[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
                     HAITI: IS U.S. AID EFFECTIVE?
=======================================================================


                                HEARING

                               BEFORE THE

                      COMMITTEE ON FOREIGN AFFAIRS

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 9, 2013

                               __________

                           Serial No. 113-100

                               __________

        Printed for the use of the Committee on Foreign Affairs


Available via the World Wide Web: http://www.foreignaffairs.house.gov/ 
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                       http://www.gpo.gov/fdsys/

                                 ______





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                      COMMITTEE ON FOREIGN AFFAIRS

                 EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey     ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida         ENI F.H. FALEOMAVAEGA, American 
DANA ROHRABACHER, California             Samoa
STEVE CHABOT, Ohio                   BRAD SHERMAN, California
JOE WILSON, South Carolina           GREGORY W. MEEKS, New York
MICHAEL T. McCAUL, Texas             ALBIO SIRES, New Jersey
TED POE, Texas                       GERALD E. CONNOLLY, Virginia
MATT SALMON, Arizona                 THEODORE E. DEUTCH, Florida
TOM MARINO, Pennsylvania             BRIAN HIGGINS, New York
JEFF DUNCAN, South Carolina          KAREN BASS, California
ADAM KINZINGER, Illinois             WILLIAM KEATING, Massachusetts
MO BROOKS, Alabama                   DAVID CICILLINE, Rhode Island
TOM COTTON, Arkansas                 ALAN GRAYSON, Florida
PAUL COOK, California                JUAN VARGAS, California
GEORGE HOLDING, North Carolina       BRADLEY S. SCHNEIDER, Illinois
RANDY K. WEBER SR., Texas            JOSEPH P. KENNEDY III, 
SCOTT PERRY, Pennsylvania                Massachusetts
STEVE STOCKMAN, Texas                AMI BERA, California
RON DeSANTIS, Florida                ALAN S. LOWENTHAL, California
TREY RADEL, Florida                  GRACE MENG, New York
DOUG COLLINS, Georgia                LOIS FRANKEL, Florida
MARK MEADOWS, North Carolina         TULSI GABBARD, Hawaii
TED S. YOHO, Florida                 JOAQUIN CASTRO, Texas
LUKE MESSER, Indiana

     Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

               Jason Steinbaum, Democratic Staff Director


                            C O N T E N T S

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                                                                   Page

                               WITNESSES

Mr. David B. Gootnick, Director, International Affairs and Trade, 
  U.S. Government Accountability Office..........................     5
Mr. Thomas C. Adams, Haiti Special Coordinator, U.S. Department 
  of State.......................................................    58
Ms. Elizabeth Hogan, Acting Assistant Administrator, Bureau for 
  Latin America and the Caribbean, U.S. Agency for International 
  Development....................................................    69

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Mr. David B. Gootnick: Prepared statement........................     8
Mr. Thomas C. Adams: Prepared statement..........................    61
Ms. Elizabeth Hogan: Prepared statement..........................    71

                                APPENDIX

Hearing notice...................................................    96
Hearing minutes..................................................    97
The Honorable Eliot L. Engel, a Representative in Congress from 
  the State of New York: Material submitted for the record.......    99
The Honorable Gregory W. Meeks, a Representative in Congress from 
  the State of New York: Prepared statement......................   100
The Honorable Gerald E. Connolly, a Representative in Congress 
  from the Commonwealth of Virginia: Prepared statement..........   101
Response from Mr. Thomas C. Adams to question submitted for the 
  record by the Honorable Joseph P. Kennedy III, a Representative 
  in Congress from the Commonwealth of Massachusetts.............   103


                     HAITI: IS U.S. AID EFFECTIVE?

                              ----------                              


                       WEDNESDAY, OCTOBER 9, 2013

                       House of Representatives,

                     Committee on Foreign Affairs,

                            Washington, DC.

    The committee met, pursuant to notice, at 10:10 a.m. in 
room 2172, Rayburn House Office Building, Hon. Ed Royce 
(chairman of the committee) presiding.
    Chairman Royce. Last call for members to take their seat, 
and this hearing will come to order.
    Today we meet to discuss the situation in Haiti. In January 
2010, a massive earthquake struck Haiti doing major physical, 
social, and economic damage to the country that is the poorest 
country in the Western Hemisphere. It was a devastating blow to 
a nation already struggling from centuries of violent 
repression, endemic corruption and from extreme poverty.
    The international community, led by the U.S., rapidly 
organized an unprecedented humanitarian response. International 
donors pledged $13 billion to support immediate relief and 
recovery. Private charities also provided another $3 billion, 
and that year Congress approved $1 billion in appropriations 
for Haiti of which $651 million was provided to the Agency for 
International Development to support post-earthquake 
reconstruction.
    Now it is 3 years later, and the results are not 
impressive. Of the $2 million Haitians impacted by the 
earthquake, an estimated 320,000 remain in squalid displacement 
camps. Efforts to provide permanent housing have been 
undermined by weak property rights, unemployment is very high, 
corruption again is rampant, and the business climate is very 
poor.
    Under the leadership of Chairman Emeritus Ros-Lehtinen, the 
Government Accountability Office was tasked with studying 
USAID's efforts, and in particular this committee was concerned 
about shelter projects in the development of the Caracol 
Industrial Park in the northern part of the country. As we will 
hear today, the GAO, unfortunately, has found that these 
programs have been slowly implemented, more costly than 
planned, and of questionably lasting impact. While much has 
been promised, little has been effectively delivered.
    Following this discouraging report, the ranking member and 
I sent a bipartisan delegation of committee staff to Haiti to 
review the GAO's findings, and they were left asking some basic 
questions, and those questions are why does USAID still lack an 
engineer for the proposed port in the Caracol Industrial Park? 
Question one. Question two: Why did the U.S. set expectations 
for massive permanent housing projects in a country where the 
overwhelming majority of people do not have secure property 
rights to begin with? And number three: Why aren't intended 
beneficiaries occupying the few housing units that have 
actually been built?
    Haiti has suffered too many natural disasters, but it is 
weak institutions and endemic corruption that perpetuate the 
poverty of the country. The World Bank has found that the 
chances of reducing poverty under these conditions in the World 
Bank's estimate ``approaches zero.''
    The absence of a transparent, legally enforceable system of 
property rights--and Hernando de Soto has done a lot of work on 
this issue in Haiti--which would allow Haitians to secure and 
invest capital or open and expand a business, is debilitating. 
Without these basics, no level of assistance would put Haiti on 
the right economic path.
    The Haitian Government's failure to hold long-delayed 
elections is also troubling. Fully one-third of the Senate in 
Haiti remains vacant, making a quorum difficult. Even worse, 
without elections, the President may end up governing by 
decree.
    I believe the Haitian people deserve better. I know 
American taxpayers deserve better. If aid is to continue, we 
need a viable partner in development, a viable partner there in 
democracy.
    And our ranking member, Eliot Engel, was instrumental in 
bringing this hearing together and also in helping organize the 
focus on Haiti, and I am now going to turn to him for his 
opening remarks.
    Mr. Engel. Mr. Chairman, I would like to begin----
    Mr. Chairman, I would like to begin by thanking you for 
holding this hearing. I have been focused on U.S. policy toward 
Haiti for many years, and I sincerely appreciate your 
willingness to bring this issue before the full committee.
    The January 2010 earthquake in Haiti focused world 
attention on the plight of that country in a new and different 
way. The international community and especially the United 
States responded to the urgency and the sheer devastation with 
both generosity and determination. Our post earthquake 
assistance in Haiti currently stands as one of the most 
significant U.S. aid commitments in the world.
    Even before the dust had settled from the aftermath of the 
earthquake, 150 donor countries and organizations rolled up 
their sleeves and, together with the Government of Haiti, began 
to craft a rebuilding plan. All agreed that this plan would not 
be business as usual, and that it would seek to have a 
sustained and unprecedented impact on the future of Haiti. The 
U.S. piece of that plan after 3-plus years is the central focus 
of this hearing.
    Pursuant to a request by me and Congresswoman Ileana Ros-
Lehtinen, the GAO issued a report in June of this year that 
reached some troubling conclusions. This committee dispatched a 
staff delegation to Haiti last month to dig deeper into these 
issues and to help us set the stage for this hearing.
    The GAO report is the most recent official statement on 
United States assistance to Haiti. Today's hearing will provide 
GAO, State, and USAID an opportunity to update and clarify that 
information. I will leave it to the GAO witness to summarize 
the conclusions of their report. Suffice it to say that some of 
their findings came as a surprise to many of us in Congress, 
and it gave rise to some tough questions.
    For example, the number of houses to be built with U.S. 
assistance dropped from roughly 15,000 to 2,649. The estimated 
number of beneficiaries declined from roughly 80,000 to 
approximately 14,000. A back-of-the-envelope calculation tells 
us that the costs per unit have doubled and sometimes tripled.
    We now know that the Haitian Government prevailed upon U.S. 
officials to build bigger and better housing. The problem, of 
course, is that this benefited a much smaller pool of people. 
Even though it misrepresented a dramatic change in the terms of 
reference for the expenditure of these funds, Congress was not 
consulted about the decision. Had we been consulted, would we 
have gone ahead with that plan? Who knows. And was it a good 
decision to devote a third or more of earthquake-reconstruction 
funding to an industrial park, a power plant to run it, and 
possibly a new port to service it in a part of the country that 
was largely unaffected by the earthquake?
    In terms of process, the GAO report pointed out that the 
administration has not always provided sufficiently detailed 
information that Congress needs to assess and evaluate our 
Haiti programs. It is my hope that greater transparency in the 
administration's execution of these programs for us and for the 
Haitian people is among the changes that result from this 
oversight effort.
    I will be submitting a series of questions for the record 
to begin to rebuild the reservoir of information on our Haiti 
programs. In addition, we may call upon the GAO to conduct an 
additional study regarding our Haiti assistance.
    Finally, we may look at streamlining--streamlined reporting 
to Congress such as that included in H.R. 1749, the Assessing 
Progress in Haiti Act, introduced by Rep Barbara Lee. And let 
me say I am glad that our colleague is here today with us.
    Another issue I hope we can focus on today relates to how 
we partner with NGOs and the Haitian Government on these 
programs. On their recent trip, committee staff learned that 
Haitian officials consistently expressed concern that U.S. Aid 
largely circumvents the Haitian Government. Some say Haiti has 
become a republic of NGOs. The down side of operating this way 
is that we lose the opportunity to strengthen the capacity of 
the Haitian Government and to increase the ownership of the 
Haitian Government in people. That ownership is a critical 
ingredient in the sustainability of our system. I understand 
that there are significant accountability barriers here that 
must be overcome, but the Haitian Government is the essential 
partner in this effort.
    That said, I must be clear about the Haitian election issue 
that currently overhangs this entire effort. Haitian 
congressional municipal elections are 2 years overdue. The 
Haitian Senate is operating with 10 of its 30 seats vacant, and 
President Martelly is claiming that the terms of 10 of the 
Senators end in 2014. The donor community does not agree with 
this assessment, and I don't either.
    In any case, if that were to occur, the Haitian Congress 
would effectively be incapable of carrying out its legislative 
duties, and we would face the unacceptable prospect of 
President Martelly governing by decree.
    This matter is already significantly affecting the patience 
of the donor community, and I know it will greatly affect how 
the U.S. Congress approaches our assistance in Haiti. I call on 
President Martelly to find a quick constitutional resolution to 
this matter and hold elections as soon as practicable.
    The threshold question we need to ask today is not whether 
we are on track to rebuild Haiti to a pre-earthquake standard, 
but, rather, if we are helping to build Haiti back better. I 
hope very much that in 2015, when we reach the 5-year 
anniversary of our post-earthquake assistance program, we can 
answer that question in the affirmative.
    So, Mr. Chairman, thank you again for holding this hearing. 
I look forward to the testimony of our witnesses.
    Chairman Royce. Thank you, Mr. Engel.
    We now go to Representative Salmon of Arizona, chairman of 
the Western Hemisphere Subcommittee.
    Mr. Salmon. Thank you, Mr. Chairman.
    I would like to commend Chairman Royce and Ranking Member 
Engel for convening this important oversight hearing on Haiti, 
the GAO's report on aid to Haiti, and the status of the U.S. 
reconstruction projects and our investment in economic 
development there.
    Although the rubble has been largely cleared away, I 
believe the Haitian people have a right to be frustrated with 
the lack of progress on reconstruction and for a perceived lack 
of coordination on the part of the international donor 
community. The GAO's report was critical in many respects when 
it comes to USAID overpromising and under delivering on many 
fronts, and we are here today to try to find out why. But I 
also would like to use my time to point out a couple of areas 
where the bipartisan staff delegation reported back some 
positive findings.
    In particular, I was told that some specific projects 
regarding USAID partnering with the Government of Haiti to 
provide healthcare services in underserved rural areas seem to 
be working quite well. In addition, I heard some exciting 
agricultural programs are being made possible by a unique 
partnership between USAID and the University of Florida that 
are making a real difference for the lives of Haitian farming 
families and having a positive impact in the local agricultural 
community by trying to bring their farming techniques and 
practices into the 21st century.
    I was also impressed with what I heard regarding the 
training and professionalism of the Haitian National Police and 
the Government of Haiti's partnership with our DEA to combat 
the narcotraffickers.
    In conclusion, I would like to add my voice to Chairman 
Royce's concerning the importance of Haiti going forward with 
finally holding elections. This is a crucial step that the 
Government of Haiti must take if we are able to count on them 
as reliable partners going forward. Failure to conduct 
elections in the near term will cause many of us to question 
the use of taxpayer dollars in recovery efforts as we will have 
little confidence in the Haitian Government.
    I look forward to hearing more today and making sure U.S. 
taxpayer dollars are being spent wisely and most cost-
effectively as they possibly can in Haiti.
    Thank you, Mr. Chairman. I yield back.
    Chairman Royce. Thank you.
    We go now to Mr. Sires of New Jersey, ranking member of the 
Western Hemisphere Subcommittee.
    Mr. Sires. Thank you, Mr. Chairman.
    Good morning, and thank you to our witnesses for being here 
today.
    The 2010 earthquake in Haiti unleashed an unthinkable 
amount of death and destruction to what was already the poorest 
country in the Western Hemisphere. More than \1/4\ million 
people died, 200 million people were displaced, and ever since, 
a cholera outbreak has plagued the island, and more than 
300,000 displaced people remain in camps.
    Through a June 2013 GAO report, we know that the USAID 
efforts in Haiti have been grossly inadequate and marred by 
incompetence. Reports submitted to Congress have been untimely 
and shallow. We know little of how money has been spent, and 
there is a failure to recruit appropriate technical expertise 
when necessary. And amongst the most disturbing accounts is how 
the USAID increased the funding allocated for housing by 65 
percent while decreasing the projected number of houses to be 
built by 80 percent.
    I understand the post-earthquake environment was chaotic, 
and that the Haitian Government has not been entirely 
cooperative at times. Nonetheless, these lapses are 
unacceptable. USAID efforts are an effective and critical 
component of our foreign policy; however, the accounts outlined 
by the GAO report undercut these efforts and overshadow our 
goodwill. At a time when the Congress is deadlocked over 
funding the government, our U.S. agencies must do better. Thank 
you.
    Chairman Royce. Thank you.
    This morning we are going to hear first from Dr. David 
Gootnick, Director of International Affairs and Trade at the 
Government Accountability Office. He has been in that position 
since 2011.
    Although not a common committee practice, Dr. Gootnick will 
be followed by a second distinguished panel consisting of 
representatives from the Department of State and from USAID.
    Earlier this year GAO issued a critical report of the 
administration's efforts, and I think the format of allowing 
the GAO to testify first is going to give members an 
opportunity to fully understand the GAO's findings before 
asking questions of the administration.
    So, without objection, the witness' fully prepared 
statement will be made part of the record. Members here will 
have 5 days to submit statements or questions or extraneous 
materials for the record.
    And we will now ask Mr. Gootnick to summarize his 
statements. And you have 5 minutes, Mr. Gootnick.

