[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
HAITI: IS U.S. AID EFFECTIVE?
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HEARING
BEFORE THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
OCTOBER 9, 2013
__________
Serial No. 113-100
__________
Printed for the use of the Committee on Foreign Affairs
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COMMITTEE ON FOREIGN AFFAIRS
EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida ENI F.H. FALEOMAVAEGA, American
DANA ROHRABACHER, California Samoa
STEVE CHABOT, Ohio BRAD SHERMAN, California
JOE WILSON, South Carolina GREGORY W. MEEKS, New York
MICHAEL T. McCAUL, Texas ALBIO SIRES, New Jersey
TED POE, Texas GERALD E. CONNOLLY, Virginia
MATT SALMON, Arizona THEODORE E. DEUTCH, Florida
TOM MARINO, Pennsylvania BRIAN HIGGINS, New York
JEFF DUNCAN, South Carolina KAREN BASS, California
ADAM KINZINGER, Illinois WILLIAM KEATING, Massachusetts
MO BROOKS, Alabama DAVID CICILLINE, Rhode Island
TOM COTTON, Arkansas ALAN GRAYSON, Florida
PAUL COOK, California JUAN VARGAS, California
GEORGE HOLDING, North Carolina BRADLEY S. SCHNEIDER, Illinois
RANDY K. WEBER SR., Texas JOSEPH P. KENNEDY III,
SCOTT PERRY, Pennsylvania Massachusetts
STEVE STOCKMAN, Texas AMI BERA, California
RON DeSANTIS, Florida ALAN S. LOWENTHAL, California
TREY RADEL, Florida GRACE MENG, New York
DOUG COLLINS, Georgia LOIS FRANKEL, Florida
MARK MEADOWS, North Carolina TULSI GABBARD, Hawaii
TED S. YOHO, Florida JOAQUIN CASTRO, Texas
LUKE MESSER, Indiana
Amy Porter, Chief of Staff Thomas Sheehy, Staff Director
Jason Steinbaum, Democratic Staff Director
C O N T E N T S
----------
Page
WITNESSES
Mr. David B. Gootnick, Director, International Affairs and Trade,
U.S. Government Accountability Office.......................... 5
Mr. Thomas C. Adams, Haiti Special Coordinator, U.S. Department
of State....................................................... 58
Ms. Elizabeth Hogan, Acting Assistant Administrator, Bureau for
Latin America and the Caribbean, U.S. Agency for International
Development.................................................... 69
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Mr. David B. Gootnick: Prepared statement........................ 8
Mr. Thomas C. Adams: Prepared statement.......................... 61
Ms. Elizabeth Hogan: Prepared statement.......................... 71
APPENDIX
Hearing notice................................................... 96
Hearing minutes.................................................. 97
The Honorable Eliot L. Engel, a Representative in Congress from
the State of New York: Material submitted for the record....... 99
The Honorable Gregory W. Meeks, a Representative in Congress from
the State of New York: Prepared statement...................... 100
The Honorable Gerald E. Connolly, a Representative in Congress
from the Commonwealth of Virginia: Prepared statement.......... 101
Response from Mr. Thomas C. Adams to question submitted for the
record by the Honorable Joseph P. Kennedy III, a Representative
in Congress from the Commonwealth of Massachusetts............. 103
HAITI: IS U.S. AID EFFECTIVE?
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WEDNESDAY, OCTOBER 9, 2013
House of Representatives,
Committee on Foreign Affairs,
Washington, DC.
The committee met, pursuant to notice, at 10:10 a.m. in
room 2172, Rayburn House Office Building, Hon. Ed Royce
(chairman of the committee) presiding.
Chairman Royce. Last call for members to take their seat,
and this hearing will come to order.
Today we meet to discuss the situation in Haiti. In January
2010, a massive earthquake struck Haiti doing major physical,
social, and economic damage to the country that is the poorest
country in the Western Hemisphere. It was a devastating blow to
a nation already struggling from centuries of violent
repression, endemic corruption and from extreme poverty.
The international community, led by the U.S., rapidly
organized an unprecedented humanitarian response. International
donors pledged $13 billion to support immediate relief and
recovery. Private charities also provided another $3 billion,
and that year Congress approved $1 billion in appropriations
for Haiti of which $651 million was provided to the Agency for
International Development to support post-earthquake
reconstruction.
Now it is 3 years later, and the results are not
impressive. Of the $2 million Haitians impacted by the
earthquake, an estimated 320,000 remain in squalid displacement
camps. Efforts to provide permanent housing have been
undermined by weak property rights, unemployment is very high,
corruption again is rampant, and the business climate is very
poor.
Under the leadership of Chairman Emeritus Ros-Lehtinen, the
Government Accountability Office was tasked with studying
USAID's efforts, and in particular this committee was concerned
about shelter projects in the development of the Caracol
Industrial Park in the northern part of the country. As we will
hear today, the GAO, unfortunately, has found that these
programs have been slowly implemented, more costly than
planned, and of questionably lasting impact. While much has
been promised, little has been effectively delivered.
Following this discouraging report, the ranking member and
I sent a bipartisan delegation of committee staff to Haiti to
review the GAO's findings, and they were left asking some basic
questions, and those questions are why does USAID still lack an
engineer for the proposed port in the Caracol Industrial Park?
Question one. Question two: Why did the U.S. set expectations
for massive permanent housing projects in a country where the
overwhelming majority of people do not have secure property
rights to begin with? And number three: Why aren't intended
beneficiaries occupying the few housing units that have
actually been built?
Haiti has suffered too many natural disasters, but it is
weak institutions and endemic corruption that perpetuate the
poverty of the country. The World Bank has found that the
chances of reducing poverty under these conditions in the World
Bank's estimate ``approaches zero.''
The absence of a transparent, legally enforceable system of
property rights--and Hernando de Soto has done a lot of work on
this issue in Haiti--which would allow Haitians to secure and
invest capital or open and expand a business, is debilitating.
Without these basics, no level of assistance would put Haiti on
the right economic path.
The Haitian Government's failure to hold long-delayed
elections is also troubling. Fully one-third of the Senate in
Haiti remains vacant, making a quorum difficult. Even worse,
without elections, the President may end up governing by
decree.
I believe the Haitian people deserve better. I know
American taxpayers deserve better. If aid is to continue, we
need a viable partner in development, a viable partner there in
democracy.
And our ranking member, Eliot Engel, was instrumental in
bringing this hearing together and also in helping organize the
focus on Haiti, and I am now going to turn to him for his
opening remarks.
Mr. Engel. Mr. Chairman, I would like to begin----
Mr. Chairman, I would like to begin by thanking you for
holding this hearing. I have been focused on U.S. policy toward
Haiti for many years, and I sincerely appreciate your
willingness to bring this issue before the full committee.
The January 2010 earthquake in Haiti focused world
attention on the plight of that country in a new and different
way. The international community and especially the United
States responded to the urgency and the sheer devastation with
both generosity and determination. Our post earthquake
assistance in Haiti currently stands as one of the most
significant U.S. aid commitments in the world.
Even before the dust had settled from the aftermath of the
earthquake, 150 donor countries and organizations rolled up
their sleeves and, together with the Government of Haiti, began
to craft a rebuilding plan. All agreed that this plan would not
be business as usual, and that it would seek to have a
sustained and unprecedented impact on the future of Haiti. The
U.S. piece of that plan after 3-plus years is the central focus
of this hearing.
Pursuant to a request by me and Congresswoman Ileana Ros-
Lehtinen, the GAO issued a report in June of this year that
reached some troubling conclusions. This committee dispatched a
staff delegation to Haiti last month to dig deeper into these
issues and to help us set the stage for this hearing.
The GAO report is the most recent official statement on
United States assistance to Haiti. Today's hearing will provide
GAO, State, and USAID an opportunity to update and clarify that
information. I will leave it to the GAO witness to summarize
the conclusions of their report. Suffice it to say that some of
their findings came as a surprise to many of us in Congress,
and it gave rise to some tough questions.
For example, the number of houses to be built with U.S.
assistance dropped from roughly 15,000 to 2,649. The estimated
number of beneficiaries declined from roughly 80,000 to
approximately 14,000. A back-of-the-envelope calculation tells
us that the costs per unit have doubled and sometimes tripled.
We now know that the Haitian Government prevailed upon U.S.
officials to build bigger and better housing. The problem, of
course, is that this benefited a much smaller pool of people.
Even though it misrepresented a dramatic change in the terms of
reference for the expenditure of these funds, Congress was not
consulted about the decision. Had we been consulted, would we
have gone ahead with that plan? Who knows. And was it a good
decision to devote a third or more of earthquake-reconstruction
funding to an industrial park, a power plant to run it, and
possibly a new port to service it in a part of the country that
was largely unaffected by the earthquake?
In terms of process, the GAO report pointed out that the
administration has not always provided sufficiently detailed
information that Congress needs to assess and evaluate our
Haiti programs. It is my hope that greater transparency in the
administration's execution of these programs for us and for the
Haitian people is among the changes that result from this
oversight effort.
I will be submitting a series of questions for the record
to begin to rebuild the reservoir of information on our Haiti
programs. In addition, we may call upon the GAO to conduct an
additional study regarding our Haiti assistance.
Finally, we may look at streamlining--streamlined reporting
to Congress such as that included in H.R. 1749, the Assessing
Progress in Haiti Act, introduced by Rep Barbara Lee. And let
me say I am glad that our colleague is here today with us.
Another issue I hope we can focus on today relates to how
we partner with NGOs and the Haitian Government on these
programs. On their recent trip, committee staff learned that
Haitian officials consistently expressed concern that U.S. Aid
largely circumvents the Haitian Government. Some say Haiti has
become a republic of NGOs. The down side of operating this way
is that we lose the opportunity to strengthen the capacity of
the Haitian Government and to increase the ownership of the
Haitian Government in people. That ownership is a critical
ingredient in the sustainability of our system. I understand
that there are significant accountability barriers here that
must be overcome, but the Haitian Government is the essential
partner in this effort.
That said, I must be clear about the Haitian election issue
that currently overhangs this entire effort. Haitian
congressional municipal elections are 2 years overdue. The
Haitian Senate is operating with 10 of its 30 seats vacant, and
President Martelly is claiming that the terms of 10 of the
Senators end in 2014. The donor community does not agree with
this assessment, and I don't either.
In any case, if that were to occur, the Haitian Congress
would effectively be incapable of carrying out its legislative
duties, and we would face the unacceptable prospect of
President Martelly governing by decree.
This matter is already significantly affecting the patience
of the donor community, and I know it will greatly affect how
the U.S. Congress approaches our assistance in Haiti. I call on
President Martelly to find a quick constitutional resolution to
this matter and hold elections as soon as practicable.
The threshold question we need to ask today is not whether
we are on track to rebuild Haiti to a pre-earthquake standard,
but, rather, if we are helping to build Haiti back better. I
hope very much that in 2015, when we reach the 5-year
anniversary of our post-earthquake assistance program, we can
answer that question in the affirmative.
So, Mr. Chairman, thank you again for holding this hearing.
I look forward to the testimony of our witnesses.
Chairman Royce. Thank you, Mr. Engel.
We now go to Representative Salmon of Arizona, chairman of
the Western Hemisphere Subcommittee.
Mr. Salmon. Thank you, Mr. Chairman.
I would like to commend Chairman Royce and Ranking Member
Engel for convening this important oversight hearing on Haiti,
the GAO's report on aid to Haiti, and the status of the U.S.
reconstruction projects and our investment in economic
development there.
Although the rubble has been largely cleared away, I
believe the Haitian people have a right to be frustrated with
the lack of progress on reconstruction and for a perceived lack
of coordination on the part of the international donor
community. The GAO's report was critical in many respects when
it comes to USAID overpromising and under delivering on many
fronts, and we are here today to try to find out why. But I
also would like to use my time to point out a couple of areas
where the bipartisan staff delegation reported back some
positive findings.
In particular, I was told that some specific projects
regarding USAID partnering with the Government of Haiti to
provide healthcare services in underserved rural areas seem to
be working quite well. In addition, I heard some exciting
agricultural programs are being made possible by a unique
partnership between USAID and the University of Florida that
are making a real difference for the lives of Haitian farming
families and having a positive impact in the local agricultural
community by trying to bring their farming techniques and
practices into the 21st century.
I was also impressed with what I heard regarding the
training and professionalism of the Haitian National Police and
the Government of Haiti's partnership with our DEA to combat
the narcotraffickers.
In conclusion, I would like to add my voice to Chairman
Royce's concerning the importance of Haiti going forward with
finally holding elections. This is a crucial step that the
Government of Haiti must take if we are able to count on them
as reliable partners going forward. Failure to conduct
elections in the near term will cause many of us to question
the use of taxpayer dollars in recovery efforts as we will have
little confidence in the Haitian Government.
I look forward to hearing more today and making sure U.S.
taxpayer dollars are being spent wisely and most cost-
effectively as they possibly can in Haiti.
Thank you, Mr. Chairman. I yield back.
Chairman Royce. Thank you.
We go now to Mr. Sires of New Jersey, ranking member of the
Western Hemisphere Subcommittee.
Mr. Sires. Thank you, Mr. Chairman.
Good morning, and thank you to our witnesses for being here
today.
The 2010 earthquake in Haiti unleashed an unthinkable
amount of death and destruction to what was already the poorest
country in the Western Hemisphere. More than \1/4\ million
people died, 200 million people were displaced, and ever since,
a cholera outbreak has plagued the island, and more than
300,000 displaced people remain in camps.
Through a June 2013 GAO report, we know that the USAID
efforts in Haiti have been grossly inadequate and marred by
incompetence. Reports submitted to Congress have been untimely
and shallow. We know little of how money has been spent, and
there is a failure to recruit appropriate technical expertise
when necessary. And amongst the most disturbing accounts is how
the USAID increased the funding allocated for housing by 65
percent while decreasing the projected number of houses to be
built by 80 percent.
I understand the post-earthquake environment was chaotic,
and that the Haitian Government has not been entirely
cooperative at times. Nonetheless, these lapses are
unacceptable. USAID efforts are an effective and critical
component of our foreign policy; however, the accounts outlined
by the GAO report undercut these efforts and overshadow our
goodwill. At a time when the Congress is deadlocked over
funding the government, our U.S. agencies must do better. Thank
you.
Chairman Royce. Thank you.
This morning we are going to hear first from Dr. David
Gootnick, Director of International Affairs and Trade at the
Government Accountability Office. He has been in that position
since 2011.
Although not a common committee practice, Dr. Gootnick will
be followed by a second distinguished panel consisting of
representatives from the Department of State and from USAID.
Earlier this year GAO issued a critical report of the
administration's efforts, and I think the format of allowing
the GAO to testify first is going to give members an
opportunity to fully understand the GAO's findings before
asking questions of the administration.
So, without objection, the witness' fully prepared
statement will be made part of the record. Members here will
have 5 days to submit statements or questions or extraneous
materials for the record.
And we will now ask Mr. Gootnick to summarize his
statements. And you have 5 minutes, Mr. Gootnick.
STATEMENT OF MR. DAVID B. GOOTNICK, DIRECTOR, INTERNATIONAL
AFFAIRS AND TRADE, U.S. GOVERNMENT ACCOUNTABILITY OFFICE
Mr. Gootnick. Thank you, Mr. Chairman.
Mr. Chairman and members of the committee, thank you for
inviting GAO to participate in this hearing. As you indicated,
Mr. Chairman, today, more than 3 years after the earthquake,
nearly 300,000 Haitians remain in temporary shelter, and nearly
80 percent of the population lives in poverty.
Roughly 6 months after the earthquake, Congress provided
more than $1.1 billion in a supplemental appropriation for
Haiti's reconstruction. USAID is responsible for the single
largest share, directly implementing $651 million of this
amount. As of June 2013, USAID had obligated just over half and
disbursed about one-third of this funding.
My statement today updates GAO's recent report on two of
USAID's key activities: First, the construction of the power
plant and port to support a new industrial park known by its
acronym CIP in northern Haiti; and second, construction of
permanent housing in and around Port-au-Prince, St-Marc and
Cap-Haitien, three designated development corridors.
Regarding the industrial park, 1 year after the earthquake,
the U.S. and Haitian Governments, the Inter-American
Development Bank, and a South Korean garment maker entered into
a public private partnership for development of the CIP.
Specifically the bank was to provide funding to the Haitian
Government to construct the park complex; the U.S. Government
would build the power plant, contribute to building a nearby
port, and support construction of 5,000 housing units near the
industrial park; and the Korean firm would be the anchor tenant
with plans to hire 20,000 Haitian workers.
AID did complete the initial phase of the power plant in
time to supply the first CIP tenant with electricity, and as of
last month, 1,500 workers are employed at the park. USAID has
funding to cover operations and maintenance for 3 years, expand
the distribution of power, add solar energy, and increase the
plant's generating capacity.
However, port construction is delayed about 2 years from
its original plan. In addition, funding for the port is
insufficient to cover most of the projected costs, and it is
unclear whether the Haitian Government will find a private-
sector partner willing to cofinance all phases of the project
as originally envisioned.
The lack of a port engineer at USAID's Haiti mission is an
important factor in these planning challenges. After two
unsuccessful efforts to recruit a qualified engineer, USAID is
now working with U.S. Army Corps for this expertise.
Turning to the permanent housing, USAID's New Settlements
Program is a response to the severe post-earthquake housing
shortage and supports the Haitian Government's goal of
expanding economic activity in areas outside Port-au-Prince.
However, USAID's original housing numbers and cost estimates
for both site development and home building proved to be
optimistic.
