manage personal finances
02.08.10
UPDATE: Is Wyclef Jean's Charity the Best One to Help Haiti?
There's no doubt Wyclef Jean — who has raised $1 million since the Haiti earthquake — wants to help his homeland. But a look at his personal foundation's finances raises questions about whether it's wisely managing the donations it's collecting.
UPDATE: Go here for more on why Jean's charity may not be the best way to help Haitians right now.
The Smoking Gun took a look at the finances of Yele Haiti, the foundation Wyclef Jean founded to help his homeland—and it's ugly. Jean founded Yele Haiti in 1998, according to TSG, but didn't file any tax returns until five months ago, in August 2009. And the returns filed so far—for 2005, 2006, and 2007 only—reveal that Yele directed huge sums of money to commercial entities that Jean and his business partner Jerry Duplessis own stakes in.
The most eye-popping expenditure is $250,000 that the foundation paid in 2006 to Telemax, S.A., a Haitian television company that Jean and Duplessis own a controlling interest in. The payment for “airtime and production services” appears to have been related to a telethon of some sort that Yele Haiti produced in the country—its chalked up to “outreach”—and amounts to one out of every five dollars that the foundation took in that year. The return claims the fees were “below market” and constituted the “most efficient” way for Yele Haiti to conduct outreach.
The foundation also paid Platinum Sound, the production company that Jean and Duplessis co-own, a $100,000 fee for Jean's performance at a Yele Haiti fundraiser in 2006.
And Platinum Sound charges Yele Haiti more than $31,000 in annual rent for office space at its Manhattan studio. UPDATE: A tipster familiar with Platinum Sounds' set-up just e-mailed to say that the “office space” that Yele rents from the studio consists of one staffer who works out the kitchen, at a cost of $2,600 each month paid from the charity to Jean and Duplessis.
All told, TSG says, Yele Haiti has paid out $410,000 in the three years for which it has provided tax returns to businesses owned by Jean and Duplessis.
Which makes it even more stunning that the foundation ended 2007 with a $489,000 deficit. That year it took in only $79,000 in direct public support—not much more than the $54,711 it spent on travel—and reported $503,000 in cash with $956,000 in liabilities, including a “30-day demand note” in the amount of $500,000 borrowed from a foundation controlled by music impresario Lou Adler. Its only charitable activity that year was a $270,000 grant to Yele Haiti's Haitian operation, which presumably then distributed the funds to recipients there.
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.
Send an email to the author of this post at john@gawker.com.
In a State of the City address crafted for a recession era, Mayor Bloomberg said he will reduce government spending, streamline city agencies, and assist debt-ridden New Yorkers by establishing a $10 million fund to help refinance mortgages, and starting a new banking program that will offer accounts with no minimum balances or hidden fees. “The city can't manage anyone's personal finances but we can make it easier for New Yorkers to manage their own — and we will,” he said.
In terms of cuts and reductions, the Mayor said he will merge the Department of Juvenile Justice and the Administration for Children's Services, combine the Mayor's Office of Film, Theater and Broadcasting and NYC TV, reduce the number of city-owned cars, and save $40 million in rent and energy costs by cutting city office space by 10 percent over the next four years. He will also launch a new inter-agency task force to “consolidate,” “centralize,” and “reduce” government operations.
Bloomberg announced some new proposals, calling for a $750 million rescue fund for owners of distressed apartment buildings, expanding the NYPD's Lower Manhattan Security Initiative into Midtown, installing GPS devices on some school buses, and leading an effort to help New York residents who are undocumented Haitian immigrants apply for temporary protective status so they can stay in the country legally for 18 months. The Times found the address to be more “focused more on the incremental rather than the innovative,” while the Daily News claims that “espite campaign pledges to keep coming up with bold ideas, many of his points are familiar,” like his promise to keep development of the World Trade Center site on schedule, which he said he would do last year.
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