chief executive, announced his resignation to supporters. “As the foundation’s sole remaining employee, my decision implies the closure of the organization as a whole,” wrote Mr. Johnson, a former Time Warner executive who replaced Mr. Jean at Yéle’s helm when the musician declared his candidacy in August 2010.
His resignation came after Mr. Jean declined to accept a settlement proposed by the attorney general covering the charity’s pre-earthquake activities, and he hired Avi Schick, a lawyer who had been a member of Attorney General Eric T. Schneiderman’s transition team.
The settlement would have required Mr. Jean and the two other Yéle founders to pay $600,000 in restitution “to remedy the waste of the foundation’s assets.” It also would have required Yéle to pay for a forensic audit of its post-disaster expenses, as it had done for its pre-earthquake finances, and to start “winding down its affairs.”
On Thursday, Mr. Jean’s spokeswoman said he and his lawyers “are working assiduously to resolve any pending issues with respect to Yéle prior to its closing as Mr. Jean continues his tireless commitment to his beloved country.” Neither the spokeswoman nor Hugh Locke, a Yéle co-founder, responded to specific questions.
Mr. Jean founded Yéle, a word he coined to mean “cry for freedom,” in 2004. Now 40, he had emigrated to the United States as a child, becoming an international star with his 1990s band, the Fugees. In his memoir, he says his journey from “a hut with a dirt floor” to “a mansion in New Jersey with Grammys on the mantle” motivated him to give back to his homeland.
But from the start Yéle was lax about accounting and tax filing, blurring the boundaries between its founders’ personal and charitable enterprises.
The forensic audit examined $3 million of the charity’s 2005 to 2009 expenses and found $256,580 in illegitimate benefits to Mr. Jean and other Yéle board and staff members as well as improper or potentially improper transactions. These included $24,000 for Mr. Jean’s chauffeur services and $30,763 for a private jet that transported Lindsay Lohan from New Jersey to a benefit in Chicago that raised only $66,000.
The audit considered it appropriate, though, for the charity to pay Mr. Jean $100,000 to perform at a Yéle fund-raiser in Monaco because that was his market rate. It also found it acceptable for Yéle to spend $125,114 on travel and other matters related to a “60 Minutes” report on “Wyclef’s mission to help the people of Haiti and his personal success story” because it appeared to have heightened awareness of Yéle. It was deemed legitimate to have spent $57,927 on private jets to fly Matt Damon and others to Haiti because they gave “substantial contributions” afterward.
Mr. Schick said of Mr. Jean, “While most of the audit findings and recommendations do not in any way relate to him, he is nevertheless committed to ensuring that things are made right.”
Yéle was small before the earthquake, with only $37,000 in assets. Immediately afterward, money started pouring in. Mr. Jean said he raised $1 million in 24 hours when he urged his Twitter followers to text donations. His charity also benefited alongside more established organizations like Unicef when he co-hosted MTV’s “Hope for Haiti Now” telethon with George Clooney.
In 2010, Yéle spent $9 million and half went to travel, to salaries and consultants’ fees and to expenses related to their offices and warehouse. In contrast, another celebrity charity, Sean Penn’s J/P Haitian Relief Organization, spent $13 million with only 10 percent going to those costs.
Though Mr. Penn’s group spent $43,000 on office-related expenses, Yéle spent $1.4 million, including $375,000 for “landscaping” and $37,000 for rent to Mr. Jean’s Manhattan recording studio. Yéle spent $470,440 on its own food and beverages.
Some of Yéle’s programming money went to projects that never came to fruition: temporary homes for which it prepaid $93,000; a medical center to have been housed in geodesic domes for which it paid $146,000; the revitalization of a plaza in the Cité Soleil slum, where supposed improvements that cost $230,000 are nowhere to be seen.
There were questionable contracts, too: Mr. Jean’s brother-in-law, Eric Warnel Pierre, collected about $630,000 for three projects including the medical center and the plaza — what Yéle’s tax forms called “the rebuilding of Haiti.” Mr. Pierre did not respond to messages left for him.
And a Miami company called Amisphere Farm Labor, incorporated in 2008 and dissolved in 2009, received $1 million in 2010 to provide hot meals to displaced Haitians. Yet a Haitian caterer has sued Yéle for $430,000 in nonpayment for these very same meals, thus far succeeding only in getting the charity’s Haitian bank account frozen. It is a tangled story.
A week after the earthquake, Lusmène Bien-Aimé was recovering in the Dominican Republic from the broken leg she suffered when her hotel, the Flamboyant, collapsed. King Kino, a well-known Haitian musician and a friend of Mr. Jean’s, proposed that she return to Haiti to prepare meals for Yéle, they both said. She and Mr. Jean sealed the deal on the phone, they said, and she hobbled from bed with her leg in a cast and crossed back into Haiti.
