Haiti president accused of embezzlement scheme in government audit of Venezuela aid money

Months prior to Haiti’s deeply flawed October 2016 presidential vote, the man who would become president, Jovenel Moïse, received millions of dollars for questionable road rehabilitation projects that a panel of Haitian government auditors say were part of embezzlement schemes that defrauded the country’s poor out of billions of dollars in Venezuelan aid meant to improve their lives.

At least $1 million was for a stretch of rural road in northern Haiti that government auditors said was paid for twice, after the public works ministry issued the same contract to two firms in late 2014. The firms shared the same tax identification number, government patent, technical staff and resume of projects in their portfolio, auditors said.

The only difference between the firms, auditors noted, was their heads. Agritans listed Moïse, a relatively unknown businessman and eventual handpicked successor to then-Haiti president Michel Martelly, as its head, while Betexs, the second firm, listed someone else. Agritrans received a $419,240 or 66 percent advance on the project — two months before the signing of its contract with the ministry of public works.

“For the court, giving a second contract for the same project... is nothing less than a scheme to embezzle funds,” auditors said about the project involving the Borgne-Petit Bourg-de-Borgne road.

A relative unknown Jovenel Moise was the handpicked successor of Haitian President Michel Martlelly when he registered on May 20, 2015 for Haiti’s flawed presidential elections. HECTOR RETAMAL AFP/Getty Images

The accusation is part of a damning 600-plus page government audit of Venezuela’s PetroCaribe oil program that Haiti’s Superior Court of Auditors and Administrative Disputes handed over to the Haitian Senate on Friday. It is the second installment of a three-part investigation into how the country managed billions of dollars in savings from the oil program between 2008-16. On Monday, auditors tweeted that they are continuing to work on their wide-ranging investigation.

In a press statement issued on Monday, Agritrans lawyer Mario Delcy said the company, which is no longer headed by Moïse, “formally disagrees” with the auditors’ allegations and reserves the right to take its concerns to court.

Delcy said the audit took place without “notice, without interviews, without consultation of the archives and contrary to the requirements of international norms of an audit.”

“Agritrans S.A. and Betexs are two distinct entities with their own legal status with their separate tax references ...contrary to the allegations” of the court of auditors, he said. “We are saying it is false that Agritrans and Betexs received the same payment to do the same job.”

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Under the PetroCaribe program, Venezuela provided countries with oil, with payments deferred over 25 years at an interest rate as low as 1 percent. In Haiti, the savings from not having to immediately pay for the oil were designated for investments in roads, hospitals and social programs to help the poor. Though the program has ended due to Venezuela’s political and economic turmoil, Haiti still owes the South American nation nearly $2 billion — money that two anti-corruption commissions in the Haitian Senate say was stolen by government officials and their supporters over the years.

During the period government auditors looked into, Haiti had six governments under three different presidents — René Préval, Michel Martelly and Jocelerme Privert, who served as interim president after the 2016 presidential elections were forced into a do-over amid allegations of massive fraud. Moïse was confirmed the winner in January 2017.

Some of the auditors’ findings, from both the current report and a previous one issued in January that looked at other ministries’ misuse of funds, could be attributed to mismanagement and gross negligence. But some of it was also “collusion, favoritism and embezzlement,” the auditors concluded, especially in public works where, in addition to Moïse’s road contracts, auditors looked at other projects.

Among them: an overpriced $23.3 million overpass known as the Delmas-Nazon Viaduc that was built by the Martelly administration and had a $6.7 million cost overrun. This included a 213 percent increase in costs for grading, backfill and excavation work and a 141 percent increase on drainage-sanitation costs over the original estimates 18 months prior.

“I applaud the courage of the court of auditors because given the amount of pressure they had on their backs, I didn’t think they would even present a report with the dimensions this has,” opposition Sen. Evalière Beauplan said.

In 2017, Beauplan’s anti-corruption commission issued its own 656-page report on the misuse of PetroCaribe funds. It concluded that charges should be filed against two former prime ministers, several ex-ministers and the owners of private firms on grounds they misappropriated and embezzled money that left post-quake Haiti with unfinished government buildings, poorly built housing and overpriced public works contracts. Many of those cited in the report blasted it as being “political.”

