Donald Trump is to order his health secretary to declare a public health emergency in response to the US’s escalating opioid epidemic. But while the announcement that the president intends to “mobilise his entire administration” to combat the crisis will be seen as an important symbolic moment, there will be no new funds to deal with an epidemic claiming 100 lives or more a day.
The declaration, which follows a report from the president’s opioid commission recommending he proclaim an emergency, is for 90 days and can be renewed. Under the health service act, the president will instruct his health secretary to make the declaration. The White House said the administration chose to use health legislation because the alternative of declaring a national emergency is usually reserved for natural disasters. It would also be likely to give more immediate access to large scale funding.
A senior White House official said the crisis is an “urgent priority for the president” and that the declaration under the health service act will help the administration direct additional resources toward some of the worst hit areas, such as expanded access to telemedicine in rural areas of Appalachia where medical resources are limited. It will also allow the administration to appoint specialists and address doctor shortages, as well as direct some money used to treat HIV/Aids toward people within that programme who are also addicted to opioids.
The declaration is not expected to immediately address the mass prescribing of opioid painkillers underpinning the epidemic.
But there will for now be no new money for the kind of measures some state governments are pressing for including greatly increased funding of long term treatment centers.
The White House said it is having a “conversation with Congress” about new funding. It said that the administration has spent $1bn to deal with the crisis since Trump took office although that money was allocated while Barrack Obama was in power.
Just after President Trump was elected last November, thousands of American scientists did something unprecedented. Alarmed by the incoming president’s blatant disregard for the facts, they sent an open letter calling on the new administration and Congress to respect “scientific integrity and independence.” Signed by more than 5,500 scientists, the letter ends with a warning: “We will continue to champion efforts that strengthen the role of science in policymaking, and stand ready to hold accountable any who might seek to undermine it.”
If Trump’s scientifically indefensible statements on the campaign trail weren’t disturbing enough, his cabinet appointees, his executive actions rescinding environmental safeguards and his preliminary “skinny” budget proposing to gut federal science programs have all set off alarm bells.
In response, the scientific community is preparing for another unprecedented action. On Saturday, April 22, Earth Day, scientists and their supporters gathered in Washington, D.C., and more than 400 cities around the world for the first-ever March for Science, kicking off a week of activism that will be capped by the People’s Climate March on April 29.
Never before have scientists seemed this motivated and engaged, and with good reason. Trump’s actions and his proposed budget would not only threaten public health and the environment, they also would stifle American innovation and slow economic growth.
That’s right. Most Americans — including the businessman in the White House, apparently — do not fully appreciate how much our economy relies on federal science. The truth is, U.S. corporations, their employees, and the public at large are all heavily indebted to taxpayer-funded research for a wide array of consumer products, pharmaceuticals and technologies. Regardless, Trump’s proposed cuts would hamstring research at federal agencies that have a long history of doing the heavy lifting.
Nipping the Nifty 50
Let’s start with the fact that you’re reading this on a computer or another electronic device. In 1973, the U.S. Defense Advanced Research Projects Agency launched a research program called the Internetting project, which developed procedures that allowed computers to communicate across multiple, linked networks. In the mid-1980s, the National Science Foundation underwrote the development of DARPA’s system to provide the backbone of what we now call the internet.
The National Science Foundation’s website includes the internet in its “Nifty 50” government-funded inventions, innovations and discoveries that we all now take for granted. The list, which includes everything from barcodes and magnetic resonance imaging (MRI) technology to speech recognition and web browsers, amounts to just a small sampling of products and technologies government funding helped spawn.
Although Trump’s proposed budget does not specifically mention the National Science Foundation, which currently provides more than $7 billion annually in research grants, it likely will be included in the category of “other agencies” that Trump wants to cut by nearly 10 percent.
Defunding Life-Saving Drug Research
Trump’s proposal does explicitly call for slashing the National Institutes of Health’s annual budget by 18 percent, from its current $31.7 billion to $25.9 billion, which would bring its funding to the lowest level in at least 15 years (in constant dollars). According to the Association of American Medical Colleges, such a drastic cut “would irreparably harm the ability of the nation’s scientists to develop cures and treatments” and would “have a devastating effect on America’s health security.”
An analysis published earlier this month in the journal Science found that more than 30 percent of NIH-funded biomedical studies between 1980 and 2007 were later cited in a patent for a drug, device or medical technology. Nearly a tenth of all NIH grants over the same time period, meanwhile, led directly to a patent.
NIH’s commercialization track record has had a significant economic impact. According to a 2013 report by United for Medical Research — a coalition of leading research institutions, patient and health advocates, and private industry — NIH-funded research added $69 billion to U.S. gross domestic product in 2011 alone. If anything, “we’re underinvesting” in biomedical research, says economist Pierre Azoulay, co-author of the recent Science study. “The idea that we’re going to get to a better place by cutting [the NIH budget] is ridiculous.”
Running Out of Energy
The Trump blueprint proposes to cut the Department of Energy budget by less than 6 percent, to $28 billion, but would spend more on the DOE’s National Nuclear Security Administration — which runs the nuclear weapons complex — and chop energy-related programs by nearly 18 percent. The Office of Science, which supports research at more than 300 universities and oversees 10 national laboratories, would suffer a 16 percent cut. Many of those labs, including Lawrence Berkeley and Pacific Northwest, conduct studies on bioenergy, electric vehicles, energy efficiency, hydropower and solar energy.
The Advanced Research Projects Agency-Energy and the Innovative Technology Loan Guarantee Program, both which invest in cutting-edge energy technologies private investors won’t fund, would be eliminated altogether, as would the Advanced Technology Vehicle Manufacturing Program, which provides loans to automakers to produce a new generation of fuel-efficient vehicles.
Federal Science Trumps Corporate R&D
The Trump administration’s rationale for eliminating these DOE research programs? According to the president’s budget report, the “private sector is better positioned to finance disruptive energy research and development and to commercialize innovative technologies.”
In fact, government-funded R&D — not the private sector — is responsible for much of the innovation that drives economic growth. As economist Mariana Mazzucato, author of The Entrepreneurial State: Debunking Public vs. Private Sector Myths, explained in a September 2013 article, “businesses are typically timid — waiting to invest until they can clearly see new technological and market opportunities. And evidence shows that such opportunities come when large sums of public money are spent directly on high risk (and high cost)” research. The private sector’s “fear explains why we have seen venture capital entering, in industry after industry, only decades after the initial high risk has been absorbed by the government.”
Rush Holt, CEO at the American Association for the Advancement of Science, agrees that “corporate research, as beneficial as it may be, is no substitute for federal investment in research.”