King Kino, whose real name is Lord Kinomorsa Divers, said he asked Amsterly Pierre, the president of Amisphere, to oversee the food operation. But Ms. Bien-Aimé said in an interview that she had never heard of Amisphere or of Mr. Pierre, a former licensed barber in Florida who runs a transportation business in Haiti. She said that two weeks after the disaster, she provided 8,000 containers of meat, rice and salad and Mr. Jean, cameras in tow, distributed them to earthquake victims.
All told, she said, she was owed for 810,000 meals at $10 a plate and was paid, in cash, less than half that.
Mr. Divers said she had overcharged, “taking advantage of the emergency.” Yéle, though, agreed to pay Amisphere $10 a plate, according to a contract that was, curiously, signed a year after the meals program ended. In seeking to free its assets, Yéle has argued in Haitian court that it contracted with Mr. Pierre and that he must have subcontracted the work. Mr. Pierre could not be reached for comment.
For her part, Ms. Bien-Aimé said: “I fulfilled my end of the deal, and I don’t know why they won’t fulfill theirs. Wyclef raised millions and millions of dollars. Where is the money?”
In its relief operation, Yéle operated outside the coordination system set up by other nongovernment groups; it did not want to be burdened by rules and meetings, Mr. Locke said in a 2010 interview.
Other organizations focused on providing concrete services like sanitation or health care.
Yéle chose to work more broadly than deeply. It supplied food, water and supplies to what it said were dozens of tent camps. Julie Schindall, then spokeswoman for Oxfam America, called it a “dump and run strategy.” Mr. Penn told The New York Times in 2010, “My impression is that Yéle is at the service of Wyclef Jean and his reputation.”
Yéle’s biggest program was a job corps, through which it said it hired thousands of Haitians for a month each to clean streets and canals. Some aid experts believe such interventions worthy while others criticize them for not providing lasting employment or, with street-cleaning, lasting results. Yéle’s program cost more than $5 million, with only about half of that going to the laborers.
This program, too, left trouble in its wake. Last week, the Haitian police jailed a Yéle employee at the behest of a garbage hauling company that says it is owed more than $100,000 for two months’ work, Mr. Locke said in an e-mail to friends.
While Yéle describes its support of the Jean et Marie Orphanage as one of its most significant accomplishments, the help provided was not really what the orphanage wanted, its director says.
After the orphanage was flattened by the earthquake, another group, the Global Orphan Project, quickly replaced it with a simple concrete structure. The day that the children moved back in, a Yéle team stumbled upon them, the director, Diaoly Estimé, said.
“They offered to rebuild the orphanage and I said it was already rebuilt but we needed help to survive,” she said. “They started giving us $3,000 a month for food. Also, Mr. Clef’s wife came with a soccer star and police officers and journalists and gave the children presents.”
Then in the summer of 2010, Yéle cut off the stipend entirely, for a while sending the orphanage a weekly basket of vegetables and rice instead. The children were always hungry and crying, said the Rev. Jean Claude Dorcelly, whose Haitian-American Rock Apostolic Church in Spring Valley, N.Y., began scraping together money to help.
At the same time, Yéle pushed forward with its building plan. Mr. Jean’s brother-in-law got a $154,000 contract to construct a second floor atop the dormitory and a second building with a cafeteria and classrooms.
Pastor Dorcelly said they were grateful. “But it is an incomplete gift,” he said. “They have a new dormitory but they only have beds for half the kids. They have classrooms but no money to pay teachers. They have a cafeteria but no money to buy food.”
The vegetables came through another Yéle program that ended abruptly. A peasant farmers’ collective was paid $600,000 to provide weekly deliveries of produce for a year to what the charity’s Web site identifies as 35 orphanages.
Asked for a list of the beneficiaries, the Rev. Occide Cico Jean, who runs the collective, provided one with 19 orphanages. Nine were visited or reached by phone. Only four said they had received weekly baskets for a full year. One, Village of Hope, which has 29 severely disabled children, who were being fed gruel for supper during a recent visit, said it had never received a single basket.
Derek Q. Johnson, then the chief executive of Yéle, was skeptical of the program and canceled it. The Rev. Jean, in protest, sent an angry e-mail to Yéle: “Are we Haitians, once again, going to show ourselves incapable of carrying a project to conclusion?” he asked. “Are we going to do this Haitian-style — ‘Wash our hands and dry them in the dirt?’ ”