The program's original goals were for USAID and its
partners to build 15,000 new homes at a cost of roughly $2,000
per plot and $8,000 per house. However, the program is now
projected to complete less than 20 percent of the originally
planned homes, and costs to date are about $10,000 per plot and
over $24,000 per house.
These shortfalls are due to a number of factors. In
particular, the initial cost estimates used inaccurate
comparisons to earlier projects and did not take into account
the level of site infrastructure that USAID has designed and
built into these sites. To a lesser extent, the Haitian
Government's request for larger and improved houses also
increased costs. Problems securing land title and donor
coordination also delayed construction.
Most of this housing will be located near the industrial
park with only 15 percent located in the earthquake-affected
area. The residents at the first site have just started moving
in, and USAID is working to address sustainability risks, such
as affordability and community development. However, funding
for these efforts is limited. GAO's recent report recommended
that USAID hire a port engineer and provide timely community-
support mechanisms for each new settlement. USAID agreed with
both recommendations, and we will monitor their progress in
this regard.
Mr. Chairman, this completes my remarks. I am happy to
answer your questions.
[The prepared statement of Mr. Gootnick follows:]
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Chairman Royce. One of the questions I would like to ask
you is, how big a factor was the USAID's inability in this case
to secure land titles in moving forward? And I see the project
was delayed by 2 years, and knowing what we know about property
rights in Haiti in some of the past discussions we have had
about this issue, were the goals realistic given the morass of
inability to fix title and so forth?
Mr. Gootnick. Right. I think there is no question that land
titling and land ownership in Haiti is, at best, arcane
historically, a paper record system at most; that many of the
archives that did contain what existed of property records were
damaged or destroyed in the earthquake. It is worth recognizing
that most of the government's structures were literally
collapsed in Port-au-Prince after the earthquake. Seventeen
percent of Haitians, the Haitian Government, and civil
servants, were killed in the earthquake. And probably a third
were substantively displaced or left their positions.
But with respect to land titling, in particular the
building of homes in Port-au-Prince, I think, was sacrificed by
the absence of land title, the ability to gain land title, and
very limited options for government land in the immediate Port-
au-Prince area, so that the original plan was to build most of
the homes in Port-au-Prince, but eventually most of the land
was available outside.
Chairman Royce. Who in the Haitian Government, if you
happen to know, insisted upon the very costly design changes,
and what was the purpose? What was their purpose?
Mr. Gootnick. I would have to get you the answer on who
exactly within the Haitian Government made that request. I do
know that it came at the ministry level from the Haitian
Government, and that the interest was for larger homes and to
include indoor plumbing so that these would be exceptional
homes by Haitian standards, without question. At this point
they are built at approximately 450 square feet, and they are
excellent homes that are built to a very high standard.
Chairman Royce. Reportedly a few Haitian Senators decided
they were not getting a big enough--I guess ``kickback'' would
be the word to use here--on construction in their districts,
and so they insisted upon costly design changes. You never
know, when you are reading these accounts or hearing these
accounts, what is behind a delay like this, but the argument
was that those changes could not be justified. And the
question, of course, would be did USAID roll over in a
situation like this and finally concur in order to move forward
with something that seriously, on the face of it, couldn't be
justified?
And that speaks to the broader issue of the endemic
corruption and the exposure of U.S. assistance to waste, fraud,
and abuse in a situation like this. And indeed what can be done
to counter these types of circumstances where something goes on
years longer, Dr. Gootnick, than had been intended?
You look at the cost overruns. We underestimated the cost
by 433 percent per plot, I guess, in your study and then 193
percent per house, and the scheduling is 2 years behind
schedule. Your observations on that.
Mr. Gootnick. Well, the cost escalation occurred really in
a number of different phases, and this is outlined in our
report. The initial estimate of $2,000 per plot and $8,000 per
home came originally in some of the activity approval
documents, the early documents that USAID submitted for review
that formed the basis of their initial goals and their costs,
the estimates of the costs.
Subsequently USAID got formal independent government
estimates, just before letting contracts and found that the
cost had risen. So that was the first escalation. A second
escalation occurred when they first got bids back which were
found to be actually higher than the independent government
estimates. And then finally, the Haitian Government's request
for the larger improved homes added yet another cost increase.
I am not specifically familiar with the issue of corruption
that you mentioned, although it is fair to say corruption is
felt to be endemic in Haiti. I will say that one of the
features of the rising costs would be the interest in using
local building materials. I know that USAID would have wanted
to use local building materials, but, for example, with respect
to concrete, when some testing was done, it was found to be
inadequate and would not have proved to be a sufficient home.
Chairman Royce. I understand.
We will go now to our ranking member Mr. Engel from New
York.
Mr. Engel. Thank you. Thank you very much, Mr. Chairman.
In your report you said that USAID and State did not brief
Congress adequately. What specifically should or could be done
about this?
Mr. Gootnick. Right. Our report cited the directive in the
supplemental appropriations and the Senate report to the
supplemental appropriations which directed State to provide
reports to the Appropriations Committees and to the Congress
broadly every 6 months for the first 2 years of the
supplemental. What we did is we went back and looked at those
reports and studied the extent to which those reports fully
complied with the various directives and found that the reports
were somewhat limited at times in their candor and in their
thoroughness about the progress and the challenges that were
being faced by the reconstruction effort.
I think it is fair to say that from State and USAID's point
of view, in addition to those reports, they would willingly
come up here and provide information at the request of various
Members and committees and had briefed on the Hill numerous
times. That said, we felt that the reinstitution of the
reporting requirement would assist Congress in its oversight.
Mr. Engel. Thank you.
How does USAID's reliance on contractors and NGOs impact
the effectiveness of USAID in Haiti, in your opinion?
Mr. Gootnick. Yeah. I don't think USAID could do its work
without contractors and NGOs in Haiti. I think one of the
interesting questions related to your question would be the
extent to which large either U.S. or multinational
nongovernmental organizations versus local organizations could
be used. And it is my general understanding that part of the
reason the costs escalated for these homes was that the prime
contractor or the prime builder USAID wanted to ensure was a
fully responsible contractor who was going to build according
to the standards and specs that they had sought, and that does
raise the price.
With respect to the actual digging in the earth and laying
of the bricks and mortar, I think they have worked as hard as
they can to identify local NGOs who can hire local labor to do
that work.
Mr. Engel. I am going to give you some quotes I would like
you to comment on.
After the earthquake, the administration said we
must, quote, deg. ``do things differently'' and
explained that we had to work with the Haitian
Government, quote, deg. ``as partners.'' It said we
couldn't have a, quote, deg. ``scattered array of
well-meaning projects,'' and we needed to, quote, deg.
``coordinate our aid and hold ourselves
accountable.'', unquote deg.
Obviously, I am not sure we have done those things. I would
like you to comment.
Mr. Gootnick. Right. Well, I recall that immediately after
the earthquake, when I think the spirit of cooperation and the
endeavor to build back and build back better first emerged,
there was an intention to work as closely as possible and to
assist in rebuilding Haitian Government capacity to take charge
of this rebuilding. And the first structure that was developed
after the earthquake, something called the IHRC, the Interim
Haiti Recovery Commission, which was cochaired by the then-
Prime Minister of Haiti and former President Bill Clinton, was
an effort to have the multilateral--the U.S. and the
multilateral community--join with the Haitian Government in an
effort that ultimately could be Haitian-led.
Unfortunately, that effort did not yield a highly
functioning Haitian Government entity or ministry that could
take over development. There has been an effort to restart a
similar process just in the past 6 months. I don't--the State
Department may be able to give you additional information. I
don't believe it has proceeded particularly far at this point.
Mr. Engel. What are--the report said, I know, a lot, but if
you could highlight the major--the major criticism, the major
thing that jumped out at you, what would that be?
Mr. Gootnick. Well, the first thing I would want to do is
put this in context that we were asked by yourself and Ms. Ros-
Lehtinen to look at two of the key efforts that USAID has
undertaken, so the industrial park project and the permanent
housing, two, arguably, key features, the signature features of
the development and reconstruction post earthquake.
They are by no means the only activities that USAID has
undertaken, but with respect to those two key activities, I
would say the key takeaways for me are, one, there is a
tremendous challenge in completing the feasibility studies,
selecting a site, and then going through all the steps that are
required to construct a port that would be part of the larger
apparatus of this industrial park, the power plant, the port,
the housing units and the complex itself. So the first takeaway
is the challenges getting that port up.
The second one is the housing. I think it is fair to say
that the initial estimates were just too optimistic. That, with
the best of intention, there was a goal of 15,000 houses that
between land, donor coordination, cost of building materials
and some weakness in the initial estimates were just not
destined to come to fruition.
Mr. Engel. Thank you.
Thank you, Mr. Chairman.
Chairman Royce. We go now to Ileana Ros-Lehtinen from
Florida, chairman of the Middle East Subcommittee.
Ms. Ros-Lehtinen. Thank you, Mr. Chairman, and thank you,
Ranking Member Engel.
As we discussed more than 1 year ago on June 22, 2012,
then-Ranking Member Howard Berman and I requested that GAO
investigate reconstruction efforts in Haiti specifically
pertaining to shelters and development of the surrounding areas
of the Caracol Industrial Park in Cap-Haitien. Thank you,
Director, and thank you to your team members who did a thorough
job in this GAO report. We commend you.
I was shocked to read the findings of the report and deeply
disappointed that our foreign aid continues to suffer from a
lack of real, targeted, comprehensive strategy to improve the
situation on the ground for the people of Haiti.
While Haiti, unfortunately, remains one of the poorest
countries in the Western Hemisphere, U.S. taxpayers have been
extremely generous in providing millions of dollars in foreign
aid and humanitarian relief to this Caribbean country. In fact,
Haiti is the largest recipient of foreign aid in the region;
however, it is our responsibility to ensure that these dollars
are being spent wisely and are showing the impact and the
results that are intended.
While I recognize that the environment in Haiti may be
difficult, we must do our due diligence in this committee to
hold U.S. officials accountable for the mistakes made in Haiti.
Over 3 years ago, this body acted to provide emergency relief
funds for Haiti to help the recovery efforts after the
earthquake. It is appalling that we find out from this GAO
report that only 50 percent of the funds have been obligated,
and a mere 35 percent have been disbursed.
Mr. Director, why do you think that USAID and State have
been so behind on getting these crucial dollars out the door?
And I am going to continue, also, given the fact that no U.S.
dollars go directly to the Government of Haiti, do you believe
that our government has correctly prioritized relief efforts
through reliable NGOs?
Another alarming finding from your report relates to
housing. USAID decreased the projected number of houses they
anticipated from 15,000 homes to now just 2,600 homes. This
means that less people will be helped, from 75,000 as
originally planned to now just 13,000 people. This translates
to less homes for less people at double the cost. This is
beyond unacceptable. It is scandalous.
And lastly, I would like to discuss the report--the port in
Cap-Haitien, as you pointed out in your report. According to
the GAO report, this port is 2 years behind schedule, may take
up to 10 years in finishing, and, in addition, as of June 2013,
USAID has yet to fill the position of a port engineer to
oversee the project. These misguided decisions are reckless and
only hinder our ability to help the people of Haiti, which is
our objective.
Let me be clear. USAID does not have the expertise, the
knowledge, or the background to build this port. Mr. Director,
do you agree with this assessment? To your knowledge, has USAID
ever built a port to this scale in the past and been
successful?
Mr. Gootnick. Thank you, Congresswoman. Let me take a
couple of different parts of that.
I have one figure that I think will perhaps speak to the
obligations and disbursements, the other one, because you
mentioned, Ms. Ros-Lehtinen, that only 50 percent had been
obligated and one-third disbursed.
This is a graphic that shows the timeline of the
supplemental and the obligations and disbursements. So, on the
horizontal axis you see time and on the vertical axis you see
percent disbursed. Way to the left you can see the January 2010
earthquake. Somewhat to the right you see the timing of the
supplemental. Then what you see is the slow curve upward of
obligations and expenditures, and a couple of things to remark
about that.
Money did not start to flow for about 1 year because there
was some time that was invested in planning and building
programs on the ground, and then what you see is a steady curve
upward over the ensuing 3 years now since the supplemental.
At 35 percent disbursed at 3 years, I would say that a
project like this, USAID would probably typically think of a 5-
year course for disbursement, and so I would think they would
want to see that curve bend upwards somewhat, but they are on a
trajectory where if, on some of these larger capital projects,
outlays increase toward the latter part of the project, that
they would be able to meet a large percentage of the spending
within 5 years. So that would be a perspective on the
obligations and disbursements.
You asked a number of other things. Let me mention the
knowledge on the ports. You are correct that to the best of our
research--and I think USAID concurred they have not built a
port of this magnitude for many decades, and they did seek the
expertise of a port engineer--what I think you will hear from
them is that the challenges recruiting a qualified, highly
qualified individual to come and live and work in this
environment, they had two solicitations they were unable to
fill with a qualified person. It may have taken them a couple
of years to sort that out. At a point here----
Ms. Ros-Lehtinen. Thank you. I am sorry. I am out of time,
and I like to be cognizant of that.
Thank you, Mr. Chairman, for your generosity.
Thank you, sir, again for an excellent report. We want to
help.
Mr. Gootnick. Thank you.
Ms. Ros-Lehtinen. We really do. We need to do better.
Chairman Royce. Mr. Gregory Meeks.
Mr. Meeks. Thank you, Mr. Chairman.
Let me ask you, listening to your testimony, it seems as
though one of the big mistakes that was made early on is the
estimates that were done on the cost to build the homes, the
cost of the port, et cetera. Can you--you know, did your study
tell us how was that so wrong? Because that seems to be causing
a lot of the problems today because of where we started in the
beginning as far as the estimates. How did we go so wrong with
the estimates? Could you give us a----
Mr. Gootnick. I think it is very clear with respect to the
housing that the initial estimates were based on homes that had
been built in Haiti prior to the earthquake, in part, and that
those estimates, while they would have formed a reasonable
basis for comparison, were probably used more directly than
they ought to have been to estimate the price of a home.
Secondly, I think USAID, as it proceeded through its
design, did not anticipate the costs that would be incurred to
build the site to the specs that they have achieved. So, if you
think about the complex of homes, they are building roads,
retaining walls, putting in electricity, putting in a form of a
sewage system, building--putting in street lights, putting in
walkways and the like, and that level of infrastructure, to
build a community from a greenfield, essentially, I think, was
an underestimation of the cost.
Mr. Meeks. Now, and just--that was--the other questions I
had was the infrastructure itself, because when I hear that
there was a question from the government in regards to indoor
plumbing as opposed to outdoor plumbing, it just seems to me
all of that should be--should have been done in the
infrastructure, because in my mind, in 2013, the best way to do
something is to have indoor plumbing so that you could have a
sewer system.
That should be--should have been computed in an estimate in
doing infrastructure, and then the coordination of the funds,
because when you have between the Haiti construction fund, the
USAID money, and then, I don't know, CAD who--I don't know
whether they had coordinated, any of that coordination, so that
that then gives you, I would think, a better idea of what you
are doing and how much it costs.
How did that coordination go, and why then--you know, at
the beginning stages we were not looking at indoor plumbing as
opposed to--as opposed to just having, you know--I can't even
imagine to say having outhouses in 2013.
Mr. Gootnick. I will be honest with you, Mr. Meeks. It is
not entirely clear to me exactly how the request for indoor
plumbing--where it came from in the Haitian Government, how it
was processed by the U.S. Government, and how the U.S.
Government came to its--how USAID came to the decisions to
respond to that. That we simply report as having happened. It
is a bit of a black box. I think USAID, I am sure, and State
can answer that for you. I would also be happy to try to look
into that on your behalf and get you an answer. I think it is
fair to say that the Haitian Government asked and we agreed to
have this improvement built into the structures.
Mr. Meeks. Let me also ask, I was just looking at what your
recommendations were, and I think--I don't know if you had a
chance to answer Ms. Ros-Lehtinen's question, but it says that
the GAO recommends that we hire a port engineer to oversee port
planning and construction. Has that been done?
Mr. Gootnick. Right. At the time we issued our report,
USAID issued its second solicitation for a port engineer,
roughly timed with the issuance of our report. So they agreed
with our recommendation. They indeed proceeded with a
recruitment effort. That recruitment effort, as I understand
it, did not yield a qualified individual who was willing to
move to Haiti under the circumstances of the job offer, and so
they reinvested, I think, in working with Federal Government
agencies, particularly the U.S. Army Corps of Engineers, who
have that expertise.
Mr. Meeks. So then basically you are saying they could not
find that person, so you are trying to--you go onto plan B
since that person has not--couldn't find it, correct?
Mr. Gootnick. I think that is a fair characterization.
Mr. Meeks. Okay. And second it says, provide timely
community support mechanisms for each new settlement to help
ensure sustainability of its permanent housing program. Has
that been done?
Mr. Gootnick. Right. A little context in that. If you think
about taking a greenfield and converting that into hundreds of
homes, and then identifying beneficiaries, and providing them
with that housing, particularly where employment opportunities
may not be entirely proximate to the housing development, there
are a range of community development challenges that emerged.
First of all, how do individuals pay the rent? What kinds of
rents are required? Are they building toward ownership? Who
runs this community? Who is the community--where is the
community leadership? Where is community structure? What are
some of the rules? And USAID had funded efforts to obtain
services, expertise basically, to allow communities to help--to
help communities build that kind of expertise.
That has been made available to some of the early
communities, but we have not been given certainty that there is
funding to do that in each of the communities that is to be
built. We think that is important, and it will enhance the
sustainability of these communities that are being developed.