“We need both,” he wrote in a September 2016 column. “But we should recognize that the private sector, with its natural focus on commercial results and return on investment, will not do much of the fundamental research that is necessary for the long-term progress of society.”
Holt, who served in Congress from 1999 to 2015 and holds a doctorate in physics, called on the federal government to “fund more vital research for public health, safety, security, economics and quality of life.” The Trump administration’s preliminary budget blueprint, however, indicates that it plans to do the exact opposite, one of the many reasons scientists will be marching this weekend.
Some experts point out that gutting federal scientific research would have dire international consequences as well.
“If they were enacted, these cuts signal the end of the American century as a global innovation leader,” Robert D. Atkinson, president of the Information Technology and Innovation Foundation, recently told the Los Angeles Times. “America’s lead in science and technology was built on the fact that in the 1960s, the U.S. government alone invested more in R&D than the rest of the world combined, business and government. The Trump budget throws this great legacy away."
In the wake of the Flint, Michigan water crisis and service shutoffs in nearby cities like Detroit, many believe the country is experiencing a water infrastructure catastrophe. In this political climate, President Obama's proposed budget to Congress this week would cut federal funding for community water services by $257 million.
Wenonah Hauter, executive director of Food & Water Watch, released a statement criticizing the cuts. “Following the Flint water crisis, which is emblematic of our national water woes, it is outrageous that the Obama administration can’t be moved to truly step up and deliver the leadership needed to fully fund our water infrastructure,” her statement reads. “With the exception of the recovery stimulus, this administration has shown no interest in adequately investing in our water infrastructure.”
The public call for heads to roll in Flint has reached the level of law enforcement. This week a top investigator in the Flint probe announced that local officials could potentially face manslaughter charges for their roles in allowing the city’s water supply to be poisoned. This makes the proposed federal cuts all the more puzzling.
The 2017 budget also proposes adding money to the EPA program that offers grants and loans to help water systems, but it aims to pay for this by making much larger cuts to the EPA's clean water programs. Critics have tagged the idea as absurd. Natural Resources Defense Council attorney Mae Wu writes, "Cutting funds that help keep pollution out of our water and moving the money to remove pollution once it's already in our drinking water is no solution at all."
The proposed budget provides $1,020.5 billion for the Drinking Water State Revolving Fund and $979.5 million for the Clean Water State Revolving Fund, which is an 11% cut from last year.
The Drinking Water State Revolving Loan Fund (DWSRF) was established via 1996 amendments to the Safe Drinking Water Act and has provided $27.9 billion to water systems through 2014. That assistance has helped communities improve water supplies, and improve damaged pipes and drinking water treatment.
The Clean Water State Revolving Fund was established via the 1987 amendments to the Clean Water Act and has provided every state with grants to improve their water infrastructure and control pollution.
Following a Columbia Journalism Review article on whether science journalists should accept money from corporate interests, and whether there is adequate disclosure of sources’ corporate ties and conflicts of interest, U.S. Right to Know reviewed recent articles to assess how often journalists and columnists quote academic sources without stating that they are funded by the agrichemical giant Monsanto, which produces pesticides and GMOs.
Our review found 27 articles quoting (or authored by) university professors after they received Monsanto funding, but without disclosing that funding.
This is a collapse of journalistic standards. When reporters quote sources about food issues such as GMOs or organic food, readers deserve to know if the sources have been funded by Monsanto or have other conflicts of interest.
The principal effect of failing to reveal these conflicts of interest is to unfairly enhance the credibility of Monsanto-funded academics, and their support of GMOs and criticism of organic food, while detracting from the credibility of consumer advocates.
Our review found that many top media outlets quoted either University of Florida Professor Kevin Folta or University of Illinois Professor Emeritus Bruce Chassy without disclosing that the professors received funding from Monsanto. According to documents published by the New York Times, Professor Folta received Monsanto funding in August 2014, and Professor Chassy in October 2011, if not before.
Many of these journalistic failures occurred at influential news outlets: newspapers such as the New York Times, Washington Post and Chicago Tribune; science publications such as Nature, Science Insider and Discover; magazines such as the New Yorker, Wired and The Atlantic; as well as broadcast outlets like ABC and NPR.
Following is a list of news articles quoting (or authored by) Professors Folta and Chassy — after they received their Monsanto funding – but failing to disclose that they had received the Monsanto funding.
New York Times: Taking on the Food Industry, One Blog Post at a Time. By Courtney Rubin, March 13, 2015. (Also ran in the Sarasota Herald-Tribune.)
New York Times: Foes of Modified Corn Find Support in a Study. By Andrew Pollack, September 19, 2012.
Washington Post: Kraft Mac & Cheese Just Got Duller. You Can Thank (Or Blame) ‘The Food Babe.’ By Michael E. Miller, April 21, 2015. (Also ran in the Chicago Tribune.)
Washington Post: Proof He’s the Science Guy: Bill Nye Is Changing His Mind About GMOs. By Puneet Kollipara, March 3, 2015.
Nature: GM-Crop Opponents Expand Probe Into Ties Between Scientists and Industry. By Keith Kloor, August 6, 2015.
NPR: Is The Food Babe A Fearmonger? Scientists Are Speaking Out. By Maria Godoy, February 10, 2015.
New Yorker: The Operator. By Michael Specter, February 4, 2013.
The Atlantic: The Food Babe: Enemy of Chemicals. By James Hamblin, February 11, 2015.
Wired: Anti-GMO Activist Seeks to Expose Scientists Emails with Big Ag. By Alan Levinovitz, February 23, 2015.
ABC News: Scientists Developing Hypo-Allergenic Apples. By Gillian Mohney, March 22, 2013.
Science Insider: Agricultural Researchers Rattled by Demands for Documents from Group Opposed to GM Foods. By Keith Kloor, February 11, 2015.
Columbia Journalism Review: Why Scientists Often Hate Records Requests. By Anna Clark, February 25, 2015.
Discover: Open Letter to Bill Nye from a Plant Scientist. By Keith Kloor, November 10, 2014.
Discover: How to Balance Transparency with Academic Freedom? By Keith Kloor, February 27, 2015.
Discover: Anti-GMO Group Seeks Emails from University Scientists. By Keith Kloor, February 11, 2015.
Forbes: Did The New Yorker Botch Puff Piece On Frog Scientist Tyrone Hayes, Turning Rogue into Beleaguered Hero? By Jon Entine, March 10, 2014.
Forbes: You Can Put Lipstick On A Pig (Study), But It Still Stinks. By Bruce M. Chassy and Henry I. Miller, July 17, 2013. Forbes: Anti-GMO Scientist Gilles-Eric Seralini, Activist Jeffrey Smith Withdraw from Food Biotech Debate. By Jon Entine, May 29, 2013.
