U.S. Pledge to Rebuild Haiti Not Being Met

By Trenton Daniel and Martha Mendoza

The Hill
7/21/2012 7:28 PM EST

PORT-AU-PRINCE, Haiti — The deadly earthquake that leveled Haiti’s capital more than two years ago brought a thread of hope: a promise of renewal. With the United States taking the lead, international donors pledged billions of dollars to help the country “build back better,” breaking its cycle of dependency.

But after the rubble was cleared and the dead buried, what the quake laid bare was the depth of Haiti’s dysfunction. Today, the fruits of an ambitious, $1.8 billion U.S. reconstruction promise are hard to find. Immediate, basic needs for bottled water, temporary shelter and medicine were the obvious priorities. But projects fundamental to Haiti’s transformation out of poverty, such as permanent housing and electric plants in the heavily hit capital of Port-au-Prince have not taken off.

Critics say the U.S. effort to reconstruct Haiti was flawed from the start. While “build back better” was a comforting notion, there wasn’t much of a foundation to build upon. Haiti’s chronic political instability and lack of coordinated leadership between Haiti and the U.S. meant crucial decisions about construction projects were slow to be approved. Red tape stalled those that were.

The international community’s $10 billion effort was also hindered by its pledge to get approval for projects from the Haitian government. For more than a year then-President Rene Preval was, as he later described it, “paralyzed,” while his government was mostly obliterated, with 16,000 civil servants killed and most ministries in ruins. It wasn’t until earlier this year that a fully operational government was in place to sign paperwork, adopt codes and write regulations. Other delays included challenges to contracts, underestimates of what needed to be done, and land disputes.

Until now, comprehensive details about who is receiving U.S. funds and how they are spending them have not been released. Contracts, budgets and a 300-item spreadsheet obtained by The Associated Press under a Freedom of Information Act request show:

_ Of the $988 million spent so far, a quarter went toward debt relief to unburden the hemisphere’s poorest nation of repayments. But after Haiti’s loans were paid off, the government began borrowing again: $657 million so far, largely for oil imports rather than development projects.

_ Less than 12 percent of the reconstruction money sent to Haiti after the earthquake has gone toward energy, shelter, ports or other infrastructure. At least a third, $329 million, went to projects that were awarded before the 2010 catastrophe and had little to do with the recovery – such as HIV/AIDS programs.

_ Half of the $1.8 billion the U.S. promised for rebuilding is still in the Treasury, its disbursement stymied by an understaffed U.S. Embassy in Port-au-Prince in the months after the quake and by a Haitian government that was barely functional for more than a year.

_ Despite State Department promises to keep spending public, some members of Congress and watchdogs say they aren’t getting detailed information about how the millions are being spent, as dozens of contractors working for the U.S. government in Haiti leave a complex money trail.

“The challenges were absolutely huge and although there was a huge amount of money pledged, the structures were not there for this to be done quickly,” said former U.S. Ambassador Brian Curran. “The concept of build back better is a good one, but we were way over-optimistic about the pace we could do it.”

The U.S. Special Coordinator for Haiti Thomas C. Adams, who oversees USAID spending here, says the first priority in the critical days after the quake that killed more than 300,000 was crisis management, and the U.S. government spent $1.3 billion on critical rescue operations, saving untold lives.

Three months later, the goals shifted from rescue to what would become a $1.8 billion reconstruction package aimed at building new foundations.

“U.S. taxpayers, in the past, have spent billions of dollars in Haiti that haven’t resulted in sustainable improvement in the lives of Haitians,” said Adams. “The emphasis was never on `spend the money quickly.’ The emphasis was on spending the money so that in a year or two, we could look at these projects and see that we’ve helped create a real base to jump-start economic development and give Haitian families and businesses the kind of opportunities they deserve.”

Haitian government officials are appreciative, and said the U.S. provides generous support for projects that impact long-term development. As for going back into debt, “Haiti needs all the assistance it can possibly get at this point,” said Prime Minister Laurent Lamothe’s deputy chief of staff Dimitri Nau.

PROMISES UNMET

Within months of the quake, Congress approved a 27-page plan detailing a partnership with the Haitian government to “lay the foundation for long-term stability and economic growth.” USAID, an agency overseen by the State Department, was held responsible for getting the job done by choosing contractors, selecting projects and overseeing the work. But just as there’s little to show for the $2 billion the U.S. spent in Haiti in the two decades before the earthquake, it hasn’t built much that is permanent with the new influx of cash.

The plan laid out broad categories: infrastructure, health care, education, economic development. It was followed by a strategy that included specific benchmarks. This month, as about 40 of those come due, some are met, like a new police hotline to report abuse. But others are not.