Mr. Meeks. Thank you.
Chairman Royce. We go now to Mr. Dana Rohrabacher,
subcommittee chairman for the Europe Subcommittee.
Mr. Rohrabacher. Eurasia and Emerging Threats. That is the
exact title.
Chairman Royce. That is the full title. You have 5 minutes,
Chairman.
Mr. Rohrabacher. Thank you very much, Mr. Chairman.
I think that when we are coming to grips with--here in the
United States with our ever-increasing debt that is--as we all
realize it is unsustainable for our own economy, it behooves us
to take a look at what we are doing as a government and to see
if there are not ways that we can do things more effectively
and efficiently, and what we can afford and what we can't
afford to do, and that, in particular, deals with how we are
dealing with exactly the situations that we are examining today
in terms of our assistance to other countries.
I think that, Mr. Chairman, and specifically, we are going
to have to determine whether the United States can still be
involved in long-term development, or whether the limited
amount of money that we have now because of our own debt
situation will mean that we have got to focus instead on
emergency and disaster assistance as the essence of American
foreign aid as compared to long-term development, or especially
I don't think that we can any longer afford ongoing subsidies
to foreign governments, especially when the foreign government
seems to indicate that there are corruption problems within
that society.
First of all, specifically, the homes that were being built
that we are talking about here in Haiti, are they owned by the
occupants of the house?
Mr. Gootnick. It is a good question. What my understanding
is of the way this will work is, as beneficiaries move in, they
will be paying, and I think the first settlement is
approximately $35 per month.
Mr. Rohrabacher. To whom?
Mr. Gootnick. To the Haitian Government.
Mr. Rohrabacher. To the Haitian Government.
Mr. Gootnick. I would actually want to make sure I am
correct. Yes, to the Haitian Government. And what that will do
is that will build toward ownership of the home. Because it is
government land, they will not in the end own the land, but
they will own their home, so essentially they are paying the
mortgage.
Mr. Rohrabacher. So, we are having--we are setting these
people up. They don't really own the home until they have made
their payments. The Haitian Government may end up owning the
homes.
Mr. Gootnick. Well, but the homes were built on Haitian
Government land. Universally the permanent shelter that is
being constructed is, at the end of the day, on Haitian
Government land. The U.S. Government is the donor of this
effort. And I would defer to my colleagues at State and USAID,
but----
Mr. Rohrabacher. Sounds like we set up another scenario of
corruption there, to be frank. And it is one thing for us to--
for us to have come into this project at all, we should have
expected the Haitian Government--Mr. Chairman, we should have
expected the Haitian Government to donate the land to whoever
occupied the house rather than leave whatever petty bureaucrats
in that country who rape their own people with that kind of
power over a project that we are financing. Anyway, that sounds
like something we need to pay attention to.
You know, the Chinese do things a lot differently than we
do when they have projects like this, but let me ask you. We
used--and are we using local contractors to build these homes?
Mr. Gootnick. We are using a range of partners that are
primarily larger NGOs or in some cases multilateral
institutions that have the capacity to perform as the prime
contractor. In turn, it is my understanding that a lot of the
actual labor is being conducted by Haitians.
Mr. Rohrabacher. Okay. So we are giving money to an
organization that then doles it out to build the homes that
then actually the Haitian Government ends up controlling.
The Chinese, by the way, just so you will know, I am sure
you are already aware of this, they come in, they don't do
that. What they do is they bring in their own workers, their
own people, and when they--they build a project, and then they
leave the project. They say, here are the homes, this is what
we are giving you, but they are not deeply involved with the
murky bills of doing business in a Third World country where
there is so much corruption and so much of the money then is
wasted through corruption.
Let me ask you a little bit about the specifics. Well, I
have got about 9 seconds, but I understand Cheryl Mills,
because this was such an emergency situation and the task was
so daunting, that she was given certain authority and a vehicle
of trying to make this work in Haiti that it went out of the
normal process the State Department uses for such emergency
measures. How has that worked out as compared to what the
normal procedures would have done?
Mr. Gootnick. I would have to defer to the State Department
on that. In general we have been working with the Haiti Task
Team and the Office of the Haiti Reconstruction Coordinator,
USAID and State Department respectively. If they are working
above that level within their own respective departments, I am
less familiar with that.
Mr. Rohrabacher. Well, we are going to have to find better
ways of how we have limited amount of money now as compared to
what we have had in the past. Our own country can't sustain the
course we are on. We have got to do things better, and frankly,
there is just as much corruption as there ever has been.
Thank you very much.
Chairman Royce. We go now to Mr. Sires of New Jersey.
Mr. Sires. Yes. Okay. Did you mention before that the
houses were 450 square feet? Is that what you said?
Mr. Gootnick. Four hundred fifty square feet. Four hundred
fifty square meters. I will have to get the precise answer for
you, but my understanding was 450 square feet.
Mr. Sires. And this is a request by the government to make
it that large?
Mr. Gootnick. Yeah. They went from about 200 and--I am
going to look this up for you, but I believe they went from
about 275 square feet to 450 square feet.
Mr. Sires. 275 square feet. That is a room.
Mr. Gootnick. It is a small house. As they are constructed,
they are a one-bedroom with a concrete pad where the resident,
if they choose to, could add a second bedroom. So, it is a
bedroom, a living area, a small bathroom, and a kitchen.
Mr. Sires. I mean, I don't think it is outrageous that the
government requested that you make it a little larger and put a
bathroom in there. I assume that is the reason we agreed to it.
Mr. Gootnick. Again, I am not--I wouldn't claim to have a
great deal of knowledge about the discussions that took place
between the U.S. and the Haitian Government to agree to it. I
simply know that rather late in the day, the Haitian Government
asked for this improvement, and the U.S. Government agreed to
it.
Mr. Sires. And you say they own the land, the government
owns the land?
Mr. Gootnick. Yes. In all cases there are eight sites that
have been developed. We have a map in our report that will show
you the location of the eight sites. One is in the Port-au-
Prince area, four are around the industrial park, and two are
in the St-Marc corridor, and in each case, at the end of the
day, these ended up being on government land. Initially USAID
had hoped to work with private entities who would donate the
land. Part of their--maybe a large landholder would donate
something in exchange for enhanced value of their own land and
the like. My understanding is that, at the end of the day, this
did not work out.
Mr. Sires. Do you know if any homes have been built where
they would own the land?
Mr. Gootnick. The homes are all being built on government
property, and, as I indicated, they will pay a form of rent
where after a period of time they will own the home. They will
not own the land.
I think that what--my understanding is that between the
U.S. and the Haitians, there has been some assurances that
given the vagaries of land ownership and title in this country,
that the homeowners have been assured that when they pay their
mortgage, if you will, and ultimately own that house, that they
will have a secure title to their home.
Mr. Sires. And the land.
Mr. Gootnick. The best of my understanding, not the land.
That is correct.
Mr. Sires. So no matter what you paid, you still don't own
the land that you are there.
Mr. Gootnick. Don't own the land. Don't own the land, you
own the house.
Mr. Sires. So if the government ever wanted to do anything
and take the land, they could basically remove these people.
Mr. Gootnick. Right. It is fair to say that the vast
majority of Haitians, certainly in Port-au-Prince, do not own--
even if they own their home, they don't necessarily own the
land. If they are a tenant, they don't necessarily--their
landlord and him or herself doesn't necessarily own the land.
Land ownership is obscure, I would say, in much of Haiti.
Mr. Sires. Can you talk a little bit why you think there
were so many delays in the reports and the omissions in the
report? Is it because maybe the--we just didn't do it right, or
the government is not a good partnership in this process?
Mr. Gootnick. With respect to the 6-monthly reporting
requirement that State Department had, I think it is fair to
say that the reports emphasized the more positive aspects of
the development--the reconstruction effort, and that we felt
that additional candor about problems and challenges would give
a more rich context and more accurate view of what was taking
place.
Mr. Sires. Do you know if the government is a partner or an
obstructionist in all this?
Mr. Gootnick. Haitian Government?
Mr. Sires. Yes.
Mr. Gootnick. I would let, again, the agency comment on
that.
Mr. Sires. You take the Fifth? Okay.
Thank you, Mr. Chairman.
Mr. Salmon [presiding]. Thank you.
Mr. Gootnick, according to your report, USAID will build
only 2,649 of the 15,000 houses originally. And I am just
wondering, is this an acceptable outcome? I have heard other
folks talk about, you know, the--why we have had the mistakes
in projections and everything, but, realistically, could this
have been avoided?
Mr. Gootnick. I think it is regrettable that the goal will
not be achieved or anything like the original goal. I think
when you step back from the permanent--the question of
permanent housing, it might be also useful to look at some of
the efforts regarding the severe housing shortage, indeed the
disaster around housing that occurred after the earthquake, so
that in the immediate aftermath, there were a range of efforts,
some of which the U.S. Government took the lead on, some of
which they were a participant in, anything from simply removing
rubble to getting some of the--the initial temporary shelter in
the camps established, to getting basic safety and sanitation
in some of the camps, to some of the transitional housing
structures that were built, some of the damage assessment in
Port-au-Prince that was done. So these are housing-related
activities where I think it is fair to say that the U.S.
Government played a key role and did achieve some very positive
results.
With respect to the permanent housing, there have been some
real shortcomings in what they hoped to achieve and what they
have achieved.
Mr. Salmon. Also, USAID has committed $170.3 million to
construct a power plant and a port to support the newly
developed Caracol Industrial Park. And according to a recent
USAID feasibility study, the park port will cost anywhere
between $117 million and $189 million, more than the $68.1
million USAID planned to invest.
Is it likely that the Haitian Government or private-sector
investors will ever cover the shortfall? And what happens if
USAID can't get the additional investment? Would it have been
wise to secure funding agreements prior to construction?
And then, finally, USAID has informed the committee it
plans to hire a port engineering expert by the end of this
year. I heard you talk about the fact that they haven't had any
responses yet. But even if they do get that engineer, would
that alone be sufficient to cure the problems they are facing,
and what else should be done?
Mr. Gootnick. With respect to the shortfall on the funding
of the port, I think it is important to recognize that USAID's
investment was not intended to be the entire investment
required to build and operate this port. The port is being--has
been envisioned as a four-phased project. And right now USAID's
$60-some million that remains in that sector will cover the
majority, but I don't believe all, of phase one. USAID I
believe hopes that phase one would be enough to get the port up
and running, although would not have the full capacities,
obviously, of the completed construction over the four phases.
For the four phases, there is a significant shortfall. And
the--the effort is to identify someone in the private sector
who wants to--who will invest in the building of the port and
then obtain a concession for the running of the port and thus
recoup some of their investment.
Mr. Salmon. [Inaudible.]
Mr. Gootnick. I wouldn't say I am the best person--have the
best expertise to answer that.
I would say it would be a large investment, and the private
partner would need a concession at the port that was sufficient
to recoup their investment. And that is a private-sector
calculation I couldn't--I can't do for you.
Mr. Salmon. With that kind of a shortfall, would it be
prudent of us maybe to hold back on that money until there is a
successful game plan?
Mr. Gootnick. Well, I think there is some degree to which
the port, the power plant, the housing, and the industrial park
are interdependent. That is not specifically to say that,
without the port, the other parts of that larger project
couldn't survive. But it certainly is standard economic logic
to suggest that that port will reduce the transportation costs
for the industrial park, allowing them to expand, hire more
folks, provide more wages that will support housing, make more
use of the power plant, and support payment for the utilities
that the power plant provides. So there is some synergy to
these projects that I think would make it a greater challenge
for the larger project to succeed without the port.
Mr. Salmon. I guess what I was trying to get at, though, is
does it make sense, if it is going to be that much of a
shortfall, would you recommend that we don't spend that $68
million and build something that may not be able to be
completed?
Mr. Gootnick. We have not made that recommendation. We have
made no recommendation to halt funding or otherwise withdraw
funding. I would say that USAID has already invested a couple
years in feasibility, is continuing to invest in feasibility,
and has real plans to move forward.
Mr. Salmon. Thank you.
Mr. Connolly.
Mr. Connolly. Actually, Mr. Chairman, I would be glad to
defer to Ms. Bass.
Ms. Bass. Thank you very much, Mr. Connolly.
I have a couple of categories of questions I wanted to ask
you about. One is Feed the Future and the status of Feed the
Future.
But before that I wanted to understand more about the
contractors that are used, and not necessarily for building the
port, but all of the other projects that are going on. I think
you said they are all NGOs?
Mr. Gootnick. My understanding is that they are
nongovernmental organizations; in one case, it is a development
bank. There are other large actors who are involved in the
primary contracting to build the homes.
Ms. Bass. And how do we find the NGOs? You know, are they
U.S.-based NGOs? International? Haitian?
Mr. Gootnick. Well, the cost of this home is largely the
cost that is--the funds that are transferred to the builder.
The builder then has outlays to achieve the project and as an
NGO is not in--anticipating meeting a profit, but providing the
service.
Ms. Bass. Right. And I am just trying to get at
understanding the vetting process and how we hold NGOs
accountable, whether they are nonprofit or whether they are
making profit. How do we recruit them, vet them, hold them
accountable?
Mr. Gootnick. Right. It is an important question, and I
think it is a key priority for USAID throughout its entire
enterprise. It has been a priority of the USAID Administrator
to use local NGOs and improve capacity of local NGOs wherever
possible.
I think the challenge, which USAID could speak to, is, just
as you articulate, ensuring that you have a partner there who
can act accountably with respect to the funding and also
provide the service that you have asked them to provide.
Ms. Bass. So from your point of view, though, in terms of
the accountability and the vetting, you wouldn't know; is that
what you are saying? I know you are not--I know you are not
USAID, but----
Mr. Gootnick. Right. We have done a variety of studies at
GAO in other parts of our portfolio where we have looked at
USAID's oversight of its grants and its contracts. And I think
what we found is that there is this tension: When you are
working with a U.S. NGO, you have an enhanced ability to ensure
accountability; when you are working with a local NGO, you have
an opportunity to improve local capacity. And this is a balance
and a--and progress that USAID is trying to make with its USAID
forward, but it faces real challenges in this regard.
Ms. Bass. So ``challenges'' means there is a method of
accountability or----
Mr. Gootnick. I would say it is not a one-size-fits-all.
You have got to look in a case by case. So if you look at Haiti
in particular, by and large the prime recipient of funding has
not been a local NGO. I can't say that without exception across
all of the reconstruction effort, but with respect to the
projects we are looking at, they have not gone directly to the
Haitian--Haitian civil society, public sector or private sector
to do this work. Indirectly----
Ms. Bass. So who have they gone to?
Mr. Gootnick. Haitian laborers contributing to the
building.
Ms. Bass. Got that. I understand that. And I think that is
great. But who does the money go to? If it is not Haitian NGOs,
who is----
Mr. Gootnick. Well, I mean, there are a number of large
NGOs, some whom you would recognize. The American Red Cross and
the like are the types of organizations that are prime
recipients.
Ms. Bass. Okay. And are you able to comment about the
status of Feed the Future?
Mr. Gootnick. Excuse me?
Ms. Bass. Are you able to comment about the status of Feed
the Future in Haiti, the $88 million that has been spent so
far?
Mr. Gootnick. You know, I would be happy to take questions
for you and get back to you on that. I am not our agency's
expert on that issue. I certainly know that hunger in Haiti was
on the rise prior to the earthquake, and it has become more
acute and particularly with the cholera epidemic and certain
natural disasters subsequent to the earthquake, two hurricanes
that have buffeted the island. There have been real challenges.
And deforestation is a huge problem.
Ms. Bass. Okay. Well, we could save that for the next
panel. Thank you very much.
Mr. Connolly. Mr. Chairman?
Mr. Salmon. Mr. Connolly.
Mr. Connolly. I would ask unanimous consent that our
colleague Barbara Lee be allowed to participate in this
hearing.
Mr. Salmon. Absolutely.
Mr. Connolly. I thank the chair.
Mr. Salmon. Chair recognizes Mr. Marino.
Mr. Marino. Thank you, Chairman.
Over here, sir. Thank you for being here.
Have you or anyone from State, if you can speak to it, any
U.S. entity or person, discovered corruption, fraud, or theft
taking place in Haiti on these projects?
Mr. Gootnick. On these two projects I am not aware of any
specific charges or findings of corruption.
Mr. Marino. Is there an entity or is there a person
responsible for investigating the potential for corruption?
Mr. Gootnick. With respect to ensuring that both the
financial and programmatic controls are in place such that the
funds are being used for intended purposes, USAID is going to
have grants, or contracts managers, or oversight functions
within its--within the Office of the Haiti Coordinator--excuse
me, within the Haiti Task Team within the USAID mission that
are looking to ensure that the funds are being spent as
intended.
Again, I don't have any specific observations about
corruption or lack of accountability on these projects. That
said, they are, with respect to housing, clearly not meeting
some of their targets.
Mr. Marino. Do you have access or have you had access to
any of these reports that may have been put together to
determine whether the money is going where it is supposed to be
going and we are getting the product in return?
Mr. Gootnick. You know, that was not a key part of the
scope of this project, so I would have to honestly say I could
look into that and get back to you. But I don't have specific
information for you.
Mr. Marino. Is there a U.S. entity on the ground, for
example, let us say someone to review initial plans and prints,
someone to review initial cost; if a load of concrete is coming
in, is it the grade that was spec'd out, is it being properly
laid, are the materials that are used to build a house, are
they materials that were spec'd out, or are they ending up
being a lesser quality? Is there anyone that reviews this on
the ground as the building is taking place?
