A Day for Haiti Solutions for the Future

1. A Day for Haiti Solutions for the Future

2. Self Sufficiency Requires Prompt Governance ReformJackDSmith@RepatriationGroup.com GWU 4/12/2010

3. “Corruption is the greatest obstacleto reducing poverty…[and is] among the greatest obstacles to economic and social development.” World Bank Website

4. Why Foreign Aid to Haiti FailedA Summary Report of the National Academy of Public Administration, a nonpartisan, U.S. government-funded agency • 1990 to 2006-- more than $5.3 billion in aid—not including remittances from Haitian expatriates who contribute $1 billion annually—from international sources ($1.5 B from U.S.). • Impact--negligible-- Haiti remains poorest, most corrupt country in the Western Hemisphere.

5. Why-- “a total mismatch between levels of foreign aid and government capacity to absorb it.” • World Bank: “Haiti has dysfunctional budgetary, financial or procurement systems, making financial aid and management impossible--- without improved governance and institutional reforms, the World Bank and other donors will be able to accomplish very little.”

6. United Nations recommended capacity building for government institutions in seven areas “critical for enabling the Haitian government to adequately… absorb and utilize international assistance and development aid”: • Governance • Promotion of human rights • The administration of justice • The electoral system • Law enforcement • Police training • Other areas of social and economic development

7. Significant corruption in Institutions responsible for upholding the lawWorld Bank: Social Resilience and State Fragility in Haiti, A Country Social Analysis, April 27, 2006 • the police and the judiciary; • embezzlement of public funds by political and private organizations; • payments to government-associated individuals for goods that were not provided and services that were not rendered; • abuse of discretionary accounts by government officials; and • evasion of the licensing fees and import tariffs collected by public enterprises.

8. 2009 Evaluations • Transparency International 2009 Corruption Perceptions Index ranks Haiti as one of the most corrupt places on earth—only 7 of 180 countries have a worse ranking. “Without strong support for the rule of law, large-scale commerce is difficult or impossible, wealth is accumulated primarily by the corrupt, and things not deemed essential for everyday life—like stronger buildings—are overlooked.” • United States Department of State, 2009 Human Rights Report on Haiti said "corruption remained widespread in all branches and at all levels of government.” • President René Préval was perceived to be beginning to make inroads against corruption before the earthquake, and he appears to have the “political will” to confront it. However, he told Reuters in an interview that the US government report was "arrogant“ and “It is an arbitrary judgment to which we won't respond.”

9. AP March 6, 2008-As Haiti goes hungry, tons of food rot at ports-Government effort to halt corruption creates bureaucratic barriers • Dock workers at the River Terminal Services in Miami begin to load a ship bound for Haiti. Containers of beans, rice and other staples are rotting in the nation's ports because of government red tape. • Despite government reforms to stop corruption, some say the bribes continued. The report quotes Canadian, Jean-Paul Michaud, saying that he sailed to the capital of Port-au-Prince in late 2007 carrying 60 pounds of donated clothing and medicine — and that port authorities demanded $10,000 in "customs fees" — code for a bribe to make the fees disappear.

10. May 2009: Two Miami businessmen convicted for bribing Haitian telecom officials • Juan Diaz, 51, and Antonio Perez, 51, pled guilty to having paid more than $1 million in bribes to secure contracts and advantages for U.S.-based telecom companies in Haiti between 2001 and 2003. • Diaz set up a front company to hide and launder bribes for Haitian officials in charge of contracting at the state-owned national telecommunications company, Telecommunications D'Haiti. • The bribes were paid to Telecommunications D'Haiti's ex-director general and ex-director of international relations. Diaz and Perez each face up to five years in prison and a fine of up to $250,000. The government's investigation is ongoing.

11. “Africa doesn't need strongmen, it needs strong institutions.” President Barack Obama Accra, Ghana , July 11, 2009

12. Time 2004

13. Build It Back Better

14. Action Plan for National Recovery and Development of Haiti (March 2010) Four Major Areas of Work • Territorial rebuilding: reconstruction of the devastated zones and urban renovation, the road network, regional development hubs and urban renovation, preparation for the hurricane season and regional planning and local development. • Economic rebuilding: relaunch of national production, restoration of economic and financial circuits, access to electricity. • Social rebuilding: health, food safety, nutrition, water, sanitation, highly labor-intensive activities. • Institutional rebuilding: democratic institutions, restart of public administration, justice and security.