Forbes: Malpractice On Dr. Oz: Pop Health Expert Hosts Anti-GM Food Rant; Scientists Push Back. By Jon Entine, October 19, 2012.
Forbes: Scientists Smell a Rat In Fraudulent Genetic Engineering Study. By Henry I. Miller and Bruce Chassy, September 25, 2012. Forbes: The Science of Things That Aren’t So. By Bruce Chassy and Henry I. Miller, February 22, 2012.
Des Moines Register: Consumers Are Misled About Organic Safety. By John Block, October 10, 2014.
Gainesville Sun: Genetically Modified Foods Face Hurdles. By Jeff Schweers, June 29, 2014.
Peoria Journal Star: Hybrid Crops That Used to Offer Resistance to Rootworm No Match for Mother Nature. By Steve Tarter, June 21, 2014.
Gawker: The “Food Babe” Blogger Is Full of Shit. By Yvette d’Entremont, April 6, 2015.
Louis Post-Dispatch: California Labeling Fight May Raise Food Prices for All of Us. By David Nicklaus, August 19, 2012.
This is merely one example of two professors who were not identified as received funding from Monsanto, and yet these two professors received major traction in the media as “independent” experts on GMOs and organics. The only reason the professors admitted to receiving Monsanto funding was due to emails uncovered by Freedom of Information Act requests filed by U.S. Right to Know, a consumer group.
How often does it happen that journalists present other academics funded by food or agrichemical companies as “independent” sources and without disclosing their corporate funding?
One remedy for this problem is that when journalists write about food, that they carefully ask their sources whether they have any conflicts of interest, where they get their funding from, and whether they receive any funding from food or agrichemical companies like Monsanto, or their PR front groups.
That, however, may not be enough. Professor Kevin Folta received Monsanto funding, yet repeatedly denied ties to or funding from Monsanto. Reporters — and readers — should be aware that such deceit by Monsanto-funded academics has recently occurred, and be on their guard against it.
President Obama met with Israeli Prime Minister Netanyahu on November 9 in the White House and is considering the Israeli request to give a 50% increase of nearly $1.5 billion in U.S. military funding bringing the U.S. donation to the killing of Palestinians in the West Bank and Gaza to $4.5 billion a year.
As it stands now, more that half of the U.S. foreign military spending for 2016 goes to Israel. As in all things, Israel gets special treatment by the U.S. allowing Israel to spend 25% of its gift from the U.S. to pay itself for buying weapons from its own weapons industry!!!
According to a recent congressional report, Israel has received $124.3 billion in military assistance from the US since its founding in 1948.
The report states that “strong congressional support for Israel has resulted in Israel receiving benefits not available to any other countries; for example, Israel can use U.S. military assistance both for research and development in the United States and for military purchases from Israeli manufacturers.
In addition, U.S. assistance earmarked for Israel is generally delivered in the first 30 days of the fiscal year, while most other recipients normally receive aid in installments, and Israel (as is also the case with Egypt) is permitted to use cash flow financing for its U.S. arms purchases.
In addition to receiving U.S. State Department-administered foreign assistance, Israel also receives funds from annual defense appropriations bills for rocket and missile defense programs. Israel pursues some of those programs jointly with the United States.”
As Obama was meeting Netanyahu, eight blocks away at the Palestine Center in Washington, DC, a surgeon from Norway who works on behalf of his university part of each year in al Shifa hospital in Gaza, told of the devastation, destruction and human suffering these American weapons and dollars cause.
Dr. Mads Gilbert spoke of 51 days of terror in Gaza in the summer of 2014 as the Israeli Attack forces brutalized the people of Gaza with Israeli and U.S. artillery, assassin drone ordnance, F16s, hellfire missiles and dense inert military explosives. Gilbert said that the 2014 Israeli attack on Gaza was 500% stronger than 2009 attack. He was working at al Shifa hospital in 2009 when the IDF attacked Gaza. In 2014, the IDF fired 50,000 of those shells into Gaza and conducted over 6,000 airstrikes, destroying over 3,500 buildings in Gaza City alone including over 50% of the hospitals in Gaza.
At the end of the 51-day attack, 2250 Palestinians were dead, including 551 children and 299 women. 3,500 Palestinian children were wounded and the 1 million children and youth who live in Gaza were all deeply affected by the attacks. 60 percent of the 1.8 million who live in Gaza are under the age of 22.
Dr. Gilbert’s presentation included mind-searing photos of the carnage caused by Israeli attacks and the audio of the sounds of jets racing overhead, bombs exploding and buildings collapsing.
Citing the report of the United Nations Independent Commission of Inquiry on the 2014 Gaza Conflict, Gilbert said the IDF purposefully targeted the civilian population including entire families, that the IDF purposefully targeted hospitals, ambulances and four UN shelter facilities.
The report stated that “Hundreds of Palestinian civilians were killed in their own homes, especially women and children. At least 142 families lost three or more members in an attack on a residential building during the summer of 2014, resulting in 742 deaths. The fact that Israel did not revise its practice of air-strikes, even after their dire effects on civilians became apparent, raises the question of whether this was part of a broader policy which was at least tacitly approved at the highest level of government.”
Additionally, “the commission is concerned about Israel’s extensive use of weapons with a wide kill and injury radius; though not illegal, their use in densely populated areas is highly likely to kill combatants and civilians indiscriminately. There appears also to be a pattern whereby the IDF issued warnings to people to leave a neighbourhood and then automatically considered anyone remaining to be a fighter. This practice makes attacks on civilians highly likely. During the Israeli ground incursion into Gaza that began in mid-July 2014, hundreds of people were killed and thousands of homes destroyed or damaged.
The commission report stated: “Palestinian armed groups fired 4,881 rockets and 1,753 mortars towards Israel in July and August 2014, killing 6 civilians, including one child and injuring at least 1,600.” 66 Israeli soldiers were killed in military operations inside Gaza.
The commission also reported: “In the West Bank including East Jerusalem, 27 Palestinians were killed and 3,020 injured between June and August 2014. The number killed in these three months was equivalent to the total for the whole of 2013. The commission is concerned about what appears to be the increasing use of live ammunition for crowd control by the Israeli Security Forces, which raises the likelihood of death or serious injury.”
The commissioners wrote, “Impunity prevails across the board for violations allegedly committed by Israeli forces, both in Gaza and the West Bank. “Israel must break with its lamentable track record in holding wrong doers accountable, and accountability on the Palestinian side is also woefully inadequate.”