For example, the U.S. had planned to improve the business environment by working with the local government to reduce regulations, pass national e-commerce laws, expand mortgage lending and update the tax code. The measurement of success, said U.S. planners, would be a better ranking by the World Bank’s “Doing Business” indicators.

Instead, this year Haiti sank eight points lower compared with the rest of the world as a place to do business in categories including securing construction permits, getting electricity, registering property, receiving credit, enforcing contracts and paying taxes.

And so far, the U.S. has no public plans to build a clean water or sewer system in Port-au-Prince, even as the country grapples with the world’s biggest cholera outbreak that medical researchers say was likely introduced by a U.N. peacekeeping unit after the earthquake. The U.S.’s largest jobs program is a garment manufacturing plant being built in Caracol, 280 kilometers (175 miles) from the capital.

Adams said some investments, like fixing the electricity system, are taking more time.

A $137 million effort toward supplying reliable electricity in Haiti, including blackout-prone Port-au-Prince, stalled after a contract dispute led to a stop-work order – leaving the capital with electricity only about 10 hours a day. Those who can afford it use private generators and those without use lanterns or candles. To date, just $18 million has been spent on electricity – largely to build a power plant at the northern industrial park in Caracol.

The single largest recipient of funding is Washington, D.C.-area contractor Chemonics, which has received more than $58 million, including $6.8 million to remove rubble, $7.2 million to develop a market for environmentally friendly cook stoves, and money for youth soccer tournaments and “key cultural celebrations” including Flag Day, patron saints days and Mother’s Day. Chemonics spokeswoman Martha James says 67 percent of the federal money went to Haitians, including salary for 94 Haitian staff, and Haitian subcontractors, grantees and vendors.

Meanwhile, 390,000 people are still homeless. The U.S. promised to rebuild or replace thousands of destroyed homes, but so far has not built even one new permanent house. Auditors say land disputes, lack of USAID oversight and no clear plan have hampered the housing effort. USAID contested that critique.

The State Department says 29,100 transitional shelters have been built, to which residents are adding floors, walls or roofs to make permanent homes, although homes once again vulnerable to natural disasters. U.S. funds also supported 27,000 households as they moved in with friends or families, and repaired 5,800 of the 35,000 damaged homes they had planned to complete with partners by July 2012. Also by this month the U.S. had planned to help resolve 40,000 to 80,000 land disputes, but at latest count had helped 10,400.

The State Department acknowledges that efforts to build shelters has been slower than anticipated.

While more than 1 million people have been moved out of the tent camps, most went to stay with family or friends, or moved into temporary shelters.

“Having tent cities in the capital 2 1/2 years after the earthquake is horrendous,” said Raymond Joseph, a former Haiti ambassador to the U.S. “It’s a condemnation of those who had the money and dragged their feet.”

`NOTHING TO DO WITH THE QUAKE’

Making progress in Haiti has been easier with established programs that were under way before the earthquake. Contractors had already been chosen, and plans drawn up. As a result, much of the recovery and reconstruction funding was awarded to projects that were not damaged in the earthquake – from medical clinics to rural farms. Of the $988 million spent to date, $1 out of every $5 went to HIV/AIDS programs, though $49 million went to farming projects and $16 million supported elections.

Lack of education has long been a problem. Haiti has about 4.5 million school-age children, about half of whom were attending school before the earthquake. The largest U.S. education program after the quake was through the Washington, D.C.-based American Institutes for Research, which was a few years into a $25.6 million U.S.-funded project to train teachers.

“Then the earthquake happened and everything changed,” AIR vice president Jane Benbow said. “They said we need you to take the resources you have left and we need you to redirect them, we need you to start doing other things with that money.”

In April 2011, USAID announced that a $12 million AIR project had “constructed or is in the process of constructing more than 600 semi-permanent classrooms serving over 60,000 students.”

But when pressed for details, AIR spokesman Larry McQuillan said the number of classrooms actually was 322. They were serving at least 38,640 students each day, many in two shifts.

The organization left Haiti last year after building 120 temporary schools. Today, about half of Haiti’s school age children attend school, about the same as before the catastrophe. The Haitian government says it wants to put another 1.5 million children into school – by 2016.

The education money has made no difference for Odette Leonard, 39, who lost her husband, and her home, to the quake. Like most Haitians, she cannot afford to pay even the modest school costs for uniforms and books.

“People like me won’t be able to see any of that money,” Leonard said. She had to send her two children to her mother’s house in the countryside so they could attend an affordable school.