Mr. Gootnick. Right. In general I think I would point to
two types of oversight of that kind of accountability
challenge. One, the initial contractor or grantee is going to
be required to provide reports to the--to USAID. And,
secondarily, at the USAID mission there is going to be
oversight of those reports and--and then that information that
comes forward.
The inspector general is also--the regional inspector,
again, based in El Salvador has done a lot of work on the
ground in Haiti. But the general accountability and oversight,
the general controls for those projects are--tend to be managed
within the USAID mission.
Mr. Marino. So you stated that--previously that much of the
labor is and should be the Haitian people, correct?
Mr. Gootnick. That is my understanding, yes.
Mr. Marino. Now, if an individual, a business person, man
or woman, in Haiti has a construction--has a cement company, is
there someone--is there ever a situation where a representative
from the United States is on the ground making sure that the
product that is on site is the product that we originally paid
for?
Mr. Gootnick. Right. Well, I mean, concrete is a good
example because it is my understanding that in these building
projects there has not been sufficient information to suggest
that locally procured building materials are satisfactory. And
so part of the escalation of costs is the importation of a lot
of the building materials to satisfy the demands for quality.
Mr. Marino. Don't you think, then, there could be a cost
savings, there could be time savings if there is actually a
representative of the U.S. as a project manager on site making
certain that we are getting what we pay for, or a series of
managers?
Mr. Gootnick. Honestly, Congressman, I think that is a
question I am going to have to let you direct to USAID. I don't
have the answer for you.
Mr. Marino. I have 30 seconds left. Can you again expand on
a little bit how is private--what is USAID doing and what is
your conception of more private enterprise getting involved in
projects like this?
Mr. Gootnick. Well, the port itself is an effort to build a
public-private partnership as to say for USAID to partially
fund the port after feasibility studies have been done, designs
have been completed, and to identify what would be a large--in
Haitian terms, a very large investor to contribute to
completing the port and becoming the concessionaire. So there
is one example.
Mr. Marino. I see my time has expired, and I want to keep
within my 5 minutes. Thank you, Doctor.
Mr. Salmon. Mr. Vargas.
Mr. Vargas. Thank you very much, Mr. Chair. Appreciate the
opportunity.
I have to say I was much more scandalized before I got
here, because now that I am here, I think some of the answers--
some of the questions have been answered. I looked at the 15--
that you are going to build 15,000 homes. That was the
original. But turns out that that was a pie in the sky, that
those numbers were way off, one; and, two, that you were
looking at building them in Port-au-Prince where it would be
infill as opposed to raw construction. So infill is a lot
cheaper. I think any of us who have worked in the business know
that. So infill would have been a lot cheaper, but because the
property wasn't secure, you couldn't get simple fee title
there, you had to build somewhere else, so you have to put in
the infrastructure.
Then secondly, interestingly, the houses were going to be
275 square feet. Just so you understand what that is, a house
of 15 times 18 feet is 270 square feet. The average family size
of a Haitian family is four people. So you are going to put
four people in a room of 15 by 18. So someone came up with the
outrageous idea that they should put them instead in a room of
21 by 22 square feet.
I know that area well because a few years ago I built my
garage. That is how big my garage is. So somewhere the scandal
is that you are going to build a house the size of an American
suburban garage to put in four people, and the outrageous
thought that they might have a bathroom.
You know, my daughter spent the last two summers, the
summer before last summer, in Nicaragua, up in a place called
Los Lipes, way up in the jungle, and she didn't have a
bathroom, which I was grateful for because now she doesn't
complain at home, a 16-year-old. And this year she was in
Paraguay for the summer working for Los Amigos de Las Americas.
Again, they didn't have a bathroom, it was about 100 feet away,
which, again, was fantastic. So she does not complain at home
again about any of the issues we have.
But the notion that we couldn't build a bathroom for these
people, I think of course we should. You know, we are there to
help.
And the other thing I guess I was thinking was this. You
know, we--this is a 7.0 quake that they had, and they lost--go
through the statistics--they lost so many people. We had a 7.2
3 months later in Baja, California, about 100 miles from my
house. In fact, I thought it was the big one, and I grabbed my
6-year-old daughter and was running out the door because I
thought, oh, hell, this is the big one. But it turns out it was
100 miles away. We had four people die, only four people. We
had, you know, some damage. We didn't have hundreds of
thousands of people; we didn't have that kind of damage.
So you don't want to build houses that are so cheap that
they are going to fall down again. That would be stupid. So we
build these houses, you know, little tiny ones. People get in
there, they fall in them. Whose fault? It is our fault. You
know, so I--the scandal that I thought I was going to have and
beat you up on kind of got answered, just to be frank.
So I--I guess I would--I would just ask a little bit more
about the issue of that port, because the home one kind of got
answered for me. But the issue of the port. It is very
difficult to build that kind of infrastructure, it is difficult
to get an engineer there. How is that going to be worked out
ultimately?
Mr. Gootnick. Well, I think what--what USAID is thinking at
this point is there is an increased recognition that the time
needed to design and build a port was longer than was
originally put forward in the activity approval document and
the U.S. strategy. So I think there has been a rethinking of
just the time horizon necessary do something of this scale.
Mr. Vargas. Okay. And the other thing I guess that I
thought, I thought more money had actually been spent on the
project. A lot of the money still hasn't been spent----
Mr. Gootnick. Right.
Mr. Vargas [continuing]. Right? So they still seem to have
the ability to pay for these things, Right?
Mr. Gootnick. Well, some of the money that is projected to
go into the port and some of the money that is going into this
housing, the vast majority of it is from the supplemental.
There are some funds that are being contributed from annual
appropriations, ESF appropriations, that have plussed up some
of these over time to ensure there is enough funds to do the--
to do the work.
Mr. Vargas. Thank you. I yield back. Thank you, sir.
Mr. Salmon. Thank you.
Mr. Weber.
Mr. Weber. Thank you.
Dr. Gootnick, you are the Director of International Affairs
and Trade at the GAO. How many employees are in your particular
department?
Mr. Gootnick. The International Affairs and Trade team is
about 120, 125. GAO-wide we are, with downsizing, under 3,000
now.
Mr. Weber. But I am most interested in the department that
has oversight of what we are discussing here today. One hundred
twenty under your supervision?
Mr. Gootnick. No, no. One hundred twenty in the group as a
whole. We work in a matrixed effort and work with staff across
a number of different engagements.
Mr. Weber. And how about under your supervision?
Mr. Gootnick. Well, to do this work, for instance, there
would have been three or four of us over time.
Mr. Weber. Three or four of us over what time period?
Mr. Gootnick. This work was done over the course of about a
year, okay, but not by any means full time by all of those
individuals.
Mr. Weber. So we are--Congress has appropriated this money.
Are you telling me that three or four individuals are
responsible for watching all that goes on over in Haiti----
Mr. Gootnick. No----
Mr. Weber [continuing]. As it relates to this project, this
relief effort?
Mr. Gootnick. No. I think we respond primarily to requests
from committees of jurisdiction, and also respond to mandates
or directives that are put in legislation. So when the
supplemental was established, we were asked to do work, and
this is our third report. In addition to GAO, you are going to
have the inspector general doing work based out of El Salvador,
and then you are going to have the internal oversight of the
program itself.
Mr. Weber. So all in all would you say there is 10
American--or, I guess, government employees watching this
process? Twenty? Thirty?
Mr. Gootnick. I would have a hard time trying to put that
kind of a number on it, sir. I would say that there are
different parts of the oversight community that are brought to
bear on----
Mr. Weber. So safe to say it would be a good move for us to
try get a particular number, somebody who has accountability
and responsibility for oversight in its entirety.
When you say the inspector general from El Salvador--I am
looking at a map here--I can't help but notice that the
Dominican Republic is immediately east of Haiti. You have got
Puerto Rico, British Virgin Islands, Jamaica. Of course, it is
southeast of Cuba; looks to be, I don't know, 20 or so miles
maybe. Are all of these countries helping in any form or
fashion?
Mr. Gootnick. Well, the--the inspector general at USAID was
provided $5 million, I believe--I will check to make sure that
is correct--in the supplemental appropriation to provide
oversight of these funds. So there is one way in which the
oversight of the project was resourced, if you will.
GAO does not operate in quite the same way. We are not
looking for a directed appropriation for a specific project. We
operate with our annual appropriations to try to respond to
congressional interest----
Mr. Weber. Okay. Let me move on just a little bit here. Do
you have any knowledge, is the Dominican Republic, Puerto Rico,
Jamaica, and others, are they helping with the relief effort?
Mr. Gootnick. Many countries have been involved. I can
speak to the largest donors. None of those, I think, fall
within the very largest donors. Puerto Rico obviously part of
it.
Mr. Weber. Okay. You also mentioned that there was a South
Korea garment facility, I think, in your comments?
Mr. Gootnick. Right. A very large South Korean firm was a
key part of the public-private partnership that was the genesis
of this industrial park.
Mr. Weber. Have they invested money?
Mr. Gootnick. Sure. They are operating a--they are
operating a firm. They are producing clothing and shipping it
to the United States as we speak.
Mr. Weber. Do we have sufficient safeguards in place that
they won't use what we would--is tantamount to either slave
labor or child labor?
Mr. Gootnick. It is an important question. I think it has
been looked at. There is a minimum wage in Haiti, which is $5--
approximately $5 a day, as I understand it, and they are being
paid at minimum wage. I can't speak directly, but I am
certainly aware through--through press and other sources that
labor conditions are being observed and monitored.
Mr. Weber. Okay. Let me just comment on the 450-square-foot
homes. When I was in the Texas Legislature, my wife and I are
RVers, recreational vehicle owners, and we travel and camp. I
have a 40-foot Fifth Wheel that is 8 feet wide. It is 320
square feet. It sleeps 12 people. Wouldn't want to live in it
full time if I didn't have to. But I can't tell you how much--
and I did for 6, 5 months out of each--every other year in the
Texas Legislature. But I can tell you that you make do with
what you can.
And I lived and we have had kids live in the 320-square-
foot area for a week or 2 at a time. It is not the most
optimal, but, you know, a grateful people, of course, ought to
say 450 square feet with a bathroom would be just tremendous.
So I just want to make that comment. Thank you, Doctor.
Mr. Gootnick. And I would just add for the record that if
you look at studies of the poor in Haiti, there are many
studies that show that of the--of those in extreme poverty in
Port-au-Prince, the amount of square footage that you have to
sleep, you may literally need to sleep in shifts because there
aren't--there isn't enough square footage for people to lie
down.
Mr. Weber. Thank you very much.
Mr. Salmon. Mr. Bera.
Mr. Bera. Thank you, Mr. Chairman.
Thank you, Dr. Gootnick, for your testimony. Let me just
look at some of the numbers. Six hundred fifty-one million
dollars was what was allocated for housing; is that correct?
Mr. Gootnick. Six hundred fifty-one million dollars was
allocated across USAID's entire portfolio in a supplemental
appropriation.
Mr. Bera. Okay. Great. And the goal was 4,000 new homes,
and then leverage that with 15,000 plots, and again leverage it
for 11,000 additional homes.
Mr. Gootnick. Correct.
Mr. Bera. Is that correct?
I found Mr. Vargas' comments actually very interesting. We
are not talking about large dwellings; we are talking about,
you know, by U.S. standards, you know, very small dwellings and
very small shelter. But what worries me is, looking at our
briefing materials, is it correct that 54 percent of the
population lives on about $1 a day?
Mr. Gootnick. Yeah. I think of it as 70-plus percent live
on $2 or less, so some subset of that is going to live on $1 a
day.
Mr. Bera. So it almost--you know, again, as I am thinking
about it, you know, as we have questioned USAID and interacted
with USAID, we are almost addressing issues at U.S. standards
as opposed to looking at it in capacity building from Haitian
standards. You just commented on, you know, the square footage
that, you know, is available for a vast percentage of the
population having to sleep in shifts. More a comment as opposed
to a question: I just wonder if there is a better way to
leverage the funds to impact a larger percentage of the
population, and I would be curious as to your thoughts, and it
may be a question better for the USAID folks.
Mr. Gootnick. I would only comment that this is a
population that has lived in deep and endemic poverty for many,
many decades. And so how you reach a high percentage of those
citizens with scarce dollars is probably the challenge that our
development agencies struggle with every day.
Mr. Bera. But we are talking about pretty large sums by
Haitian standards in terms of the amount of aid that was raised
and, you know, even the amount of dollars that Congress
allocated. It seems as though a fairly large amount and a very
poor country that is going to address a small segment of the
population as opposed to really going after root-cause issues
to try to develop some systematic change to actually address
the folks that probably were most impacted by the earthquake as
well, which I would imagine the poor were disproportionately
impacted.
Mr. Gootnick. I think with respect to the housing, that is
a very fair criticism, that at the end of the day, a relatively
small number of individuals will be beneficiaries. I think in
fairness to the program effort it has to be looked at in the
context of other--of the activities that related to shelter in
the immediate aftermath and in the months and years that ensued
that don't end up yielding permanent housing, but maintain
people's roof over their head for some period of time after a
huge natural disaster.
Mr. Bera. And if I look at some of what is in our briefing,
Haiti also has one of the largest wealth disparities in the
world with 68 percent of the total national income accruing to
the wealthiest 20 percent.
I have to also believe that, you know, in construction and
land ownership and so forth, with the level of corruption, I am
worried that some of those dollars that we are investing also
disproportionately are benefiting the wealthiest as opposed to
leveraging those dollars to benefit the folks that are most
affected. Would that be a fair----
Mr. Gootnick. Yes. Haiti, I think, in--is one of the most
inequitable society--government--countries in the world. And
there is plenty of academic literature to suggest that the more
inequality, the harder it is to achieve development outcomes.
Mr. Bera. I have got about 45 seconds left. One other
thing, in a prior hearing in this full committee, in terms of
promoting democracy, promoting fairness, one of our witnesses
said one of the keys is land ownership, is property ownership,
even if it is a small plot, to give you something and give you
a stake in the game. And if I understand correctly, land
ownership is very rare, and property rights are very rare. Is
that--that is correct in Haiti?
Mr. Gootnick. Yes. I would characterize it as obscure and
arcane. But I think it is fair to say that in many cases it is
not clear who owns land that an individual or group of
individuals may be living on, and in all likelihood, with
respect to being able to actually claim full title to land, it
is a very small number of large landholders.
Mr. Bera. So I would suggest--and I am out of time--but one
way to perhaps start fundamentally changing and putting in the
seeds of democracy and stability would actually be looking at
that rule of law and looking at that land ownership. We can't
mandate that, but, again, if there is a way that we can
leverage our resources to try to put in some of that rule of
law and some of those land ownerships. That is just a comment,
not a question.
Mr. Gootnick. And if I could just remark, I think that is a
very important comment, and there are programs through this
reconstruction effort that are trying to get at that we, GAO,
did not look at and may be a good topic for discussion with the
subsequent witnesses.
Mr. Bera. Thank you.
Mr. Salmon. Mr. Perry.
Mr. Perry. Thank you, Mr. Chairman.
And, Dr. Gootnick, thanks for coming. I understand and
recognize that you are not a representative of USAID, you are
GAO. So this is frustrating to listen to, quite frankly. And I
know you don't have all the answers, but you are the person in
front of us right now.
And being a proponent of foreign assistance, and we have a
lot in America, so we have a lot of responsibility, and these
folks are our neighbors, and we should help. But it is hard to
advocate to my constituents, the taxpayers who are paying the
bill, who are willingly paying the bill, but say, you know, we
want to get the most out of our dollar, and you are sending it
here, and we are obviously not.
And I wonder, what are the systems of accountability? I
mean, I see this report from the GAO, the Government
Accountability Office, and the answer is kind of like, well,
more reporting to Congress will help. More reporting of bad
information to Congress won't help. What will help is either
the same amount of reporting, more reporting, or less reporting
of good information, of things that happened where we got the
most bang for the buck. But more reporting is not going to
change that. We are just going to be unhappy with the results.
So what are the current systems of accountability for the money
that is being spent?
Mr. Gootnick. Well, I think with respect to our
recommendation for reporting, we cited not only the end of the
reporting requirement under the supplemental, but the quality
of the reporting that came forward during the supplemental. And
just as you implied, it would be more helpful in Congress'
oversight to the extent that the reporting that was provided
gave a full and accurate picture of the progress, but also the
challenges and shortcomings of the effort that had taken place.
With respect to the accountability and oversight broadly,
as I think we have discussed, there are a range of mechanisms
that seek to get at oversight and accountability of government
expenditures in this kind of environment.
Mr. Perry. They don't seem to be working, in my estimation,
based on what I have heard. And I don't know if I am getting
partial information, but these statistics, if we--if we live by
them in our personal lives at home, we are going to build this
many houses, and we are about a third of that for the same
amount of money, and somehow we would accept that as okay, we
would not accept that. We would not accept that anywhere here.
Somebody's head would be on a platter.
Who in--is there one point of contact? Is there one person
at USAID that is responsible for this project? Who is at the
top?
Mr. Gootnick. I think that would be the Office of the Haiti
Coordinator would be the first place you would want to go.
Mr. Perry. All right. So I would recommend to the committee
that that person come--come to this committee and give us a
report. I----
Mr. Gootnick. I think he is your next witness.
Mr. Perry. Is he? Good. That would be great. That would be
great. So get ready.
