Red Cross, which raised nearly half a billion dollars after Haiti's 2010 quake, has been accused of mismanagement

By Stella Dawson

WASHINGTON, June 5 (Thomson Reuters Foundation) - The Red Cross has defended its work in Haiti following a devastating earthquake five years ago after a media investigation found it had only built six houses despite raising nearly half a billion dollars in donations.

ProPublica, an investigative journalism website, and U.S. radio network NPR confronted the American Red Cross this week with a report about the relief agency's use of donations to help the 1.5 million people displaced by January 2010 earthquake.

The report accused the Red Cross of wasting money through various failures and mismanagement, leaving families homeless and unable to survive, while relying too heavily on foreign workers who could not speak French or Creole.

The Thomson Reuters Foundation also learned the Red Cross spent at least 17 percent of funds on expenses in Haiti, despite the U.S. group and international federation stating 91 cents on each dollar goes to humanitarian programmes and services.

The American Red Cross dismissed the report as lacking in "balance, context and accuracy", saying its work in Haiti had made a difference in the lives of millions of Haitians.

"Despite the most challenging conditions, including changes in government, lack of land for housing, and civil unrest, our hardworking staff - 90 percent of whom are Haitians - continue to meet the long-term needs of the Haitian people," the non-government organisation said in a statement on its website.

"While the pace of progress is never as fast as we would like, Haiti is better off today than it was five years ago."

The 7.0-magnitude earthquake on Jan. 12, 2010, killed more than 220,000 people and was a wake-up call to the government and international aid agencies about the dire need to protect Haitians from disasters and build resilience among communities.

The Red Cross said donations had helped build eight hospitals and clinics, stem a cholera outbreak, provide clean water and sanitation, repair roads and schools, and move more than 100,000 people out of make-shift tents into housing.

But the investigation's discovery that only six permanent houses had been built in Haiti hit headlines and sparked outrage on social media about the lack of transparency and effectiveness of aid funds.

QUESTIONS OVER SPENDING

The report, based on confidential emails from top officials and accounts, said the American Red Cross claimed it provided homes for more than 130,000 displaced people, but the actual number of permanent residences it built was six.

Addressing the report, the Red Cross said it had used other methods to improve housing after the 7.0 magnitude earthquake.

"When land was not available for new homes, the Red Cross provided a range of housing solutions including rental subsidies, repairs and retrofitting of existing structures, fulfilling our promise to ensure tens of thousands of Haitians are back in homes," it said.

The American Red Cross declined to respond to any further questions from the Thomson Reuters Foundation.

In a fact sheet released with the statement, the Red Cross said often the fastest and most efficient way to provide housing was through rental subsidies.

One of its rental subsidy programmes was operated by the International Federation of Red Cross and Red Crescent Societies (IFRC), the Geneva body of which the American Red Cross is a member and this added to overhead costs.

While the American Red Cross reports 91 cents on every dollar goes to humanitarian programmes and services, the IFRC told the Thomson Reuters Foundation that when it runs a programme it levies an extra 6.5 percent plus in-country expenses to cover offices, telecoms and other operating costs.

The IFRC could not immediately provide details on how much it added to run the $6 million Haiti rental subsidy programme but in a five-year report on the Red Cross's Haiti relief efforts it said overall 17 percent was spent on "program support and coordination".

(Reporting by Stella Dawson; Editing by Belinda Goldsmith )

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