  STATEMENT OF MR. DAVID B. GOOTNICK, DIRECTOR, INTERNATIONAL 
    AFFAIRS AND TRADE, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Gootnick. Thank you, Mr. Chairman.
    Mr. Chairman and members of the committee, thank you for 
inviting GAO to participate in this hearing. As you indicated, 
Mr. Chairman, today, more than 3 years after the earthquake, 
nearly 300,000 Haitians remain in temporary shelter, and nearly 
80 percent of the population lives in poverty.
    Roughly 6 months after the earthquake, Congress provided 
more than $1.1 billion in a supplemental appropriation for 
Haiti's reconstruction. USAID is responsible for the single 
largest share, directly implementing $651 million of this 
amount. As of June 2013, USAID had obligated just over half and 
disbursed about one-third of this funding.
    My statement today updates GAO's recent report on two of 
USAID's key activities: First, the construction of the power 
plant and port to support a new industrial park known by its 
acronym CIP in northern Haiti; and second, construction of 
permanent housing in and around Port-au-Prince, St-Marc and 
Cap-Haitien, three designated development corridors.
    Regarding the industrial park, 1 year after the earthquake, 
the U.S. and Haitian Governments, the Inter-American 
Development Bank, and a South Korean garment maker entered into 
a public private partnership for development of the CIP. 
Specifically the bank was to provide funding to the Haitian 
Government to construct the park complex; the U.S. Government 
would build the power plant, contribute to building a nearby 
port, and support construction of 5,000 housing units near the 
industrial park; and the Korean firm would be the anchor tenant 
with plans to hire 20,000 Haitian workers.
    AID did complete the initial phase of the power plant in 
time to supply the first CIP tenant with electricity, and as of 
last month, 1,500 workers are employed at the park. USAID has 
funding to cover operations and maintenance for 3 years, expand 
the distribution of power, add solar energy, and increase the 
plant's generating capacity.
    However, port construction is delayed about 2 years from 
its original plan. In addition, funding for the port is 
insufficient to cover most of the projected costs, and it is 
unclear whether the Haitian Government will find a private-
sector partner willing to cofinance all phases of the project 
as originally envisioned.
    The lack of a port engineer at USAID's Haiti mission is an 
important factor in these planning challenges. After two 
unsuccessful efforts to recruit a qualified engineer, USAID is 
now working with U.S. Army Corps for this expertise.
    Turning to the permanent housing, USAID's New Settlements 
Program is a response to the severe post-earthquake housing 
shortage and supports the Haitian Government's goal of 
expanding economic activity in areas outside Port-au-Prince. 
However, USAID's original housing numbers and cost estimates 
for both site development and home building proved to be 
optimistic.
    The program's original goals were for USAID and its 
partners to build 15,000 new homes at a cost of roughly $2,000 
per plot and $8,000 per house. However, the program is now 
projected to complete less than 20 percent of the originally 
planned homes, and costs to date are about $10,000 per plot and 
over $24,000 per house.
    These shortfalls are due to a number of factors. In 
particular, the initial cost estimates used inaccurate 
comparisons to earlier projects and did not take into account 
the level of site infrastructure that USAID has designed and 
built into these sites. To a lesser extent, the Haitian 
Government's request for larger and improved houses also 
increased costs. Problems securing land title and donor 
coordination also delayed construction.
    Most of this housing will be located near the industrial 
park with only 15 percent located in the earthquake-affected 
area. The residents at the first site have just started moving 
in, and USAID is working to address sustainability risks, such 
as affordability and community development. However, funding 
for these efforts is limited. GAO's recent report recommended 
that USAID hire a port engineer and provide timely community-
support mechanisms for each new settlement. USAID agreed with 
both recommendations, and we will monitor their progress in 
this regard.
    Mr. Chairman, this completes my remarks. I am happy to 
answer your questions.
    [The prepared statement of Mr. Gootnick follows:]
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
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    Chairman Royce. One of the questions I would like to ask 
you is, how big a factor was the USAID's inability in this case 
to secure land titles in moving forward? And I see the project 
was delayed by 2 years, and knowing what we know about property 
rights in Haiti in some of the past discussions we have had 
about this issue, were the goals realistic given the morass of 
inability to fix title and so forth?
    Mr. Gootnick. Right. I think there is no question that land 
titling and land ownership in Haiti is, at best, arcane 
historically, a paper record system at most; that many of the 
archives that did contain what existed of property records were 
damaged or destroyed in the earthquake. It is worth recognizing 
that most of the government's structures were literally 
collapsed in Port-au-Prince after the earthquake. Seventeen 
percent of Haitians, the Haitian Government, and civil 
servants, were killed in the earthquake. And probably a third 
were substantively displaced or left their positions.
    But with respect to land titling, in particular the 
building of homes in Port-au-Prince, I think, was sacrificed by 
the absence of land title, the ability to gain land title, and 
very limited options for government land in the immediate Port-
au-Prince area, so that the original plan was to build most of 
the homes in Port-au-Prince, but eventually most of the land 
was available outside.
    Chairman Royce. Who in the Haitian Government, if you 
happen to know, insisted upon the very costly design changes, 
and what was the purpose? What was their purpose?
    Mr. Gootnick. I would have to get you the answer on who 
exactly within the Haitian Government made that request. I do 
know that it came at the ministry level from the Haitian 
Government, and that the interest was for larger homes and to 
include indoor plumbing so that these would be exceptional 
homes by Haitian standards, without question. At this point 
they are built at approximately 450 square feet, and they are 
excellent homes that are built to a very high standard.
    Chairman Royce. Reportedly a few Haitian Senators decided 
they were not getting a big enough--I guess ``kickback'' would 
be the word to use here--on construction in their districts, 
and so they insisted upon costly design changes. You never 
know, when you are reading these accounts or hearing these 
accounts, what is behind a delay like this, but the argument 
was that those changes could not be justified. And the 
question, of course, would be did USAID roll over in a 
situation like this and finally concur in order to move forward 
with something that seriously, on the face of it, couldn't be 
justified?
    And that speaks to the broader issue of the endemic 
corruption and the exposure of U.S. assistance to waste, fraud, 
and abuse in a situation like this. And indeed what can be done 
to counter these types of circumstances where something goes on 
years longer, Dr. Gootnick, than had been intended?
    You look at the cost overruns. We underestimated the cost 
by 433 percent per plot, I guess, in your study and then 193 
percent per house, and the scheduling is 2 years behind 
schedule. Your observations on that.
    Mr. Gootnick. Well, the cost escalation occurred really in 
a number of different phases, and this is outlined in our 
report. The initial estimate of $2,000 per plot and $8,000 per 
home came originally in some of the activity approval 
documents, the early documents that USAID submitted for review 
that formed the basis of their initial goals and their costs, 
the estimates of the costs.
    Subsequently USAID got formal independent government 
estimates, just before letting contracts and found that the 
cost had risen. So that was the first escalation. A second 
escalation occurred when they first got bids back which were 
found to be actually higher than the independent government 
estimates. And then finally, the Haitian Government's request 
for the larger improved homes added yet another cost increase.
    I am not specifically familiar with the issue of corruption 
that you mentioned, although it is fair to say corruption is 
felt to be endemic in Haiti. I will say that one of the 
features of the rising costs would be the interest in using 
local building materials. I know that USAID would have wanted 
to use local building materials, but, for example, with respect 
to concrete, when some testing was done, it was found to be 
inadequate and would not have proved to be a sufficient home.
    Chairman Royce. I understand.
    We will go now to our ranking member Mr. Engel from New 
York.
    Mr. Engel. Thank you. Thank you very much, Mr. Chairman.
    In your report you said that USAID and State did not brief 
Congress adequately. What specifically should or could be done 
about this?
    Mr. Gootnick. Right. Our report cited the directive in the 
supplemental appropriations and the Senate report to the 
supplemental appropriations which directed State to provide 
reports to the Appropriations Committees and to the Congress 
broadly every 6 months for the first 2 years of the 
supplemental. What we did is we went back and looked at those 
reports and studied the extent to which those reports fully 
complied with the various directives and found that the reports 
were somewhat limited at times in their candor and in their 
thoroughness about the progress and the challenges that were 
being faced by the reconstruction effort.
    I think it is fair to say that from State and USAID's point 
of view, in addition to those reports, they would willingly 
come up here and provide information at the request of various 
Members and committees and had briefed on the Hill numerous 
times. That said, we felt that the reinstitution of the 
reporting requirement would assist Congress in its oversight.
    Mr. Engel. Thank you.
    How does USAID's reliance on contractors and NGOs impact 
the effectiveness of USAID in Haiti, in your opinion?
    Mr. Gootnick. Yeah. I don't think USAID could do its work 
without contractors and NGOs in Haiti. I think one of the 
interesting questions related to your question would be the 
extent to which large either U.S. or multinational 
nongovernmental organizations versus local organizations could 
be used. And it is my general understanding that part of the 
reason the costs escalated for these homes was that the prime 
contractor or the prime builder USAID wanted to ensure was a 
fully responsible contractor who was going to build according 
to the standards and specs that they had sought, and that does 
raise the price.
    With respect to the actual digging in the earth and laying 
of the bricks and mortar, I think they have worked as hard as 
they can to identify local NGOs who can hire local labor to do 
that work.
    Mr. Engel. I am going to give you some quotes I would like 
you to comment on.
    After the earthquake, the administration said we 
must, quote, deg. ``do things differently'' and 
explained that we had to work with the Haitian 
Government, quote, deg. ``as partners.'' It said we 
couldn't have a, quote, deg. ``scattered array of 
well-meaning projects,'' and we needed to, quote, deg. 
``coordinate our aid and hold ourselves 
accountable.'', unquote deg.
    Obviously, I am not sure we have done those things. I would 
like you to comment.
    Mr. Gootnick. Right. Well, I recall that immediately after 
the earthquake, when I think the spirit of cooperation and the 
endeavor to build back and build back better first emerged, 
there was an intention to work as closely as possible and to 
assist in rebuilding Haitian Government capacity to take charge 
of this rebuilding. And the first structure that was developed 
after the earthquake, something called the IHRC, the Interim 
Haiti Recovery Commission, which was cochaired by the then-
Prime Minister of Haiti and former President Bill Clinton, was 
an effort to have the multilateral--the U.S. and the 
multilateral community--join with the Haitian Government in an 
effort that ultimately could be Haitian-led.
    Unfortunately, that effort did not yield a highly 
functioning Haitian Government entity or ministry that could 
take over development. There has been an effort to restart a 
similar process just in the past 6 months. I don't--the State 
Department may be able to give you additional information. I 
don't believe it has proceeded particularly far at this point.
    Mr. Engel. What are--the report said, I know, a lot, but if 
you could highlight the major--the major criticism, the major 
thing that jumped out at you, what would that be?
    Mr. Gootnick. Well, the first thing I would want to do is 
put this in context that we were asked by yourself and Ms. Ros-
Lehtinen to look at two of the key efforts that USAID has 
undertaken, so the industrial park project and the permanent 
housing, two, arguably, key features, the signature features of 
the development and reconstruction post earthquake.
    They are by no means the only activities that USAID has 
undertaken, but with respect to those two key activities, I 
would say the key takeaways for me are, one, there is a 
tremendous challenge in completing the feasibility studies, 
selecting a site, and then going through all the steps that are 
required to construct a port that would be part of the larger 
apparatus of this industrial park, the power plant, the port, 
the housing units and the complex itself. So the first takeaway 
is the challenges getting that port up.
    The second one is the housing. I think it is fair to say 
that the initial estimates were just too optimistic. That, with 
the best of intention, there was a goal of 15,000 houses that 
between land, donor coordination, cost of building materials 
and some weakness in the initial estimates were just not 
destined to come to fruition.
    Mr. Engel. Thank you.
    Thank you, Mr. Chairman.
    Chairman Royce. We go now to Ileana Ros-Lehtinen from 
Florida, chairman of the Middle East Subcommittee.
    Ms. Ros-Lehtinen. Thank you, Mr. Chairman, and thank you, 
Ranking Member Engel.
    As we discussed more than 1 year ago on June 22, 2012, 
then-Ranking Member Howard Berman and I requested that GAO 
investigate reconstruction efforts in Haiti specifically 
pertaining to shelters and development of the surrounding areas 
of the Caracol Industrial Park in Cap-Haitien. Thank you, 
Director, and thank you to your team members who did a thorough 
job in this GAO report. We commend you.
    I was shocked to read the findings of the report and deeply 
disappointed that our foreign aid continues to suffer from a 
lack of real, targeted, comprehensive strategy to improve the 
situation on the ground for the people of Haiti.
    While Haiti, unfortunately, remains one of the poorest 
countries in the Western Hemisphere, U.S. taxpayers have been 
extremely generous in providing millions of dollars in foreign 
aid and humanitarian relief to this Caribbean country. In fact, 
Haiti is the largest recipient of foreign aid in the region; 
however, it is our responsibility to ensure that these dollars 
are being spent wisely and are showing the impact and the 
results that are intended.
    While I recognize that the environment in Haiti may be 
difficult, we must do our due diligence in this committee to 
hold U.S. officials accountable for the mistakes made in Haiti. 
Over 3 years ago, this body acted to provide emergency relief 
funds for Haiti to help the recovery efforts after the 
earthquake. It is appalling that we find out from this GAO 
report that only 50 percent of the funds have been obligated, 
and a mere 35 percent have been disbursed.
    Mr. Director, why do you think that USAID and State have 
been so behind on getting these crucial dollars out the door? 
And I am going to continue, also, given the fact that no U.S. 
dollars go directly to the Government of Haiti, do you believe 
that our government has correctly prioritized relief efforts 
through reliable NGOs?
    Another alarming finding from your report relates to 
housing. USAID decreased the projected number of houses they 
anticipated from 15,000 homes to now just 2,600 homes. This 
means that less people will be helped, from 75,000 as 
originally planned to now just 13,000 people. This translates 
to less homes for less people at double the cost. This is 
beyond unacceptable. It is scandalous.
    And lastly, I would like to discuss the report--the port in 
Cap-Haitien, as you pointed out in your report. According to 
the GAO report, this port is 2 years behind schedule, may take 
up to 10 years in finishing, and, in addition, as of June 2013, 
USAID has yet to fill the position of a port engineer to 
oversee the project. These misguided decisions are reckless and 
only hinder our ability to help the people of Haiti, which is 
our objective.
    Let me be clear. USAID does not have the expertise, the 
knowledge, or the background to build this port. Mr. Director, 
do you agree with this assessment? To your knowledge, has USAID 
ever built a port to this scale in the past and been 
successful?
    Mr. Gootnick. Thank you, Congresswoman. Let me take a 
couple of different parts of that.
    I have one figure that I think will perhaps speak to the 
obligations and disbursements, the other one, because you 
mentioned, Ms. Ros-Lehtinen, that only 50 percent had been 
obligated and one-third disbursed.
    This is a graphic that shows the timeline of the 
supplemental and the obligations and disbursements. So, on the 
horizontal axis you see time and on the vertical axis you see 
percent disbursed. Way to the left you can see the January 2010 
earthquake. Somewhat to the right you see the timing of the 
supplemental. Then what you see is the slow curve upward of 
obligations and expenditures, and a couple of things to remark 
about that.
    Money did not start to flow for about 1 year because there 
was some time that was invested in planning and building 
programs on the ground, and then what you see is a steady curve 
upward over the ensuing 3 years now since the supplemental.
    At 35 percent disbursed at 3 years, I would say that a 
project like this, USAID would probably typically think of a 5-
year course for disbursement, and so I would think they would 
want to see that curve bend upwards somewhat, but they are on a 
trajectory where if, on some of these larger capital projects, 
outlays increase toward the latter part of the project, that 
they would be able to meet a large percentage of the spending 
within 5 years. So that would be a perspective on the 
obligations and disbursements.
    You asked a number of other things. Let me mention the 
knowledge on the ports. You are correct that to the best of our 
research--and I think USAID concurred they have not built a 
port of this magnitude for many decades, and they did seek the 
expertise of a port engineer--what I think you will hear from 
them is that the challenges recruiting a qualified, highly 
qualified individual to come and live and work in this 
environment, they had two solicitations they were unable to 
fill with a qualified person. It may have taken them a couple 
of years to sort that out. At a point here----
    Ms. Ros-Lehtinen. Thank you. I am sorry. I am out of time, 
and I like to be cognizant of that.
    Thank you, Mr. Chairman, for your generosity.
    Thank you, sir, again for an excellent report. We want to 
help.
    Mr. Gootnick. Thank you.
    Ms. Ros-Lehtinen. We really do. We need to do better.
    Chairman Royce. Mr. Gregory Meeks.
    Mr. Meeks. Thank you, Mr. Chairman.
    Let me ask you, listening to your testimony, it seems as 
though one of the big mistakes that was made early on is the 
estimates that were done on the cost to build the homes, the 
cost of the port, et cetera. Can you--you know, did your study 
tell us how was that so wrong? Because that seems to be causing 
a lot of the problems today because of where we started in the 
beginning as far as the estimates. How did we go so wrong with 
the estimates? Could you give us a----
    Mr. Gootnick. I think it is very clear with respect to the 
housing that the initial estimates were based on homes that had 
been built in Haiti prior to the earthquake, in part, and that 
those estimates, while they would have formed a reasonable 
basis for comparison, were probably used more directly than 
they ought to have been to estimate the price of a home.
    Secondly, I think USAID, as it proceeded through its 
design, did not anticipate the costs that would be incurred to 
build the site to the specs that they have achieved. So, if you 
think about the complex of homes, they are building roads, 
retaining walls, putting in electricity, putting in a form of a 
sewage system, building--putting in street lights, putting in 
walkways and the like, and that level of infrastructure, to 
build a community from a greenfield, essentially, I think, was 
an underestimation of the cost.
    Mr. Meeks. Now, and just--that was--the other questions I 
had was the infrastructure itself, because when I hear that 
there was a question from the government in regards to indoor 
plumbing as opposed to outdoor plumbing, it just seems to me 
all of that should be--should have been done in the 
infrastructure, because in my mind, in 2013, the best way to do 
something is to have indoor plumbing so that you could have a 
sewer system.
    That should be--should have been computed in an estimate in 
doing infrastructure, and then the coordination of the funds, 
because when you have between the Haiti construction fund, the 
USAID money, and then, I don't know, CAD who--I don't know 
whether they had coordinated, any of that coordination, so that 
that then gives you, I would think, a better idea of what you 
are doing and how much it costs.
    How did that coordination go, and why then--you know, at 
the beginning stages we were not looking at indoor plumbing as 
opposed to--as opposed to just having, you know--I can't even 
imagine to say having outhouses in 2013.