You know, I almost don't know where to start. I mean, it
seems to me when you are living in a cardboard shack in a
tropical country, having a 450-foot home--arguably, it is a--it
is a probably a square cinder block or concrete structure with
a roof over the top of it, and maybe a window, a couple windows
and a door. If you are used to living or you have been forced
to live in a cardboard home with a mud floor, with an open
sewer out front--because I have been to some of these Third
World countries, not particularly to Haiti, but I have been to
other environments that are similar--it is a great step up to
move into 450 square feet of concrete, enclosed, roof-covered
domicile where you cannot be subject to the bugs and the
environment, and you can move on with the rest of your life.
And it seems to me that that should have been our primary
focus. And if I found a contractor in my own hometown and said,
I want to build a development of X amount of houses, they would
know immediately. This is open ground. We are not talking about
tearing down the city and building new--we are talking about an
open field. We just start digging and putting stuff in. You
don't need a sidewalk the first day. You don't need running
water the first day. You need a place to put your stuff and get
out of the weather.
That is what we should be focusing on. And it is appalling
to me, and I think it would be appalling to most citizens, that
that is not what we are focused on. And I beseech you as the
GAO representative for us, that is what you should be focusing
on; not the efficacy of reporting, the efficacy of getting
something accomplished for the best bang for the buck.
I gotta tell you, I am disappointed in this. This isn't
going to tell us, well, you are going to report more to
Congress. La-di-da. That is great. It is going to be the same,
we failed to provide, we failed to spend the taxpayers' money
wisely. That is what we are going to be hearing more of.
Should I be--this is rhetorical, but should we be happy
with this? What can you do? Is there something that we are not
doing to empower you more? How can we help you help us?
Mr. Gootnick. Well, I think I need to think about that
question before I give you an off-the-top answer. But in
general I would say that, you know, sunlight is helpful. That
is to say the more something is observed is, the more likely it
is going to be accountable, it is going to be more transparent,
and you may get more for the investment.
Mr. Perry. Thank you, Mr. Chairman. Thank you. I yield.
Mr. Salmon. Mr. Connolly.
Mr. Connolly. Thank you, Mr. Chairman.
And before I begin, I would ask unanimous consent that our
colleague, the gentlelady from California Maxine Waters, also
be permitted to participate in this hearing.
Mr. Salmon. Without objection.
Mr. Connolly. I thank the chair.
Dr. Gootnick, how often have you been to Haiti?
Mr. Gootnick. I have been to Haiti twice since the
earthquake, and a couple of times prior.
Mr. Connolly. Okay. Just personally, on a scale of 1--zero
to 10, in that time period have you seen some progress? How
would--what--assign it a number.
Mr. Gootnick. Well, the first time after the earthquake
that I visited Haiti was about 6 months, right about the time
of the supplemental appropriation, just after. And what you saw
at that point in time was, in Port-au-Prince, rubble that had
been only partially removed. So the challenge of removing the
rubble, I think, is something I could not have envisioned until
I was there 6 months later and then observed the scale of
rubble that still existed, where main thoroughfares were a
maze, trying to get around piles of rubble that hadn't
literally been removed, but had just been moved, and rubble was
not simply removed, but was moved from place to place before it
could be ultimately removed to its final location.
Mr. Connolly. And to what do you ascribe that? I mean,
there have been other disasters. The tsunami, for example,
almost a decade ago, devastating parts of Sri Lanka, Indonesia,
and that corner of the world, and yet recovery certainly--you
know, rubble was removed. You said----
Mr. Gootnick. I would say the density of the infrastructure
in Port-au-Prince, the quality of the infrastructure in Port-
au-Prince, and the level of dysfunction in the city, the
unworkable city that it--I think many people would say that it
had been prior to this disaster.
Mr. Connolly. Can we just focus on that a little bit, the
dysfunction in the city? In various questions you have
indicated that, you know, home--ownership, land ownership,
which creates stakeholders in a community, is fairly rare
actually among ordinary people; is that correct?
Mr. Gootnick. Yes, I think it is rare. And most people--
most people who live in--at $2 a day or less, and even those
who live in better circumstances, are renters.
Mr. Connolly. Would you describe a vibrant civic life
existing in Haiti before or after the earthquake?
Mr. Gootnick. Yes. I would say one of the things that is
impressive about Haiti is the vibrancy and resiliency of the
citizenry.
Mr. Connolly. And the government, functional?
Mr. Gootnick. I would say the government has faced many
challenges and has been seen to be a corrupt government for a
long time.
Mr. Connolly. You were just asked questions about oversight
and accountability. Is the problem that USAID adopted good,
heroic metrics that, just upon reflection, were unrealistic in
terms of meeting its goals and disbursing its--its funding?
Mr. Gootnick. Right. I think the goal of 15,000, which
originally came, as I have said, in both the activity approval
document, which was the first sort of project document
submitted, and also in the U.S. Government strategy for Haiti
that was issued about a year after the earthquake, was--
probably grew--in retrospect grew out of a spirit of wanting to
make this better and wanting to do the maximum amount that the
U.S. Government possibly could to achieve a better outcome for
Haitians. So it was overly optimistic.
Mr. Connolly. Mr. Chairman, I understand the time
limitations. And I--first of all, if I can suspend my time for
a second, I would also unanimous consent that the gentlelady
from New York, Yvette Clarke, also be allowed to participate in
this hearing.
Mr. Salmon. Without objection. We will go ahead and allow
all the noncommittee Members to ask questions and speak after
the second panel.
Mr. Connolly. Is that agreeable?
I thank the chair.
Mr. Salmon. Thank you.
Mr. Connolly. I was going to actually defer to my colleague
Barbara Lee to give her an opportunity because she came here
first. So I now would yield to my colleague, the gentlelady
from California Ms. Lee.
Ms. Lee. Thank you very much, Mr. Chairman. And thank you
for giving us the opportunity to participate with you today in
this hearing. I served on this committee for over 10 years, and
with Chairman Hyde and Chairman Lantos, and I am glad to see it
still remains bipartisan, given the--what we are dealing with
here. So thank you again.
Just a couple questions on this. As it relates to the
report, I--and also the legislation, Assessing Progress in
Haiti, and some of--and your presentation really reaffirms the
need for this legislation. And I wanted to know, if you have
had a chance to look at it, what your suggestions would be, and
also just wanted to ask you in your report you mentioned that
.4 percent of the funds so far that have been allocated went to
domestic Haitian NGOs and businesses. Have you drilled down a
little bit on that to find out what the reason is for that and
how that can be addressed? And we will ask USAID that question
also.
Mr. Gootnick. Right. With respect to 1749, the legislation
that you sponsored, because a large share of that contains a
directive for GAO to do work, as is our practice, we have
reached out to your staff and staff of some of the other
cosponsors of the legislation and had, I think, very good
discussions about those parts of that directive to us that we
think would--we would be--we could most effectively accomplish.
Particularly those things that pertain to U.S. programs or
activities, we believe that the first part in particular of the
directive to GAO in 1749 is something that we would be eager to
pursue. When you are looking at the extent to which Haitian--
Haitian civil society, Haitian actors have been involved in the
process and the relationship amongst those different entities,
it is harder for us, because we are--it is not a direct look at
a U.S. program and activity for us to give you satisfactory
answers to some of those questions. It relates to our audit
authority and our access authority. We have made that clear to
your staff, and I think we are looking at some maybe revisions
in that regard.
The other thing is you have outlined a project there that I
think we would not be able to responsibly do in a 6-month time
window. So we would look for additional time to do that.
Ms. Lee. Thank you.
Mr. Connolly. Mr. Chairman?
Mr. Salmon. Yes.
Mr. Connolly. I am guilty of an oversight. I was so dazzled
by the hat, I overlooked, and I regret my oversight. I would
also ask unanimous consent that our colleague, the gentlelady
from Florida Ms. Frederica Wilson, also be recognized for
participation in this hearing.
Mr. Salmon. I welcome all our noncommittee colleagues who
are here today based on their long-standing interest in Haiti-
related issues. And although the House and committee rules only
entitle noncommittee members to nonparticipatory attendance, I
ask unanimous consent that they also be allowed to question the
witnesses after all committee members, both majority and
minority, have had their opportunity to do so after the second
panel.
Mr. Connolly. I thank the chairman.
Mr. Salmon. Okay. Mr. Yoho.
Mr. Yoho. Thank you, Mr. Chairman.
Dr. Gootnick, I appreciate your being here. And I want to
start off with kind of agreeing and disagreeing with Ms. Ros-
Lehtinen in that the American people are very generous, they
are very giving, very charitable. I agree 100 percent with
that. But giving to foreign aid, I disagree with that,
especially if our money is going, and it is not accountable, it
is not being held accountable.
We hear it all the time from our constituents, you know,
stop the foreign aid. And, you know, I know a certain amount of
that is necessary, and we will probably continue that. But to
throw good money on top of bad, nobody wants to do that, and I
know you guys don't either. So I am going to kind of reiterate,
and I feel a lot the way Mr. Rohrabacher feels about it. If we
are going to go in there, we should have American workforces in
there.
And some of my questions are going to be along the lines of
what you have already heard. Who is running that country? Who
is in charge of that country?
Mr. Gootnick. Well, Haiti has had a storied political past.
Right now there is a President who was elected, Martelly.
Mr. Yoho. President Martelly.
Mr. Gootnick. Yes.
Mr. Yoho. I mean, the report I have right here in front of
me, I mean, it says Haiti is a hellhole. Not the people; the
people are great, the country is beautiful. It is the
government, the corruption that has been there for the last 30,
40 years that has kept those people repressed. It has--it has
prevented the growth of that economy, and it is a corrupt
government.
So Dr. Martelly is in charge. He is the President. The
former government, is it a democracy?
Mr. Gootnick. Mixed presidential-parliamentary system,
where there is a Prime Minister and a bicameral legislature.
Mr. Yoho. In your opinion, how stable do you think it is?
Mr. Gootnick. Well, there have been in the past, since the
earthquake certainly, challenges to holding--fully holding
elections that are considered legitimate and also to form a
government. So----
Mr. Yoho. And the next election is in 2015?
Mr. Gootnick. You said the last election. The election--the
election of President Martelly was, I believe, the first time
that there had been a peaceful transition from one President to
another of a different party. It has occurred within the same
party; this was a transition to a different party. That was
marked by a lot of fractiousness in terms of the President's
ability to appoint a Prime Minister.
Mr. Yoho. Okay.
Mr. Gootnick. And that took a better part of a year, and
some of the Prime Ministers have not----
Mr. Yoho. In your opinion, how efficient is that government
as far as doing the basic fundamental needs that a government
should provide to their country?
Mr. Gootnick. Well, I can speak better to the capacity
constraints of the civil service.
Mr. Yoho. Okay.
Mr. Gootnick. I think the civil service there is weak. It
is not always paid or paid properly and on time, and that is a
situation that is a setup for corruption.
Mr. Yoho. Okay.
Mr. Gootnick. And at the same time there is--like many
places, while there is an educated cadre, there is a lot of
brain drain, and many of the most educated individuals in Haiti
are coming to the United States and Canada and elsewhere.
Mr. Yoho. Right. I am from Florida, so I am aware of that.
Let me ask you this: They have a Constitution; right?
Mr. Gootnick. Yes.
Mr. Yoho. And that Constitution, does that provide for
individual property rights, to own property?
Mr. Gootnick. You know, you----
Mr. Yoho. Does the government acknowledge that?
Mr. Gootnick. I would have to look into that and get you an
answer.
Mr. Yoho. If you could give me an answer, I would love
that.
Now, along those lines, you were talking about these houses
around 4-, 450 square feet. Do you know on a cost estimate per
house what we are paying for that?
Mr. Gootnick. Yeah. At this point the cost of the--a plot
is about just shy of $10,000.
Mr. Yoho. For a house.
Mr. Gootnick. That is for the plot, and the house itself
about the 23-----
Mr. Yoho. I thought you said the government owns the land.
Mr. Gootnick. The government owns the land.
Mr. Yoho. So why is it costing $10,000?
Mr. Gootnick. The cost of the plot is really the cost of
the site, the land on which all of the homes in the community
are being built, divided by the number of homes. So the cost of
a plot is the prorated share of the road, the grading, the
retaining walls.
Mr. Yoho. Okay. Let me stop you there. If we are paying
$10,000 for a plot that has a 450-square-foot house, that is
$200 a square foot building costs. I mean, that is outrageous
in a country that they are paying $5 a day for labor? And then
those people have to pay $35 a month to rent a house they don't
even own?
That whole system is wrong, and for us to throw money on
top of that would be like building a great ocean liner and
loading it up with all the things you need in the ocean liner,
but having an incompetent person running that. And that would
be the government. And so for us to continue to do that, I just
can't find--until we change the government and the way--I don't
want to change the government. But until we have a more
accountable, to throw money on something like that is just--we
have already spent half of $651 million, roughly?
Mr. Gootnick. Obligated that amount, yes.
Mr. Yoho. To continue that at this point in time in our
economy when we are furloughing people, we can't have our parks
open, is just unconscionable to the American people. And for us
to continue this, to keep Haiti in that kind of a deadlock to
where they are not going to grow out of that economically, I
think we need to rethink this whole process.
And I appreciate your time here, and I yield back. Thank
you.
Mr. Salmon. Thank you.
Mr. Sherman.
Mr. Sherman. It is interesting to have you say that paying
your civil servants on time is a sign of competent government.
How has the U.S. Government shutdown affected our
activities in Haiti?
Mr. Gootnick. I think--I would ask you to direct that
question to State and USAID. I can tell you that with respect
to GAO, to the oversight that we are able to do, our routine
oversight has been shut down.
Mr. Sherman. This hearing is about aid, but trade is more
effective. I would hope that you would respond for the record
what we could do to import less textiles from China and more
from Haiti. Whether that would involve declaring China a
currency manipulator, which has the additional advantage of
being true, or using the old textile quota system to allocate
less to China and more to Haiti, what we could do to give Haiti
access to the U.S. markets on more favorable terms. I don't
know if you have any preliminary comments on that.
Mr. Gootnick. Well, you are outside my area of expertise a
little bit, but I can tell you that the two pieces of
legislation, the so-called HOPE Act and the HELP Act, which are
trade preferences, in one case for Haiti, in another case for
the broader Caribbean, are important tools of U.S. policy that
have encouraged exports from Haiti and elsewhere in the
Caribbean, particularly in the area of textiles.
Mr. Sherman. But that was not a circumstance where we
reduced imports from China; we just increased exports from the
Caribbean.
With that, I would like to yield to the gentlelady from
California Maxine Waters.
Ms. Waters. Thank you very much.
I have wanted to get into our concerns about Haitians being
able to participate in the opportunities that are present for
redevelopment. I spent some time in Haiti looking at this
question, and I took a look at the information that is put out
in proposals and found that none of that information is in
Creole, that some of the requirements of the USAID contracts
are such that it requires certain kind of experience that you
know that Haitians do not have. And I have been looking for
more joint ventures so that Haitians could, you know, realize,
you know, income from USAID projects and be able to improve
their communities and create jobs.
So why is it you have not been able to provide the kind of
assistance, technical and otherwise, to Haitians so that they
would be able to respond to these requests for proposals or
participate in joint ventures?
Mr. Gootnick. I think that is a good question perhaps to
direct to State and USAID. I think one of--as we were
discussing earlier, this is a balance. When funds are moving
through a U.S. firm or a U.S. large NGO, you have more
assurances and more ability to ensure accountability. On the
other hand, it is a priority in development to try to empower
and to provide--have services provided by the local--local
service providers, local NGOs, local civil society and firms
wherever possible.
Ms. Waters. If I may, the Haitians will never be able to
provide you with the kind of experience that would be required
in these proposals unless you do more joint venturing and
require that of major corporations to do check training and
bring people into those proposals in ways that they can learn
and they can eventually respond themselves. But you have no
requirements anywhere, and then you don't have the language in
the proposals. So really you don't have a program, USAID.
Really you don't have a way by which you are empowering
Haitians to do business with you.
Mr. Gootnick. Right. As GAO as the oversight entity, that
is something we could look into on your behalf. But as the
implementer, I think you need to direct that question to USAID
itself.
Ms. Waters. Oh. All right. Whoever would like to respond.
Okay. Thank you. Okay.
I yield back the balance of my time.
Mr. Sherman. One more question would be what can we do to
analyze the issue of whether we need to provide more quantity
of housing or more quality of housing? Is there an argument to
be made, or are we pretty much building the type of housing
that meets minimum standards and tries to make a dent in the
overall demand?
Mr. Gootnick. Right. I think that is a really excellent
question, and I am not sure I can answer it, but I would add
one more dimension to it. That is to say in addition to quality
versus quantity or size versus cost, I would add location. So
if you look at the initial plans where housing would be built,
there was more of an effort to build houses in the earthquake-
affected areas. That turned out to be a particular challenge,
and most of the housing is being built outside. So I would look
at where as well.
Mr. Sherman. Thank you.
Mr. Salmon. Thank you very much, Dr. Gootnick. We
appreciate your testimony, and we would like to excuse you and
seat the next panel.
Mr. Gootnick. Thank you.
Mr. Salmon. In September 2010, Thomas C. Adams was named
Special Coordinator for Haiti by then-Secretary of State
Hillary Clinton. Mr. Adams' career with the U.S. Government has
spanned more than 35 years, with much of it focused on managing
foreign assistance.
Thank you for being here.
Elizabeth Hogan is the Senior Deputy Assistant
Administrator for USAID's Bureau of Latin America and the
Caribbean. Previously she served as the Director of the
agency's Haiti Task Team, overseeing reconstruction efforts
after the 2010 earthquake.
We will now ask our witnesses to summarize their
statements, beginning with Mr. Adams.