Signaling further attacks on Gaza, during a November 10 talk at the Center for American Progress in Washington, Netanyahu said that Gaza has “become this poison thumb, this poison dagger that sends rockets” into Israel and that Israel must be prepared for a long period of tension.
This blind backing for whatever Israel does and providing the weapons to do it is dangerous for the United States and for Israel. As Israeli journalist Gideon Levy recently wrote concerning Hillary Clinton’s unwavering support for Israel, but can be expanded to the similar support given by both Republican and Democratic led U.S. administrations: “… support (for) the continued occupation is like a person who continues to buy drugs for an addicted relative. This is neither concern nor friendship; it is destruction… “false” friends of Israel – have been one of the curses on this country for years. Because of them, Israel can continue to act as wildly as it likes, thumbing its nose at the world and paying no price. Because of them, it can destroy itself unhindered. http://www.commondreams.org/views/2015/11/10/hillary-clinton-no-friend-israel
Israeli attacks on people in Gaza and the West Bank will end when we the citizens of the U.S. force our government to stop its military and diplomatic backing of the State of Israel.
Ford Motor Company, despite its much-hyped commitment to the environment, has been quietly funding the American Legislative Exchange Council (ALEC), a group widely criticized for its promotion of climate change denial and for its opposition to the development of renewable alternatives to fossil fuels.
A Ford spokesperson, Christin Baker, confirmed the ALEC grant to the Center for Media and Democracy/PRWatch, but said that the funding was not intended to be used by ALEC to block action on climate change.
"Ford participates in a broad range of organizations that support our business needs, but no organization speaks for Ford on every issue. We do not engage with ALEC on climate change," said Baker.
Major Corporations Flee ALEC over Climate Denial
CMD is breaking the story of Ford funding of ALEC as other major international corporations have continued to withdraw financial support for the organization. Since CMD first launched the ALEC Exposed investigation in 2011, revealing the extensive agenda of the corporate lobbying group, more than 100 corporations have left ALEC, including BP, Occidental, Yahoo, Visa, Coca-Cola, Microsoft, Walmart, and McDonalds.
In September 2014, Google announced that it would end its ALEC funding. "I think the consensus within the company was that that was some sort of mistake, and so we’re trying to not do that in the future," Chairman Eric Schmidt told National Public Radio.
Schmidt then slammed ALEC for the deceptive claims it has showcased on climate change, even though "The facts of climate change are not in question anymore. Everyone understands climate change is occurring, and the people who oppose it are really hurting our children and our grandchildren and making the world a much worse place. And so we should not be aligned with such people—they’re just, they’re just literally lying."
Most recently, Shell Oil announced it would withdraw support for ALEC in August 2015, telling the Washington Post: "ALEC advocates for specific economic growth initiatives, but its stance on climate change is clearly inconsistent with our own."
Ford has attempted to present itself as a leader in addressing climate change, in part through its participation in the United Nations Global Compact (UNGC). The compact requires corporate members to address ten principles concerning human rights, labor standards, anti-corruption, and the environment.
As part of its UNGC commitment, Ford boasts that it "is committed to doing our share to prevent or reduce the potential for environmental, economic and social harm due to climate change."
Ford's funding of ALEC is inconsistent with that aim.
At a session held during the 2014 ALEC Annual Meeting in Dallas, Texas, ALEC legislators were repeatedly told: “There is no scientific consensus on the human role in climate change.” At another session during the same conference, legislators heard that: "The idea that there is a "scientific consensus" [on climate change] does not hold up." ALEC counts more than 2,000 legislators as members and it has touted its reach in Congress with former House Speaker John Boehner plus several GOP members of the Senate and House who have publicly denied climate change.
Despite ALEC's efforts to promote climate change denial among U.S. politicians, there is in fact wide consensus that the earth is warming because of human activity. Respected scientific bodies including the National Academy of Sciences, the American Medical Association, and the American Association for the Advancement of Science, along with 97% of climate scientists agree on this point.
Earlier this year, CMD/PRwatch co-launched a new website that documents the teaching of climate change denial to legislators at ALEC conferences: ALECClimateChangeDenial.org.
ALEC's next meeting is in Scottsdale, Arizona, at the same time as the UNFCC's COP 21 meeting on climate change will be taking place in Paris, France.
Specialists in infectious disease are protesting a gigantic overnight increase in the price of a 62-year-old drug that is the standard of care for treating a life-threatening parasitic infection.
The drug, called Daraprim, was acquired in August by Turing Pharmaceuticals, a start-up run by a former hedge fund manager. Turing immediately raised the price to $750 a tablet from $13.50, bringing the annual cost of treatment for some patients to hundreds of thousands of dollars.
The hedge fund manager responsible for the price increase is named Martin Shkreli. Shkreli has a reputation as some type of wunderkind, having started his own hedge fund company while still in his 20's. Shkreli has already drawn attention for urging the FDA not to approve drugs made by companies whose stocks Shkreli was shorting. In July 20012, Citizens for Responsibility and Ethics in Washington called for an investigation of Shkreli and others whom it charged were manipulating the prices of drug company stocks through blog posts intended to spread negative and purportedly misleading information about certain drugs. According to CREW, Mr. Shkreli has acknowledged he has no medical expertise whatsoever. His company stands to increase sales in the magnitude of tens or even hundreds of millions of dollars from the price increase, according to the article.
The Infectious Diseases Society of America and the HIV Medicine Association sent a joint letter to Turing earlier this month calling the price increase on Daraprim “unjustifiable for the medically vulnerable patient population” and “unsustainable for the health care system.” An organization representing the directors of state AIDS programs has also been looking into the price increase, according to doctors and patient advocates.
Daraprim, known generically as pyrimethamine, is used mainly to treat toxoplasmosis, a parasite infection that can cause serious or even life-threatening problems for babies born to women who become infected during pregnancy, and also for those with compromised immune systems, like AIDS patients and certain cancer patients.
The history of Daraprim provides an interesting case study into everything that is wrong with the U.S. health care system.
Daraprim, which is also used to treat malaria, was approved by the F.D.A. in 1953 and has long been made by GlaxoSmithKline. Glaxo sold United States marketing rights in 2010 to CorePharma. Last year, Impax Laboratories agreed to buy Core and affiliated companies for $700 million. In August, Impax sold Daraprim to Turing for $55 million, a deal announced the same day Turing said it had raised $90 million from Mr. Shkreli and other investors in its first round of financing.
Shkreli may also be able to prevent generic duplication of the drug by controlling its distribution, a tactic which prevents other companies from getting enough of the drug to test.