One of USAID’s most tangible post-earthquake accomplishments was the construction of a bridge across the muddy, winding Ennery River. The strong and well-engineered span eases a key route from the north to the south 160 kilometers (100 miles) from Port-au-Prince. The bridge had been down for more than a year before the earthquake, a casualty of the 2008 hurricane season. Plans had been sketched for a new bridge, but there wasn’t funding.

Engineer Larry Wright, who temporarily moved to Haiti from Wyoming to lead the $4 million project, said he didn’t know the funding came from earthquake reconstruction funds.

“This had nothing to do with the quake,” said Wright.

AND YET MORE DEBT

When the earthquake hit, world lenders were already several years into forgiving Haiti’s substantial debts, many of which dated back to millions in loans taken by the dictator Jean-Claude Duvalier, who was overthrown in 1986 and suddenly returned last year. In June 2009, seven months before the earthquake, donors wiped out $1.2 billion of the Haitian government’s debt. In January 2010, as the capital lay in ruins, it still was $828 million in the red.

In March 2010, Congresswoman Maxine Waters (D-CA) said canceling the debt is “one of the simplest but most important things we can do to help Haiti.”

And to date, debt relief is the largest single item the U.S. has spent toward Haiti’s rebuilding: $245 million.

But since taking office in May 2011, President Michel Martelly’s administration has borrowed $657 million, largely from Venezuela for basic fuel needs, but also from Taiwan, the International Fund for Agricultural Development, the International Monetary Fund and OPEC. Next year Haiti is expected to spend close to $10 million servicing those debts, according to the IMF.

“The U.S. government cannot dictate how the government of Haiti, as a sovereign country, chooses to address its financial situation,” said USAID’s Haiti task team leader in Washington D.C., Beth Hogan, whose office facilitated the payments. The U.S. is now only providing grants, not loans, to Haiti.

Waters now says she’s disappointed, but not surprised, that Haiti has resumed its borrowing habits.

More than half of Haiti’s annual $1 billion budget comes from foreign aid.

“Haiti needs grants, gifts and loans,” said Haitian official Nau. “Every country in the world has debt and Haiti is no different.”

OFF THE RECORD

A major frustration for watchdogs of the U.S. effort is a lack of transparency over how the millions of dollars are being spent.

From interviews to records requests, efforts to track spending in Haiti by members of Congress, university researchers and news organizations have sometimes been met with resistance and even, in some cases, outright refusals.

As a result, U.S. taxpayers are told they’ve agreed to spend $7.2 million for a project to design and distribute cleaner cooking stoves to 10,000 street vendors and 800 schools and orphanages, but there’s no public accounting for how that will break down: How much might each stove cost? What are the office expenses? What are workers’ salaries?

“The lack of specific details in where the money has gone facilitates corruption and waste, creates a closed process that reduces competition and prevents us from assessing the efficacy of certain taxpayer-funded projects,” said Congresswoman Yvette Clarke, a New York Democrat whose district includes the second largest population of Haitian immigrants in the country.

Legislation introduced last year in Congress would direct the Obama administration to report on the status of post-earthquake humanitarian, reconstruction and development efforts in Haiti.

The AP filed a Freedom of Information request to learn what was accomplished and how much was spent on a two-day retreat for 12 senior U.S. staffers in Miami in March 2011. USAID released the hotel sales agreement, the facilitator’s purchase order and an agenda. It did not release information about what was accomplished, and withheld another nine pages, citing concerns that it contained information that had not been finalized.

State Department officials say they are trying to be responsive, noting that in the past nine months, they have coordinated 51 briefings to members of Congress and their staff on Haiti and delivered five congressionally-mandated reports.

One of the problems with following the money in Haiti is that the records are not up to date.

A State Department inspector general report in June found the embassy’s political section retains about 10 linear feet of paper files dating back a decade in several safes, and the narcotics affairs team doesn’t have a coherent filing system.

In its own effort to follow the money, this year the AP began contacting firms that have received U.S. funding since the earthquake. A memo went out two weeks later.

“A series of requests from journalists may come your way,” cautioned Karine Roy, a spokeswoman for the USAID, in an email to about 50 humanitarian aid officials. “Wait for formal clearance from me before releasing any information.”

U.S. contractors, from pollsters to private development firms, told the AP that USAID had asked them not to provide any information, and referred to publicly released descriptions of their projects.

The Durham, North Carolina-based group Family Health International 360, for example, received $32 million, including $10 million for what the State Department described as an “initiative designed to increase the flow of commercially viable financial products and services to productive enterprises, with a focus on semi-urban and rural areas.”

When the AP asked for a budget breakdown, FHI 360 spokeswoman Liza Morris said, “We were pulling that for you but were told that it was proprietary by our funder.”

Who is the funder?

“Our funder,” she said, “is USAID.”

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