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UPDATE – 7:55 p.m.: Hugh Locke, the president of Yéle Haiti, has released a statement: “Wyclef Jean, the founder of Yéle Haiti has never profited from his organization.” Read the full statement at the bottom of the article. Original post below:
On Monday, some of the District’s biggest rap names will perform at the 9:30 Club to raise money for charities providing earthquake relief in Haiti—-but one of those organizations, Yéle Haiti, has an inconsistent history of reporting its finances to the IRS, and has made a series of dubious payments to companies associated with its founder, the Haitian-born performer Wyclef Jean.
One organizer of the concert, Yodit Gebreyes, was surprised to learn of the reports of the charity’s history, but stressed that the show will go on—-and, for the time being, plans to donate proceeds to Yéle Haiti will not change.
The Smoking Gun reports today that the Wyclef Jean Foundation, which conducts business as the Yele Haiti Foundation, only began filing tax returns last August—-for the years 2005, 2006, and 2007—-despite being incorporated and active for 12 years. In 2006 and 2007, the Smoking Gun reports, the charity paid $31,000 a year in rent to Platinum Sound, a recording studio in Manhattan that Jean owns with Jerry Duplessis, who is a board member of the foundation along with Jean. Jean also received $100,000 from the foundation for “musical performance services” at a fundraiser. And in 2006, the foundation paid $250,000 for “TV airtime and production services” to Telemax, S.A., which is a for-profit company that Jean and Duplessis own “a controlling interest” in. According to the Christian Science Monitor, Yéle put nearly a quarter of its revenues to operating and fundraising costs in 2006 and 2007.
Gebreyes, a graduate student at Georgetown who runs the nightlife and marketing Web site TalkofDC.com, said the group organizing the show, DMV Helps Haiti, is taking the Smoking Gun report seriously.
“Of course with allegations like these, we definitely take them to heart,” she said, noting the good reputation of the other charity the concert will give money to, Partners in Health.
Gebreyes said she would discuss with other organizers the efforts and actions of Yéle Haiti, which has raised over $2 million since a 7.0 earthquake decimated the Haitian capital of Port-au-Prince earlier this week. She said the group may re-examine Yéle Haiti, and may decide to donate less money raised by the concert to the organization. “It’s kind of sad that something like this could mess it up,” she said. “We’re going to hope that it’s not true and that if it is, they’re going to fix that.”
Jean, who was born in Croix-des-Bouquets, Haiti, is currently in the island nation helping with relief efforts.
A spokesperson for the 9:30 Club, who had not read the Smoking Gun report, said the venue was approached this week by DMV Helps Haiti and quickly agreed to stage the concert. “For us it was a natural thing to say yes to,” said Audrey Schaefer. “We were dark on Monday. [Headliner] Wale was available on Monday.” She stressed that the venue will donate 100 percent of the evening’s proceeds to the two charities, that the club’s employees are donating their wages for the night, and that the ticketing service, Ticketfly, will waive its usual percentage.
“Wyclef Jean is walking around Haiti with President Clinton, and all the eyes of the world are on Haiti and the organizations helping there, so I trust that those organizations are doing the right thing,” Schaefer said. “We will take it upon ourselves to see where [the money] goes. We’re the ones writing the check.”
Andrew Marx, the communications director of Partners in Health, said concertgoers should feel confident giving money to that charity. “We have really been in a position to provide effective relief. We’ve been working in Haiti for 25 years, and we have 10 functioning hospitals north of the city that were not damaged.” Although the closest hospital Partners in Health runs is about two hours north of Port-au-Prince, the organization has been treating victims since the earthquake hit, and is currently preparing a team to send into the capital city.
Tabi Bonney, one of the evening’s performers, wrote in an e-mail: “I just got a call & agreed to perform for the people of Haiti brother. I am sure that the proceeds will go to the PEOPLE OF HAITI. God is too great!”
UPDATE – 7:55 p.m.: A statement from Hugh Locke—-one which leaves Gawker, quoting an anonymous source it says is familiar with the charity, feeling skeptical:
Statement by Hugh Locke, President of Yéle Haiti
“Wyclef Jean, the founder of Yéle Haiti has never profited from his organization. It’s a shame that during this international emergency, we have had to divert resources away from our response efforts to address these allegations.”
Yéle Haiti Financial Facts
Fact: Yéle Haiti, originally called the Wyclef Jean Foundation, filed a tax return in 2000 and then suspended activities until 2005 and so was not required by law to file a tax return until it resumed operation.
Fact: Yéle Haiti received a clean bill of health in independent external audits conducted in 2005, 2006, 2007 and 2008 by the firm of Tempesta & Farrell, P.C..
Fact: Yéle Haiti was guided by the firm of Grant Thornton LLP to ensure that all transactions involving board members Wyclef Jean and Jerry Duplessis were conducted to fully comply with both the spirit and letter of the law governing such matters.
Fact: Yéle Haiti offices are located in Platinum Sound, the recording studio owned by Wyclef and Jerry Duplessis in order to save money. The organization pays only $2,600 a month for the space and a shared reception service, instead of considerably more for the same arrangement in midtown Manhattan.
Fact: Wyclef Jean was paid $100,000 in connection with a benefit concert in Monte Carlo in 2006, which was organized by a for-profit organization. The vast majority of that amount went towards costs related to the performance, including the hiring of backing musicians and other costs related to the production.
Fact: Yéle Haiti purchased $250,000 of airtime on the commercial television station Telemax in Haiti that is owned by Wyclef and Jerry. We have documentation allocating the hundreds of hours of Yéle programming, over several years, that addressed a wide range of development and social issues in Haiti.