“While I am applauding them, I have to also applaud the lawyers in the democratic sector who accompanied the citizens who filed complaints. If you didn’t have complaints that were filed, if you didn’t have the Petro-challengers keep the pressure going, the court of auditors would have failed even if it had the political will,” Beauplan said.

He added he’s not surprised by the auditors’ findings, especially those involving the president, who has yet to make any public statements since the report’s release.

“How is it that Jovenel had all of this money?” Beauplan said about an estimated $3.5 million that was shelled out in road contracts. “Remember, Martelly was governing and he knew that Jovenel would be his presidential candidate. And if he was going to be a presidential candidate, he needed to have money in his hands.

“They profited from Agritrans in order to give a bunch of bogus contracts. You will see that a lot of the disbursements were done in 2015, and in 2015 Jovenel was on the campaign trail,” said Beauplan, who like Moïse is from the country’s northwest region, where some of the road projects commenced. “He was a simple businessman who was selling water in Port-de-Paix. Where would he find money to mount a presidential bid? It’s this same money that he used from mounting a false company... He just never thought there would be a PetroCaribe investigation.”

Members of the South Florida Haitian community demonstrate in front of the Haitian consulate in Miami. Pedro Portal pportal@miamiherald.com

Since last year, pressure has been building on Moïse to launch an investigation into management of the PetroCaribe funds and to show results on his promise to fight corruption. In a series of sit-ins, social media posts and deadly protests, opposition parties and young activists known as Petro-challengers have been demanding to know where the PetroCaribe money went.

Following nationwide protests and calls for his resignation, Moïse in an Oct. 18, 2018, tweet, announced that his administration would support the court of auditors, a government agency that has audit and approval powers over public contracts, to investigate the allegations of misuse of funds and to hold those responsible accountable.

“No one will escape justice. It’s a moral and judicial duty,” Moïse said at the time.

The report now presents Moïse with a significant problem. In office just over two years, he is already facing a deepening political and economic crisis with no functioning government after the March firing of Prime Minister Jean Henry Céant by the lower chamber of Parliament, increasing gang violence, deep political tensions, fuel shortages and a collapsing economy. The domestic currency has registered a 20 percent depreciation over the past five months.

“He has to set an example and put himself at the disposal of justice,” said Velina Charlier, 38, who is part of the anti-corruption Petro-challenger and Nou pap Dòmi (We won’t sleep) citizens’ movement. “We have to break the cycle of people stealing the government’s money and nothing happening to them.”

Charlier said while the court of auditors is to be commended for the report, which also looks into corruption in several social programs targeted at the poorest of the poor and the awarding of hundreds of millions of dollars in contracts to Dominican firms after the January 2010 earthquake under Martelly’s administration, auditors’ work is not done.

So far, only 77 percent of the funds administered under PetroCaribe have been accounted for. Charlier said the vast amounts of waste detailed in some of the projects like the Ti Manman Cheri social protection program to help poor mothers, requires an even more thorough audit of government institutions, including the presidential palace.

For example, auditors said they found at least 20,000 fictitious cash beneficiaries between 2012 and 2014 in the Ti Manman Cheri, which was the Haitian government’s first conditional cash transfer program using mobile phones. Among the program’s expenditures: $21,878 for 11,000 rubber Ti Manman Cheri bracelets.

Photo taken during two-year anniversary celebration of the social protection program for Haitian mothers called Ti Manman Cheri. A Haitian government audit said 11,000 bracelets costing $21,878 were ordered in 2014 on the program’s behalf. Haitian government FAES Facebook page

“The Agritrans-Betexs case is only 1 percent,” Charlier said. ”They have opened a Pandora’s box and we have to see what waste there are in other institutions”

To keep the pressure on, activists have announced an anti-corruption march for Sunday in which they plan to call for not only a special independent judiciary to act on the audit’s findings, but also Moïse’s resignation, Charlier said.

On the surface, the report presents an unexpected opportunity for Haiti to begin to rid itself of some of the bad habits presented as governance under the Martelly administration, and to reinvigorate an anti-corruption movement battered by violence and politicization. But the report could also end up going nowhere in a country where the judiciary is notoriously corrupt and the executive and legislative branches face huge credibility problems.

“The president’s best chance may be to come clean about his own involvement and ‘blow the whistle’ on the system that appears to have facilitated his own ascension to the presidency,” said Jake Johnston, a research associate at the Center for Economic Policy Research in Washington who had been investigating Agritrans’ connection to the road contracts prior to the report’s publication.