STATEMENT OF MR. THOMAS C. ADAMS, HAITI SPECIAL COORDINATOR,
U.S. DEPARTMENT OF STATE
Mr. Adams. Thank you, Chairman Salmon, members of the
committee. Thank you for this opportunity to appear before you
with my colleague Beth Hogan from USAID to discuss the U.S.
Government's engagement with Haiti with a particular focus on
our foreign assistance. I welcome the chance to provide a brief
overview of where we are in those efforts, to describe next
steps, and to answer your questions. With your permission, I
would like to submit my full testimony for the record and make
a brief oral statement.
The ties that link the United States and Haiti are broad
and deep. Following the devastating January 2010 earthquake, an
estimated one out of two U.S. households made some contribution
to relief efforts for Haiti. Congress, likewise, was quick to
respond to that country's needs, appropriating $1.3 billion in
supplemental funding. Even.
Before the earthquake in 2009, this administration was
conducting a whole-of-government review of U.S. engagement in
Haiti--with Haiti to help put the country on a more solid and
sustainable foundation. The result was a new tack, focusing on
economic development and growth and encouraging
decentralization. This approach mirrors that of the Government
of Haiti in its post-earthquake reconstruction plan.
So where do things stand now in helping Haitians build a
better future? Clearly there is still much to be done. To be
frank, we all hoped we would be further along by now.
Nevertheless, there are signs of progress in Haiti, reasons to
consider the glass half full, if you will, and we are not
finished.
It is worth bearing in mind the point at which Haiti
started. The 2010 earthquake traumatized a country already
facing uphill struggles. And like the country's population as a
whole, Haiti's weak governing institutions were left shocked
and reeling from the earthquake, and as a result, crucial
decisions to recovery were often deferred or delayed.
Furthermore, 2010 was an election year in Haiti. In March
2011, Michael Martelly was elected after two rounds of voting
as President of Haiti. He entered his office in May of that
year on a pledge to speed up Haiti's rebuilding.
Overdue elections are a current concern in Haiti, with
nearly all municipal offices and one-third of the Senate seats
expired. The Haitian executive and legislative branches have
yet to agree on the timing and the scope of these overdue
elections. We, along with other donor countries and
international institutions, including the Organization of
American States and the United Nations, have urged the
President and Parliament to reach agreement, and we remain
engaged on this important issue.
Besides the effect of the earthquake, Haitians' resilience
was also repeatedly tested over the past 3 years as the country
experienced an outbreak of cholera, suffered a significant
drought, and was buffeted by hurricanes and tropical storms.
Under all these circumstances, Haiti has perhaps made about as
much progress in its recovery as history might lead one to
expect.
No one would deny that much remains to be done in Haiti,
but, as I said, there is progress to report. If you visited
Haiti today, you would remark on the virtual absence of
earthquake rubble, and that camps for internally displaced
persons, which used to take up every square inch of free space
in Port-au-Prince, are dramatically reduced in size and number.
While focusing our assistance on the most pressing
humanitarian needs immediately following the earthquake, we
have also made headway against broader systematic challenges.
We currently provide approximately 50 percent of Haiti's
population with access to health care. With our help, the
Government of Haiti is taking increasing ownership of this
system.
The key to sustainable improvement in Haiti lies not in the
generosity of donors, but in the creation of economic
opportunity. There is not enough donor money to fix everything
wrong in Haiti. U.S. Support for Haiti's Caracol Industrial
Park is one example of our comprehensive effort to help Haiti
attract investment and to create needed jobs. Congress, through
the HOPE, the HOPE II, and HELP Acts, has helped to make Haiti
a more attractive place to invest with 8,000 new apparel-sector
jobs created since 2007 in Caracol and the other industrial
parks.
Agriculture is another area where our efforts to boost
economic opportunity are yielding significant results. Our
agricultural programs are benefiting some 100,000 farmers,
hoping to increase crop yield, create new markets, and boost
farmer income.
Building durable Haitian institutions remain a priority of
the U.S. and other donors. Without good governance, economic
growth in Haiti is built on unreliable foundations. We speak
plainly and often with Haitians about the need for new laws and
reforms to strengthen the rule of law and improve the business
climate, and we complement these discussions with programs to
help the Haitians advance these priorities, including providing
specialized expertise to Parliament and funding an integrated
financial management system for the Government of Haiti.
With strong U.S. support, Haiti, in 2012, took a
significant step toward judicial reform with the establishment
of a Superior Judicial Council, a new body that will provide
independent oversight of the judiciary and to which we are
providing technical support. We are working to build capacity
in the Haitian National Police, providing equipment, uniforms,
food, and other essential supplies for new police cadets.
I have been describing the progress that U.S. assistance
has helped Haiti achieve in its effort to rebuild, but I do not
mean to minimize the challenges still ahead. Make no mistake,
it will take many more years to make the kinds of far-reaching
and lasting improvements we all wish to see in Haiti. Toward
that goal, we need to maintain an open and frank dialogue with
the Haitians and focus on how we can help that country's
institutions build their capacity to be effective providers of
basic services to the Haitian people.
To a very real degree, that type of progress cannot move
more quickly than the Haitians are capable of taking on, but I
take a positive view of this challenge and believe that our
continued long-term commitment, the United States is helping
Haiti's Haitians to achieve a better future.
Thank you, Mr. Chairman.
Mr. Salmon. Thank you.
[The prepared statement of Mr. Adams follows:]
----------
Mr. Salmon. Ms. Hogan.
STATEMENT OF MS. ELIZABETH HOGAN, ACTING ASSISTANT
ADMINISTRATOR, BUREAU FOR LATIN AMERICA AND THE CARIBBEAN, U.S.
AGENCY FOR INTERNATIONAL DEVELOPMENT
Ms. Hogan. Mr. Chairman, Ranking Member Engel, and members
of the committee, thank you for the opportunity to appear
before you today. I appreciate the committee's interest in
USAID's efforts in Haiti. I, too, have submitted a written
testimony for the record and will proceed with a short opening
statement.
Nearly 4 years after the earthquake, we have seen notable
success across our portfolio. We have helped boost the income
of small-scale farmers, whose crop yields sharply increased
from USAID's interventions. We have helped fund shelter
solutions for more than 328,000 formerly displaced persons. To
accelerate the job-creating potential of the private sector, we
are assisting financial institutions to provide small
businesses with access to credit. And according to the latest
demographic health survey, health indicators, particularly for
women and children, have improved dramatically over the last 5
years.
Central to the U.S. Government's assistance strategy in
Haiti is a commitment to doing business differently. As we
implement our program, USAID is building the capacity of key
Haitian institutions, like the Ministries of Health, Finance,
and Agriculture. Our goal in Haiti, as in the rest of the
region, is to strengthen local capacity to the point where the
country can lead and finance its own development.
In addition to partnering more closely with the Haitian
public sector, we are tapping into the resources, markets, and
technologies of the private sector. For example, we are working
with Coca-Cola and the local Heineken subsidiary to improve the
productivity and incomes of small-scale farmers.
We also launched an innovative business plan competition
that provides matching grants to small businesses to expand
their operations and create jobs. One of the winners is a
Haitian entrepreneur who founded a recycling company that works
to clean up public spaces while providing extra cash to over
6,000 Haitians who turn in discarded bottles. He was able to
expand his operations, collecting, compacting and shipping
nearly 300 million plastic bottles for further processing last
year alone.
But ultimately, donor and private-sector resources will not
solve Haiti's development challenges, which is why building the
capacity of government institutions is so critical to our long-
term success. USAID is helping to strengthen local
municipality's efforts to raise revenues to pay for basic
services. In the Carrefour municipality, for instance, USAID
supported a program to help increase tax collection, and
between 2011 and 2012, they increased their tax revenues by 481
percent in just 1 year.
Over the years our programs and approach have improved
thanks to extensive consultations with Congress, Haitians,
civil society and the diaspora community. As such, we welcome
the scrutiny and recommendations of the GAO. We are pleased
that the GAO acknowledged that we completed the power plant for
the Caracol Industrial Park on time and under budget.
The GAO report also examined the construction of a new
greenfield port. According to the U.S. Army Corps of Engineers
and other agencies with port expertise; planning, and designing
a new port can take up to 5 years. We are on schedule to
complete the planning and design work in that timeframe.
To address a GAO recommendation, we are finalizing an
agreement with the Army Corps of Engineers to embed a ports
advisor in our Haiti mission.
In regards to the GAO comments on our shelter program, we
acknowledge that we face challenges meeting our original
expectations. Construction costs significantly exceeded the
initial estimates. These initial estimates did not adequately
address the cost of meeting international building codes,
Federal building standards, disaster resistance standards, and
underestimated the rising of cost materials in a post-disaster
setting. The Government of Haiti's design changes also added to
the increased cost. Other factors, such as complications in
clarifying land title and reduced donor participation, also led
to construction delays and reduced housing estimates.
We are working to ensure that USAID-funded settlements are
sustainable and do not slip into disrepair. To mitigate these
risks, and in line with the GAO's recommendation, we are
funding community development programs to ensure proper
maintenance and sustainability.
It is important to note that Haiti faced large-scale
housing shortages even before the earthquake; therefore, new
housing construction was never considered to be the sole answer
to meeting Haiti's housing needs. Looking forward, we are
working on a full range of approaches that will provide shelter
solutions to many more than the 328,000 beneficiaries we have
reached so far.
For example, we are partnering with Haitian financial
institutions to stimulate a local housing finance market. We
are also piloting a program in an informal settlement to help
residents access loans for housing repairs and construction of
new homes.
In conclusion, I want to thank Congress for its generous
support of our work in Haiti. USAID is committed to keeping you
informed on our progress as well as our challenges as we move
forward. Thank you again for this opportunity to testify, and I
look forward to your questions.
Mr. Salmon. Thank you.
[The prepared statement of Ms. Hogan follows:]
----------
Mr. Salmon. I would like to direct my questions to Mr.
Adams.
The United States has invested hundreds of millions of
dollars in Haiti in the form of aid, and governments of both
the U.S. and Haiti encourage American enterprise invest in
Haiti. However, we do not have a bilateral investment treaty
that would provide U.S. investors an assurance of fair
treatment in that country and afford them international
arbitration of disputes with the Haitian Government. Bilateral
investment treaty was negotiated by the U.S. and Haiti in 1983,
but it has not yet been ratified. Isn't it time to put that
treaty in place?
Mr. Adams. That is an excellent point, and I have had
discussions with my colleagues in the United States Treasury
Department, who, as you know, negotiate those, and encouraged
them to do it. And the simple answer is that Treasury
prioritizes, because of lack of resources to do all of these at
once, to the largest trading partners, and Haiti being a
relatively small one, they are down the list. But I will
certainly convey to them your interest in seeing this one moved
up the line, and I agree with it.
Mr. Salmon. Well, as we continue to invest U.S. taxpayer
dollars in supporting Haiti's reconstruction, we have also got
to make sure that the Haitian Government is creating an
environment that allows the private sector to play a role in
the country's development. Is the Government of Haiti providing
a level playing field to our foreign investors, to American
investors?
Mr. Adams. That is a very good question. I think the answer
is generally yes. Haiti does allow for international
arbitration in contracts, and it abides by the ruling of
international arbitrators. And given the state of Haiti's
judicial system, investors are reluctant to trust the Haitian
courts to resolve commercial disputes, so that is one way to
get around it.
So, yeah, I do think--I do think American firms have a
level playing field. An American firm just won the largest
contract I think, the Government of Haiti has given out
recently in rebuilding the port in Port-au-Prince for some $70
million.
Mr. Salmon. Members of the committee have received some
reports of an American company, Trilogy International Partners
of Bellevue, Washington, that has been put through a 1-year
ordeal by Haitian tax authorities in a process that has lacked
transparency and does not appear to be grounded in the due
process of law. Can you provide an update on that situation and
what treatment of Trilogy says about the investment climate in
Haiti?
Mr. Adams. Yeah, I talk to Trilogy quite often on this. And
I can't go into too much detail because of confidential
business information, but our Economic and Commercial Section
of the Embassy has been actively engaged with Trilogy and with
other U.S. firms who have disputes there, and all I can say is
I think the differences between the Government of Haiti--this
is a tax issue basically--have been narrowed considerably, and
I think that one--I think we can resolve this with a little
more time.
Mr. Salmon. Appreciate anything you could do.
Mr. Adams. Thank you, sir.
Mr. Salmon. I yield back, and I recognize Mr. Engel.
Mr. Engel. Thank you. Thank you very much, Mr. Chairman.
Let me--let me, first of all, welcome both of you. I want
to also welcome our colleagues who are not members of the
committee, but each of whom have interest and a lot of good
work behind them through the years involving Haiti: Ms. Waters,
who certainly has worked hard on the issue; Ms. Lee, who we
mentioned before, who has been relentless in doing it; Ms.
Wilson, who has the largest Haitian American community, I
believe, of any community, any district in the country, in her
Florida district; and of course, Yvette Clarke of my home State
of New York, the largest Haitian community of New York.
So, welcome. We are all united and care very, very much
about what goes on in that island and the responsibility.
I have so many questions to ask you, both of you, that I
can hardly get it in in the allotted minute, but let me say
this. In my opening statement I made reference to the fact that
Haitian authorities are feeling left out of the decision-making
process as well as the implementation process of our
assistance. Among the goals of our assistance program, we have
tried to resolve the capacity problems in the Haitian
Government, because obviously they remain our indispensable
partners in doing this.
Can you, both of you, please describe the current capacity
of the Haitian Government to decide upon and implement aid
programs? Have efforts to improve the capacity of the
government been successful? Are other governmental and
nongovernmental donors going around the Haitians or working
closely with them?
Ms. Hogan, why don't we start with you.
Ms. Hogan. Thank you very much for that question.
As I said in my opening statement, we are doing business
differently in Haiti, and we are not working around the
government. Rather, we are embedding advisors in key government
ministries in order to help them develop the infrastructure,
both governance, procurement, management information systems,
merit-based staffing, et cetera, so that they can ultimately
get to the point where they can manage without the need for
external assistance.
I think we are seeing results already. For example, they
have an integrated financial management system that we have now
seen through the Ministry of Finance that connects up all
government ministries' budgets so that it will provide for the
first time control and transparency of Government of Haiti
expenditures.
That is a very important first step; however, we have a
long way to go. One of the things we would like to ultimately
be able to do is work government to government and fund
government agencies directly. I think we are further advanced
with the Ministry of Health than we are anywhere else, because
along with the World Bank, USAID has been working with them for
several years now in developing their internal systems, but we
are still, as I say, a ways off before they are going to be
able to account for every dollar that is invested. We are on a
path, we are not there, but we are heading in the right
direction.
Mr. Engel. Thank you.
Mr. Adams.
Mr. Adams. Let me just add one thing to that. What you
describe usually takes the form of the Government of Haiti
asking us to provide budget support; i.e., funding directly the
Government of Haiti while they are running it through
contractors and grantees. And they had a meeting of their
first--their first meeting of their new coordinating mechanism,
which they are in charge of, and on the margins of that, we
reached agreement, donors and the Government of Haiti, because
they ask this of all donors, that we will support measures to
increase governmental transparency there, because that is our
biggest complaint. And the reason we don't give money directly
to the Government of Haiti is because we don't have any
assurances that it will be accounted for accurately.
The Prime Minister took this up. He has appointed very good
people on this, and 2 months ago we kicked off this
transparency initiative, and hopefully--the two biggest
complaints we have on transparency is they don't audit
government expenditures and income, and the other complaint is
they don't prosecute people for public corruption. So I think
those are sort of two benchmarks that we want to work with them
on resolving.
Mr. Engel. Thank you.
Our first witness is from the GAO, and according to the GAO
report, of the 15,000 houses originally planned, only 2,649 are
expected to be completed--that is really not good--with USAID
building 906 houses and NGOs and other partner donors estimated
to build 1,743. In addition, cost estimates were widely off
base, over 300,000 percent.
So can you break this down for us, and what caused the
changes in the overruns, and looking forward, what are the key
issues that have been learned regarding this issue, and what
changes and improvements do you plan to make?
Ms. Hogan.
Ms. Hogan. Thank you very much for your question.
Actually our housing numbers have been revised slightly
since the GAO report was submitted to you, and we are now
estimating that we will build 3,100 homes. This is in part due
to cooperation that we have had with the American Red Cross and
the Government of Qatar, that have also given us resources to
build houses on the sites that we will develop for them. So, in
total, we will build 3,100 homes, and we have another 533 plots
that have been serviced and are ready and available if other
donors or if other buyers want to come in and build homes
there.
Mr. Engel. But why were we so off----
Ms. Hogan. Right.
Mr. Engel [continuing]. On the estimates of how many homes
we would build and what the cost would be?
Ms. Hogan. Thank you.
We were significantly off in terms of what our original
estimates were. We based that on a survey, a very quick survey,
we did in the middle of the crisis when we were trying to stand
up our new strategy of what NGOs spent in building homes in
Haiti, and at that time it was roughly $10,000 a home.
When we got on the ground and were able to do our own
government independent cost estimate, that number doubled, and
so we realized early on that our estimates were off. Then when
we put the procurement out to bid and got back bids from
offerors who were going to actually build these homes, the
estimates were increased even further.
Again, it is because of the requirements that we put into
our solicitation document that it meet international building
codes, comply with Federal building standards, and that these
materials would be disaster- and hurricane-proof. We also
required that they insure their workers and that they provide
safety equipment to their workers. These are higher standards
that we are accountable for as a U.S. Government than would be
local actors, and so all of that increased the cost of those
individual homes.