    Mr. Gootnick. I will be honest with you, Mr. Meeks. It is 
not entirely clear to me exactly how the request for indoor 
plumbing--where it came from in the Haitian Government, how it 
was processed by the U.S. Government, and how the U.S. 
Government came to its--how USAID came to the decisions to 
respond to that. That we simply report as having happened. It 
is a bit of a black box. I think USAID, I am sure, and State 
can answer that for you. I would also be happy to try to look 
into that on your behalf and get you an answer. I think it is 
fair to say that the Haitian Government asked and we agreed to 
have this improvement built into the structures.
    Mr. Meeks. Let me also ask, I was just looking at what your 
recommendations were, and I think--I don't know if you had a 
chance to answer Ms. Ros-Lehtinen's question, but it says that 
the GAO recommends that we hire a port engineer to oversee port 
planning and construction. Has that been done?
    Mr. Gootnick. Right. At the time we issued our report, 
USAID issued its second solicitation for a port engineer, 
roughly timed with the issuance of our report. So they agreed 
with our recommendation. They indeed proceeded with a 
recruitment effort. That recruitment effort, as I understand 
it, did not yield a qualified individual who was willing to 
move to Haiti under the circumstances of the job offer, and so 
they reinvested, I think, in working with Federal Government 
agencies, particularly the U.S. Army Corps of Engineers, who 
have that expertise.
    Mr. Meeks. So then basically you are saying they could not 
find that person, so you are trying to--you go onto plan B 
since that person has not--couldn't find it, correct?
    Mr. Gootnick. I think that is a fair characterization.
    Mr. Meeks. Okay. And second it says, provide timely 
community support mechanisms for each new settlement to help 
ensure sustainability of its permanent housing program. Has 
that been done?
    Mr. Gootnick. Right. A little context in that. If you think 
about taking a greenfield and converting that into hundreds of 
homes, and then identifying beneficiaries, and providing them 
with that housing, particularly where employment opportunities 
may not be entirely proximate to the housing development, there 
are a range of community development challenges that emerged. 
First of all, how do individuals pay the rent? What kinds of 
rents are required? Are they building toward ownership? Who 
runs this community? Who is the community--where is the 
community leadership? Where is community structure? What are 
some of the rules? And USAID had funded efforts to obtain 
services, expertise basically, to allow communities to help--to 
help communities build that kind of expertise.
    That has been made available to some of the early 
communities, but we have not been given certainty that there is 
funding to do that in each of the communities that is to be 
built. We think that is important, and it will enhance the 
sustainability of these communities that are being developed.
    Mr. Meeks. Thank you.
    Chairman Royce. We go now to Mr. Dana Rohrabacher, 
subcommittee chairman for the Europe Subcommittee.
    Mr. Rohrabacher. Eurasia and Emerging Threats. That is the 
exact title.
    Chairman Royce. That is the full title. You have 5 minutes, 
Chairman.
    Mr. Rohrabacher. Thank you very much, Mr. Chairman.
    I think that when we are coming to grips with--here in the 
United States with our ever-increasing debt that is--as we all 
realize it is unsustainable for our own economy, it behooves us 
to take a look at what we are doing as a government and to see 
if there are not ways that we can do things more effectively 
and efficiently, and what we can afford and what we can't 
afford to do, and that, in particular, deals with how we are 
dealing with exactly the situations that we are examining today 
in terms of our assistance to other countries.
    I think that, Mr. Chairman, and specifically, we are going 
to have to determine whether the United States can still be 
involved in long-term development, or whether the limited 
amount of money that we have now because of our own debt 
situation will mean that we have got to focus instead on 
emergency and disaster assistance as the essence of American 
foreign aid as compared to long-term development, or especially 
I don't think that we can any longer afford ongoing subsidies 
to foreign governments, especially when the foreign government 
seems to indicate that there are corruption problems within 
that society.
    First of all, specifically, the homes that were being built 
that we are talking about here in Haiti, are they owned by the 
occupants of the house?
    Mr. Gootnick. It is a good question. What my understanding 
is of the way this will work is, as beneficiaries move in, they 
will be paying, and I think the first settlement is 
approximately $35 per month.
    Mr. Rohrabacher. To whom?
    Mr. Gootnick. To the Haitian Government.
    Mr. Rohrabacher. To the Haitian Government.
    Mr. Gootnick. I would actually want to make sure I am 
correct. Yes, to the Haitian Government. And what that will do 
is that will build toward ownership of the home. Because it is 
government land, they will not in the end own the land, but 
they will own their home, so essentially they are paying the 
mortgage.
    Mr. Rohrabacher. So, we are having--we are setting these 
people up. They don't really own the home until they have made 
their payments. The Haitian Government may end up owning the 
homes.
    Mr. Gootnick. Well, but the homes were built on Haitian 
Government land. Universally the permanent shelter that is 
being constructed is, at the end of the day, on Haitian 
Government land. The U.S. Government is the donor of this 
effort. And I would defer to my colleagues at State and USAID, 
but----
    Mr. Rohrabacher. Sounds like we set up another scenario of 
corruption there, to be frank. And it is one thing for us to--
for us to have come into this project at all, we should have 
expected the Haitian Government--Mr. Chairman, we should have 
expected the Haitian Government to donate the land to whoever 
occupied the house rather than leave whatever petty bureaucrats 
in that country who rape their own people with that kind of 
power over a project that we are financing. Anyway, that sounds 
like something we need to pay attention to.
    You know, the Chinese do things a lot differently than we 
do when they have projects like this, but let me ask you. We 
used--and are we using local contractors to build these homes?
    Mr. Gootnick. We are using a range of partners that are 
primarily larger NGOs or in some cases multilateral 
institutions that have the capacity to perform as the prime 
contractor. In turn, it is my understanding that a lot of the 
actual labor is being conducted by Haitians.
    Mr. Rohrabacher. Okay. So we are giving money to an 
organization that then doles it out to build the homes that 
then actually the Haitian Government ends up controlling.
    The Chinese, by the way, just so you will know, I am sure 
you are already aware of this, they come in, they don't do 
that. What they do is they bring in their own workers, their 
own people, and when they--they build a project, and then they 
leave the project. They say, here are the homes, this is what 
we are giving you, but they are not deeply involved with the 
murky bills of doing business in a Third World country where 
there is so much corruption and so much of the money then is 
wasted through corruption.
    Let me ask you a little bit about the specifics. Well, I 
have got about 9 seconds, but I understand Cheryl Mills, 
because this was such an emergency situation and the task was 
so daunting, that she was given certain authority and a vehicle 
of trying to make this work in Haiti that it went out of the 
normal process the State Department uses for such emergency 
measures. How has that worked out as compared to what the 
normal procedures would have done?
    Mr. Gootnick. I would have to defer to the State Department 
on that. In general we have been working with the Haiti Task 
Team and the Office of the Haiti Reconstruction Coordinator, 
USAID and State Department respectively. If they are working 
above that level within their own respective departments, I am 
less familiar with that.
    Mr. Rohrabacher. Well, we are going to have to find better 
ways of how we have limited amount of money now as compared to 
what we have had in the past. Our own country can't sustain the 
course we are on. We have got to do things better, and frankly, 
there is just as much corruption as there ever has been.
    Thank you very much.
    Chairman Royce. We go now to Mr. Sires of New Jersey.
    Mr. Sires. Yes. Okay. Did you mention before that the 
houses were 450 square feet? Is that what you said?
    Mr. Gootnick. Four hundred fifty square feet. Four hundred 
fifty square meters. I will have to get the precise answer for 
you, but my understanding was 450 square feet.
    Mr. Sires. And this is a request by the government to make 
it that large?
    Mr. Gootnick. Yeah. They went from about 200 and--I am 
going to look this up for you, but I believe they went from 
about 275 square feet to 450 square feet.
    Mr. Sires. 275 square feet. That is a room.
    Mr. Gootnick. It is a small house. As they are constructed, 
they are a one-bedroom with a concrete pad where the resident, 
if they choose to, could add a second bedroom. So, it is a 
bedroom, a living area, a small bathroom, and a kitchen.
    Mr. Sires. I mean, I don't think it is outrageous that the 
government requested that you make it a little larger and put a 
bathroom in there. I assume that is the reason we agreed to it.
    Mr. Gootnick. Again, I am not--I wouldn't claim to have a 
great deal of knowledge about the discussions that took place 
between the U.S. and the Haitian Government to agree to it. I 
simply know that rather late in the day, the Haitian Government 
asked for this improvement, and the U.S. Government agreed to 
it.
    Mr. Sires. And you say they own the land, the government 
owns the land?
    Mr. Gootnick. Yes. In all cases there are eight sites that 
have been developed. We have a map in our report that will show 
you the location of the eight sites. One is in the Port-au-
Prince area, four are around the industrial park, and two are 
in the St-Marc corridor, and in each case, at the end of the 
day, these ended up being on government land. Initially USAID 
had hoped to work with private entities who would donate the 
land. Part of their--maybe a large landholder would donate 
something in exchange for enhanced value of their own land and 
the like. My understanding is that, at the end of the day, this 
did not work out.
    Mr. Sires. Do you know if any homes have been built where 
they would own the land?
    Mr. Gootnick. The homes are all being built on government 
property, and, as I indicated, they will pay a form of rent 
where after a period of time they will own the home. They will 
not own the land.
    I think that what--my understanding is that between the 
U.S. and the Haitians, there has been some assurances that 
given the vagaries of land ownership and title in this country, 
that the homeowners have been assured that when they pay their 
mortgage, if you will, and ultimately own that house, that they 
will have a secure title to their home.
    Mr. Sires. And the land.
    Mr. Gootnick. The best of my understanding, not the land. 
That is correct.
    Mr. Sires. So no matter what you paid, you still don't own 
the land that you are there.
    Mr. Gootnick. Don't own the land. Don't own the land, you 
own the house.
    Mr. Sires. So if the government ever wanted to do anything 
and take the land, they could basically remove these people.
    Mr. Gootnick. Right. It is fair to say that the vast 
majority of Haitians, certainly in Port-au-Prince, do not own--
even if they own their home, they don't necessarily own the 
land. If they are a tenant, they don't necessarily--their 
landlord and him or herself doesn't necessarily own the land. 
Land ownership is obscure, I would say, in much of Haiti.
    Mr. Sires. Can you talk a little bit why you think there 
were so many delays in the reports and the omissions in the 
report? Is it because maybe the--we just didn't do it right, or 
the government is not a good partnership in this process?
    Mr. Gootnick. With respect to the 6-monthly reporting 
requirement that State Department had, I think it is fair to 
say that the reports emphasized the more positive aspects of 
the development--the reconstruction effort, and that we felt 
that additional candor about problems and challenges would give 
a more rich context and more accurate view of what was taking 
place.
    Mr. Sires. Do you know if the government is a partner or an 
obstructionist in all this?
    Mr. Gootnick. Haitian Government?
    Mr. Sires. Yes.
    Mr. Gootnick. I would let, again, the agency comment on 
that.
    Mr. Sires. You take the Fifth? Okay.
    Thank you, Mr. Chairman.
    Mr. Salmon [presiding]. Thank you.
    Mr. Gootnick, according to your report, USAID will build 
only 2,649 of the 15,000 houses originally. And I am just 
wondering, is this an acceptable outcome? I have heard other 
folks talk about, you know, the--why we have had the mistakes 
in projections and everything, but, realistically, could this 
have been avoided?
    Mr. Gootnick. I think it is regrettable that the goal will 
not be achieved or anything like the original goal. I think 
when you step back from the permanent--the question of 
permanent housing, it might be also useful to look at some of 
the efforts regarding the severe housing shortage, indeed the 
disaster around housing that occurred after the earthquake, so 
that in the immediate aftermath, there were a range of efforts, 
some of which the U.S. Government took the lead on, some of 
which they were a participant in, anything from simply removing 
rubble to getting some of the--the initial temporary shelter in 
the camps established, to getting basic safety and sanitation 
in some of the camps, to some of the transitional housing 
structures that were built, some of the damage assessment in 
Port-au-Prince that was done. So these are housing-related 
activities where I think it is fair to say that the U.S. 
Government played a key role and did achieve some very positive 
results.
    With respect to the permanent housing, there have been some 
real shortcomings in what they hoped to achieve and what they 
have achieved.
    Mr. Salmon. Also, USAID has committed $170.3 million to 
construct a power plant and a port to support the newly 
developed Caracol Industrial Park. And according to a recent 
USAID feasibility study, the park port will cost anywhere 
between $117 million and $189 million, more than the $68.1 
million USAID planned to invest.
    Is it likely that the Haitian Government or private-sector 
investors will ever cover the shortfall? And what happens if 
USAID can't get the additional investment? Would it have been 
wise to secure funding agreements prior to construction?
    And then, finally, USAID has informed the committee it 
plans to hire a port engineering expert by the end of this 
year. I heard you talk about the fact that they haven't had any 
responses yet. But even if they do get that engineer, would 
that alone be sufficient to cure the problems they are facing, 
and what else should be done?
    Mr. Gootnick. With respect to the shortfall on the funding 
of the port, I think it is important to recognize that USAID's 
investment was not intended to be the entire investment 
required to build and operate this port. The port is being--has 
been envisioned as a four-phased project. And right now USAID's 
$60-some million that remains in that sector will cover the 
majority, but I don't believe all, of phase one. USAID I 
believe hopes that phase one would be enough to get the port up 
and running, although would not have the full capacities, 
obviously, of the completed construction over the four phases.
    For the four phases, there is a significant shortfall. And 
the--the effort is to identify someone in the private sector 
who wants to--who will invest in the building of the port and 
then obtain a concession for the running of the port and thus 
recoup some of their investment.
    Mr. Salmon. [Inaudible.]
    Mr. Gootnick. I wouldn't say I am the best person--have the 
best expertise to answer that.
    I would say it would be a large investment, and the private 
partner would need a concession at the port that was sufficient 
to recoup their investment. And that is a private-sector 
calculation I couldn't--I can't do for you.
    Mr. Salmon. With that kind of a shortfall, would it be 
prudent of us maybe to hold back on that money until there is a 
successful game plan?
    Mr. Gootnick. Well, I think there is some degree to which 
the port, the power plant, the housing, and the industrial park 
are interdependent. That is not specifically to say that, 
without the port, the other parts of that larger project 
couldn't survive. But it certainly is standard economic logic 
to suggest that that port will reduce the transportation costs 
for the industrial park, allowing them to expand, hire more 
folks, provide more wages that will support housing, make more 
use of the power plant, and support payment for the utilities 
that the power plant provides. So there is some synergy to 
these projects that I think would make it a greater challenge 
for the larger project to succeed without the port.
    Mr. Salmon. I guess what I was trying to get at, though, is 
does it make sense, if it is going to be that much of a 
shortfall, would you recommend that we don't spend that $68 
million and build something that may not be able to be 
completed?
    Mr. Gootnick. We have not made that recommendation. We have 
made no recommendation to halt funding or otherwise withdraw 
funding. I would say that USAID has already invested a couple 
years in feasibility, is continuing to invest in feasibility, 
and has real plans to move forward.
    Mr. Salmon. Thank you.
    Mr. Connolly.
    Mr. Connolly. Actually, Mr. Chairman, I would be glad to 
defer to Ms. Bass.
    Ms. Bass. Thank you very much, Mr. Connolly.
    I have a couple of categories of questions I wanted to ask 
you about. One is Feed the Future and the status of Feed the 
Future.
    But before that I wanted to understand more about the 
contractors that are used, and not necessarily for building the 
port, but all of the other projects that are going on. I think 
you said they are all NGOs?
    Mr. Gootnick. My understanding is that they are 
nongovernmental organizations; in one case, it is a development 
bank. There are other large actors who are involved in the 
primary contracting to build the homes.
    Ms. Bass. And how do we find the NGOs? You know, are they 
U.S.-based NGOs? International? Haitian?
    Mr. Gootnick. Well, the cost of this home is largely the 
cost that is--the funds that are transferred to the builder. 
The builder then has outlays to achieve the project and as an 
NGO is not in--anticipating meeting a profit, but providing the 
service.
    Ms. Bass. Right. And I am just trying to get at 
understanding the vetting process and how we hold NGOs 
accountable, whether they are nonprofit or whether they are 
making profit. How do we recruit them, vet them, hold them 
accountable?
    Mr. Gootnick. Right. It is an important question, and I 
think it is a key priority for USAID throughout its entire 
enterprise. It has been a priority of the USAID Administrator 
to use local NGOs and improve capacity of local NGOs wherever 
possible.
    I think the challenge, which USAID could speak to, is, just 
as you articulate, ensuring that you have a partner there who 
can act accountably with respect to the funding and also 
provide the service that you have asked them to provide.
    Ms. Bass. So from your point of view, though, in terms of 
the accountability and the vetting, you wouldn't know; is that 
what you are saying? I know you are not--I know you are not 
USAID, but----
    Mr. Gootnick. Right. We have done a variety of studies at 
GAO in other parts of our portfolio where we have looked at 
USAID's oversight of its grants and its contracts. And I think 
what we found is that there is this tension: When you are 
working with a U.S. NGO, you have an enhanced ability to ensure 
accountability; when you are working with a local NGO, you have 
an opportunity to improve local capacity. And this is a balance 
and a--and progress that USAID is trying to make with its USAID 
forward, but it faces real challenges in this regard.
    Ms. Bass. So ``challenges'' means there is a method of 
accountability or----
    Mr. Gootnick. I would say it is not a one-size-fits-all. 
You have got to look in a case by case. So if you look at Haiti 
in particular, by and large the prime recipient of funding has 
not been a local NGO. I can't say that without exception across 
all of the reconstruction effort, but with respect to the 
projects we are looking at, they have not gone directly to the 
Haitian--Haitian civil society, public sector or private sector 
to do this work. Indirectly----
    Ms. Bass. So who have they gone to?
    Mr. Gootnick. Haitian laborers contributing to the 
building.
    Ms. Bass. Got that. I understand that. And I think that is 
great. But who does the money go to? If it is not Haitian NGOs, 
who is----
    Mr. Gootnick. Well, I mean, there are a number of large 
NGOs, some whom you would recognize. The American Red Cross and 
the like are the types of organizations that are prime 
recipients.
    Ms. Bass. Okay. And are you able to comment about the 
status of Feed the Future?
    Mr. Gootnick. Excuse me?
    Ms. Bass. Are you able to comment about the status of Feed 
the Future in Haiti, the $88 million that has been spent so 
far?
    Mr. Gootnick. You know, I would be happy to take questions 
for you and get back to you on that. I am not our agency's 
expert on that issue. I certainly know that hunger in Haiti was 
on the rise prior to the earthquake, and it has become more 
acute and particularly with the cholera epidemic and certain 
natural disasters subsequent to the earthquake, two hurricanes 
that have buffeted the island. There have been real challenges. 
And deforestation is a huge problem.
    Ms. Bass. Okay. Well, we could save that for the next 
panel. Thank you very much.
    Mr. Connolly. Mr. Chairman?
    Mr. Salmon. Mr. Connolly.
