American Red Cross Wasted Millions After Haiti Earthquake: Report

Despite raising almost half a billion dollars for relief and development in the aftermath of the 2010 Haiti earthquake, the American Red Cross has thus far built only six permanent houses in the country, according to an investigation by ProPublica and NPR.

The investigation alleges chronic mismanagement, a lack of skilled staff and bureaucracy leading to lengthy delays in projects, and significantly more money being spent on administration than the 9 cents on the dollar Red Cross CEO Gail McGovern had pledged. The report also alleges that the Red Cross consistently misrepresented the efficacy of its activities in Haiti, and that while the charity made sweeping claims of success in fundraising materials, it refused to act in a transparent manner to allow their claims to be independently verified.

"Five hundred million in Haiti is a lot of money," Jean-Max Bellerive, who was the country's prime minister until 2011, told NPR. "I'm not a big mathematician, but I can make some additions. It doesn't add up for me," he reportedly said, referring to the funds raised by the Red Cross to aid rebuilding efforts in the Caribbean nation, which is among the world's poorest.

One of the key areas the report focuses on is housing and shelter. Red Cross promotional materials claimed that the charity had "provided homes for more than 130,000 Haitians.” The investigation revealed, however, that this figure included people who went to a seminar on how to fix their own homes, those who received temporary rental assistance, and people given temporary shelters.

While internal Red Cross documents published by the authors showed that the group had initially aimed to construct 700 homes in Haiti, it had succeeded in building only six. The Red Cross said that Haiti's complex land title system had been responsible for delays to housing projects. Other charities, the report found, who had to deal with the same regulatory complications, had managed to construct 9,000 homes in the country since the earthquake.

While the Red Cross does not give out information on specific projects or their costs, the group's own review stated that 35 percent of the $488 million it received for Haiti was spent on projects relating to shelter.

The charity's practice of subcontracting relief work to other organizations also lead to increased administrative costs, the report found. With both the Red Cross and the third party taking cuts for management expenses out of project budgets, significant amounts of money intended to help Haitians were spent instead on administration.

The authors were also critical of the charity's reliance on expatriate staff who, despite costing significantly more than local people, often lacked relevant skills and experience, and did not speak the local languages.

A 2011 memo from the group's Haiti program director to the organization's management in the U.S. had warned that the charity was “failing,” in Haiti, and complained of a "lack of leadership."

The Red Cross has rejected the report, saying that it has “helped build and operate eight hospitals and clinics” and “move more than 100,000 people out of make-shift tents into safe and improved housing,” in Haiti. In a statement, the organization said it is “disappointed” by the “lack of balance, context and accuracy” on the part of ProPublica and NPR, the Guardian reported.