On this episode of Misfortune: A Financial Crimes Podcast, Adam and Danger discuss the allegations against Wyclef Jean’s charity, Yele Haiti. Note: Neither Wyclef Jean nor anyone associated with this foundation has been charged or convicted of any of the allegations discussed in this episode. The New York Attorney General’s office did not return our request for comment.
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Nel Ust Wyclef Jean was born on October 17, 1969 in Croix-des-Bouquets, Haiti. When he was 9 years old, he and his family emigrated to the United States, eventually settling in Newark, New Jersey.
Wyclef gained fame in the early 90s as a member of the Fugees – the band’s name was derived from the term “refugees.” The band broke up in 1997, and Wyclef went on to have a successful solo career, releasing 8 studio albums and 2 EPs, most recently Carnival III: The Fall and Rise of a Refugee in September 2017.
Wyclef registered the Wyclef Jean Foundation in Illinois sometime in the early 2000s. The organization did business as Yele Haiti, Yele being a word Wyclef came up with to mean “cry for freedom.”
The organization was relatively small and low-profile at first. In its first year, it claimed to have provided scholarships to more than 3,600 children in Haiti. In September 2008, after several devastating tropical storms, Wyclef and Matt Damon went to Haiti to distribute food and raise awareness for the hurricane victims. In 2009, Timberland and Yele partnered up to release a boot and T-shirt collection, with $2 for each pair of shoes sold and $1 per T-shirt going to the Yele Haiti Foundation.
According to the New York Times, tax returns filed before 2010 showed that the organization raised an average of $300,000 per year. By 2007, however, it somehow managed to run a $490,000 deficit, which was covered by a loan from a Canadian foundation. Despite its high profile brand and celebrity relationships, Yele had only $37,000 in assets prior to 2010.
On Tuesday, January 12, 2010, at 4:53 pm local time, a 7.1 magnitude earthquake struck Haiti, with its epicenter approximately 16 miles west of its capital Port-au-Prince. Death toll estimates vary, but range between 100,000 to 300,000, with about 1.5 million people initially displaced. The Haitian government estimated that 250,000 residences and 30,000 commercial buildings had collapsed or were severely damaged.
After the earthquake, Wyclef encouraged the public to donate $5 to Yele via text message and raised more than $2 million from text donations alone.
On January 14, 2010, 2 days after the Haiti earthquake, The Smoking Gun published pages from the organization’s first tax returns, filed in August 2009 and covering the years 2005 to 2007. Those returns revealed that in 2006, the charity reported a contribution of $1 million, most of which came from People magazine. Angelina Jolie, who had toured Haiti along with Wyclef and Brad Pitt, had reportedly requested that the magazine make a direct contribution to the charity in exchange for being the first to publish her pregnancy photos.
The returns also revealed that a $100,000 fee had been paid for “musical performance services of Wyclef Jean at a benefit concert” in Monaco. Wyclef and organization executives defended the fee as not being for Wyclef personally but rather to cover the production costs.
Despite concerns being raised about its spending practices, the charity managed to raise about $16 million that year, much of it through its participation in MTV’s Hope for Haiti Now telethon, which raised more than $60 million.
In August 2010, Wyclef confirmed rumors that he was running for president of Haiti, telling Wolf Blitzer on CNN “I feel like I’m being drafted by the population right now to give them a different face, a different voice.” He also announced his resignation from the foundation in order to focus on his candidacy, with former Time Warner executive Derek Q. Johnson replacing him as Yele’s chief executive.
Wycler filed formal papers for the November 28 presidential election to run as a candidate for the Viv Ansanm political party, but his candidacy was rejected by the electoral council. Although no official reason was given for the rejection, Wyclef believes it was because of the constitutional requirement that candidates live in the country for five years prior to an election. He had argued that his 2007 appointment as a roving ambassador for Haiti should exempt him from the requirement.
In 2011, the New York Attorney General’s office began investigating the organization, including a forensic audit of its 2005 to 2009 finances.
The forensic audit found that of the $3 million the charity spent in expenses during those years, $256,580 resulted in “illegitimate benefits” to Wyclef and Yele’s board and staff members, including $24,000 in chauffeur services and $30,763 for a private jet to fly Lindsay Lohan from New Jersey to Chicago for a benefit that raised $66,000.
The auditors determined that other seemingly extravagant expenses were justified, including
the $100,000 Monaco performance fee, $125,000 in travel expenses associated with a 60 Minutes interview, and nearly $58,000 spent on flying Matt Damon and others to Haiti on private jets.
As far as we know, no forensic audit has been done of the organization’s post-earthquake finances. According to the New York Times, Yele spent $9 million in 2010, including $375,000 for landscaping and $470,440 on its own food and beverages. Other expenses had good intentions on the surface, but there is little to show for the money spent. A $146,000 medical center doesn’t seem to exist and $230,000 to revitalize a plaza within the Cité Soleil slum doesn’t seem to have resulted in any actual improvements. A Miami corporation called Amisphere Farm Labor somehow received $1 million to provide hot meals to Haitians a year after the company dissolved, but the Haitian caterer who actually provided the meals claims she only received half of what she was owed.
In August 2012, Derek Johnson, the organization’s sole remaining employee at this point, resigned from his position amidst the attorney general’s investigation, effectively shutting down the organization for good.
Prosecutors offered Wyclef a settlement in which he, along with the Yele’s 2 other founders, would pay $600,000 to “remedy the waste of the foundation’s assets” between 2005 and 2009, leaving open the possibility that more fines may be imposed for any “financial improprieties” from 2010 on. Wyclef refused the deal, and to this day has not been charged or penalized. He has acknowledged “administrative errors” but otherwise denies any wrongdoing. After all, he wrote in his autobiography, he doesn’t need the money. The proof? “I have a watch collection worth $500,000.”
An NBC News article revealed that as of 2015, the New York Attorney General’s office was still investigating the charity. Whether the organization’s founders will ultimately be held responsible for its alleged fund mismanagement remains to be seen.
Photo Credit: Lynne Sladky/AP
- Wikipedia: Wyclef Jean
- Wikipedia: Yele Haiti
- Wikipedia: 2010 Haiti Earthquake