    Mr. Connolly. I would ask unanimous consent that our 
colleague Barbara Lee be allowed to participate in this 
hearing.
    Mr. Salmon. Absolutely.
    Mr. Connolly. I thank the chair.
    Mr. Salmon. Chair recognizes Mr. Marino.
    Mr. Marino. Thank you, Chairman.
    Over here, sir. Thank you for being here.
    Have you or anyone from State, if you can speak to it, any 
U.S. entity or person, discovered corruption, fraud, or theft 
taking place in Haiti on these projects?
    Mr. Gootnick. On these two projects I am not aware of any 
specific charges or findings of corruption.
    Mr. Marino. Is there an entity or is there a person 
responsible for investigating the potential for corruption?
    Mr. Gootnick. With respect to ensuring that both the 
financial and programmatic controls are in place such that the 
funds are being used for intended purposes, USAID is going to 
have grants, or contracts managers, or oversight functions 
within its--within the Office of the Haiti Coordinator--excuse 
me, within the Haiti Task Team within the USAID mission that 
are looking to ensure that the funds are being spent as 
intended.
    Again, I don't have any specific observations about 
corruption or lack of accountability on these projects. That 
said, they are, with respect to housing, clearly not meeting 
some of their targets.
    Mr. Marino. Do you have access or have you had access to 
any of these reports that may have been put together to 
determine whether the money is going where it is supposed to be 
going and we are getting the product in return?
    Mr. Gootnick. You know, that was not a key part of the 
scope of this project, so I would have to honestly say I could 
look into that and get back to you. But I don't have specific 
information for you.
    Mr. Marino. Is there a U.S. entity on the ground, for 
example, let us say someone to review initial plans and prints, 
someone to review initial cost; if a load of concrete is coming 
in, is it the grade that was spec'd out, is it being properly 
laid, are the materials that are used to build a house, are 
they materials that were spec'd out, or are they ending up 
being a lesser quality? Is there anyone that reviews this on 
the ground as the building is taking place?
    Mr. Gootnick. Right. In general I think I would point to 
two types of oversight of that kind of accountability 
challenge. One, the initial contractor or grantee is going to 
be required to provide reports to the--to USAID. And, 
secondarily, at the USAID mission there is going to be 
oversight of those reports and--and then that information that 
comes forward.
    The inspector general is also--the regional inspector, 
again, based in El Salvador has done a lot of work on the 
ground in Haiti. But the general accountability and oversight, 
the general controls for those projects are--tend to be managed 
within the USAID mission.
    Mr. Marino. So you stated that--previously that much of the 
labor is and should be the Haitian people, correct?
    Mr. Gootnick. That is my understanding, yes.
    Mr. Marino. Now, if an individual, a business person, man 
or woman, in Haiti has a construction--has a cement company, is 
there someone--is there ever a situation where a representative 
from the United States is on the ground making sure that the 
product that is on site is the product that we originally paid 
for?
    Mr. Gootnick. Right. Well, I mean, concrete is a good 
example because it is my understanding that in these building 
projects there has not been sufficient information to suggest 
that locally procured building materials are satisfactory. And 
so part of the escalation of costs is the importation of a lot 
of the building materials to satisfy the demands for quality.
    Mr. Marino. Don't you think, then, there could be a cost 
savings, there could be time savings if there is actually a 
representative of the U.S. as a project manager on site making 
certain that we are getting what we pay for, or a series of 
managers?
    Mr. Gootnick. Honestly, Congressman, I think that is a 
question I am going to have to let you direct to USAID. I don't 
have the answer for you.
    Mr. Marino. I have 30 seconds left. Can you again expand on 
a little bit how is private--what is USAID doing and what is 
your conception of more private enterprise getting involved in 
projects like this?
    Mr. Gootnick. Well, the port itself is an effort to build a 
public-private partnership as to say for USAID to partially 
fund the port after feasibility studies have been done, designs 
have been completed, and to identify what would be a large--in 
Haitian terms, a very large investor to contribute to 
completing the port and becoming the concessionaire. So there 
is one example.
    Mr. Marino. I see my time has expired, and I want to keep 
within my 5 minutes. Thank you, Doctor.
    Mr. Salmon. Mr. Vargas.
    Mr. Vargas. Thank you very much, Mr. Chair. Appreciate the 
opportunity.
    I have to say I was much more scandalized before I got 
here, because now that I am here, I think some of the answers--
some of the questions have been answered. I looked at the 15--
that you are going to build 15,000 homes. That was the 
original. But turns out that that was a pie in the sky, that 
those numbers were way off, one; and, two, that you were 
looking at building them in Port-au-Prince where it would be 
infill as opposed to raw construction. So infill is a lot 
cheaper. I think any of us who have worked in the business know 
that. So infill would have been a lot cheaper, but because the 
property wasn't secure, you couldn't get simple fee title 
there, you had to build somewhere else, so you have to put in 
the infrastructure.
    Then secondly, interestingly, the houses were going to be 
275 square feet. Just so you understand what that is, a house 
of 15 times 18 feet is 270 square feet. The average family size 
of a Haitian family is four people. So you are going to put 
four people in a room of 15 by 18. So someone came up with the 
outrageous idea that they should put them instead in a room of 
21 by 22 square feet.
    I know that area well because a few years ago I built my 
garage. That is how big my garage is. So somewhere the scandal 
is that you are going to build a house the size of an American 
suburban garage to put in four people, and the outrageous 
thought that they might have a bathroom.
    You know, my daughter spent the last two summers, the 
summer before last summer, in Nicaragua, up in a place called 
Los Lipes, way up in the jungle, and she didn't have a 
bathroom, which I was grateful for because now she doesn't 
complain at home, a 16-year-old. And this year she was in 
Paraguay for the summer working for Los Amigos de Las Americas. 
Again, they didn't have a bathroom, it was about 100 feet away, 
which, again, was fantastic. So she does not complain at home 
again about any of the issues we have.
    But the notion that we couldn't build a bathroom for these 
people, I think of course we should. You know, we are there to 
help.
    And the other thing I guess I was thinking was this. You 
know, we--this is a 7.0 quake that they had, and they lost--go 
through the statistics--they lost so many people. We had a 7.2 
3 months later in Baja, California, about 100 miles from my 
house. In fact, I thought it was the big one, and I grabbed my 
6-year-old daughter and was running out the door because I 
thought, oh, hell, this is the big one. But it turns out it was 
100 miles away. We had four people die, only four people. We 
had, you know, some damage. We didn't have hundreds of 
thousands of people; we didn't have that kind of damage.
    So you don't want to build houses that are so cheap that 
they are going to fall down again. That would be stupid. So we 
build these houses, you know, little tiny ones. People get in 
there, they fall in them. Whose fault? It is our fault. You 
know, so I--the scandal that I thought I was going to have and 
beat you up on kind of got answered, just to be frank.
    So I--I guess I would--I would just ask a little bit more 
about the issue of that port, because the home one kind of got 
answered for me. But the issue of the port. It is very 
difficult to build that kind of infrastructure, it is difficult 
to get an engineer there. How is that going to be worked out 
ultimately?
    Mr. Gootnick. Well, I think what--what USAID is thinking at 
this point is there is an increased recognition that the time 
needed to design and build a port was longer than was 
originally put forward in the activity approval document and 
the U.S. strategy. So I think there has been a rethinking of 
just the time horizon necessary do something of this scale.
    Mr. Vargas. Okay. And the other thing I guess that I 
thought, I thought more money had actually been spent on the 
project. A lot of the money still hasn't been spent----
    Mr. Gootnick. Right.
    Mr. Vargas [continuing]. Right? So they still seem to have 
the ability to pay for these things, Right?
    Mr. Gootnick. Well, some of the money that is projected to 
go into the port and some of the money that is going into this 
housing, the vast majority of it is from the supplemental. 
There are some funds that are being contributed from annual 
appropriations, ESF appropriations, that have plussed up some 
of these over time to ensure there is enough funds to do the--
to do the work.
    Mr. Vargas. Thank you. I yield back. Thank you, sir.
    Mr. Salmon. Thank you.
    Mr. Weber.
    Mr. Weber. Thank you.
    Dr. Gootnick, you are the Director of International Affairs 
and Trade at the GAO. How many employees are in your particular 
department?
    Mr. Gootnick. The International Affairs and Trade team is 
about 120, 125. GAO-wide we are, with downsizing, under 3,000 
now.
    Mr. Weber. But I am most interested in the department that 
has oversight of what we are discussing here today. One hundred 
twenty under your supervision?
    Mr. Gootnick. No, no. One hundred twenty in the group as a 
whole. We work in a matrixed effort and work with staff across 
a number of different engagements.
    Mr. Weber. And how about under your supervision?
    Mr. Gootnick. Well, to do this work, for instance, there 
would have been three or four of us over time.
    Mr. Weber. Three or four of us over what time period?
    Mr. Gootnick. This work was done over the course of about a 
year, okay, but not by any means full time by all of those 
individuals.
    Mr. Weber. So we are--Congress has appropriated this money. 
Are you telling me that three or four individuals are 
responsible for watching all that goes on over in Haiti----
    Mr. Gootnick. No----
    Mr. Weber [continuing]. As it relates to this project, this 
relief effort?
    Mr. Gootnick. No. I think we respond primarily to requests 
from committees of jurisdiction, and also respond to mandates 
or directives that are put in legislation. So when the 
supplemental was established, we were asked to do work, and 
this is our third report. In addition to GAO, you are going to 
have the inspector general doing work based out of El Salvador, 
and then you are going to have the internal oversight of the 
program itself.
    Mr. Weber. So all in all would you say there is 10 
American--or, I guess, government employees watching this 
process? Twenty? Thirty?
    Mr. Gootnick. I would have a hard time trying to put that 
kind of a number on it, sir. I would say that there are 
different parts of the oversight community that are brought to 
bear on----
    Mr. Weber. So safe to say it would be a good move for us to 
try get a particular number, somebody who has accountability 
and responsibility for oversight in its entirety.
    When you say the inspector general from El Salvador--I am 
looking at a map here--I can't help but notice that the 
Dominican Republic is immediately east of Haiti. You have got 
Puerto Rico, British Virgin Islands, Jamaica. Of course, it is 
southeast of Cuba; looks to be, I don't know, 20 or so miles 
maybe. Are all of these countries helping in any form or 
fashion?
    Mr. Gootnick. Well, the--the inspector general at USAID was 
provided $5 million, I believe--I will check to make sure that 
is correct--in the supplemental appropriation to provide 
oversight of these funds. So there is one way in which the 
oversight of the project was resourced, if you will.
    GAO does not operate in quite the same way. We are not 
looking for a directed appropriation for a specific project. We 
operate with our annual appropriations to try to respond to 
congressional interest----
    Mr. Weber. Okay. Let me move on just a little bit here. Do 
you have any knowledge, is the Dominican Republic, Puerto Rico, 
Jamaica, and others, are they helping with the relief effort?
    Mr. Gootnick. Many countries have been involved. I can 
speak to the largest donors. None of those, I think, fall 
within the very largest donors. Puerto Rico obviously part of 
it.
    Mr. Weber. Okay. You also mentioned that there was a South 
Korea garment facility, I think, in your comments?
    Mr. Gootnick. Right. A very large South Korean firm was a 
key part of the public-private partnership that was the genesis 
of this industrial park.
    Mr. Weber. Have they invested money?
    Mr. Gootnick. Sure. They are operating a--they are 
operating a firm. They are producing clothing and shipping it 
to the United States as we speak.
    Mr. Weber. Do we have sufficient safeguards in place that 
they won't use what we would--is tantamount to either slave 
labor or child labor?
    Mr. Gootnick. It is an important question. I think it has 
been looked at. There is a minimum wage in Haiti, which is $5--
approximately $5 a day, as I understand it, and they are being 
paid at minimum wage. I can't speak directly, but I am 
certainly aware through--through press and other sources that 
labor conditions are being observed and monitored.
    Mr. Weber. Okay. Let me just comment on the 450-square-foot 
homes. When I was in the Texas Legislature, my wife and I are 
RVers, recreational vehicle owners, and we travel and camp. I 
have a 40-foot Fifth Wheel that is 8 feet wide. It is 320 
square feet. It sleeps 12 people. Wouldn't want to live in it 
full time if I didn't have to. But I can't tell you how much--
and I did for 6, 5 months out of each--every other year in the 
Texas Legislature. But I can tell you that you make do with 
what you can.
    And I lived and we have had kids live in the 320-square-
foot area for a week or 2 at a time. It is not the most 
optimal, but, you know, a grateful people, of course, ought to 
say 450 square feet with a bathroom would be just tremendous. 
So I just want to make that comment. Thank you, Doctor.
    Mr. Gootnick. And I would just add for the record that if 
you look at studies of the poor in Haiti, there are many 
studies that show that of the--of those in extreme poverty in 
Port-au-Prince, the amount of square footage that you have to 
sleep, you may literally need to sleep in shifts because there 
aren't--there isn't enough square footage for people to lie 
down.
    Mr. Weber. Thank you very much.
    Mr. Salmon. Mr. Bera.
    Mr. Bera. Thank you, Mr. Chairman.
    Thank you, Dr. Gootnick, for your testimony. Let me just 
look at some of the numbers. Six hundred fifty-one million 
dollars was what was allocated for housing; is that correct?
    Mr. Gootnick. Six hundred fifty-one million dollars was 
allocated across USAID's entire portfolio in a supplemental 
appropriation.
    Mr. Bera. Okay. Great. And the goal was 4,000 new homes, 
and then leverage that with 15,000 plots, and again leverage it 
for 11,000 additional homes.
    Mr. Gootnick. Correct.
    Mr. Bera. Is that correct?
    I found Mr. Vargas' comments actually very interesting. We 
are not talking about large dwellings; we are talking about, 
you know, by U.S. standards, you know, very small dwellings and 
very small shelter. But what worries me is, looking at our 
briefing materials, is it correct that 54 percent of the 
population lives on about $1 a day?
    Mr. Gootnick. Yeah. I think of it as 70-plus percent live 
on $2 or less, so some subset of that is going to live on $1 a 
day.
    Mr. Bera. So it almost--you know, again, as I am thinking 
about it, you know, as we have questioned USAID and interacted 
with USAID, we are almost addressing issues at U.S. standards 
as opposed to looking at it in capacity building from Haitian 
standards. You just commented on, you know, the square footage 
that, you know, is available for a vast percentage of the 
population having to sleep in shifts. More a comment as opposed 
to a question: I just wonder if there is a better way to 
leverage the funds to impact a larger percentage of the 
population, and I would be curious as to your thoughts, and it 
may be a question better for the USAID folks.
    Mr. Gootnick. I would only comment that this is a 
population that has lived in deep and endemic poverty for many, 
many decades. And so how you reach a high percentage of those 
citizens with scarce dollars is probably the challenge that our 
development agencies struggle with every day.
    Mr. Bera. But we are talking about pretty large sums by 
Haitian standards in terms of the amount of aid that was raised 
and, you know, even the amount of dollars that Congress 
allocated. It seems as though a fairly large amount and a very 
poor country that is going to address a small segment of the 
population as opposed to really going after root-cause issues 
to try to develop some systematic change to actually address 
the folks that probably were most impacted by the earthquake as 
well, which I would imagine the poor were disproportionately 
impacted.
    Mr. Gootnick. I think with respect to the housing, that is 
a very fair criticism, that at the end of the day, a relatively 
small number of individuals will be beneficiaries. I think in 
fairness to the program effort it has to be looked at in the 
context of other--of the activities that related to shelter in 
the immediate aftermath and in the months and years that ensued 
that don't end up yielding permanent housing, but maintain 
people's roof over their head for some period of time after a 
huge natural disaster.
    Mr. Bera. And if I look at some of what is in our briefing, 
Haiti also has one of the largest wealth disparities in the 
world with 68 percent of the total national income accruing to 
the wealthiest 20 percent.
    I have to also believe that, you know, in construction and 
land ownership and so forth, with the level of corruption, I am 
worried that some of those dollars that we are investing also 
disproportionately are benefiting the wealthiest as opposed to 
leveraging those dollars to benefit the folks that are most 
affected. Would that be a fair----
    Mr. Gootnick. Yes. Haiti, I think, in--is one of the most 
inequitable society--government--countries in the world. And 
there is plenty of academic literature to suggest that the more 
inequality, the harder it is to achieve development outcomes.
    Mr. Bera. I have got about 45 seconds left. One other 
thing, in a prior hearing in this full committee, in terms of 
promoting democracy, promoting fairness, one of our witnesses 
said one of the keys is land ownership, is property ownership, 
even if it is a small plot, to give you something and give you 
a stake in the game. And if I understand correctly, land 
ownership is very rare, and property rights are very rare. Is 
that--that is correct in Haiti?
    Mr. Gootnick. Yes. I would characterize it as obscure and 
arcane. But I think it is fair to say that in many cases it is 
not clear who owns land that an individual or group of 
individuals may be living on, and in all likelihood, with 
respect to being able to actually claim full title to land, it 
is a very small number of large landholders.
    Mr. Bera. So I would suggest--and I am out of time--but one 
way to perhaps start fundamentally changing and putting in the 
seeds of democracy and stability would actually be looking at 
that rule of law and looking at that land ownership. We can't 
mandate that, but, again, if there is a way that we can 
leverage our resources to try to put in some of that rule of 
law and some of those land ownerships. That is just a comment, 
not a question.
    Mr. Gootnick. And if I could just remark, I think that is a 
very important comment, and there are programs through this 
reconstruction effort that are trying to get at that we, GAO, 
did not look at and may be a good topic for discussion with the 
subsequent witnesses.
    Mr. Bera. Thank you.
    Mr. Salmon. Mr. Perry.
    Mr. Perry. Thank you, Mr. Chairman.
    And, Dr. Gootnick, thanks for coming. I understand and 
recognize that you are not a representative of USAID, you are 
GAO. So this is frustrating to listen to, quite frankly. And I 
know you don't have all the answers, but you are the person in 
front of us right now.
    And being a proponent of foreign assistance, and we have a 
lot in America, so we have a lot of responsibility, and these 
folks are our neighbors, and we should help. But it is hard to 
advocate to my constituents, the taxpayers who are paying the 
bill, who are willingly paying the bill, but say, you know, we 
want to get the most out of our dollar, and you are sending it 
here, and we are obviously not.
    And I wonder, what are the systems of accountability? I 
mean, I see this report from the GAO, the Government 
Accountability Office, and the answer is kind of like, well, 
more reporting to Congress will help. More reporting of bad 
information to Congress won't help. What will help is either 
the same amount of reporting, more reporting, or less reporting 
of good information, of things that happened where we got the 
most bang for the buck. But more reporting is not going to 
change that. We are just going to be unhappy with the results. 
So what are the current systems of accountability for the money 
that is being spent?
    Mr. Gootnick. Well, I think with respect to our 
recommendation for reporting, we cited not only the end of the 
reporting requirement under the supplemental, but the quality 
of the reporting that came forward during the supplemental. And 
just as you implied, it would be more helpful in Congress' 
oversight to the extent that the reporting that was provided 
gave a full and accurate picture of the progress, but also the 
challenges and shortcomings of the effort that had taken place.
    With respect to the accountability and oversight broadly, 
as I think we have discussed, there are a range of mechanisms 
that seek to get at oversight and accountability of government 