Ultimately, the problem really isn't Mr. Shkreli. He's just a shark doing what sharks do. The problem is that when vital drug treatments and health care are consigned to the whims of the "free market," people like Shkreli are equally free to charge whatever they want to vulnerable patients by claiming, as here, that the distribution is small enough to warrant "specialty status" for such drugs:
Turing’s price increase could bring sales to tens or even hundreds of millions of dollars a year if use remains constant. Medicaid and certain hospitals will be able to get the drug inexpensively under federal rules for discounts and rebates. But private insurers, Medicare and hospitalized patients would have to pay closer to the list price.
Shkreli claims that the higher cost for the drug is necessary for his new company to develop better treatments for toxoplasmosis, a claim which doctors quoted in the Times article call hollow as the side effects for Daraprim are manageable and there is no "clamoring" for a substitute. Interestingly, Shkreli's is the same type of claim pharmaceutical companies made in responseto efforts to allow Medicare to negotiate prescription drug prices.
Toxoplasmosis affects nearly half of the world's population and is generally not viewed as a serious health problem for most. The people for whom it is a serious problem and life-threatening are those infected with HIV, those diagnosed with AIDS, cancer patients, or who have otherwise compromised immune systems. These are often the people who can least afford to bear ridiculously inflated drug costs imposed solely to line the pockets of hedge fund managers.
Dr. [Judith] Aberg of Mount Sinai said some hospitals will now find Daraprim too expensive to keep in stock, possibly resulting in treatment delays. She said that Mount Sinai is continuing to use the drug, but each use now requires a special review.
“This seems to be all profit driven for somebody,” she said, “and I just think it’s a very dangerous process.”
Last night was the deadline for the Federal Election Commission's requirements that presidential candidates report how much they raised in the second quarter of 2015. On the Republican side, this includes sizable hauls that were matched by much larger super PAC fundraising that acts as a sort of loophole to allow billionaires to give whatever they want to the political process.
For the Democrats, the two leading candidates are Bernie Sanders and Hillary Clinton. Sanders raised about $13.7 million. When added to money from his last Senate campaign, this brings him to over $15 million. Clinton raised almost $48 million.
But it is the nature of that fundraising that is perhaps most interesting. The FEC segregates donations into two levels that can be easily deciphered: under $200, typically referred to as “small donors," and over $200. Nearly 81 percent of Sanders' donors fit into this small donor category, making him the candidate who has raised the most from these donors on either side (Ben Carson comes in second at around 80.2 percent).
Clinton raised just 17 percent of her total from small donors. Much of the rest was raised by bundlers, many of whom are lobbyists, such as Heather Podesta and Steve Elmendorf (check out the list of bundlers here).
This is a stark contrast in how the campaigns are raising money. Sanders has pledged to reject corporate Political Action Committee money and fundraise mostly from small donors. Clinton has embraced traditional Washington methods of fundraising. As of the second quarter of 2015, both are basically sticking to their plans.
If SUNY is going to oversee more charter schools, it’s going to need more money, the chair of its charter-school committee said Monday.
Trustee Joseph Belluck said SUNY is facing a choice between maintaining the Charter School Institute’s strict oversight or stretching its staff thin by authorizing more New York City charter schools, as the state legislature allowed in a deal approved last week. Belluck said his decision was clear.
“I will say this now: I am not scheduling a vote on a single charter, a new charter, until there are additional resources allocated to the Charter School Institute,” Belluck said.
“I am saying it to the charter community and the legislature and everybody else. I am a very stubborn person. I will not change my mind about this,” he added. “If you want more charters in New York City or in upstate New York, you need to figure out a way to give us the resources to do it.”
SUNY is one of two entities, along with the Board of Regents, that can approve new charter schools in New York state. Until last week’s legislative deal, New York City charters were divided into those set aside for the Regents and for SUNY. SUNY had nearly exhausted its supply, with only one remaining charter.
The new law allows 50 additional charter schools to open in New York City, and allows those applicants to choose between the Regents and SUNY, the preferred authorizer of some of the city’s charter-school networks, including Success Academy. If schools rush to SUNY, Belluck said, the situation could become untenable.
“I do not think it would be the responsible thing for me to add more charters to the Institute’s workload without some additional funding,” he said. “I am personally very disappointed that the legislation that just passed did not include some additional funding for our work.”
SUNY Charter School Institute’s budget for the coming school year, when it will oversee 146 schools, is $2.58 million. The Institute’s funding has trended downward for years even as it added more schools, and next year’s budget is less than the Institute was allocated in 2009-10, when the Institute oversaw just 68 schools, though it represents an increase over its $2.44 million budget for 2014-15.
Few were ready to offer additional support Monday.
“We fully expect the Charter Institute and SUNY to comply with the law and approve applications for high-performing charter schools, as it would be irresponsible not to,” a Cuomo administration official said in a statement, which praised the Institute’s “impeccable” track record. “This year, the State did approve an additional 5.8% increase for the Charter Institute, while many other agencies were held flat, so we believe they have the resources to handle any additional workload.”
The New York City Charter Center was also critical of any potential delay in approving new schools.
“While we are sympathetic to the need of charter authorizers, including SUNY, to have sufficient resources to accomplish their critical oversight role, nothing can or should delay new great public charter schools from opening,” Charter Center CEO James Merriman said in statement.
Merriman said he hoped SUNY would quickly release a request for proposals, which would kick off another round of charter applications. Susan Miller Barker, the Institute’s executive director, said during Monday’s meeting that one was ready to be posted later this week.
Summer weather is being intensified by the heat of the state budget season—a time when, in too many places, the cost of tax cutting and privatization of the public schools is being represented clearly in dollars and cents. And today’s attack on the common good is bipartisan.
A new report shows that New York’s Democratic governor, Andrew Cuomo, and the NY legislature have been the target of $13 million in lobbying in the past year to push the expansion of charters and a tuition tax credit voucher program—both hot topics in NY’s budget debate—with Cuomo leading the charge for privatization and vouchers.
Another report explores the impact of pro-charter school lobbying on the Democratic governor of Connecticut, Dan Malloy—money from people like Jonathan Sackler, who made his fortune producing Oxycontin at Purdue Pharma, and who is the founder of ConCAN (which is part of a nationwide, Sackler supported, coalition of far-right privatizers, 50-CAN). In an opinion piece in the Stamford Advocate, Wendy Lecker explains: “Governor Malloy’s tenure has been characterized by denigrating teachers, vigorously opposing adequate funding of public schools and vastly increasing financial support for privately run charter schools…. Why would Malloy favor these questionable privately run schools over underfunded public schools?… The web of charter money is so thick it must have blinded Malloy to the needs and wishes of constituents from Stamford and Bridgeport.”