And what we realized, as we were going into this and that
we would only be able to afford the 3,100 new homes, is that
new homes isn't the solution for Haiti. The solution for Haiti
is helping to generate a local housing finance market so that
people can access microloans to either improve their homes, or
to expand their homes for rental opportunities, or to build new
homes.
We have had an excellent experience in one community in
Port-au-Prince called Ravine Pintade, where we were able to
rehabilitate 620 houses by investing about $8.5 million there.
We were able to help them build retaining walls, improve their
drainage, improve their sanitation, helping them do rainwater
harvesting, and also develop footbridges, streets, lighting, et
cetera.
So, we see that neighborhood reconstruction is really the
way to go forward to be able to reach the numbers, in fact,
beyond the numbers than we would have reached through single-
family housing.
Mr. Engel. Can you come to Congress and brief us on this
program, because I think it would be very, very important. And
I know I am way over my time, Mr. Chairman, but I just want to
ask one question.
One of the primary obstacles to reconstruction is secure
land tenure, and how has USAID prioritized this issue to ensure
the security of U.S. investments and the long-term development
in Haiti?
Ms. Hogan. Thank you for the question.
Let me begin by saying that the land tenure situation in
Haiti is more a political problem than it is a technical
problem, and the Haitians need to take the lead in revitalizing
a land tenure system. We are prepared to help them, but they
need to take the tough political choices in order to be able to
move forward.
What we have done, however, is, through a local coalition
of housing organizations, helped for the first time develop a
booklet that is both in French and Creole that explains how one
legally acquires land title in Haiti. This has never been
written or done before there. This is why you have two or three
or five people who all have title to the same land, because
depending which notary you go to, you will get different
advice. So at least now we have transparency established and a
very clear line that has been accepted by all of the
stakeholders as the way in which one goes about securing land
title in Haiti. So it is a big step forward, but there are big
political decisions to make as well.
Mr. Engel. Thank you, Ms. Hogan.
Thank you, Madam Chairman.
Ms. Ros-Lehtinen [presiding]. Thank you, Mr. Engel, and
thank you to our witnesses.
I guess it takes much more U.S. taxpayer dollars to be
wasted for a Member of Congress to call it a scandal. In the
2010 supplemental, $651 million was allocated to USAID to
support, relief, and reconstruction efforts. Three years later,
just 35 percent of these funds have been spent as delays mount
and goals are scaled back. In Fiscal Year 2011, $370 million
was allocated to Haiti programs, but yet only a little more
than half, $194 million, has been distributed to date. In
Fiscal Year 2012, $351 million was allocated, and only $90
million has been disbursed.
This backlog of funding and the amount of money left in the
pipeline for Haiti is in the hundreds of millions of dollars,
and I am concerned that the team in place cannot handle the
oversight over these crucial funds. This amount of money should
give us the necessary leverage to help even more people in
Haiti. The American people deserve better, and, more
importantly, the Haitian people deserve better. So, yes,
colleagues, this is a scandal.
I recognize that our work in Haiti continues to be a
challenge, and the conditions on the ground are not easy.
However, the narrative of let us blame the Haitians for our own
faults needs to stop now. As representatives of USAID and
State, your agencies are in charge of U.S. taxpayer dollars
that are being used in Haiti. The findings in the GAO report
were alarming, and to make matters worse, Congress and
specifically members of this committee were not consulted nor
briefed over these serious deficiencies in our programming.
When it comes to the port, for example, the project is
seriously delayed. We do not have a private-sector partner at
this time. We do not even know what the final cost will be, yet
the success of the north industrial park is dependent upon the
completion of the port. The administration estimated that the
park would produce 20,000 to 65,000 much-needed jobs. It is
discouraging that not even 2,000 Haitians are employed at the
park at the moment.
Moving on to the housing shelters, I am concerned about the
plumbing situation at the housing settlements because it has
more than doubled the cost of these homes. If not maintained
well, we risk endangering the health of the very people that we
are trying to help in these communities.
In addition, I am concerned with the families in these
settlements, whether they own the houses we have talked about.
They own the house, but not the land. The land is owned by the
Haitian Government. What mechanisms do we have in place to stop
the government from overtaking these homes? And, Assistant
Administrator Hogan, what specific changes in your office are
you making to fully comply with all of the GAO recommendations,
or do you not agree with some of the recommendations?
I am also concerned about the security situation in Haiti.
While the U.N. Stabilization mission in Haiti is planning on
shutting down their operations, more emphasis needs to be given
to the Haitian National Police, known as HNP. I am very pleased
that Secretary Brownfield and the INL, which handles the
narcotics and law enforcement at State, has partnered with our
very fine Miami-Dade police department in helping to train the
Haitian National Police, the HNP. To this date, more than 60
HNPs have been trained in south Florida, and I hope more to
come.
The security situation has to be stable in order to hold
free, fair, and transparent elections in Haiti. It is so
disappointing that local and senatorial elections in Haiti have
been delayed for more than 2 years, and I urge the President of
Haiti to call the Haitian Parliament back into session to agree
to an electoral law and schedule elections as quickly as
possible.
Let me be clear. Ruling by decree or dissolving Parliament
is not acceptable. Can you provide us with an update on the
elections? What are we doing to foster civil society
engagement?
And lastly, private businesses are very worried that the
Haitian Government is not abiding by its obligations to promote
fair business practices. U.S. companies have grievances against
the Government of Haiti. Special Coordinator Adams, given the
fact that U.S. investors are already reluctant to invest in
Haiti due to uncertainty, can you please describe what the
business environment is right now for Haiti and for U.S.
businesses operating in Haiti? Thank you. Thank you.
Mr. Adams. Sure. I will start. I think there were four or
five questions in there.
On the business climate, the Government of Haiti has come
out and said Haiti is open for business. We want to get
business, but they have done precious little to really make
Haiti open for business in the sense that a number of key laws
need to be passed by Parliament. The Haitian Parliament has
been singularly unproductive this last year, passing something
like nine laws in total, and obviously they need to pick up
their game. Haiti needs new anticorruption law. They need
modern laws to allow for electronic signatures and better
business practices. They need law to make it easier to register
a new business. They need a law to make it easier to get a
construction permit. I could go on and on, but you get the
idea.
And so part and parcel of that is having this political
peace between the executive and the Parliament. I was down
there last week meeting with them, saying they need to find a
better way to work together. The irony wasn't lost on them
about our own situation, I should mention.
Ms. Ros-Lehtinen. No. If you will excuse me, I know that
that is a cute dig, but you surely are not comparing the United
States Government----
Mr. Adams. And I tell them that.
Ms. Ros-Lehtinen [continuing]. With any government in the
world. I mean, we are talking about----
Mr. Adams. I agree. I agree.
Ms. Ros-Lehtinen [continuing]. A country we are trying to
help, which have invested millions of dollars, and they don't
have elections. They are not registering people. They are not
calling for elections.
Do you think that having U.S. businesses do business in
Haiti, in a place where there is no due process, we have U.S.
companies that have filed complaints with the Haitian
Government, and we want to say that Haiti is open for business?
What about all of the complaints that U.S. firms have already
filed?
And you can make digs----
Mr. Adams. Right.
Ms. Ros-Lehtinen [continuing]. At the U.S. Government, but
please don't compare----
Mr. Adams. Yeah. Yeah.
Ms. Ros-Lehtinen [continuing]. My adopted homeland, the
greatest country on Earth, to any country in the world.
Mr. Adams. No. And I am sorry if I gave that impression.
Ms. Ros-Lehtinen. Impression?
Mr. Adams. But there are--we have a very active economic
commercial section, which helps Americans get business down
there and helps resolve disputes. And I can't go into cases too
much, but let me just say not all American businesses that go
down to Haiti are purely ethical and honorable, so sometimes
the disputes, while there is a dispute between an American
company, the Haitians are right. Often the Haitians are wrong.
And so we sort these cases out individually.
On at the elections, they are 2 years overdue, and we
constantly tell the Haitians that we have some expectations of
the Haitian Government. One is that they be seen as democratic.
Democracies have elections on schedule. They have free and fair
elections. We also expect them to curb corruption, to work to
curb corruption. There has been some progress there. There
needs to be more. This government has filed more anticorruption
cases than any of their predecessors have. The weaknesses: They
don't prosecute them successfully because they need a new
anticorruption law. They say their current law is--makes that
difficult.
They also need to address human rights issues.
Ms. Ros-Lehtinen. I am sorry. I am over time as well.
Mr. Adams. Okay.
Ms. Ros-Lehtinen. So, sorry. I did not realize. I apologize
to our members. Thank you, and I am sorry I did not give you a
chance. Thank you.
Mr. Meeks is recognized.
Mr. Meeks. Thank you very much.
Ms. Ros-Lehtinen. And we can go over because we both went
over.
Mr. Meeks. Let me first ask, I guess, Ms. Hogan. One of the
issues that we are seeing that we--the first mistake was made
in the underestimation. So my first question is in the
beginning did we do any consultations with the Haitians on the
size, et cetera, because as I said to Mr. Gootnick, that it
seems to me, in 2013, to build a home without the
infrastructure necessary to at least have a sewer system so
that people could have plumbing in their homes, that would have
been a nonstarter in the beginning. And I would imagine that if
you talked to anyone from Haiti initially in that regard, then
that would have come up then at the time of the initial
estimates, and we wouldn't be talking about overruns now, which
then causes the difficulties that we have here in trying to
move forward.
So I was wondering what, if any, consultation you had with
the Haitians in the beginning process with reference to coming
up with the estimates that we are coming up with as to what the
size, you know, and what should be there.
Ms. Hogan. Thank you for your question. Yes, indeed, we did
have initial consultations with the Government of Haiti in
terms of its expectations. One of the drivers of the cost,
however, was not so much the indoor plumbing, but whether it
was rain-fed or piped. We had initially anticipated doing pipe
stands so that people could collect water outside their home
and bring it inside, and also have cisterns above their roofs
to collect rainwater and feed it that way.
What the Government of Haiti really wants to do is create a
prototype for what is dignified housing for low-income
populations, and I should say that they are using the same
design for the housing that they are building with their own
resources. They have a social housing site, infrastructure site
now, which is the first of its kind in Haiti, funded by the
Government of Haiti, that has about 2,000 units under
construction, and it is very similar in size to the houses that
we have built, and it also includes this indoor plumbing as
well. So they are not holding us to a higher standard than
themselves. And, in fact, I think that this is, although a very
modest home by anyone's standards, it is a dream come true for
whoever gets to live in that kind of space.
Mr. Meeks. But clearly, then, their expectations of what
they are asking for, the aspirations of their people is not
out--they are not asking for mansions. They are asking for
something that would be reasonable for, you know, the situation
that you have in Haiti. And, you know, at a time after the
terrible earthquake, what the thought was, well, here we have
an opportunity to start from scratch, ``scratch'' meaning
infrastructure building, et cetera, and thereby including
what--you know, what the people want, because they are going to
have to live there for a long time and needs to be something
that is sustainable, not something that has to be done again in
the next 5 or 10 years. And I think that, from what I am
hearing, what they were talking about is something that would
be more sustainable and more long-lasting. And, I mean, I think
that is kind of--should be very important to include that in.
Let me--you also talked about a number of capacity-building
projects. Now, what metric are you using? How many--you know,
can tell us how many companies that are Haitian that are
receiving help to build this capacity? What number? What is the
percentages? Are there any goals that you have set in place? Do
you have that information?
Ms. Hogan. Yes, I do. I would want to say that, first, in
terms of reaching local Haitian institutions, we have gone from
$1 million of direct awards to Haitian institutions in 2011 to
$10.1 million. So we have a metric of increasingly working
through local institutions, and the metric is up to 17 percent.
We are trying to reach 17 percent of our overall budget to be
channeled through local institutions.
It is a very time-consuming goal because it requires us to
hire CPA firms to work with those institutions to develop the
kind of accounting systems that would allow us to invest USG
resources and for them to be accountable. It is a worthy goal,
because ultimately they have got to develop that capacity in
order to manage their own development programs.
Another example is in the health sector, where we have
performance-based contracting now in place whereby the
Government of Haiti has to reach certain benchmarks. The
Government of Haiti's Ministry of Health has to reach certain
benchmarks, and these are negotiated with them up front in
terms of health gains, and then we pay as they reach those
gains. So that is another way in which we are building the
capacity of the health system going forward.
Mr. Meeks. Let me ask. And, Mr. Adams, in your testimony,
in reviewing your testimony, you talked about that there were
staffing issues that slowed the process especially, as well as
procurement and contracting challenges. Is there a mechanism in
your procurement and contracting challenges for--and I think--I
think Congresswoman Waters was going in that direction
earlier--for joint venture projects with Haitian companies and
Haitian businesses, and are there any goals in that regard so
that there are Haitian businesses that are being stabilized and
able to come up so that they can live on their own?
Mr. Adams. Yeah, that is a very good question.
Staffing after the earthquake, we had staffing challenges
for a number of reasons. One is our employees needed to be in
safe housing. A lot of our housing was destroyed during the
earthquake, so we had some constraints on sending people down
there, particularly long term, and we still have those to a
certain degree. I think the USAID mission, for example, is
understaffed, frankly, and we need to grow its capacity and are
taking some steps to do that.
Similarly, other U.S. Government agencies working on their
own contracting. The Bureau of International Narcotics and Law
Enforcement, as well as USAID, has had some contracting
challenges, we admit. I think we have strengthened our teams
working in both these areas, both for INL and for USAID, and I
think we can claw back at the backlog of procurement that we
have down there.
Mr. Meeks. Lastly, let me just ask this, because there is a
number of individuals in the Haitian diaspora who are tireless
in these efforts to raise the awareness in the plight about the
Haitian people and what is happening there. Is there a role
that you see that the Haitian diaspora can play in helping you
develop, and if so, what is that role? And, you know, what are
the opportunities that members of the Haitian diaspora can
participate so that they can be involved there?
Mr. Adams. Certainly. I talk often to the diaspora. In
fact, I have traveled to many cities in this country, along
with Beth and others from USAID, to talk to the diaspora about
how they can contribute and how they can get U.S. Government
contracts and grants, which many of them seek, but also other
ways to help in Haiti.
Many members of the diaspora are helping in Haiti in any
number of ways, large ways, large and small, and certainly two
members of my own staff are Haitian/Americans, very valuable
ones. And we are always glad to talk to the diaspora about
helping, but I think two things need to be borne in mind here.
One, they often ask for a set-aside for Haitian/Americans, and
we have to remind them that that is against our law. And the
other thing is to tell them that our goal is really to create
jobs for Haitians, and that is an overriding effort on our
part. But we do--we do work very closely with the diaspora and
appreciate their contributions.
Beth may want to add to that.
Ms. Hogan. I would like to point out that the first housing
complex where people are now moving in was built by a Haitian/
American firm, and we are very happy with the quality of what
we have seen that firm produce. So we are very excited about
people actually getting keys, moving in and starting new lives.
I also want to say that with the Haitian diaspora, what
Haiti needs more that anything is investments, and so one of
the things that we are trying to seek through our business plan
competition that I mentioned in my opening remarks is
opportunities for Haitian diaspora and other investors to
invest in these small businesses so that they can expand their
operation and create jobs, because that is ultimately what
Haiti needs more than anything, is job creation so that people
can afford to buy homes, send their kids to school, meet their
health needs, et cetera. I think there is a huge role for the
Haitian diaspora to play in that regard.
Ms. Ros-Lehtinen. Thank you so much. And that is the limit
of our going over, so thank you.
My good friend, Karen Bass from California, is recognized.
Ms. Bass. Madam Chair, I would like to yield my time to
Congresswoman Waters.
Ms. Ros-Lehtinen. Without objection.
Ms. Waters. Thank you very much, Congresswoman Bass, for
yielding time to me. I am very appreciative for that.
And I would like to thank our ranking member Mr. Engel for
his interest and concern in Haiti. We have traveled there, and
I would like to say to him, if you and the chairman can arrange
a codel, many of us would like to go back very soon to look at
some of the work that we have been involved in.
And I would like to say to Mr. Adams and Ms. Hogan, this is
not easy work, and we understand that. It is very difficult,
and I appreciate whatever progress that you have made. And I am
really concerned about the Haitians being able to create jobs
and to do joint ventures.
And I held a meeting up at Henry Saenz's home in Haiti
where, you know, the middle-class Haitians all gathered, and I
had USAID come up to show me the forms that you use, your
requests for proposal. They were not--nothing in Creole, no
technical assistance, two local businesses. The kind of
experiences that are being asked and the assets that are being
asked about, I mean, it is just unreasonable. So I would really
like to see some movement in that area, because as you will
hear from most of us who work with Haiti, who love Haiti, we
really want to see Haitians empowered to be able to run their
own country, to run their own businesses, et cetera.
Having said that, and not being able to say everything I
would like to say, I sincerely believe that until we get
governance right in Haiti, that you are not going to be able to
do the best job that you can do. Until we provide the technical
assistance to Haiti, we are not going to be able to have the
kind of institution that you allude to to do what needs to be
done.
Now, I know that you were just down there, Mr. Adams. I
talked to you before you left, and you probably got a copy of
my letter that I sent to the Secretary. And I know that Haiti
is sovereign country, and we can't just go and tell them what
to do, but I think they want our technical assistance, and I
think a lot of the missteps is about a lack of knowledge and
understanding about how to get some of this done.
