How Aid Money Disappears in Countries Like Haiti

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On June 3rd, 2015, ProPublica published an article titled “How the Red Cross Raised Half a Billion Dollars for Haiti and Built Six Homes”. The article ignited a firestorm of conversation, from television talk shows to Facebook feeds. The article, written by Justin Elliot and Laura Sullivan of ProPublica, and sourced with help by Jakob Johnston, alleged that in the aftermath of the January 2010 earthquake the Red Cross claimed to have provided homes for more than 130,000 people. In reality, just six homes had been built.

For most readers, the news was a revelation. The Red Cross is generally considered a reputable organization with operations spanning the globe. But for those who had been watching the flow of aid in Haiti especially, this wasn’t news at all. As far back as May 2010, news outlets were indicating disbelief at the slow disbursement of the approximately $15 billion in aid funding that had been designated emergency relief for Haiti. Filmmaker Michele Mitchell screened her documentary, “Haiti: Where Did the Money Go?” in 2012 on Capitol Hill. The documentary focused almost exclusively on the American Red Cross’s work post-earthquake in the field of transitional and permanent housing. In fact, this wasn’t even the first time the Red Cross had been implicated in potential mismanagement of funds – its conduct in New Orleans following Hurricane Katrina and in Japan after the 2011 tsunami have been subject to scrutiny.

The Red Cross has categorically denied these accusations; often by claiming a difference between the “metrics” and “measurement” they use to present their results and those that reporters and detractors use to criticize the organization. But this excuse can only go so far, especially when the question of where exactly the money went has yet to be answered.

Dr. Paul Farmer, co-founder of Partners in Health, an anthropologist and physician with a long history of effective humanitarian work, and an advocated for reformed foreign aid funding models, commented earlier this year in an article for The Toronto Star on the subject of foreign aid funding. “The whole reason this didn’t work is structural,” said Dr. Farmer. “(The aid model) is not designed to strengthen Haitian institutions, or transfer resources to Haiti. There was lots of talk about that, but structurally things are not set up that way. It’s set up as a contracting system, and the biggest contractors are American. So you shouldn’t ask ‘what went wrong.’ It went right. It was set up to work this way.”

He’s not exaggerating. The vast majority of funds donated to a country in the aftermath of a disaster will go to international aid agencies, not local groups with on-the-ground expertise and the promise of longevity after the emergency is gone. And when those international aid agencies need to deliver on the promises made when they solicited donations, rather than train or recruit local contractors, they stick with what’s familiar. Still confused? Here’s the international relief / emergency aid funding model, broken down into steps.

  1. Disaster occurs. In the immediate aftermath of the disaster, organizations such as the Red Cross deploy methods of donation collection aimed at raising the largest amount of funding in the least discriminatory fashion possible – usually text donations.
  2. Immediate relief work, such as medical care, rescue missions, and temporary shelters, is any aid organization’s primary focus in the days following an emergency. Typically, medical care is the only field in which an international aid agency involves itself. In the days following a disaster, organizations like the Red Cross are not capable of mustering a dedicated task force capable of digging people out from under rubble or building temporary housing. Instead, funding is often used to transport organization officials and teams, cover the costs of funding drives for items deemed necessary, and to support teams on the ground with shelter, transportation, supplies, etc.
  3. As the immediate dangers presented by the disaster cool off, the aid organization is now presented with a dilemma. What to do with the funding donors have earmarked specifically for the country in need? In most disaster-zones, shelter and prolonged medical care seems to be what’s most badly needed from the point of view of a typical aid donor. The country’s government, on the other hand, may be thinking of rebuilding already: from homes and offices to jobs and government infrastructure, officials will have a lot of hope about where that money ends up going. In the vast majority of cases, however, the funding sticks with the aid agency and does not go to the government – so it’s the aid agency which attempts to determine what is most needed in the country, often without requesting input or guidance from government officials beyond securing permission to operate within a nation’s borders.
  4. At this point, the organization will need to hire contractors. Overwhelmingly, these contractors are from the United States beltway, and they’re also all overwhelmingly inefficient. A 2013 study determined that of the $1,1481,000,000 from the United States obligated to Haiti after the earthquake, the recipient of the most funding – a tidy $196,000,000 million – was Chemonics International. In the 2012 fiscal year alone, Chemonics was the single largest recipient of USAID funding around the world, receiving $680 million. Chemonics is not alone in its fortunate position, although it is certainly the most notorious. Development Alternatives Inc, MHW Americas, and CH2M Hill Constructors are only some of the multitude of contractors currently operating without oversight in countries around the world, despite serious controversies reported in Iraq, Afghanistan, and even during Hurricane Katrina relief.Even more unsettling is the behavior of the US government and the USAID. Two years after the disaster, of the original $1.4 billion in aid allocated by Congress, $655 million in funds had been reimbursed to the Department of Defense for expenditures such as docking American ships offshore, dropping food and medical aid off around the island, and securing the Port au Prince airport. $220 million of Congress’ aid allocation repaid the US Department of Health and Human Services for their provision of goods, food, and grants to Haitian evacuees seeking services or shelter. $350 million went to ‘disaster assistance’. $150 million went to the US Department of Agriculture for emergency food distribution. $15 million went to the Department of Homeland Security for immigration and evacuation fees.It’s not just the US, however. In general, of the $2.4 billion overall pledged by the UN for humanitarian assistance, 34% ($864 million) was returned to donor countries or organizations; 28% ($672 million) was expended on non-emergency projects like housing or health care system-building; 26% ($624 million) went to contractors for road-building and infrastructure projects, and 5% ($120 million) went to Red Cross-affiliated agencies. And an article written two years after the earthquake discusses the benefits of the growing NGO presence in Haiti. Chief among these is the purchase of imported vehicles for travel across the difficult Haitian terrain. The article’s author visits a dealership, where he is informed that their sales shot up in the months immediately following the earthquake, amounting to a gross cash influx of $150 million in the last two years. The dealership, briefly humbled at these numbers spoken aloud, mentioned that it typically only sells 250 cars – $15 million worth –  per year.
  5. At this point, with contractors hired and aid funding doled out, there is very little evidence that points to aid agency oversight of the work performed and results presented by these contractors. It’s as if the agency, once the money has been distributed, considers its job well done. And that’s how foreign aid funding flows in Haiti, and in other countries, in the wake of disaster.

When foreign aid funding becomes a front-end show, relevant to most donors only in the wake of scandal or only as when the dust from disaster has yet to settle, the back-end will inevitably go unsupervised. International aid agencies and donors need to take a closer look at where their money is going, and make conscious decisions to support local contractors, workers, and governments.

It has always been understood that teaching a man to fish provides far more benefit to him and his community than throwing him even the bones of a meal already eaten. Foreign aid funding cannot continue simply in the business of “giving”; it must, instead, relegate itself to the business of teaching, assisting, and guiding.

 

Larissa Liburd

Larissa Liburd

Larissa Liburd is a volunteer with the National Association of Haitian Professionals and Crisis Text Line. Find more of her writing over at Un’Ruly, an online magazine devoted to the causes and concerns of black women, and at her tumblr, lakou.tumblr.com, where she reviews books, music, movies, and TV shows, and deposits (many) unfinished drafts.

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