And in the middle of the country, Kansas Governor Sam Brownback, a Republican and radical income-tax slasher, was forced to raise sales and cigarette taxes to keep the state from going broke—the predictable result of his deep income tax cuts enacted last year. No matter that regressive sales and cigarette taxes eat up a larger percentage of the income of poor people, Brownback had bragged about his adherence to far-right orthodoxy, in his belief that the income tax cuts that have left his state on the verge of bankruptcy will eventually grow the economy. John Hanna explains in an Associated Press report: “Kansas found itself in such a deep budget hole because the tax cuts implemented in 2013 initially led to a steep fall in revenue that has still not reversed as much as Brownback had hoped. For the fiscal year beginning next month, the state estimated in mid-April that it would face a shortfall of 12 percent of its general fund budget.” Hanna explains further: “Brownback and his GOP allies managed to avoid backtracking on past reductions on income tax rates… Instead, they raised the state’s sales tax to one of the highest rates in the nation and smokers will be paying 50 cents more for each pack of cigarettes. Republican legislators cobbled together a mix of tax policies to both balance the budget and attract just enough votes for passage, but it’s not yet clear whether they’ve created long-term fiscal stability.” A number of school districts in the state had been forced to cut weeks off the school year this spring when the state suddenly was unable to provide funding that had been previously allocated and promised.
In this context, what just happened in California looks pretty encouraging. Democratic Governor Jerry Brown and the California legislature just agreed on a budget that increases spending for education at all levels. California’s state fiscal capacity continues to benefit from the four-year Proposition 30, passed in November of 2012 specifically to pay for education. Proposition 30 increased income tax rates for joint filers earning over $500,000 per year and single filers earning $250,000 per year, and it increased sales taxes for four years by a quarter of a cent.
At least until the four-year Proposition 30 ends, California has the capacity to increase education funding, and the new budget agreement does just that. As reported by John Fensterwald for EdSource, the new agreement between Governor Brown and the legislature adds $6.1 billion (on top of last year’s 13.2 percent increase) for general funding for public education through the Local Control Funding Formula: “That’s an average of $1,088 more per student for an average district, in which 63 percent of English learners and low-income children receive extra money under the formula.” The agreement also allocates $500 million this year for staff development for teachers. It adds over $1 billion over three years for career and technical education. It provides $60 million in new funding for interventions to support toddlers who have special needs. It adds $10 million to increase counseling and tutoring for children in foster care. It provides $7.9 billion this year for community colleges, a $700 million increase from last year. Finally it provides $4 billion for debt repayment: “This includes $3 billion for unpaid state mandates and $1 billion in the final repayment for deferrals—late payments that required schools to borrow money.”
Having frozen local property-taxing capacity in 1978 with Proposition 13 and, over time, reduced the state’s investment in education, California has desperately needed to increase its budget for education. In 2012 just before Governor Jerry Brown pushed through Proposition 30, according to the Education Law Center, California was spending only $8, 218 per pupil (when the average expenditure per pupil across the states was $11,110 ) and ranking 41st among the 50 states. In a commentary back in November of 2012 immediately after passage of Proposition 30, Molly Hunter of the Education Law Center commented on what had been the deplorable level of tax effort in California: “Not surprisingly, California received an ‘F’ on fiscal effort. This measures the percentage of the state’s fiscal capacity that is spent on education. California, despite its enormous economy and relatively high fiscal capacity, devotes a small proportion of its wealth and economic vibrancy to public education.”
California continues to face serious problems in education funding. John Fensterwald comments: “The fat budget years for education are expected to level off with the expiration of temporary taxes under Proposition 30. Surging revenues have enabled the state to pay back most of the more than $10 billion… owed to districts in past years…. But districts are still owed $700 million, and that amount is expected to grow post Prop. 30.”
While for years to come California will grapple with a legacy of disastrous cuts to state and local funding of schools, at least this year Jerry Brown deserves credit for leadership in talking about the need to fund public services that serve California’s children from pre-school through the K-12 years and into community colleges. His declared support for public education, with dollars allocated to prove it, is refreshing.
The neighborhood of Campeche sprawls up a steep hillside in Haiti’s capital city, Port-au-Prince. Goats rustle in trash that goes forever uncollected. Children kick a deflated volleyball in a dusty lot below a wall with a hand-painted logo of the American Red Cross.
In late 2011, the Red Cross launched a multimillion-dollar project to transform the desperately poor area, which was hit hard by the earthquake that struck Haiti the year before. The main focus of the project — called LAMIKA, an acronym in Creole for “A Better Life in My Neighborhood” — was building hundreds of permanent homes.
Today, not one home has been built in Campeche. Many residents live in shacks made of rusty sheet metal, without access to drinkable water, electricity or basic sanitation. When it rains, their homes flood and residents bail out mud and water.
The Red Cross received an outpouring of donations after the quake, nearly half a billion dollars.
The group has publicly celebrated its work. But in fact, the Red Cross has repeatedly failed on the ground in Haiti. Confidential memos, emails from worried top officers, and accounts of a dozen frustrated and disappointed insiders show the charity has broken promises, squandered donations, and made dubious claims of success.
The Red Cross says it has provided homes to more than 130,000 people. But the actual number of permanent homes the group has built in all of Haiti: six.
After the earthquake, Red Cross CEO Gail McGovern unveiled ambitious plans to “develop brand-new communities.” None has ever been built.
Aid organizations from around the world have struggled after the earthquake in Haiti, the Western Hemisphere’s poorest country. But ProPublica and NPR’s investigation shows that many of the Red Cross’s failings in Haiti are of its own making. They are also part of a larger pattern in which the organization has botched delivery of aid after disasters such as Superstorm Sandy. Despite its difficulties, the Red Cross remains the charityof choice for ordinary Americans and corporations alike after natural disasters.
One issue that has hindered the Red Cross’ work in Haiti is an overreliance on foreigners who could not speak French or Creole, current and former employees say.
In a blistering 2011 memo, the then-director of the Haiti program, Judith St. Fort, wrote that the group was failing in Haiti and that senior managers had made “very disturbing” remarks disparaging Haitian employees. St. Fort, who is Haitian American, wrote that the comments included, “he is the only hard working one among them” and “the ones that we have hired are not strong so we probably should not pay close attention to Haitian CVs.”
The Red Cross won’t disclose details of how it has spent the hundreds of millions of dollars donated for Haiti. But our reporting shows that less money reached those in need than the Red Cross has said.
Lacking the expertise to mount its own projects, the Red Cross ended up giving much of the money to other groups to do the work. Those groups took out a piece of every dollar to cover overhead and management. Even on the projects done by others, the Red Cross had its own significant expenses – in one case, adding up to a third of the project’s budget.
In statements, the Red Cross cited the challenges all groups have faced in post-quake Haiti, including the country’s dysfunctional land title system.