“President Moïse has pledged action, and action will be necessary to calm political tensions — but it will be very difficult to judicially pursue members of the private sector or former government officials when it is the president himself who now stands accused,” Johnston said.

On Monday, presidential adviser Guichard Doré told Radio Kiskeya that he thought it was a good thing that clarification had been brought to the PetroCaribe funds. “It’s public money and everyone wants to know how it was spent. It’s normal and I think it’s an obligation,” he said.

Doré, however, sought to distance the president from the report’s allegations. He said there was “a lot of confusion in the report” on the advances Agritrans received on public works contracts.

Rapport final 2 CSCCA_31 mai 2019_Page_164_Image_0001
Haiti’s current President Jovenel Moise is accused of double billing the country for repair work on this road, Borgne-Petit Bourg-de-Borge, in rural northern Haiti that two firms he controlled received contracts to fix. Haiti's Superior Court of Auditors and Administrative Disputes

“Agritrans signed one contract with the ministry of public works for the rehabilitation of one segment of the Borgne-Petit Bourg-de-Borgne road,” Doré said. He dismissed the report and said it, along with those calling for Moïse to put himself at the disposal of justice officials, are “a political operation aimed at destabilization.”

While Agritrans was mentioned in the audit 69 times, Doré emphasized that it was the company and not Moïse himself that was cited by auditors. But the auditors found that Moïse not only controlled Agritrans but he personally negotiated the contracts and signed them.

Still, with the second audit, it now means that a third company controlled by Moïse has been caught up in the corruption scandal involving Venezuelan aid. In the January report, auditors highlighted Comphener, S.A., in an analysis of solar lamp contracts.

In the most recent audit, one of the contracts examined involved the rehabilitation of the stretch of road between Port-de-Paix in the northwest and Port Margot in the north, and the second, for the barely impassable section of Borgne-Petit Bourg-de-Borge for which Moïse’s two firms are accused of double billing.

During a two-month span in late 2014, Public Works Minister Jacques Rousseau awarded two separate contracts — one on Oct. 15 for $904,146 and the other on Dec. 12 for $748,957 — for the same stretch of the Borgne road to Agritrans and Betexs Ingenieurs Conseils.

“The court is questioning the motivation of the ministry of public works to initiate such a maneuver,” said the auditors, who also found that Moïse’s firms also received disbursement before contracts were even signed and, in some cases, money disbursed “was used for other purposes.”

In fact, a chart presented by auditors on disbursements showed that funds allocated for the road’s construction became a dipping pot by December 2014 for Agritrans and others. Of the money advanced on the project before a contract was signed or a bid offer was issued, Agritrans receive $110,326 in disbursement on Aug. 26, 2014.

In another road project involving a stretch between the towns of Port-de-Paix in the northwest and Port Margot in the north, auditors said the public works ministry “from the outset...made a series of questionable decisions.” Among them, it transferred $1,063,005.07 of $7 million earmarked for the project to Agritrans and Betexs, and the money was used for other purposes.

“These payments do not concern the Port-de-Paix-Port Margot Road Rehabilitation Project,” auditors said. “For the court, this amounts to embezzlement, which has irreparably damaged the project and the community.”

Agritrans was paid $431,514 for 1.2 miles of road between Borgne and Pas Zoranj, auditors added. The audit included photos of the current state of the road: unpaved and in bad shape.

During the 2015-16 presidential campaign, Agritrans was a fixture in Moïse’s presidential bid. He and his team of pricey international campaign consultants fashioned him as a banana farmer who would transform Haiti into a banana-producing country. As Exhibit A, they presented Agritrans, the beneficiary of tax-free government land in northeast Haiti and a $6 million loan. Moïse who began going by the moniker Neg Bannan nan, or Banana Man, spoke about his 2,500-acre Agritrans banana plantation in northeast Haiti.

In the audit, Agritrans isn’t presented as an agriculture firm but as a road construction company.

The auditors, who examined government contracts and bank transfers where they were available, lamented that in more than one instance, the ministry of public works “did not take into account the impact of these decisions on future generations.”

“The amounts spent constitute a debt in the long run for Haiti,” auditors wrote. “Misappropriating these funds for other purposes denied the community quality infrastructure, but above all has increased the burden of the debt of the country and this is scandalous.”