expenditures in this kind of environment.
    Mr. Perry. They don't seem to be working, in my estimation, 
based on what I have heard. And I don't know if I am getting 
partial information, but these statistics, if we--if we live by 
them in our personal lives at home, we are going to build this 
many houses, and we are about a third of that for the same 
amount of money, and somehow we would accept that as okay, we 
would not accept that. We would not accept that anywhere here. 
Somebody's head would be on a platter.
    Who in--is there one point of contact? Is there one person 
at USAID that is responsible for this project? Who is at the 
top?
    Mr. Gootnick. I think that would be the Office of the Haiti 
Coordinator would be the first place you would want to go.
    Mr. Perry. All right. So I would recommend to the committee 
that that person come--come to this committee and give us a 
report. I----
    Mr. Gootnick. I think he is your next witness.
    Mr. Perry. Is he? Good. That would be great. That would be 
great. So get ready.
    You know, I almost don't know where to start. I mean, it 
seems to me when you are living in a cardboard shack in a 
tropical country, having a 450-foot home--arguably, it is a--it 
is a probably a square cinder block or concrete structure with 
a roof over the top of it, and maybe a window, a couple windows 
and a door. If you are used to living or you have been forced 
to live in a cardboard home with a mud floor, with an open 
sewer out front--because I have been to some of these Third 
World countries, not particularly to Haiti, but I have been to 
other environments that are similar--it is a great step up to 
move into 450 square feet of concrete, enclosed, roof-covered 
domicile where you cannot be subject to the bugs and the 
environment, and you can move on with the rest of your life.
    And it seems to me that that should have been our primary 
focus. And if I found a contractor in my own hometown and said, 
I want to build a development of X amount of houses, they would 
know immediately. This is open ground. We are not talking about 
tearing down the city and building new--we are talking about an 
open field. We just start digging and putting stuff in. You 
don't need a sidewalk the first day. You don't need running 
water the first day. You need a place to put your stuff and get 
out of the weather.
    That is what we should be focusing on. And it is appalling 
to me, and I think it would be appalling to most citizens, that 
that is not what we are focused on. And I beseech you as the 
GAO representative for us, that is what you should be focusing 
on; not the efficacy of reporting, the efficacy of getting 
something accomplished for the best bang for the buck.
    I gotta tell you, I am disappointed in this. This isn't 
going to tell us, well, you are going to report more to 
Congress. La-di-da. That is great. It is going to be the same, 
we failed to provide, we failed to spend the taxpayers' money 
wisely. That is what we are going to be hearing more of.
    Should I be--this is rhetorical, but should we be happy 
with this? What can you do? Is there something that we are not 
doing to empower you more? How can we help you help us?
    Mr. Gootnick. Well, I think I need to think about that 
question before I give you an off-the-top answer. But in 
general I would say that, you know, sunlight is helpful. That 
is to say the more something is observed is, the more likely it 
is going to be accountable, it is going to be more transparent, 
and you may get more for the investment.
    Mr. Perry. Thank you, Mr. Chairman. Thank you. I yield.
    Mr. Salmon. Mr. Connolly.
    Mr. Connolly. Thank you, Mr. Chairman.
    And before I begin, I would ask unanimous consent that our 
colleague, the gentlelady from California Maxine Waters, also 
be permitted to participate in this hearing.
    Mr. Salmon. Without objection.
    Mr. Connolly. I thank the chair.
    Dr. Gootnick, how often have you been to Haiti?
    Mr. Gootnick. I have been to Haiti twice since the 
earthquake, and a couple of times prior.
    Mr. Connolly. Okay. Just personally, on a scale of 1--zero 
to 10, in that time period have you seen some progress? How 
would--what--assign it a number.
    Mr. Gootnick. Well, the first time after the earthquake 
that I visited Haiti was about 6 months, right about the time 
of the supplemental appropriation, just after. And what you saw 
at that point in time was, in Port-au-Prince, rubble that had 
been only partially removed. So the challenge of removing the 
rubble, I think, is something I could not have envisioned until 
I was there 6 months later and then observed the scale of 
rubble that still existed, where main thoroughfares were a 
maze, trying to get around piles of rubble that hadn't 
literally been removed, but had just been moved, and rubble was 
not simply removed, but was moved from place to place before it 
could be ultimately removed to its final location.
    Mr. Connolly. And to what do you ascribe that? I mean, 
there have been other disasters. The tsunami, for example, 
almost a decade ago, devastating parts of Sri Lanka, Indonesia, 
and that corner of the world, and yet recovery certainly--you 
know, rubble was removed. You said----
    Mr. Gootnick. I would say the density of the infrastructure 
in Port-au-Prince, the quality of the infrastructure in Port-
au-Prince, and the level of dysfunction in the city, the 
unworkable city that it--I think many people would say that it 
had been prior to this disaster.
    Mr. Connolly. Can we just focus on that a little bit, the 
dysfunction in the city? In various questions you have 
indicated that, you know, home--ownership, land ownership, 
which creates stakeholders in a community, is fairly rare 
actually among ordinary people; is that correct?
    Mr. Gootnick. Yes, I think it is rare. And most people--
most people who live in--at $2 a day or less, and even those 
who live in better circumstances, are renters.
    Mr. Connolly. Would you describe a vibrant civic life 
existing in Haiti before or after the earthquake?
    Mr. Gootnick. Yes. I would say one of the things that is 
impressive about Haiti is the vibrancy and resiliency of the 
citizenry.
    Mr. Connolly. And the government, functional?
    Mr. Gootnick. I would say the government has faced many 
challenges and has been seen to be a corrupt government for a 
long time.
    Mr. Connolly. You were just asked questions about oversight 
and accountability. Is the problem that USAID adopted good, 
heroic metrics that, just upon reflection, were unrealistic in 
terms of meeting its goals and disbursing its--its funding?
    Mr. Gootnick. Right. I think the goal of 15,000, which 
originally came, as I have said, in both the activity approval 
document, which was the first sort of project document 
submitted, and also in the U.S. Government strategy for Haiti 
that was issued about a year after the earthquake, was--
probably grew--in retrospect grew out of a spirit of wanting to 
make this better and wanting to do the maximum amount that the 
U.S. Government possibly could to achieve a better outcome for 
Haitians. So it was overly optimistic.
    Mr. Connolly. Mr. Chairman, I understand the time 
limitations. And I--first of all, if I can suspend my time for 
a second, I would also unanimous consent that the gentlelady 
from New York, Yvette Clarke, also be allowed to participate in 
this hearing.
    Mr. Salmon. Without objection. We will go ahead and allow 
all the noncommittee Members to ask questions and speak after 
the second panel.
    Mr. Connolly. Is that agreeable?
    I thank the chair.
    Mr. Salmon. Thank you.
    Mr. Connolly. I was going to actually defer to my colleague 
Barbara Lee to give her an opportunity because she came here 
first. So I now would yield to my colleague, the gentlelady 
from California Ms. Lee.
    Ms. Lee. Thank you very much, Mr. Chairman. And thank you 
for giving us the opportunity to participate with you today in 
this hearing. I served on this committee for over 10 years, and 
with Chairman Hyde and Chairman Lantos, and I am glad to see it 
still remains bipartisan, given the--what we are dealing with 
here. So thank you again.
    Just a couple questions on this. As it relates to the 
report, I--and also the legislation, Assessing Progress in 
Haiti, and some of--and your presentation really reaffirms the 
need for this legislation. And I wanted to know, if you have 
had a chance to look at it, what your suggestions would be, and 
also just wanted to ask you in your report you mentioned that 
.4 percent of the funds so far that have been allocated went to 
domestic Haitian NGOs and businesses. Have you drilled down a 
little bit on that to find out what the reason is for that and 
how that can be addressed? And we will ask USAID that question 
also.
    Mr. Gootnick. Right. With respect to 1749, the legislation 
that you sponsored, because a large share of that contains a 
directive for GAO to do work, as is our practice, we have 
reached out to your staff and staff of some of the other 
cosponsors of the legislation and had, I think, very good 
discussions about those parts of that directive to us that we 
think would--we would be--we could most effectively accomplish.
    Particularly those things that pertain to U.S. programs or 
activities, we believe that the first part in particular of the 
directive to GAO in 1749 is something that we would be eager to 
pursue. When you are looking at the extent to which Haitian--
Haitian civil society, Haitian actors have been involved in the 
process and the relationship amongst those different entities, 
it is harder for us, because we are--it is not a direct look at 
a U.S. program and activity for us to give you satisfactory 
answers to some of those questions. It relates to our audit 
authority and our access authority. We have made that clear to 
your staff, and I think we are looking at some maybe revisions 
in that regard.
    The other thing is you have outlined a project there that I 
think we would not be able to responsibly do in a 6-month time 
window. So we would look for additional time to do that.
    Ms. Lee. Thank you.
    Mr. Connolly. Mr. Chairman?
    Mr. Salmon. Yes.
    Mr. Connolly. I am guilty of an oversight. I was so dazzled 
by the hat, I overlooked, and I regret my oversight. I would 
also ask unanimous consent that our colleague, the gentlelady 
from Florida Ms. Frederica Wilson, also be recognized for 
participation in this hearing.
    Mr. Salmon. I welcome all our noncommittee colleagues who 
are here today based on their long-standing interest in Haiti-
related issues. And although the House and committee rules only 
entitle noncommittee members to nonparticipatory attendance, I 
ask unanimous consent that they also be allowed to question the 
witnesses after all committee members, both majority and 
minority, have had their opportunity to do so after the second 
panel.
    Mr. Connolly. I thank the chairman.
    Mr. Salmon. Okay. Mr. Yoho.
    Mr. Yoho. Thank you, Mr. Chairman.
    Dr. Gootnick, I appreciate your being here. And I want to 
start off with kind of agreeing and disagreeing with Ms. Ros-
Lehtinen in that the American people are very generous, they 
are very giving, very charitable. I agree 100 percent with 
that. But giving to foreign aid, I disagree with that, 
especially if our money is going, and it is not accountable, it 
is not being held accountable.
    We hear it all the time from our constituents, you know, 
stop the foreign aid. And, you know, I know a certain amount of 
that is necessary, and we will probably continue that. But to 
throw good money on top of bad, nobody wants to do that, and I 
know you guys don't either. So I am going to kind of reiterate, 
and I feel a lot the way Mr. Rohrabacher feels about it. If we 
are going to go in there, we should have American workforces in 
there.
    And some of my questions are going to be along the lines of 
what you have already heard. Who is running that country? Who 
is in charge of that country?
    Mr. Gootnick. Well, Haiti has had a storied political past. 
Right now there is a President who was elected, Martelly.
    Mr. Yoho. President Martelly.
    Mr. Gootnick. Yes.
    Mr. Yoho. I mean, the report I have right here in front of 
me, I mean, it says Haiti is a hellhole. Not the people; the 
people are great, the country is beautiful. It is the 
government, the corruption that has been there for the last 30, 
40 years that has kept those people repressed. It has--it has 
prevented the growth of that economy, and it is a corrupt 
government.
    So Dr. Martelly is in charge. He is the President. The 
former government, is it a democracy?
    Mr. Gootnick. Mixed presidential-parliamentary system, 
where there is a Prime Minister and a bicameral legislature.
    Mr. Yoho. In your opinion, how stable do you think it is?
    Mr. Gootnick. Well, there have been in the past, since the 
earthquake certainly, challenges to holding--fully holding 
elections that are considered legitimate and also to form a 
government. So----
    Mr. Yoho. And the next election is in 2015?
    Mr. Gootnick. You said the last election. The election--the 
election of President Martelly was, I believe, the first time 
that there had been a peaceful transition from one President to 
another of a different party. It has occurred within the same 
party; this was a transition to a different party. That was 
marked by a lot of fractiousness in terms of the President's 
ability to appoint a Prime Minister.
    Mr. Yoho. Okay.
    Mr. Gootnick. And that took a better part of a year, and 
some of the Prime Ministers have not----
    Mr. Yoho. In your opinion, how efficient is that government 
as far as doing the basic fundamental needs that a government 
should provide to their country?
    Mr. Gootnick. Well, I can speak better to the capacity 
constraints of the civil service.
    Mr. Yoho. Okay.
    Mr. Gootnick. I think the civil service there is weak. It 
is not always paid or paid properly and on time, and that is a 
situation that is a setup for corruption.
    Mr. Yoho. Okay.
    Mr. Gootnick. And at the same time there is--like many 
places, while there is an educated cadre, there is a lot of 
brain drain, and many of the most educated individuals in Haiti 
are coming to the United States and Canada and elsewhere.
    Mr. Yoho. Right. I am from Florida, so I am aware of that.
    Let me ask you this: They have a Constitution; right?
    Mr. Gootnick. Yes.
    Mr. Yoho. And that Constitution, does that provide for 
individual property rights, to own property?
    Mr. Gootnick. You know, you----
    Mr. Yoho. Does the government acknowledge that?
    Mr. Gootnick. I would have to look into that and get you an 
answer.
    Mr. Yoho. If you could give me an answer, I would love 
that.
    Now, along those lines, you were talking about these houses 
around 4-, 450 square feet. Do you know on a cost estimate per 
house what we are paying for that?
    Mr. Gootnick. Yeah. At this point the cost of the--a plot 
is about just shy of $10,000.
    Mr. Yoho. For a house.
    Mr. Gootnick. That is for the plot, and the house itself 
about the 23-----
    Mr. Yoho. I thought you said the government owns the land.
    Mr. Gootnick. The government owns the land.
    Mr. Yoho. So why is it costing $10,000?
    Mr. Gootnick. The cost of the plot is really the cost of 
the site, the land on which all of the homes in the community 
are being built, divided by the number of homes. So the cost of 
a plot is the prorated share of the road, the grading, the 
retaining walls.
    Mr. Yoho. Okay. Let me stop you there. If we are paying 
$10,000 for a plot that has a 450-square-foot house, that is 
$200 a square foot building costs. I mean, that is outrageous 
in a country that they are paying $5 a day for labor? And then 
those people have to pay $35 a month to rent a house they don't 
even own?
    That whole system is wrong, and for us to throw money on 
top of that would be like building a great ocean liner and 
loading it up with all the things you need in the ocean liner, 
but having an incompetent person running that. And that would 
be the government. And so for us to continue to do that, I just 
can't find--until we change the government and the way--I don't 
want to change the government. But until we have a more 
accountable, to throw money on something like that is just--we 
have already spent half of $651 million, roughly?
    Mr. Gootnick. Obligated that amount, yes.
    Mr. Yoho. To continue that at this point in time in our 
economy when we are furloughing people, we can't have our parks 
open, is just unconscionable to the American people. And for us 
to continue this, to keep Haiti in that kind of a deadlock to 
where they are not going to grow out of that economically, I 
think we need to rethink this whole process.
    And I appreciate your time here, and I yield back. Thank 
you.
    Mr. Salmon. Thank you.
    Mr. Sherman.
    Mr. Sherman. It is interesting to have you say that paying 
your civil servants on time is a sign of competent government.
    How has the U.S. Government shutdown affected our 
activities in Haiti?
    Mr. Gootnick. I think--I would ask you to direct that 
question to State and USAID. I can tell you that with respect 
to GAO, to the oversight that we are able to do, our routine 
oversight has been shut down.
    Mr. Sherman. This hearing is about aid, but trade is more 
effective. I would hope that you would respond for the record 
what we could do to import less textiles from China and more 
from Haiti. Whether that would involve declaring China a 
currency manipulator, which has the additional advantage of 
being true, or using the old textile quota system to allocate 
less to China and more to Haiti, what we could do to give Haiti 
access to the U.S. markets on more favorable terms. I don't 
know if you have any preliminary comments on that.
    Mr. Gootnick. Well, you are outside my area of expertise a 
little bit, but I can tell you that the two pieces of 
legislation, the so-called HOPE Act and the HELP Act, which are 
trade preferences, in one case for Haiti, in another case for 
the broader Caribbean, are important tools of U.S. policy that 
have encouraged exports from Haiti and elsewhere in the 
Caribbean, particularly in the area of textiles.
    Mr. Sherman. But that was not a circumstance where we 
reduced imports from China; we just increased exports from the 
Caribbean. 
    With that, I would like to yield to the gentlelady from 
California Maxine Waters.
    Ms. Waters. Thank you very much.
    I have wanted to get into our concerns about Haitians being 
able to participate in the opportunities that are present for 
redevelopment. I spent some time in Haiti looking at this 
question, and I took a look at the information that is put out 
in proposals and found that none of that information is in 
Creole, that some of the requirements of the USAID contracts 
are such that it requires certain kind of experience that you 
know that Haitians do not have. And I have been looking for 
more joint ventures so that Haitians could, you know, realize, 
you know, income from USAID projects and be able to improve 
their communities and create jobs.
    So why is it you have not been able to provide the kind of 
assistance, technical and otherwise, to Haitians so that they 
would be able to respond to these requests for proposals or 
participate in joint ventures?
    Mr. Gootnick. I think that is a good question perhaps to 
direct to State and USAID. I think one of--as we were 
discussing earlier, this is a balance. When funds are moving 
through a U.S. firm or a U.S. large NGO, you have more 
assurances and more ability to ensure accountability. On the 
other hand, it is a priority in development to try to empower 
and to provide--have services provided by the local--local 
service providers, local NGOs, local civil society and firms 
wherever possible.
    Ms. Waters. If I may, the Haitians will never be able to 
provide you with the kind of experience that would be required 
in these proposals unless you do more joint venturing and 
require that of major corporations to do check training and 
bring people into those proposals in ways that they can learn 
and they can eventually respond themselves. But you have no 
requirements anywhere, and then you don't have the language in 
the proposals. So really you don't have a program, USAID. 
Really you don't have a way by which you are empowering 
Haitians to do business with you.
    Mr. Gootnick. Right. As GAO as the oversight entity, that 
is something we could look into on your behalf. But as the 
implementer, I think you need to direct that question to USAID 
itself.
    Ms. Waters. Oh. All right. Whoever would like to respond. 
Okay. Thank you. Okay.
    I yield back the balance of my time.
    Mr. Sherman. One more question would be what can we do to 
analyze the issue of whether we need to provide more quantity 
of housing or more quality of housing? Is there an argument to 
be made, or are we pretty much building the type of housing 
that meets minimum standards and tries to make a dent in the 
overall demand?
    Mr. Gootnick. Right. I think that is a really excellent 
question, and I am not sure I can answer it, but I would add 
one more dimension to it. That is to say in addition to quality 
versus quantity or size versus cost, I would add location. So 
if you look at the initial plans where housing would be built, 
there was more of an effort to build houses in the earthquake-
affected areas. That turned out to be a particular challenge, 
and most of the housing is being built outside. So I would look 
at where as well.
    Mr. Sherman. Thank you.
    Mr. Salmon. Thank you very much, Dr. Gootnick. We 
appreciate your testimony, and we would like to excuse you and 
seat the next panel.
    Mr. Gootnick. Thank you.
    Mr. Salmon. In September 2010, Thomas C. Adams was named 
Special Coordinator for Haiti by then-Secretary of State 
Hillary Clinton. Mr. Adams' career with the U.S. Government has 
spanned more than 35 years, with much of it focused on managing 
foreign assistance.
    Thank you for being here.
    Elizabeth Hogan is the Senior Deputy Assistant 
Administrator for USAID's Bureau of Latin America and the 
Caribbean. Previously she served as the Director of the 
agency's Haiti Task Team, overseeing reconstruction efforts 
after the 2010 earthquake.
    We will now ask our witnesses to summarize their 
statements, beginning with Mr. Adams.

