Both Oars In Seeing Red

Mar 29, 2012

When it comes to Haiti, the Associated Press appears to be able to turn over stones other news services either miss or cannot handle. In late 2010, the AP broke the story on the likely connection between the cholera outbreak in Haiti and the Nepalese military personnel serving in the country under the UN. This time, the AP has brought to light an odd multi-million dollar real estate purchase made in the midst of the international relief effort. 

According to Martha Mendoza and Trenton Daniel of the AP, the International Federation of the Red Cross and Red Crescent Societies (IFRC) used $10.5 million of the charitable funds the organization received on behalf of the quake-stricken people of Haiti to purchase what is known locally as the “Hilton Property” for its headquarters. The emergency relief organization has occupied the partially constructed buildings of the failed hotel project since Haiti’s earthquake on January 12, 2010. The story, published on March 26, adds that this purchase is just part of the $754 million dollars the IFRC has spent to date in Haiti.

This is not the first time that I have heard about this peculiar real estate project. Just months after the earthquake, I was contacted by a KPMG accountant. On a phone call in lieu of a meeting that would have sunk me in traffic for hours, the accountant informed me that the firm was helping its client, the IFRC, evaluate the benefits of buying the property they were currently leasing. As part of the calculation, he informed me that the emergency relief organization was contemplating being in Haiti for 5 to 10 years. 

You might wonder why a missionary would get a call from a Big Four accounting firm to confirm real estate values. Well, not long before the inquiry, I had published a column on land values in Haiti. In the article, I stated that land was more expensive in Haiti than one would expect. I think my price perspective fit their needs.

While not a professional appraiser, I did have enough knowledge and contacts to give an informal, uncompensated opinion on the price—which I did. I also let the caller know that while I felt the price was acceptable, the idea that the IFRC would be able to purchase a headquarters before the government of Haiti had secured even temporary offices was not. I still think that. 

I am also a bit puzzled by the IFRC’s plan, revealed this week by the AP, to convert part of the facility into a hotel and conference center. This was not mentioned in my conversation with the accountant. I wonder if this may have been added later as a cover story to mitigate the danger of negative PR for purchasing such a large property while the country remained crippled. The purchase has to be a bit embarrassing to say the least.

Even if the hotel and conference center is an actual idea, it is an alarming example of mission creep. Since when is it acceptable to build a hotel with relief funds? How does hotel operation fit with flood fighting? Could they be thinking of housing their own aid workers instead of paying for four star rooms up town?

The story’s revelation that the IFRC has spent over three-quarters of a billion dollars alarms me more than the hotel plan. This admission certainly gives support to President Martelly’s concern over the lack of visible results from the billions that have been spent in just over 24 months. This past September, Haiti’s belabored president lamented during a CNN interview, “… they’re saying that it was about saving lives. So you can’t really tell what money was properly used.” 

The story also makes me feel obligated to relate my only real experience with the IFRC in Haiti. On December 18, 2010, just eleven months after the earthquake, I visited the IFRC’s “Hilton Hotel” compound. A friend and I were in search of assistance with transporting a corpse to the morgue from a nearby tent city. Not only did we not find help, we found 163 vehicles sitting idle. It was the weekend; the landlords or tenants, whatever the case at the time, were out until Monday.

This latest story from the AP is the kind that makes a missionary’s head spin and, I hope, charitable donors see red.