15. Prompt Action against Corruption? p.9: “Institutional rebuilding that will immediately focus on making state institutions operational again by prioritizing the most essential functions; redefining our legal and regulatory framework to better adapt it to our requirements; implementing a structure that will have the power to manage reconstruction; and establishing a culture of transparency and accountability that deters corruption in our country. This ideal, to be reached within 20 years, calls for the mobilization of all efforts and all resources to "make a qualitative change", the theme of the National Strategy for Growth and Poverty Reduction in November 2007.”

16. Haiti Cannot Wait 20 Years • History shows that impoverished countries are especially vulnerable during periods of reconstruction. • Dishonest government officials feast on the huge influx of money and establish powerful networks that perpetuate their dominance after normalcy returns. • In some cases up to 30 percent of development aid has been lost to bribery, kickbacks and embezzlement. • Seventeen percent of Haiti’s civil servants died in the disaster and the Interim Commission will be recruiting an entirely new staff. If these new employees are properly trained during the reconstruction, when they transfer back into the ministries, ethical conduct of government will start to become embedded as standard practice throughout the Haitian government.

17. Anticorruption Mechanisms • P. 51. “The head of state… has committed to taking all necessary measures to facilitate the establishment of mechanisms that can ensure the proper use of funds for the implementation of the Action Plan for National Recovery and Development of Haiti.” • Unfortunately, Action Plan does not provide any details about the mechanisms.

18. Top 20 Mechanisms to Reform Governance in a Corrupt Environment • Living Wages for Government Employees • Code of Ethics (With Annual Training) • Making corruption by a police officer or other government employee a serious criminal offense • Providing for a merit based system for the recruitment of staff who are of high integrity (making nepotism and cronyism unlawful) • Annual Asset Disclosures for all Government Employees (Subject to Penalties for Perjury) • Unexplained Assets (Illicit Enrichment) Subject to Criminal Penalties and Forfeiture • Strict Enforcement of Banking Anti-Money Laundering Laws and Requirements for Enhanced Scrutiny of Politically Exposed Persons • Whistleblower Protection Laws • Hotline to Report Corruption

19. 10% to 20% Rewards for Information Leading to Recoveries of Corrupt Assets • Independent Inspector General • Independent Anti-Corruption Agency which can Form Task Forces with Other Countries to Aggressively Pursue Cross-Border Cases • IHRC Administrative Hearings to Swiftly Process Allegations of Corruption with Power to Order Disbarment, Fines and Restitution. • A New Anti-Corruption Court for Criminal Matters and Review of IHRC Administrative Decisions • Publicize All Corruption Convictions and Administrative Decisions • Competitive Bidding for All Procurements over $10,000 • Annual Audits by Independent Auditors • Requirement for Grantees to Report Each Grant to an Agency Registry to Curb Double Dipping • Publication of All Project Selections Over $ 10,000 to Facilitate Community Monitoring • Bi-Annual Public Expenditure Tracking Surveys

20. “Aid Curse” • High aid revenues going to the national government benefit political insiders, often corrupt insiders, who will vigorously oppose reforms that would lead to more equal distribution of aid. • A 2005 World Bank study found aid’s effect on democracy to be worse than the effect of oil on democracy. • Other studies show that without buy-in from the national government aid programs generally fail. • There are brave and incorruptible leaders in every country. The only way to successfully “build Haiti back better” is to exchange the money carrot for governance reforms, including independent anticorruption courts and agencies under the leadership of those individuals.

21. Governance Reform Now Or Haiti as a Perpetual Ward of the United Nations Forever

22. Morrison Challenge What can the George Washington University, as an institution, do to help Haiti?

23. Annual Survey of Haitian Governance (ASHG) • Establish a course/intern program on aid and governance in developing countries • Each year professors, political science majors and law students will be organized to conduct a survey of individuals and groups involved in or knowledgeable about the progress of governance reforms in Haiti, including: • NGOs and Aid organizations • Press • Representatives of the poor • Representatives of the business community • Contractors • Representatives of the Haitian government • Representatives of international organizations and governments providing aid to Haiti

24. Benefits to students: practical experience in assessing real-world problems in a developing country; meeting and talking to practitioners in the development field; and making a practical contribution to the largest development project on the planet. • Benefits to Haiti: the data collected by the GWU project team will be collated by the GW IT department and published annually. Within two years it will be the definitive impartial statement on governance in Haiti, used by Haitians and non-Haitians alike to support and guide ongoing governance reforms.