 STATEMENT OF MR. THOMAS C. ADAMS, HAITI SPECIAL COORDINATOR, 
                    U.S. DEPARTMENT OF STATE

    Mr. Adams. Thank you, Chairman Salmon, members of the 
committee. Thank you for this opportunity to appear before you 
with my colleague Beth Hogan from USAID to discuss the U.S. 
Government's engagement with Haiti with a particular focus on 
our foreign assistance. I welcome the chance to provide a brief 
overview of where we are in those efforts, to describe next 
steps, and to answer your questions. With your permission, I 
would like to submit my full testimony for the record and make 
a brief oral statement.
    The ties that link the United States and Haiti are broad 
and deep. Following the devastating January 2010 earthquake, an 
estimated one out of two U.S. households made some contribution 
to relief efforts for Haiti. Congress, likewise, was quick to 
respond to that country's needs, appropriating $1.3 billion in 
supplemental funding. Even.
    Before the earthquake in 2009, this administration was 
conducting a whole-of-government review of U.S. engagement in 
Haiti--with Haiti to help put the country on a more solid and 
sustainable foundation. The result was a new tack, focusing on 
economic development and growth and encouraging 
decentralization. This approach mirrors that of the Government 
of Haiti in its post-earthquake reconstruction plan.
    So where do things stand now in helping Haitians build a 
better future? Clearly there is still much to be done. To be 
frank, we all hoped we would be further along by now. 
Nevertheless, there are signs of progress in Haiti, reasons to 
consider the glass half full, if you will, and we are not 
finished.
    It is worth bearing in mind the point at which Haiti 
started. The 2010 earthquake traumatized a country already 
facing uphill struggles. And like the country's population as a 
whole, Haiti's weak governing institutions were left shocked 
and reeling from the earthquake, and as a result, crucial 
decisions to recovery were often deferred or delayed.
    Furthermore, 2010 was an election year in Haiti. In March 
2011, Michael Martelly was elected after two rounds of voting 
as President of Haiti. He entered his office in May of that 
year on a pledge to speed up Haiti's rebuilding.
    Overdue elections are a current concern in Haiti, with 
nearly all municipal offices and one-third of the Senate seats 
expired. The Haitian executive and legislative branches have 
yet to agree on the timing and the scope of these overdue 
elections. We, along with other donor countries and 
international institutions, including the Organization of 
American States and the United Nations, have urged the 
President and Parliament to reach agreement, and we remain 
engaged on this important issue.
    Besides the effect of the earthquake, Haitians' resilience 
was also repeatedly tested over the past 3 years as the country 
experienced an outbreak of cholera, suffered a significant 
drought, and was buffeted by hurricanes and tropical storms. 
Under all these circumstances, Haiti has perhaps made about as 
much progress in its recovery as history might lead one to 
expect.
    No one would deny that much remains to be done in Haiti, 
but, as I said, there is progress to report. If you visited 
Haiti today, you would remark on the virtual absence of 
earthquake rubble, and that camps for internally displaced 
persons, which used to take up every square inch of free space 
in Port-au-Prince, are dramatically reduced in size and number.
    While focusing our assistance on the most pressing 
humanitarian needs immediately following the earthquake, we 
have also made headway against broader systematic challenges. 
We currently provide approximately 50 percent of Haiti's 
population with access to health care. With our help, the 
Government of Haiti is taking increasing ownership of this 
system.
    The key to sustainable improvement in Haiti lies not in the 
generosity of donors, but in the creation of economic 
opportunity. There is not enough donor money to fix everything 
wrong in Haiti. U.S. Support for Haiti's Caracol Industrial 
Park is one example of our comprehensive effort to help Haiti 
attract investment and to create needed jobs. Congress, through 
the HOPE, the HOPE II, and HELP Acts, has helped to make Haiti 
a more attractive place to invest with 8,000 new apparel-sector 
jobs created since 2007 in Caracol and the other industrial 
parks.
    Agriculture is another area where our efforts to boost 
economic opportunity are yielding significant results. Our 
agricultural programs are benefiting some 100,000 farmers, 
hoping to increase crop yield, create new markets, and boost 
farmer income.
    Building durable Haitian institutions remain a priority of 
the U.S. and other donors. Without good governance, economic 
growth in Haiti is built on unreliable foundations. We speak 
plainly and often with Haitians about the need for new laws and 
reforms to strengthen the rule of law and improve the business 
climate, and we complement these discussions with programs to 
help the Haitians advance these priorities, including providing 
specialized expertise to Parliament and funding an integrated 
financial management system for the Government of Haiti.
    With strong U.S. support, Haiti, in 2012, took a 
significant step toward judicial reform with the establishment 
of a Superior Judicial Council, a new body that will provide 
independent oversight of the judiciary and to which we are 
providing technical support. We are working to build capacity 
in the Haitian National Police, providing equipment, uniforms, 
food, and other essential supplies for new police cadets.
    I have been describing the progress that U.S. assistance 
has helped Haiti achieve in its effort to rebuild, but I do not 
mean to minimize the challenges still ahead. Make no mistake, 
it will take many more years to make the kinds of far-reaching 
and lasting improvements we all wish to see in Haiti. Toward 
that goal, we need to maintain an open and frank dialogue with 
the Haitians and focus on how we can help that country's 
institutions build their capacity to be effective providers of 
basic services to the Haitian people.
    To a very real degree, that type of progress cannot move 
more quickly than the Haitians are capable of taking on, but I 
take a positive view of this challenge and believe that our 
continued long-term commitment, the United States is helping 
Haiti's Haitians to achieve a better future.
    Thank you, Mr. Chairman.
    Mr. Salmon. Thank you.
    [The prepared statement of Mr. Adams follows:]
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
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    Mr. Salmon. Ms. Hogan.

      STATEMENT OF MS. ELIZABETH HOGAN, ACTING ASSISTANT 
ADMINISTRATOR, BUREAU FOR LATIN AMERICA AND THE CARIBBEAN, U.S. 
              AGENCY FOR INTERNATIONAL DEVELOPMENT

    Ms. Hogan. Mr. Chairman, Ranking Member Engel, and members 
of the committee, thank you for the opportunity to appear 
before you today. I appreciate the committee's interest in 
USAID's efforts in Haiti. I, too, have submitted a written 
testimony for the record and will proceed with a short opening 
statement.
    Nearly 4 years after the earthquake, we have seen notable 
success across our portfolio. We have helped boost the income 
of small-scale farmers, whose crop yields sharply increased 
from USAID's interventions. We have helped fund shelter 
solutions for more than 328,000 formerly displaced persons. To 
accelerate the job-creating potential of the private sector, we 
are assisting financial institutions to provide small 
businesses with access to credit. And according to the latest 
demographic health survey, health indicators, particularly for 
women and children, have improved dramatically over the last 5 
years.
    Central to the U.S. Government's assistance strategy in 
Haiti is a commitment to doing business differently. As we 
implement our program, USAID is building the capacity of key 
Haitian institutions, like the Ministries of Health, Finance, 
and Agriculture. Our goal in Haiti, as in the rest of the 
region, is to strengthen local capacity to the point where the 
country can lead and finance its own development.
    In addition to partnering more closely with the Haitian 
public sector, we are tapping into the resources, markets, and 
technologies of the private sector. For example, we are working 
with Coca-Cola and the local Heineken subsidiary to improve the 
productivity and incomes of small-scale farmers.
    We also launched an innovative business plan competition 
that provides matching grants to small businesses to expand 
their operations and create jobs. One of the winners is a 
Haitian entrepreneur who founded a recycling company that works 
to clean up public spaces while providing extra cash to over 
6,000 Haitians who turn in discarded bottles. He was able to 
expand his operations, collecting, compacting and shipping 
nearly 300 million plastic bottles for further processing last 
year alone.
    But ultimately, donor and private-sector resources will not 
solve Haiti's development challenges, which is why building the 
capacity of government institutions is so critical to our long-
term success. USAID is helping to strengthen local 
municipality's efforts to raise revenues to pay for basic 
services. In the Carrefour municipality, for instance, USAID 
supported a program to help increase tax collection, and 
between 2011 and 2012, they increased their tax revenues by 481 
percent in just 1 year.
    Over the years our programs and approach have improved 
thanks to extensive consultations with Congress, Haitians, 
civil society and the diaspora community. As such, we welcome 
the scrutiny and recommendations of the GAO. We are pleased 
that the GAO acknowledged that we completed the power plant for 
the Caracol Industrial Park on time and under budget.
    The GAO report also examined the construction of a new 
greenfield port. According to the U.S. Army Corps of Engineers 
and other agencies with port expertise; planning, and designing 
a new port can take up to 5 years. We are on schedule to 
complete the planning and design work in that timeframe.
    To address a GAO recommendation, we are finalizing an 
agreement with the Army Corps of Engineers to embed a ports 
advisor in our Haiti mission.
    In regards to the GAO comments on our shelter program, we 
acknowledge that we face challenges meeting our original 
expectations. Construction costs significantly exceeded the 
initial estimates. These initial estimates did not adequately 
address the cost of meeting international building codes, 
Federal building standards, disaster resistance standards, and 
underestimated the rising of cost materials in a post-disaster 
setting. The Government of Haiti's design changes also added to 
the increased cost. Other factors, such as complications in 
clarifying land title and reduced donor participation, also led 
to construction delays and reduced housing estimates.
    We are working to ensure that USAID-funded settlements are 
sustainable and do not slip into disrepair. To mitigate these 
risks, and in line with the GAO's recommendation, we are 
funding community development programs to ensure proper 
maintenance and sustainability.
    It is important to note that Haiti faced large-scale 
housing shortages even before the earthquake; therefore, new 
housing construction was never considered to be the sole answer 
to meeting Haiti's housing needs. Looking forward, we are 
working on a full range of approaches that will provide shelter 
solutions to many more than the 328,000 beneficiaries we have 
reached so far.
    For example, we are partnering with Haitian financial 
institutions to stimulate a local housing finance market. We 
are also piloting a program in an informal settlement to help 
residents access loans for housing repairs and construction of 
new homes.
    In conclusion, I want to thank Congress for its generous 
support of our work in Haiti. USAID is committed to keeping you 
informed on our progress as well as our challenges as we move 
forward. Thank you again for this opportunity to testify, and I 
look forward to your questions.
    Mr. Salmon. Thank you.
    [The prepared statement of Ms. Hogan follows:]
    
    
    
    
    
    
    
    
    
    
    
