Financial Crime World

Financial Crimes Examples in Haiti: Where Donations End Up

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A recent surge in donations to Haiti following the assassination of President Jovenel Moïse and a 7.2 magnitude earthquake has raised questions about where these funds ultimately end up. According to experts, the majority of funds disbursed for aid return to the donor country, with private contractors in the US and Canada reaping most of the benefits.

Where Do Donations Really Go?

  • A staggering 75% of USAID’s 2010 earthquake funds went to private contractors within the Beltway.
  • Canadian donations to the Red Cross were used to prop up a struggling business in Quebec.
  • The goal is clear: to sell products and services from donor countries, reducing unemployment at home. This is not corruption, but rather a legitimate use of taxpayer dollars.

How Does the Process Work?

Expatriates are paid at rates similar to their home country, plus benefits and expenses, taking up to 70% of the donated money without leaving any tangible impact in Haiti. The remaining 30% makes it to the beneficiary country, only to be siphoned off by corruption, leaving a mere 10% for actual work.

A Case Study: PetroCaribe

A 1,000-page report from Haiti’s High Court of Auditors slammed fraudulent management by various ministers and administrations, resulting in nearly $2 billion being embezzled. In one instance, over $46 million was paid to a Dominican company to build an industrial park and houses, but no contracts were traced.

Challenges Faced

  • The presence of expats without proper expertise or cultural literacy can create friction with local counterparts, leading to inefficient work on site.
  • The lack of dialogue between parties often means objectives are not aligned, resulting in programs that do not meet the needs of Haitians.

Combating Corruption and Inefficiency

Haiti must take matters into its own hands by reforming institutions and accepting accountability for managing public funds. The international judiciary system must also be reformed to directly investigate financial crimes from foreign or national corruption.