The Haiti earthquake has already triggered hundreds of thousands of donations to musician Wyclef Jean’s charitable foundation, which expects to raise upwards of $1 million a day in the disaster’s wake. However, Internal Revenue Service records show the group has a lackluster history of accounting for its finances, and that the organization has paid the performer and his business partner at least $410,000 for rent, production services, and Jean’s appearance at a benefit concert. Though the Wyclef Jean Foundation, which does business as Yele Haiti Foundation, was incorporated 12 years ago–and has been active since that time–the group only first filed tax returns in August 2009. That month, the foundation provided the IRS with returns covering calendar years 2005, 2006, and 2007–the only periods for which it has publicly provided a glimpse at its financial affairs. In 2006, Jean’s charity reported contributions of $1 million, the bulk of which came from People magazine in exchange for the first photos of a pregnant Angelina Jolie (the actress reportedly directed that the publication’s payment go to Jean’s charity, not her personally). As seen on the following pages from the foundation’s 2006 tax return, the group paid $31,200 in rent to Platinum Sound, a Manhattan recording studio owned by Jean and Jerry Duplessis, who, like Jean, is a foundation board member. A $31,200 rent payment was also made in 2007 to Platinum Sound. The rent, tax returns assure, “is priced below market value.” The recording studio also was paid $100,000 in 2006 for the “musical performance services of Wyclef Jean at a benefit concert.” That six-figure payout, the tax return noted, “was substantially less than market value.” The return, of course, does not address why Jean needed to be paid to perform at his own charity’s fundraiser. But the largest 2006 payout–a whopping $250,000–went to Telemax, S.A., a for-profit Haiti company in which Jean and Duplessis were said to “own a controlling interest.” The money covered “pre-purchased…TV airtime and production services” that were part of the foundation’s “outreach efforts” in Haiti. No further description of these services was offered, though the return claimed that “the fees paid are below market” and that the use of Telemax was the “most efficient way of providing these services.” The group’s tax returns also report “consultant” payments totaling $300,000 between 2005-2007, while the 2006 return reported nearly $225,000 in “promotion and PR” costs. These expenses are not itemized further in the IRS returns.
John Cook at Gawker:
When we called a contact number for Duplessis listed in Yele Haiti’s tax return, a receptionist at Platinum Sounds answered the phone and referred us to a public relations firm. We haven’t heard back from the publicist. We also tried to contact Hugh Locke, the head of Orsa Consultants, a firm that Yele Haiti paid $82,000 in 2006. According to this 2005 press release, Orsa is a “corporate social responsibility consultancy” that managed Yele Haiti’s programs; we couldn’t find any public references to Orsa independent of Yele Haiti, and the firm’s web site is no longer operative. When we called Lock, he immediately handed the phone to someone identifying herself as “Mrs. Lock,” who referred us to the PR firm. When we asked her about Yele Haiti’s expenditures, she said, “Our finances are totally straightened out. We have filed, and are up to date on everything.”
None of this means that Jean, Duplessis, and Yele Haiti aren’t doing important work in Haiti, or that they can’t play a constructive role in responding to the earthquake crisis. It does mean that, if the past is any guide, they are unlikely to wisely manage any of the money they are currently collecting from concerned Americans on behalf of the victims in Haiti.
Tim Cavanaugh at Reason:
Non-profit management is an ugly business under the best conditions. There are few major charities where you won’t find most of the pennies on your donated dollar diverted to waste, rent-seeking, politicking and other forms of institutional self-perpetuation. Jean’s has not blazed any new trails in reliability, and it’s wonderful to contemplate the levels of concealment involved when somebody asks what you make and you respond with how much you make per month, after taxes.
Furthermore, Haiti didn’t just start being a basket case on Tuesday. It doesn’t make the mismanagement any less serious that it was going on when Haiti was a disaster nobody cared about. It also doesn’t inspire confidence that Jean’s staff might rise to the occasion now that Haiti is temporarily a disaster everybody cares about.
On the other hand, most charities, like most everythings, are failures, and despite Yéle’s previous poor performance it could still succeed with its new windfall. I’d expect more than a plane full of Clif Bars for my $5, but given how hard it is to get into Port-au-Prince in the first place, even this may not be evidence of incompetence.
It has been jarring this week to realize how many people give some variation of “I just give and pray the money goes where it’s supposed to go,” when asked about the reliability of charities. But who am I to judge? I kicked into a Help Haiti bucket the other day that for all I know is being handled by the Avenues Gang. It’s still a pretty good bet Jean is doing more for Haiti than fellow Fugees Lauryn Hill and Pras.
What’s more, charities raising money for Haiti right now are going to have to earmark that money to be spent in Haiti and in Haiti only. For a Haiti-specific charity like Yele, that’s not an option. But as The Smoking Gun shows, Yele is not the soundest of charitable institutions: it has managed only one tax filing in its 12-year existence, and it has a suspicious habit of spending hundreds of thousands of dollars on paying either Wyclef Jean personally or paying companies where he’s a controlling shareholder, or paying his recording-studio expenses. If you want to be certain that your donation will be well spent, you might be a bit worried that, for instance, Yele is going to be receiving 20% of the proceeds of the telethon.
Meanwhile, none of the money from the telethon will go to the wholly admirable Medecins Sans Frontieres/Doctors Without Borders, which has already received enough money over the past three days to keep its Haiti mission running for the best part of the next decade. MSF is behaving as ethically as it can, and has determined that the vast majority of the spike in donations that it’s received in the past few days was intended to be spent in Haiti. It will therefore earmark that money for Haiti, and try to spend it there over the coming years, even as other missions, elsewhere in the world, are still in desperate need of resources. Do give money to MSF, then, but if you do, make sure that your donation is unrestricted. The charity will do its very best in Haiti either way, but by allowing your money to be spent anywhere, you will help people in dire need all over the world, not just in Haiti.
Wyclef Jean’s statement:
Lisa Derrick at Firedoglake:
Jean has responded on his YouTube channel explaining that he has been in Haiti already, digging out bodies and burying them, and that he started Yele Haiti, an NGO with $1 million of own money.
He answers charges that money was spent on organizing a concert, explaining that there are costs associated with fund raisers, and says that he is disgusted that people would question his dedication ot his homeland. Speaking in both Haitian Creole and English, Wyclef expressed his love and devotion to Haiti, his native land.
The singer will be holding a press conference in a few hours.
On January 22 Wyclef and George Clooney will host a benefit featuring Bono, Alicia Keyes, Sting, Christina Aguilera and Timberlake. Money will be raised for the the Red Cross, UNICEF, Oxfam America, Partners in Health and Jean’s Yele Haiti Foundation, so Wyclef’s really gotta come through here.
UPDATE: More John Cook from Gawker