    
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    Mr. Salmon. I would like to direct my questions to Mr. 
Adams.
    The United States has invested hundreds of millions of 
dollars in Haiti in the form of aid, and governments of both 
the U.S. and Haiti encourage American enterprise invest in 
Haiti. However, we do not have a bilateral investment treaty 
that would provide U.S. investors an assurance of fair 
treatment in that country and afford them international 
arbitration of disputes with the Haitian Government. Bilateral 
investment treaty was negotiated by the U.S. and Haiti in 1983, 
but it has not yet been ratified. Isn't it time to put that 
treaty in place?
    Mr. Adams. That is an excellent point, and I have had 
discussions with my colleagues in the United States Treasury 
Department, who, as you know, negotiate those, and encouraged 
them to do it. And the simple answer is that Treasury 
prioritizes, because of lack of resources to do all of these at 
once, to the largest trading partners, and Haiti being a 
relatively small one, they are down the list. But I will 
certainly convey to them your interest in seeing this one moved 
up the line, and I agree with it.
    Mr. Salmon. Well, as we continue to invest U.S. taxpayer 
dollars in supporting Haiti's reconstruction, we have also got 
to make sure that the Haitian Government is creating an 
environment that allows the private sector to play a role in 
the country's development. Is the Government of Haiti providing 
a level playing field to our foreign investors, to American 
investors?
    Mr. Adams. That is a very good question. I think the answer 
is generally yes. Haiti does allow for international 
arbitration in contracts, and it abides by the ruling of 
international arbitrators. And given the state of Haiti's 
judicial system, investors are reluctant to trust the Haitian 
courts to resolve commercial disputes, so that is one way to 
get around it.
    So, yeah, I do think--I do think American firms have a 
level playing field. An American firm just won the largest 
contract I think, the Government of Haiti has given out 
recently in rebuilding the port in Port-au-Prince for some $70 
million.
    Mr. Salmon. Members of the committee have received some 
reports of an American company, Trilogy International Partners 
of Bellevue, Washington, that has been put through a 1-year 
ordeal by Haitian tax authorities in a process that has lacked 
transparency and does not appear to be grounded in the due 
process of law. Can you provide an update on that situation and 
what treatment of Trilogy says about the investment climate in 
Haiti?
    Mr. Adams. Yeah, I talk to Trilogy quite often on this. And 
I can't go into too much detail because of confidential 
business information, but our Economic and Commercial Section 
of the Embassy has been actively engaged with Trilogy and with 
other U.S. firms who have disputes there, and all I can say is 
I think the differences between the Government of Haiti--this 
is a tax issue basically--have been narrowed considerably, and 
I think that one--I think we can resolve this with a little 
more time.
    Mr. Salmon. Appreciate anything you could do.
    Mr. Adams. Thank you, sir.
    Mr. Salmon. I yield back, and I recognize Mr. Engel.
    Mr. Engel. Thank you. Thank you very much, Mr. Chairman.
    Let me--let me, first of all, welcome both of you. I want 
to also welcome our colleagues who are not members of the 
committee, but each of whom have interest and a lot of good 
work behind them through the years involving Haiti: Ms. Waters, 
who certainly has worked hard on the issue; Ms. Lee, who we 
mentioned before, who has been relentless in doing it; Ms. 
Wilson, who has the largest Haitian American community, I 
believe, of any community, any district in the country, in her 
Florida district; and of course, Yvette Clarke of my home State 
of New York, the largest Haitian community of New York.
    So, welcome. We are all united and care very, very much 
about what goes on in that island and the responsibility.
    I have so many questions to ask you, both of you, that I 
can hardly get it in in the allotted minute, but let me say 
this. In my opening statement I made reference to the fact that 
Haitian authorities are feeling left out of the decision-making 
process as well as the implementation process of our 
assistance. Among the goals of our assistance program, we have 
tried to resolve the capacity problems in the Haitian 
Government, because obviously they remain our indispensable 
partners in doing this.
    Can you, both of you, please describe the current capacity 
of the Haitian Government to decide upon and implement aid 
programs? Have efforts to improve the capacity of the 
government been successful? Are other governmental and 
nongovernmental donors going around the Haitians or working 
closely with them?
    Ms. Hogan, why don't we start with you.
    Ms. Hogan. Thank you very much for that question.
    As I said in my opening statement, we are doing business 
differently in Haiti, and we are not working around the 
government. Rather, we are embedding advisors in key government 
ministries in order to help them develop the infrastructure, 
both governance, procurement, management information systems, 
merit-based staffing, et cetera, so that they can ultimately 
get to the point where they can manage without the need for 
external assistance.
    I think we are seeing results already. For example, they 
have an integrated financial management system that we have now 
seen through the Ministry of Finance that connects up all 
government ministries' budgets so that it will provide for the 
first time control and transparency of Government of Haiti 
expenditures.
    That is a very important first step; however, we have a 
long way to go. One of the things we would like to ultimately 
be able to do is work government to government and fund 
government agencies directly. I think we are further advanced 
with the Ministry of Health than we are anywhere else, because 
along with the World Bank, USAID has been working with them for 
several years now in developing their internal systems, but we 
are still, as I say, a ways off before they are going to be 
able to account for every dollar that is invested. We are on a 
path, we are not there, but we are heading in the right 
direction.
    Mr. Engel. Thank you.
    Mr. Adams.
    Mr. Adams. Let me just add one thing to that. What you 
describe usually takes the form of the Government of Haiti 
asking us to provide budget support; i.e., funding directly the 
Government of Haiti while they are running it through 
contractors and grantees. And they had a meeting of their 
first--their first meeting of their new coordinating mechanism, 
which they are in charge of, and on the margins of that, we 
reached agreement, donors and the Government of Haiti, because 
they ask this of all donors, that we will support measures to 
increase governmental transparency there, because that is our 
biggest complaint. And the reason we don't give money directly 
to the Government of Haiti is because we don't have any 
assurances that it will be accounted for accurately.
    The Prime Minister took this up. He has appointed very good 
people on this, and 2 months ago we kicked off this 
transparency initiative, and hopefully--the two biggest 
complaints we have on transparency is they don't audit 
government expenditures and income, and the other complaint is 
they don't prosecute people for public corruption. So I think 
those are sort of two benchmarks that we want to work with them 
on resolving.
    Mr. Engel. Thank you.
    Our first witness is from the GAO, and according to the GAO 
report, of the 15,000 houses originally planned, only 2,649 are 
expected to be completed--that is really not good--with USAID 
building 906 houses and NGOs and other partner donors estimated 
to build 1,743. In addition, cost estimates were widely off 
base, over 300,000 percent.
    So can you break this down for us, and what caused the 
changes in the overruns, and looking forward, what are the key 
issues that have been learned regarding this issue, and what 
changes and improvements do you plan to make?
    Ms. Hogan.
    Ms. Hogan. Thank you very much for your question.
    Actually our housing numbers have been revised slightly 
since the GAO report was submitted to you, and we are now 
estimating that we will build 3,100 homes. This is in part due 
to cooperation that we have had with the American Red Cross and 
the Government of Qatar, that have also given us resources to 
build houses on the sites that we will develop for them. So, in 
total, we will build 3,100 homes, and we have another 533 plots 
that have been serviced and are ready and available if other 
donors or if other buyers want to come in and build homes 
there.
    Mr. Engel. But why were we so off----
    Ms. Hogan. Right.
    Mr. Engel [continuing]. On the estimates of how many homes 
we would build and what the cost would be?
    Ms. Hogan. Thank you.
    We were significantly off in terms of what our original 
estimates were. We based that on a survey, a very quick survey, 
we did in the middle of the crisis when we were trying to stand 
up our new strategy of what NGOs spent in building homes in 
Haiti, and at that time it was roughly $10,000 a home.
    When we got on the ground and were able to do our own 
government independent cost estimate, that number doubled, and 
so we realized early on that our estimates were off. Then when 
we put the procurement out to bid and got back bids from 
offerors who were going to actually build these homes, the 
estimates were increased even further.
    Again, it is because of the requirements that we put into 
our solicitation document that it meet international building 
codes, comply with Federal building standards, and that these 
materials would be disaster- and hurricane-proof. We also 
required that they insure their workers and that they provide 
safety equipment to their workers. These are higher standards 
that we are accountable for as a U.S. Government than would be 
local actors, and so all of that increased the cost of those 
individual homes.
    And what we realized, as we were going into this and that 
we would only be able to afford the 3,100 new homes, is that 
new homes isn't the solution for Haiti. The solution for Haiti 
is helping to generate a local housing finance market so that 
people can access microloans to either improve their homes, or 
to expand their homes for rental opportunities, or to build new 
homes.
    We have had an excellent experience in one community in 
Port-au-Prince called Ravine Pintade, where we were able to 
rehabilitate 620 houses by investing about $8.5 million there. 
We were able to help them build retaining walls, improve their 
drainage, improve their sanitation, helping them do rainwater 
harvesting, and also develop footbridges, streets, lighting, et 
cetera.
    So, we see that neighborhood reconstruction is really the 
way to go forward to be able to reach the numbers, in fact, 
beyond the numbers than we would have reached through single-
family housing.
    Mr. Engel. Can you come to Congress and brief us on this 
program, because I think it would be very, very important. And 
I know I am way over my time, Mr. Chairman, but I just want to 
ask one question.
    One of the primary obstacles to reconstruction is secure 
land tenure, and how has USAID prioritized this issue to ensure 
the security of U.S. investments and the long-term development 
in Haiti?
    Ms. Hogan. Thank you for the question.
    Let me begin by saying that the land tenure situation in 
Haiti is more a political problem than it is a technical 
problem, and the Haitians need to take the lead in revitalizing 
a land tenure system. We are prepared to help them, but they 
need to take the tough political choices in order to be able to 
move forward.
    What we have done, however, is, through a local coalition 
of housing organizations, helped for the first time develop a 
booklet that is both in French and Creole that explains how one 
legally acquires land title in Haiti. This has never been 
written or done before there. This is why you have two or three 
or five people who all have title to the same land, because 
depending which notary you go to, you will get different 
advice. So at least now we have transparency established and a 
very clear line that has been accepted by all of the 
stakeholders as the way in which one goes about securing land 
title in Haiti. So it is a big step forward, but there are big 
political decisions to make as well.
    Mr. Engel. Thank you, Ms. Hogan.
    Thank you, Madam Chairman.
    Ms. Ros-Lehtinen [presiding].  Thank you, Mr. Engel, and 
thank you to our witnesses.
    I guess it takes much more U.S. taxpayer dollars to be 
wasted for a Member of Congress to call it a scandal. In the 
2010 supplemental, $651 million was allocated to USAID to 
support, relief, and reconstruction efforts. Three years later, 
just 35 percent of these funds have been spent as delays mount 
and goals are scaled back. In Fiscal Year 2011, $370 million 
was allocated to Haiti programs, but yet only a little more 
than half, $194 million, has been distributed to date. In 
Fiscal Year 2012, $351 million was allocated, and only $90 
million has been disbursed.
    This backlog of funding and the amount of money left in the 
pipeline for Haiti is in the hundreds of millions of dollars, 
and I am concerned that the team in place cannot handle the 
oversight over these crucial funds. This amount of money should 
give us the necessary leverage to help even more people in 
Haiti. The American people deserve better, and, more 
importantly, the Haitian people deserve better. So, yes, 
colleagues, this is a scandal.
    I recognize that our work in Haiti continues to be a 
challenge, and the conditions on the ground are not easy. 
However, the narrative of let us blame the Haitians for our own 
faults needs to stop now. As representatives of USAID and 
State, your agencies are in charge of U.S. taxpayer dollars 
that are being used in Haiti. The findings in the GAO report 
were alarming, and to make matters worse, Congress and 
specifically members of this committee were not consulted nor 
briefed over these serious deficiencies in our programming.
    When it comes to the port, for example, the project is 
seriously delayed. We do not have a private-sector partner at 
this time. We do not even know what the final cost will be, yet 
the success of the north industrial park is dependent upon the 
completion of the port. The administration estimated that the 
park would produce 20,000 to 65,000 much-needed jobs. It is 
discouraging that not even 2,000 Haitians are employed at the 
park at the moment.
    Moving on to the housing shelters, I am concerned about the 
plumbing situation at the housing settlements because it has 
more than doubled the cost of these homes. If not maintained 
well, we risk endangering the health of the very people that we 
are trying to help in these communities.
    In addition, I am concerned with the families in these 
settlements, whether they own the houses we have talked about. 
They own the house, but not the land. The land is owned by the 
Haitian Government. What mechanisms do we have in place to stop 
the government from overtaking these homes? And, Assistant 
Administrator Hogan, what specific changes in your office are 
you making to fully comply with all of the GAO recommendations, 
or do you not agree with some of the recommendations?
    I am also concerned about the security situation in Haiti. 
While the U.N. Stabilization mission in Haiti is planning on 
shutting down their operations, more emphasis needs to be given 
to the Haitian National Police, known as HNP. I am very pleased 
that Secretary Brownfield and the INL, which handles the 
narcotics and law enforcement at State, has partnered with our 
very fine Miami-Dade police department in helping to train the 
Haitian National Police, the HNP. To this date, more than 60 
HNPs have been trained in south Florida, and I hope more to 
come.
    The security situation has to be stable in order to hold 
free, fair, and transparent elections in Haiti. It is so 
disappointing that local and senatorial elections in Haiti have 
been delayed for more than 2 years, and I urge the President of 
Haiti to call the Haitian Parliament back into session to agree 
to an electoral law and schedule elections as quickly as 
possible.
    Let me be clear. Ruling by decree or dissolving Parliament 
is not acceptable. Can you provide us with an update on the 
elections? What are we doing to foster civil society 
engagement?
    And lastly, private businesses are very worried that the 
Haitian Government is not abiding by its obligations to promote 
fair business practices. U.S. companies have grievances against 
the Government of Haiti. Special Coordinator Adams, given the 
fact that U.S. investors are already reluctant to invest in 
Haiti due to uncertainty, can you please describe what the 
business environment is right now for Haiti and for U.S. 
businesses operating in Haiti? Thank you. Thank you.
    Mr. Adams. Sure. I will start. I think there were four or 
five questions in there.
    On the business climate, the Government of Haiti has come 
out and said Haiti is open for business. We want to get 
business, but they have done precious little to really make 
Haiti open for business in the sense that a number of key laws 
need to be passed by Parliament. The Haitian Parliament has 
been singularly unproductive this last year, passing something 
like nine laws in total, and obviously they need to pick up 
their game. Haiti needs new anticorruption law. They need 
modern laws to allow for electronic signatures and better 
business practices. They need law to make it easier to register 
a new business. They need a law to make it easier to get a 
construction permit. I could go on and on, but you get the 
idea.
    And so part and parcel of that is having this political 
peace between the executive and the Parliament. I was down 
there last week meeting with them, saying they need to find a 
better way to work together. The irony wasn't lost on them 
about our own situation, I should mention.
    Ms. Ros-Lehtinen. No. If you will excuse me, I know that 
that is a cute dig, but you surely are not comparing the United 
States Government----
    Mr. Adams. And I tell them that.
    Ms. Ros-Lehtinen [continuing]. With any government in the 
world. I mean, we are talking about----
    Mr. Adams. I agree. I agree.
    Ms. Ros-Lehtinen [continuing]. A country we are trying to 
help, which have invested millions of dollars, and they don't 
have elections. They are not registering people. They are not 
calling for elections.
    Do you think that having U.S. businesses do business in 
Haiti, in a place where there is no due process, we have U.S. 
companies that have filed complaints with the Haitian 
Government, and we want to say that Haiti is open for business? 
What about all of the complaints that U.S. firms have already 
filed?
    And you can make digs----
    Mr. Adams. Right.
    Ms. Ros-Lehtinen [continuing]. At the U.S. Government, but 
please don't compare----
    Mr. Adams. Yeah. Yeah.
    Ms. Ros-Lehtinen [continuing]. My adopted homeland, the 
greatest country on Earth, to any country in the world.
    Mr. Adams. No. And I am sorry if I gave that impression.
    Ms. Ros-Lehtinen. Impression?
    Mr. Adams. But there are--we have a very active economic 
commercial section, which helps Americans get business down 
there and helps resolve disputes. And I can't go into cases too 
much, but let me just say not all American businesses that go 
down to Haiti are purely ethical and honorable, so sometimes 
the disputes, while there is a dispute between an American 
company, the Haitians are right. Often the Haitians are wrong. 
And so we sort these cases out individually.
    On at the elections, they are 2 years overdue, and we 
constantly tell the Haitians that we have some expectations of 
the Haitian Government. One is that they be seen as democratic. 
Democracies have elections on schedule. They have free and fair 
elections. We also expect them to curb corruption, to work to 
curb corruption. There has been some progress there. There 
needs to be more. This government has filed more anticorruption 
cases than any of their predecessors have. The weaknesses: They 
don't prosecute them successfully because they need a new 
anticorruption law. They say their current law is--makes that 
difficult.
    They also need to address human rights issues.
    Ms. Ros-Lehtinen. I am sorry. I am over time as well.
    Mr. Adams. Okay.
    Ms. Ros-Lehtinen. So, sorry. I did not realize. I apologize 
to our members. Thank you, and I am sorry I did not give you a 
chance. Thank you.
    Mr. Meeks is recognized.
    Mr. Meeks. Thank you very much.
    Ms. Ros-Lehtinen. And we can go over because we both went 
over.
    Mr. Meeks. Let me first ask, I guess, Ms. Hogan. One of the 
issues that we are seeing that we--the first mistake was made 
in the underestimation. So my first question is in the 
beginning did we do any consultations with the Haitians on the 
size, et cetera, because as I said to Mr. Gootnick, that it 
seems to me, in 2013, to build a home without the 
infrastructure necessary to at least have a sewer system so 
that people could have plumbing in their homes, that would have 
been a nonstarter in the beginning. And I would imagine that if 
you talked to anyone from Haiti initially in that regard, then 
that would have come up then at the time of the initial 
estimates, and we wouldn't be talking about overruns now, which 
then causes the difficulties that we have here in trying to 
move forward.
    So I was wondering what, if any, consultation you had with 
the Haitians in the beginning process with reference to coming 
up with the estimates that we are coming up with as to what the 
size, you know, and what should be there.
    Ms. Hogan. Thank you for your question. Yes, indeed, we did 
have initial consultations with the Government of Haiti in 
terms of its expectations. One of the drivers of the cost, 
however, was not so much the indoor plumbing, but whether it 
was rain-fed or piped. We had initially anticipated doing pipe 
stands so that people could collect water outside their home 
and bring it inside, and also have cisterns above their roofs 
to collect rainwater and feed it that way.
    What the Government of Haiti really wants to do is create a 
prototype for what is dignified housing for low-income 
populations, and I should say that they are using the same 
design for the housing that they are building with their own 
resources. They have a social housing site, infrastructure site 
now, which is the first of its kind in Haiti, funded by the 
Government of Haiti, that has about 2,000 units under 
construction, and it is very similar in size to the houses that 
we have built, and it also includes this indoor plumbing as 
well. So they are not holding us to a higher standard than 
themselves. And, in fact, I think that this is, although a very 
modest home by anyone's standards, it is a dream come true for 
whoever gets to live in that kind of space.
    Mr. Meeks. But clearly, then, their expectations of what 
they are asking for, the aspirations of their people is not 
out--they are not asking for mansions. They are asking for 
something that would be reasonable for, you know, the situation 
that you have in Haiti. And, you know, at a time after the 
terrible earthquake, what the thought was, well, here we have 
an opportunity to start from scratch, ``scratch'' meaning 