“Like many humanitarian organizations responding in Haiti, the American Red Cross met complications in relation to government coordination delays, disputes over land ownership, delays at Haitian customs, challenges finding qualified staff who were in short supply and high demand, and the cholera outbreak, among other challenges,” the charity said.
The group said it responded quickly to internal concerns, including hiring an expert to train staff on cultural competency after St. Fort’s memo. While the group won’t provide a breakdown of its projects, the Red Cross said it has done more than 100. The projects include repairing 4,000 homes, giving several thousand families temporary shelters, donating $44 million for food after the earthquake, and helping fund the construction of a hospital.
“Millions of Haitians are safer, healthier, more resilient, and better prepared for future disasters thanks to generous donations to the American Red Cross,” McGovern wrote in a recent report marking the fifth anniversary of the earthquake.
In other promotional materials, the Red Cross said it has helped “more than 4.5 million” individual Haitians “get back on their feet.”
It has not provided details to back up the claim. And Jean-Max Bellerive, Haiti’s prime minister at the time of the earthquake, doubts the figure, pointing out the country’s entire population is only about 10 million.
“No, no,” Bellerive said of the Red Cross’ claim, “it’s not possible.”
***
When the earthquake struck Haiti in January 2010, the Red Cross was facing a crisis of its own. McGovern had become chief executive just 18 months earlier, inheriting a deficit and an organization that had faced scandals after 9/11 and Katrina.
Inside the Red Cross, the Haiti disaster was seen as “a spectacular fundraising opportunity,” recalled one former official who helped organize the effort. Michelle Obama, the NFL and a long list of celebrities appealed for donations to the group.
The Red Cross kept soliciting money well after it had enough for the emergency relief that is the group’s stock in trade. Doctors Without Borders, in contrast, stopped fundraising off the earthquake after it decided it had enough money. The donations to the Red Cross helped the group erase its more-than $100 million deficit.
The Red Cross ultimately raised far more than any other charity.
A year after the quake, McGovern announced that the Red Cross would use the donations to make a lasting impact in Haiti.
We asked the Red Cross to show us around its projects in Haiti so we could see the results of its work. It declined. So earlier this year we went to Campeche to see one of the group’s signature projects for ourselves.
Street vendors in the dusty neighborhood immediately pointed us to Jean Jean Flaubert, the head of a community group that the Red Cross set up as a local sounding board.
Sitting with us in their sparse one-room office, Flaubert and his colleagues grew angry talking about the Red Cross. They pointed to the lack of progress in the neighborhood and the healthy salaries paid to expatriate aid workers.
“What the Red Cross told us is that they are coming here to change Campeche. Totally change it,” said Flaubert. “Now I do not understand the change that they are talking about. I think the Red Cross is working for themselves.”
The Red Cross’ initial plan said the focus would be building homes — an internal proposal put the number at 700. Each would have finished floors, toilets, showers, even rainwater collection systems. The houses were supposed to be finished in January 2013.
None of that ever happened. Carline Noailles, who was the project’s manager in Washington, said it was endlessly delayed because the Red Cross “didn’t have the know-how.”
Another former official who worked on the Campeche project said, “Everything takes four times as long because it would be micromanaged from DC, and they had no development experience.”
Shown an English-language press release from the Red Cross website, Flaubert was stunned to learn of the project’s $24 million budget — and that it is due to end next year.
“Not only is [the Red Cross] not doing it,” Flaubert said, “now I’m learning that the Red Cross is leaving next year. I don’t understand that.” (The Red Cross says it did tell community leaders about the end date. It also accused us of “creating ill will in the community which may give rise to a security incident.”)
The project has since been reshaped and downscaled. A road is being built. Some existing homes have received earthquake reinforcement and a few schools are being repaired. Some solar street lights have been installed, though many broke and residents say others are unreliable.
The group’s most recent press release on the project cites achievements such as training school children in disaster response.
The Red Cross said it has to scale back its housing plans because it couldn’t acquire the rights to land. No homes will be built.
Other Red Cross infrastructure projects also fizzled.
In January 2011, McGovern announced a $30 million partnership with the U.S. Agency for International Development, or USAID. The agency would build roads and other infrastructure in at least two locations where the Red Cross would build new homes.
But it took more than two and a half years, until August 2013, for the Red Cross just to sign an agreement with USAID on the program, and even that was for only one site. The program was ultimately canceled because of a land dispute.
A Government Accountability Office report attributed the severe delays to problems “in securing land title and because of turnover in Red Cross leadership” in its Haiti program.
Other groups also ran into trouble with land titles and other issues. But they also ultimately built 9,000 homes compared to the Red Cross’ six.
Asked about the Red Cross’ housing projects in Haiti, David Meltzer, the group’s general counsel and chief international officer, said changing conditions forced changes in plans. “If we had said, ‘All we’re going to do is build new homes,’ we’d still be looking for land,” he said.
The USAID project’s collapse left the Red Cross grasping for ways to spend money earmarked for it.
“Any ideas on how to spend the rest of this?? (Besides the wonderful helicopter idea?),” McGovern wrote to Meltzer in a November 2013 email obtained by ProPublica and NPR. “Can we fund Conrad’s hospital? Or more to PiH[Partners in Health]? Any more shelter projects?”
It’s not clear what helicopter idea McGovern was referring to or if it was ever carried out. The Red Cross would say only that her comments were “grounded in the American Red Cross’ strategy and priorities, which focus on health and housing.”
Another signature project, known in Creole as “A More Resilient Great North,” is supposed to rehabilitate roads in poor, rural communities and to help them get clean water and sanitation.
But two years after it started, the $13 million effort has been faltering badly. An internal evaluation from March found residents were upset because nothing had been done to improve water access or infrastructure or to make “contributions of any sort to the well being of households,” the report said.
So much bad feeling built up in one area that the population “rejects the project.”
Instead of making concrete improvements to living conditions, the Red Cross has launched hand-washing education campaigns. The internal evaluation noted that these were “not effective when people had no access to water and no soap.” (The Red Cross declined to comment on the project.)
The group’s failures went beyond just infrastructure.
When a cholera epidemic raged through Haiti nine months after the quake, the biggest part of the Red Cross’ response — a plan to distribute soap and oral rehydration salts — was crippled by “internal issues that go unaddressed,” wrote the director of the Haiti program in her May 2011 memo.
Throughout that year, cholera was a steady killer. By September 2011, when the death toll had surpassed 6,000, the project was still listed as “very behind schedule” according to another internal document.
The Red Cross said in a statement that its cholera response, including a vaccination campaign, has continued for years and helped millions of Haitians.