Now, you know that I am very, very concerned, and in that
letter that I sent to the Secretary, and I cc'd you, I said
that I am especially concerned about the political challenges
facing the Haitian Senate. Under the Haitian Constitution, the
Senate should consist of 30 Senators, each of whom is elected
to serve for 6 years. However, one-third of the seats in the
Senate are currently vacant. These 10 Senators' terms ended in
2012, and Haiti has yet to hold or even schedule elections to
replace them. This has forced the Senate to function with only
two-thirds of its full complement and made it extremely
difficult for the Senate to assemble a quorum and conduct
legislative business.
A second group of 10 Senators took office in 2009, and
their 6-year terms are scheduled to expire 2015. Unfortunately,
it appears that elections to replace these Senators may not be
held on schedule either, and, of course, there is widespread
rumor within Haiti and among the Haitian diaspora that the
Haitian Government does not intend to allow the Senators
elected in 2009 to serve out their full 6-year terms. This
rumor has it that the government intends to force these 10
Senators to leave office in January 2014, leaving the Senate
completely unable to function, and this, of course, renews old
concerns about dictatorship.
Now, I am not going to go any further except to try and
make this point, that we are providing a lot of aid, and it has
done a lot of good. I want us to continue to provide aid. I
want housing built. I want potable water. I want all of those
things. But I also want us to have some conditions, and part of
those conditions have to do with the Constitution and the
ability to have a government that functions. And I want us to
assign resources to help them get these elections together so
that people can make decisions, and you are not down there
trying to make decisions that you shouldn't have to make.
And so my question, if I still have time to ask it, is, Mr.
Adams, did you take a message down there that--when you went
that you were willing to provide technical assistance to get
these elections done?
Mr. Adams. Yes. Short answer is we have offered $10 million
to support these next round of elections. The cost is estimated
to be about $34 million. The Government of Haiti will put in
about $14 million, and other donors will make up the
difference.
So money is not the issue on the elections. Again, we are--
we have helped Parliament through a parliamentary strengthening
program that it has to analyze their electoral laws and help
produce laws, and that has had some results, but as I
mentioned, we think they can do better there.
I think on the elections, I think you are right, they do
want us to help them schedule a whole series of elections next
year. I don't have time to go into how that might work, but I
will be glad to talk to you or your staff about sort of how we
think that is going to work out. But your letter was very
helpful. They had--they were aware of it, so thank you for
sending it.
Ms. Waters. You are welcome. Thank you.
And I yield back the balance of my time, and I thank you,
Congresswoman Bass. But she left. Thank you.
Ms. Ros-Lehtinen. Thank you very much.
And now we will go to the esteemed Members of Congress who
are not on this committee, but who have earned the right to be
recognized and ask questions. We are honored to have Barbara
Lee, who was first here, recognized for her questioning. And
you may go over the time limit, too, Ms. Lee.
Ms. Lee. Thank you very much, Madam Chair, and thank you
once again for your leadership and also for your assistance
last Congress in getting our legislation, Assessing Progress in
Haiti Act, passed, and I look forward to working with you on
this reintroduction.
Ms. Ros-Lehtinen. I am blessed to work with you. Thank you.
Ms. Lee. Thank you very much.
And to our ranking member Mr. Engel, thank you so much for
your continued leadership as it relates to the Caribbean
region. I have served on the Western Hemisphere Subcommittee
for many years with Mr. Engel, and he ensured that we had some
focus and priority on the Caribbean, and especially Haiti. So
thank you again.
Let me ask you a couple of things. First of all, just to
mention to Mr. Adams, you know, we have--while set-asides may
not be legal, you said against the law, we had minority
business requirements in statute, and believe you me, I know
how State and USAID conduct their contracting, and you-all have
a pretty dismal record in terms of contracting with minority
and women-owned businesses. And so I would hope that you would
go back to the drawing board and look at how you can engage
more with Haitian businesses, Haitian and the diaspora
businesses, as well as African American companies, and other
minority companies who want to participate.
You mentioned the $70 million contract for the port
construction that was just let. I wanted to ask you if you know
how much of that contract was minority-owned in terms of
subcontracting, or requirements for subcontracting for either
Haitian-owned businesses or minority-owned businesses. That is
the first question.
And then second, on the involvement of Haitian Americans,
Haitians and the diaspora, we had a specific requirement that
USAID make it as a priority not only to talk to the Haitian
Americans, but to engage in funding some of these technical
exchanges and professional exchanges. And so I want to see how
that is working and if, in fact, that has been a priority
within your funding mechanism.
Mr. Adams. Yeah. On the port contract, that was a contract
let by the Government of Haiti, not the United States of
America, so I don't know what minority contracting provisions
they put in there. I think it was just a simple contract with a
port construction company.
Ms. Lee. Is it a--I don't remember whether you said--is it
a Haitian-owned company or a U.S. company?
Mr. Adams. It is a U.S.--it is a Florida company. Actually
it is a U.S. subsidiary, a fully owned U.S. subsidiary of an
Italian company, but it is a U.S. company.
Ms. Lee. Yeah. Could you look into that for us and let us
know?
Mr. Adams. Sure.
Ms. Lee. What the elements of that contract are?
Mr. Adams. Sure.
Ms. Lee. Okay. Thank you very much.
And then on the Haitian American exchanges, the technical
exchanges, the support for Haitians in diaspora to go back to
Haiti to contribute to their homeland?
Ms. Hogan. Yes. Indeed, we have initiated a program similar
to what a Fulbright scholarship might look like to send and
embed Haitian Americans into key ministries for a period of up
to 1 year to work side by side with government counterparts to
try to improve their institutional capacity.
Ms. Lee. How many do you have now, and how is that broken
down? We worked on this for many, many years, and I would like
to get sort of an update on that.
Ms. Hogan. Okay. I will defer to State since State runs
that program.
Mr. Adams. Yeah, it is run by our Educational Cultural
Affairs Bureau. There were three last year, and there are
three--there are going to be three more replacing him about now
actually. They are changing over. It has been very successful.
Ms. Lee. You mean three individuals?
Mr. Adams. Yeah, three. They are academics largely. They
are--I mean, they can come from anywhere. They happen to be
Haitian Americans, for the most part. One was assigned to the
Ministry of Health, one to the Prime Minister's office, and one
to the Ministry of Planning, and they were very well received,
and we are going to repeat it.
Ms. Lee. Well, I would like not only repeat it, we need to
enhance this and make it a priority. And I don't think three is
sufficient for what we had initially suggested as some of the
goals for engaging the Haitian diaspora.
Mr. Adams. Yeah, I agree with you. Some of the limitations
are security generated, and I would be glad to discuss that
with you later.
Ms. Lee. Yeah. I think I would like to follow up with that.
Also, a couple of things on the Haiti strategy plan. This
GAO report, again, I just have to say really reinforces the
need for legislation. On the results framework within the Haiti
strategy plan, how does the United States assess the assistance
activity, USAID activities, how they are impacting the lives of
Haitians? We asked about this performance management plan,
which includes all the benchmarks used to measure performance
and effectiveness. How do you do that?
And then also I know that we had requested a detailed
program-by-program description of USAID activities by, you
know, your goals, your objectives, and the amounts of funds
obligated for each program. That was part of the report that
the Senate Committee on Appropriations had requested, as well
as all of the other requirements that we asked for. You know,
what is happening with that?
Ms. Hogan. Yes. In fact, I want to say that just in the
last couple of months, we have launched what we call the
Foreign Assistance Dashboard that now lists all of our programs
by country, by amount, by contracting agency or NGO. So that is
a huge step forward in meeting President Obama's Open
Government Initiative. I just want to reaffirm that we are
completely committed, as an agency, to full transparency in
what we are doing.
Ms. Lee. Could we receive a copy of that report?
Ms. Hogan. Well, it is a dashboard. It is an electronic
system, so you actually go into it, but we can certainly send
you the link for it. Happy to do that.
And as I say, we are not only committed to providing
information, but to making it accessible, hence the dashboard.
So I think we are going to keep building on that over time. And
it is not just USAID's resources; in fact, it is all USG
assistance, so it includes State, it includes Treasury, it
includes some of the DOD activities that they are doing on
international development. So this is just the beginning, but
it is getting built out as we speak, and I think it is going to
be a huge resource for Congress and other interested
stakeholders.
Ms. Lee. Okay. And then in the GAO report--this is my final
question on--which was really quite shocking and appalling when
I saw this--.4 percent of funds went to domestic Haitian NGOs
and businesses? Point-four percent? What is that about?
Ms. Hogan. It is much too low, and as I say, we have a
target of getting up to 17 percent, and even getting to 17
percent is going to be difficult because of the low capacity.
But we are committed to putting resources into building that
capacity so that we will be able to----
Ms. Lee. But this has been going on for years and years and
years, and so what is the problem?
Ms. Hogan. I think we have put aside funds specifically to
build capacity for people to meet our requirements for grant
management, so that is what is different, and that is going to
help us meet that goal.
Although very little of our money goes directly--as I said,
$10.1 million last year went directly to Haitian institutions--
we have spent $50 million through grants and subgrants and
subcontracts to Haitian institutions. And so we are increasing
our numbers both through subs as well as direct, but ideally we
are going to get to direct, and one----
Ms. Lee. Could you break down those institutions, though,
and send us the report on them?
Ms. Hogan. Certainly.
Ms. Lee. Again, that is a----
Ms. Hogan. Certainly.
Ms. Lee [continuing]. Requirement of my legislation.
Ms. Hogan. One thing I would like to highlight for you is a
very innovative condition that we put into our new agricultural
program in the north, which we call Feed the Future North, and
in that contract that has been awarded to a U.S. company, their
performance fee is going to be tied to the degree to which they
can ``graduate'' Haitian subcontractors to the point that they
can then become primary contractors in their own right. I think
this is the first time we have done it as an agency, and we are
doing it in Haiti.
Ms. Lee. That is a very good idea, makes a lot of sense.
Again, I want to see your U.S. companies, any Haitian-owned
U.S.-based companies, or minority-owned companies.
Ms. Hogan. Certainly.
Ms. Lee. U.S. Thank you.
Chairman Royce [presiding]. Frederica Wilson from Florida.
Ms. Wilson. Thank you for holding this hearing. I will not
have time to ask the many questions that I have that have been
submitted to me by my constituents, so I am going to leave them
for you--for staff to get answers to them. But the one thing
they are concerned about is what is being discussed here today:
How do they become a part of the rebuilding of Haiti? This is
what they want to do. They feel left out.
And you talked about the laws of the United States, but
what about the laws of Haiti? When you said the Haitian
Government let out a contract for the port. Will the Haitian
Government make sure that there is minority participation, and
will they make sure that Haitian companies are involved?
They also have some criticisms of USAID, and they have
criticism of the Haitian Government, and one is--another one is
the taxes on any money transfers into Haiti. There is a tax put
on the money to improve education, and they need to find out is
there any oversight of this money that is being sent to Haiti?
Is it really being used for education? Who is making sure that
they are building schools? Because people in the diaspora go
over and they build schools, they build churches, orphanages,
community centers, but they don't ever get any return for that.
So they are not getting contracts; they are doing this on their
own time and money.
And also, there was a ruling in the Dominican Republic the
other day about Haitians--that will render stateless four
generations of Haitian Dominicans. Will our government do
anything to help with this problem? It is a real issue. And if
we continue to say that the Haitian Government lacks capacity,
how are we going to build it?
So there are many, many questions about the restavecs, and
are we following these children? What are we doing as a
government to make sure? Because the problem has increased
since the earthquake. There are problems of insecurity,
deprivation, hunger, and lack of prevention.
And those are some of the issues, but I have a long list
that I would like to get answers for so that I can--I am going
to have a tele-town hall meeting with the Haitian community to
make sure that they have appropriate answers for this. They are
concerned about the elections, and they are saying in the
community in Miami that when the President does not allow for
the elections, he is appointing people to these Senate seats,
and he is appointing people to mayorships and different elected
positions when the people should be electing them. The
President is appointing his friends to these different
positions. So there is a lot of criticism against the
Government of Haiti and a lot of criticism against USAID.
So I will submit the questions to you. But just try to
answer the one about the Dominican Republic. Is anything
happening with that?
Mr. Adams. Sure. I will be glad to speak to that.
On September 23rd, the Dominican Supreme Court issued a
ruling which basically said that those residing in the country
of Haitian origin were only transients and weren't entitled to
citizenship. This prompted the Government of Haiti to withdraw
its Ambassador, and a number of international organizations,
U.N. agencies, protested this result as being in violation of
international law and norms, and particularly a 2005 judgment
by the Inter-American Court of Human Rights, which states that
children do not inherit the illegal status of their parents.
So there is a lot of controversy here. We have engaged, at
very senior levels, with the Government of the Dominican
Republic in a way to figure out how we can ameliorate this
situation, and there are a number of avenues that could take
place on that, but it is fairly complicated. I will be glad to
brief you on that separately, but rest assured, we are engaged
diplomatically in this.
Ms. Wilson. Thank you.
Chairman Royce. Okay. We go now to Yvette Clarke from New
York.
Ms. Clarke. I thank you, Mr. Chairman, and I want to thank
Congressman Engel for extending the invitation to sit in and to
listen. And I think most of the colleagues have really hit some
of the more salient points and concerns that I have. I look
forward to the responses that were requested by colleagues.
However, I do have a question about the minimum wage.
During the questioning of Dr. Gootnick, he spoke to the
issue of the minimum wage. And Haiti's minimum wage is among
the lowest among countries that export apparel, and it is the
lowest in the Western Hemisphere. In addition, garment factory
owners, including those in the Caracol Park, which is heavily
subsidized by U.S. funding and benefits from trade preferences
under HOPE II, are violating U.S. law and Haitian laws. The
Better Work Haiti Program established by the International
Labor Organization and the International Finance Corporation
reported that every single one of Haiti's 24 garment factories
is failing to pay the minimum wage. Therefore, is the State
Department and USAID aware of this issue, and if so, are you-
all engaging the factory industries to be more compliant?
Mr. Adams. That is an excellent question, and let me give
you a fairly extensive answer on that.
The Haitian minimum wage law requires a base wage of 200
gourds a day for those involved in export industries. The
Better Work Haiti report found that all the export factories
are pretty much in compliance with that lower wage tier. The
Haitian law is unclear, however, and requires that piece work
in these factories--anyone engaged in piece work be given an
opportunity to earn a higher 300-gourd wage, but it never
defined how that wage was to be established.
Ms. Clarke. Can you translate the gourd in gourd dollars?
Mr. Adams. About 44 gourds to a dollar.
Ms. Clarke. Okay.
Mr. Adams. Okay.
Ms. Clarke. 44 gourds to a dollar
Mr. Adams. So, the 200-gourd wage is about 5 bucks. The
300-gourd wage is about 7 bucks.
Ms. Clarke. And that is 5 bucks a day?
Mr. Adams. Yes, ma'am, which is higher than Asian wages, I
might add.
But at any rate, the Government of Haiti has worked with
the factory owners, with labor and others to define how that
300-gourd wage is reached, and I think they have gotten
everybody in agreement, and when that is promulgated by the
Government of Haiti, it will clarify this whole area.
All of the factories in Haiti cannot export to the U.S.
unless they meet core labor standards. So we have found that
with--with--as we resolve these issues, they are very
resolvable, there is incentive on both sides to do it, and I am
firmly convinced that this--this unclear area of Haitian wage
law will be clarified very shortly, and that the factories will
be in compliance with it.
Ms. Clarke. I think it is critical, because if we are
subsidizing that, then we become complicit. And, you know, we
are here to help the Haitian people, that is our moral
obligation, and for us to sit and twiddle our thumbs while
these folks are exploited does not bode well for us as a
Nation.
Mr. Adams. Rest assured, we are not twiddling our thumbs.
The U.S. Department of Labor is engaged in this, providing help
and assistance to both sides.
Ms. Clarke. Do we have a sense of when this will be
resolved, how this will be proclaimed, how people will know
their rights as workers, and, you know, how we hold these
factories accountable? I mean, if you are inclined to get away
with paying people, you know, below minimum wage, then you are
inclined to do that notwithstanding, you know, what we set. You
know, we should not have our dollars invested in these types of
companies.
Mr. Adams. No, I think this has been a good story by and
large, the compliance with core labor standards, and I think
this will continue to be a good story.
Ms. Clarke. I would just like to add my voice to that of
Congresswoman Waters about the governance concerns. We have got
to fix that. You know, everything else we are saying here
becomes moot if this government tilts toward a dictatorship.
And, you know, this is a very, very serious issue. Whatever we
must do, we must do to get them on the right track and make
sure that democracy continues down the road to strength.
Thank you.
Mr. Chairman, I yield back, and I thank you for the
opportunity today.
Chairman Royce. I thank the gentlelady. And let me also
thank our witnesses for their willingness to come here and to
testify today, Ms. Hogan, Mr. Adams. And as I said in my
opening statement on this issue of lack of rule of law and lack
of transparency in Haiti, both the Haitians and the U.S.
taxpayers deserve better.
I would like to share some good news. Earlier this year
some private charitable groups were having problems getting an
air ambulance program approved for Medor, Haiti, and we raised
this issue with Tom Adams, and we want to express our
appreciation because you along with the Haitian authorities,
helped resolve the issue. The committee learned just yesterday
that verbal permission has been given by the civil aviation
authorities to proceed with a free emergency air ambulance
program into Medor, and, additionally, that you were present at
the meeting with the Haitian Government when this happened. So
we thank you for that, Mr. Adams, and just want to convey that
the committee appreciates your good work on behalf of these
charitable groups.
And again, thank you both for your testimony here today.
Mr. Adams. Thank you, sir
Chairman Royce. We stand adjourned.
[Whereupon, at 1:10 p.m., the committee was adjourned.]
A P P E N D I X
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Material Submitted for the Hearing Record