But while other groups also struggled early responding to cholera, some performed well.
“None of these people had to die. That’s what upsets me,” said Paul Christian Namphy, a Haitian water and sanitation official who helped lead the effort to fight cholera. He says early failures by the Red Cross and other NGOs had a devastating impact. “These numbers should have been zero.”
***
So why did the Red Cross’ efforts fall so short? It wasn’t just that Haiti is a hard place to work.
“They collected nearly half a billion dollars,” said a congressional staffer who helped oversee Haiti reconstruction. “But they had a problem. And the problem was that they had absolutely no expertise.”
Lee Malany was in charge of the Red Cross’ shelter program in Haiti starting in 2010. He remembers a meeting in Washington that fall where officials did not seem to have any idea how to spend millions of dollars set aside for housing. Malany says the officials wanted to know which projects would generate good publicity, not which projects would provide the most homes.
“When I walked out of that meeting I looked at the people that I was working with and said, ‘You know this is very disconcerting, this is depressing,’” he recalled.
The Red Cross said in a statement its Haiti program has never put publicity over delivering aid.
Malany resigned the next year from his job in Haiti. “I said there’s no reason for me to stay here. I got on the plane and left.”
Sometimes it wasn’t a matter of expertise, but whether anybody was filling key jobs. An April 2012 organizational chart obtained by ProPublica and NPR lists 9 of 30 leadership positions in Haiti as vacant, including slots for experts on health and shelter.
The Red Cross said vacancies and turnover were inevitable because of “the security situation, separation from family for international staff, and the demanding nature of the work.”
The constant upheaval took a toll. Internal documents refer to repeated attempts over years to “finalize” and “complete” a strategic plan for the Haiti program, efforts that were delayed by changes in senior management. As late as March 2014, more than four years into a six-year program, an internal update cites a “revised strategy” still awaiting “final sign-off.”
The Red Cross said settling on a plan early would have been a mistake. “It would be hard to create the perfect plan from the beginning in a complicated place like Haiti,” it said. “But we also need to begin, so we create plans that are continually revised.”
Those plans were further undermined by the Red Cross’ reliance on expats. Noailles, the Haitian development professional who worked for the Red Cross on the Campeche project, said expat staffers struggled in meetings with local officials.
“Going to meetings with the community when you don’t speak the language is not productive,” she said. Sometimes, she recalled, expat staffers would skip such meetings altogether.
The Red Cross said it has “made it a priority to hire Haitians” despite lots of competition for local professionals, and that over 90 percent of its staff is Haitian. The charity said it used a local human resources firm to help.
Yet very few Haitians have made it into the group’s top echelons in Haiti, according to five current and former Red Cross staffers as well as staff lists obtained by ProPublica and NPR.
That not only affected the group’s ability to work in Haiti, it was also expensive.
According to an internal Red Cross budgeting document for the project in Campeche, the project manager – a position reserved for an expatriate – was entitled to allowances for housing, food and other expenses, home leave trips, R&R four times a year, and relocation expenses. In all, it added up to $140,000.
Compensation for a senior Haitian engineer — the top local position — was less than one-third of that, $42,000 a year.
Shelim Dorval, a Haitian administrator who worked for the Red Cross coordinating travel and housing for expatriate staffers, recalled thinking it was a waste to spend so much to bring in people with little knowledge of Haiti when locals were available.
“For each one of those expats, they were having high salaries, staying in a fancy house, and getting vacation trips back to their countries,” Dorval said. “A lot of money was spent on those people who were not Haitian, who had nothing to do with Haiti. The money was just going back to the United States.”
***
Soon after the earthquake, McGovern, the Red Cross CEO, said the group would make sure donors knew exactly what happened to their money.
The Red Cross would “lead the effort in transparency,” she pledged. “We are happy to share the way we are spending our dollars.”
That hasn’t happened. The Red Cross’ public reports offer only broad categories about where $488 million in donations has gone. The biggest category is shelter, at about $170 million. The others include health, emergency relief and disaster preparedness.
It has declined repeated requests to disclose the specific projects, to explain how much money went to each or to say what the results of each project were.
There is reason to doubt the Red Cross’ claims that it helped 4.5 million Haitians. An internal evaluation found that in some areas, the Red Cross reported helping more people than even lived in the communities. In other cases, the figures were low, and in others double-counting went uncorrected.
In describing its work, the Red Cross also conflates different types of aid, making it more difficult to assess the charity’s efforts in Haiti.
For example, while the Red Cross says it provided more than 130,000 people with homes, that includes thousands of people who were not actually given homes, but rather were “trained in proper construction techniques.” (That was first reported by the Haiti blog of the Center for Economic and Policy Research.)
The figure includes people who got short-term rental assistance or were housed in several thousand “transitional shelters,” which are temporary structures that can get eaten up by termites or tip over in storms. It also includes modest improvements on 5,000 temporary shelters.
The Red Cross also won’t break down what portion of donations went to overhead.
McGovern told CBS News a few months after the quake, “Minus the 9 cents overhead, 91 cents on the dollar will be going to Haiti. And I give you my word and my commitment, I’m banking my integrity, my own personal sense of integrity on that statement.”
But the reality is that less money went to Haiti than 91 percent. That’s because in addition to the Red Cross’ 9 percent overhead, the other groups that got grants from the Red Cross also have their own overhead.
In one case, the Red Cross sent $6 million to the International Federation of the Red Cross for rental subsidies to help Haitians leave tent camps. The IFRC then took out 26 percent for overhead and what the IFRC described as program-related “administration, finance, human resources” and similar costs.
Beyond all that, the Red Cross also spends another piece of each dollar for what it describes as “program costs incurred by the American Red Cross in managing” the projects done by other groups.
The American Red Cross’ management and other costs consumed an additional 24 percent of the money on one project, according to the group’s statements and internal documents. The actual work, upgrading shelters, was done by the Swiss and Spanish Red Cross societies.
“It’s a cycle of overhead,” said Jonathan Katz, the Associated Press reporter in Haiti at the time of the earthquake who tracked post-disaster spending for his book, The Big Truck That Went By. “It was always going to be the American Red Cross taking a 9 percent cut, re-granting to another group, which would take out their cut.”
Given the results produced by the Red Cross’ projects in Haiti, Bellerive, the former prime minister, said he has a hard time fathoming what’s happened to donors’ money.
“Five hundred million dollars in Haiti is a lot of money,” he said. “I’m not a big mathematician, but I can make some additions. I know more or less the cost of things. Unless you don’t pay for the gasoline the same price I was paying, unless you pay people 20 times what I was paying them, unless the cost of the house you built was five times the cost I was paying, it doesn’t add up for me.”