infrastructure building, et cetera, and thereby including 
what--you know, what the people want, because they are going to 
have to live there for a long time and needs to be something 
that is sustainable, not something that has to be done again in 
the next 5 or 10 years. And I think that, from what I am 
hearing, what they were talking about is something that would 
be more sustainable and more long-lasting. And, I mean, I think 
that is kind of--should be very important to include that in.
    Let me--you also talked about a number of capacity-building 
projects. Now, what metric are you using? How many--you know, 
can tell us how many companies that are Haitian that are 
receiving help to build this capacity? What number? What is the 
percentages? Are there any goals that you have set in place? Do 
you have that information?
    Ms. Hogan. Yes, I do. I would want to say that, first, in 
terms of reaching local Haitian institutions, we have gone from 
$1 million of direct awards to Haitian institutions in 2011 to 
$10.1 million. So we have a metric of increasingly working 
through local institutions, and the metric is up to 17 percent. 
We are trying to reach 17 percent of our overall budget to be 
channeled through local institutions.
    It is a very time-consuming goal because it requires us to 
hire CPA firms to work with those institutions to develop the 
kind of accounting systems that would allow us to invest USG 
resources and for them to be accountable. It is a worthy goal, 
because ultimately they have got to develop that capacity in 
order to manage their own development programs.
    Another example is in the health sector, where we have 
performance-based contracting now in place whereby the 
Government of Haiti has to reach certain benchmarks. The 
Government of Haiti's Ministry of Health has to reach certain 
benchmarks, and these are negotiated with them up front in 
terms of health gains, and then we pay as they reach those 
gains. So that is another way in which we are building the 
capacity of the health system going forward.
    Mr. Meeks. Let me ask. And, Mr. Adams, in your testimony, 
in reviewing your testimony, you talked about that there were 
staffing issues that slowed the process especially, as well as 
procurement and contracting challenges. Is there a mechanism in 
your procurement and contracting challenges for--and I think--I 
think Congresswoman Waters was going in that direction 
earlier--for joint venture projects with Haitian companies and 
Haitian businesses, and are there any goals in that regard so 
that there are Haitian businesses that are being stabilized and 
able to come up so that they can live on their own?
    Mr. Adams. Yeah, that is a very good question.
    Staffing after the earthquake, we had staffing challenges 
for a number of reasons. One is our employees needed to be in 
safe housing. A lot of our housing was destroyed during the 
earthquake, so we had some constraints on sending people down 
there, particularly long term, and we still have those to a 
certain degree. I think the USAID mission, for example, is 
understaffed, frankly, and we need to grow its capacity and are 
taking some steps to do that.
    Similarly, other U.S. Government agencies working on their 
own contracting. The Bureau of International Narcotics and Law 
Enforcement, as well as USAID, has had some contracting 
challenges, we admit. I think we have strengthened our teams 
working in both these areas, both for INL and for USAID, and I 
think we can claw back at the backlog of procurement that we 
have down there.
    Mr. Meeks. Lastly, let me just ask this, because there is a 
number of individuals in the Haitian diaspora who are tireless 
in these efforts to raise the awareness in the plight about the 
Haitian people and what is happening there. Is there a role 
that you see that the Haitian diaspora can play in helping you 
develop, and if so, what is that role? And, you know, what are 
the opportunities that members of the Haitian diaspora can 
participate so that they can be involved there?
    Mr. Adams. Certainly. I talk often to the diaspora. In 
fact, I have traveled to many cities in this country, along 
with Beth and others from USAID, to talk to the diaspora about 
how they can contribute and how they can get U.S. Government 
contracts and grants, which many of them seek, but also other 
ways to help in Haiti.
    Many members of the diaspora are helping in Haiti in any 
number of ways, large ways, large and small, and certainly two 
members of my own staff are Haitian/Americans, very valuable 
ones. And we are always glad to talk to the diaspora about 
helping, but I think two things need to be borne in mind here. 
One, they often ask for a set-aside for Haitian/Americans, and 
we have to remind them that that is against our law. And the 
other thing is to tell them that our goal is really to create 
jobs for Haitians, and that is an overriding effort on our 
part. But we do--we do work very closely with the diaspora and 
appreciate their contributions.
    Beth may want to add to that.
    Ms. Hogan. I would like to point out that the first housing 
complex where people are now moving in was built by a Haitian/
American firm, and we are very happy with the quality of what 
we have seen that firm produce. So we are very excited about 
people actually getting keys, moving in and starting new lives.
    I also want to say that with the Haitian diaspora, what 
Haiti needs more that anything is investments, and so one of 
the things that we are trying to seek through our business plan 
competition that I mentioned in my opening remarks is 
opportunities for Haitian diaspora and other investors to 
invest in these small businesses so that they can expand their 
operation and create jobs, because that is ultimately what 
Haiti needs more than anything, is job creation so that people 
can afford to buy homes, send their kids to school, meet their 
health needs, et cetera. I think there is a huge role for the 
Haitian diaspora to play in that regard.
    Ms. Ros-Lehtinen. Thank you so much. And that is the limit 
of our going over, so thank you.
    My good friend, Karen Bass from California, is recognized.
    Ms. Bass. Madam Chair, I would like to yield my time to 
Congresswoman Waters.
    Ms. Ros-Lehtinen. Without objection.
    Ms. Waters. Thank you very much, Congresswoman Bass, for 
yielding time to me. I am very appreciative for that.
    And I would like to thank our ranking member Mr. Engel for 
his interest and concern in Haiti. We have traveled there, and 
I would like to say to him, if you and the chairman can arrange 
a codel, many of us would like to go back very soon to look at 
some of the work that we have been involved in.
    And I would like to say to Mr. Adams and Ms. Hogan, this is 
not easy work, and we understand that. It is very difficult, 
and I appreciate whatever progress that you have made. And I am 
really concerned about the Haitians being able to create jobs 
and to do joint ventures.
    And I held a meeting up at Henry Saenz's home in Haiti 
where, you know, the middle-class Haitians all gathered, and I 
had USAID come up to show me the forms that you use, your 
requests for proposal. They were not--nothing in Creole, no 
technical assistance, two local businesses. The kind of 
experiences that are being asked and the assets that are being 
asked about, I mean, it is just unreasonable. So I would really 
like to see some movement in that area, because as you will 
hear from most of us who work with Haiti, who love Haiti, we 
really want to see Haitians empowered to be able to run their 
own country, to run their own businesses, et cetera.
    Having said that, and not being able to say everything I 
would like to say, I sincerely believe that until we get 
governance right in Haiti, that you are not going to be able to 
do the best job that you can do. Until we provide the technical 
assistance to Haiti, we are not going to be able to have the 
kind of institution that you allude to to do what needs to be 
done.
    Now, I know that you were just down there, Mr. Adams. I 
talked to you before you left, and you probably got a copy of 
my letter that I sent to the Secretary. And I know that Haiti 
is sovereign country, and we can't just go and tell them what 
to do, but I think they want our technical assistance, and I 
think a lot of the missteps is about a lack of knowledge and 
understanding about how to get some of this done.
    Now, you know that I am very, very concerned, and in that 
letter that I sent to the Secretary, and I cc'd you, I said 
that I am especially concerned about the political challenges 
facing the Haitian Senate. Under the Haitian Constitution, the 
Senate should consist of 30 Senators, each of whom is elected 
to serve for 6 years. However, one-third of the seats in the 
Senate are currently vacant. These 10 Senators' terms ended in 
2012, and Haiti has yet to hold or even schedule elections to 
replace them. This has forced the Senate to function with only 
two-thirds of its full complement and made it extremely 
difficult for the Senate to assemble a quorum and conduct 
legislative business.
    A second group of 10 Senators took office in 2009, and 
their 6-year terms are scheduled to expire 2015. Unfortunately, 
it appears that elections to replace these Senators may not be 
held on schedule either, and, of course, there is widespread 
rumor within Haiti and among the Haitian diaspora that the 
Haitian Government does not intend to allow the Senators 
elected in 2009 to serve out their full 6-year terms. This 
rumor has it that the government intends to force these 10 
Senators to leave office in January 2014, leaving the Senate 
completely unable to function, and this, of course, renews old 
concerns about dictatorship.
    Now, I am not going to go any further except to try and 
make this point, that we are providing a lot of aid, and it has 
done a lot of good. I want us to continue to provide aid. I 
want housing built. I want potable water. I want all of those 
things. But I also want us to have some conditions, and part of 
those conditions have to do with the Constitution and the 
ability to have a government that functions. And I want us to 
assign resources to help them get these elections together so 
that people can make decisions, and you are not down there 
trying to make decisions that you shouldn't have to make.
    And so my question, if I still have time to ask it, is, Mr. 
Adams, did you take a message down there that--when you went 
that you were willing to provide technical assistance to get 
these elections done?
    Mr. Adams. Yes. Short answer is we have offered $10 million 
to support these next round of elections. The cost is estimated 
to be about $34 million. The Government of Haiti will put in 
about $14 million, and other donors will make up the 
difference.
    So money is not the issue on the elections. Again, we are--
we have helped Parliament through a parliamentary strengthening 
program that it has to analyze their electoral laws and help 
produce laws, and that has had some results, but as I 
mentioned, we think they can do better there.
    I think on the elections, I think you are right, they do 
want us to help them schedule a whole series of elections next 
year. I don't have time to go into how that might work, but I 
will be glad to talk to you or your staff about sort of how we 
think that is going to work out. But your letter was very 
helpful. They had--they were aware of it, so thank you for 
sending it.
    Ms. Waters. You are welcome. Thank you.
    And I yield back the balance of my time, and I thank you, 
Congresswoman Bass. But she left. Thank you.
    Ms. Ros-Lehtinen. Thank you very much.
    And now we will go to the esteemed Members of Congress who 
are not on this committee, but who have earned the right to be 
recognized and ask questions. We are honored to have Barbara 
Lee, who was first here, recognized for her questioning. And 
you may go over the time limit, too, Ms. Lee.
    Ms. Lee. Thank you very much, Madam Chair, and thank you 
once again for your leadership and also for your assistance 
last Congress in getting our legislation, Assessing Progress in 
Haiti Act, passed, and I look forward to working with you on 
this reintroduction.
    Ms. Ros-Lehtinen. I am blessed to work with you. Thank you.
    Ms. Lee. Thank you very much.
    And to our ranking member Mr. Engel, thank you so much for 
your continued leadership as it relates to the Caribbean 
region. I have served on the Western Hemisphere Subcommittee 
for many years with Mr. Engel, and he ensured that we had some 
focus and priority on the Caribbean, and especially Haiti. So 
thank you again.
    Let me ask you a couple of things. First of all, just to 
mention to Mr. Adams, you know, we have--while set-asides may 
not be legal, you said against the law, we had minority 
business requirements in statute, and believe you me, I know 
how State and USAID conduct their contracting, and you-all have 
a pretty dismal record in terms of contracting with minority 
and women-owned businesses. And so I would hope that you would 
go back to the drawing board and look at how you can engage 
more with Haitian businesses, Haitian and the diaspora 
businesses, as well as African American companies, and other 
minority companies who want to participate.
    You mentioned the $70 million contract for the port 
construction that was just let. I wanted to ask you if you know 
how much of that contract was minority-owned in terms of 
subcontracting, or requirements for subcontracting for either 
Haitian-owned businesses or minority-owned businesses. That is 
the first question.
    And then second, on the involvement of Haitian Americans, 
Haitians and the diaspora, we had a specific requirement that 
USAID make it as a priority not only to talk to the Haitian 
Americans, but to engage in funding some of these technical 
exchanges and professional exchanges. And so I want to see how 
that is working and if, in fact, that has been a priority 
within your funding mechanism.
    Mr. Adams. Yeah. On the port contract, that was a contract 
let by the Government of Haiti, not the United States of 
America, so I don't know what minority contracting provisions 
they put in there. I think it was just a simple contract with a 
port construction company.
    Ms. Lee. Is it a--I don't remember whether you said--is it 
a Haitian-owned company or a U.S. company?
    Mr. Adams. It is a U.S.--it is a Florida company. Actually 
it is a U.S. subsidiary, a fully owned U.S. subsidiary of an 
Italian company, but it is a U.S. company.
    Ms. Lee. Yeah. Could you look into that for us and let us 
know?
    Mr. Adams. Sure.
    Ms. Lee. What the elements of that contract are?
    Mr. Adams. Sure.
    Ms. Lee. Okay. Thank you very much.
    And then on the Haitian American exchanges, the technical 
exchanges, the support for Haitians in diaspora to go back to 
Haiti to contribute to their homeland?
    Ms. Hogan. Yes. Indeed, we have initiated a program similar 
to what a Fulbright scholarship might look like to send and 
embed Haitian Americans into key ministries for a period of up 
to 1 year to work side by side with government counterparts to 
try to improve their institutional capacity.
    Ms. Lee. How many do you have now, and how is that broken 
down? We worked on this for many, many years, and I would like 
to get sort of an update on that.
    Ms. Hogan. Okay. I will defer to State since State runs 
that program.
    Mr. Adams. Yeah, it is run by our Educational Cultural 
Affairs Bureau. There were three last year, and there are 
three--there are going to be three more replacing him about now 
actually. They are changing over. It has been very successful.
    Ms. Lee. You mean three individuals?
    Mr. Adams. Yeah, three. They are academics largely. They 
are--I mean, they can come from anywhere. They happen to be 
Haitian Americans, for the most part. One was assigned to the 
Ministry of Health, one to the Prime Minister's office, and one 
to the Ministry of Planning, and they were very well received, 
and we are going to repeat it.
    Ms. Lee. Well, I would like not only repeat it, we need to 
enhance this and make it a priority. And I don't think three is 
sufficient for what we had initially suggested as some of the 
goals for engaging the Haitian diaspora.
    Mr. Adams. Yeah, I agree with you. Some of the limitations 
are security generated, and I would be glad to discuss that 
with you later.
    Ms. Lee. Yeah. I think I would like to follow up with that.
    Also, a couple of things on the Haiti strategy plan. This 
GAO report, again, I just have to say really reinforces the 
need for legislation. On the results framework within the Haiti 
strategy plan, how does the United States assess the assistance 
activity, USAID activities, how they are impacting the lives of 
Haitians? We asked about this performance management plan, 
which includes all the benchmarks used to measure performance 
and effectiveness. How do you do that?
    And then also I know that we had requested a detailed 
program-by-program description of USAID activities by, you 
know, your goals, your objectives, and the amounts of funds 
obligated for each program. That was part of the report that 
the Senate Committee on Appropriations had requested, as well 
as all of the other requirements that we asked for. You know, 
what is happening with that?
    Ms. Hogan. Yes. In fact, I want to say that just in the 
last couple of months, we have launched what we call the 
Foreign Assistance Dashboard that now lists all of our programs 
by country, by amount, by contracting agency or NGO. So that is 
a huge step forward in meeting President Obama's Open 
Government Initiative. I just want to reaffirm that we are 
completely committed, as an agency, to full transparency in 
what we are doing.
    Ms. Lee. Could we receive a copy of that report?
    Ms. Hogan. Well, it is a dashboard. It is an electronic 
system, so you actually go into it, but we can certainly send 
you the link for it. Happy to do that.
    And as I say, we are not only committed to providing 
information, but to making it accessible, hence the dashboard. 
So I think we are going to keep building on that over time. And 
it is not just USAID's resources; in fact, it is all USG 
assistance, so it includes State, it includes Treasury, it 
includes some of the DOD activities that they are doing on 
international development. So this is just the beginning, but 
it is getting built out as we speak, and I think it is going to 
be a huge resource for Congress and other interested 
stakeholders.
    Ms. Lee. Okay. And then in the GAO report--this is my final 
question on--which was really quite shocking and appalling when 
I saw this--.4 percent of funds went to domestic Haitian NGOs 
and businesses? Point-four percent? What is that about?
    Ms. Hogan. It is much too low, and as I say, we have a 
target of getting up to 17 percent, and even getting to 17 
percent is going to be difficult because of the low capacity. 
But we are committed to putting resources into building that 
capacity so that we will be able to----
    Ms. Lee. But this has been going on for years and years and 
years, and so what is the problem?
    Ms. Hogan. I think we have put aside funds specifically to 
build capacity for people to meet our requirements for grant 
management, so that is what is different, and that is going to 
help us meet that goal.
    Although very little of our money goes directly--as I said, 
$10.1 million last year went directly to Haitian institutions--
we have spent $50 million through grants and subgrants and 
subcontracts to Haitian institutions. And so we are increasing 
our numbers both through subs as well as direct, but ideally we 
are going to get to direct, and one----
    Ms. Lee. Could you break down those institutions, though, 
and send us the report on them?
    Ms. Hogan. Certainly.
    Ms. Lee. Again, that is a----
    Ms. Hogan. Certainly.
    Ms. Lee [continuing]. Requirement of my legislation.
    Ms. Hogan. One thing I would like to highlight for you is a 
very innovative condition that we put into our new agricultural 
program in the north, which we call Feed the Future North, and 
in that contract that has been awarded to a U.S. company, their 
performance fee is going to be tied to the degree to which they 
can ``graduate'' Haitian subcontractors to the point that they 
can then become primary contractors in their own right. I think 
this is the first time we have done it as an agency, and we are 
doing it in Haiti.
    Ms. Lee. That is a very good idea, makes a lot of sense. 
Again, I want to see your U.S. companies, any Haitian-owned 
U.S.-based companies, or minority-owned companies.
    Ms. Hogan. Certainly.
    Ms. Lee. U.S. Thank you.
    Chairman Royce [presiding]. Frederica Wilson from Florida.
    Ms. Wilson. Thank you for holding this hearing. I will not 
have time to ask the many questions that I have that have been 
submitted to me by my constituents, so I am going to leave them 
for you--for staff to get answers to them. But the one thing 
they are concerned about is what is being discussed here today: 
How do they become a part of the rebuilding of Haiti? This is 
what they want to do. They feel left out.
    And you talked about the laws of the United States, but 
what about the laws of Haiti? When you said the Haitian 
Government let out a contract for the port. Will the Haitian 
Government make sure that there is minority participation, and 
will they make sure that Haitian companies are involved?
    They also have some criticisms of USAID, and they have 
criticism of the Haitian Government, and one is--another one is 
the taxes on any money transfers into Haiti. There is a tax put 
on the money to improve education, and they need to find out is 
there any oversight of this money that is being sent to Haiti? 
Is it really being used for education? Who is making sure that 
they are building schools? Because people in the diaspora go 
over and they build schools, they build churches, orphanages, 
community centers, but they don't ever get any return for that. 
So they are not getting contracts; they are doing this on their 
own time and money.
    And also, there was a ruling in the Dominican Republic the 
other day about Haitians--that will render stateless four 
generations of Haitian Dominicans. Will our government do 
anything to help with this problem? It is a real issue. And if 
we continue to say that the Haitian Government lacks capacity, 
how are we going to build it?
    So there are many, many questions about the restavecs, and 
are we following these children? What are we doing as a 
government to make sure? Because the problem has increased 
since the earthquake. There are problems of insecurity, 
deprivation, hunger, and lack of prevention.
    And those are some of the issues, but I have a long list 
that I would like to get answers for so that I can--I am going 
to have a tele-town hall meeting with the Haitian community to 
make sure that they have appropriate answers for this. They are 
concerned about the elections, and they are saying in the 
community in Miami that when the President does not allow for 
the elections, he is appointing people to these Senate seats, 
and he is appointing people to mayorships and different elected 
positions when the people should be electing them. The 
President is appointing his friends to these different 
positions. So there is a lot of criticism against the 
Government of Haiti and a lot of criticism against USAID.
    So I will submit the questions to you. But just try to 
answer the one about the Dominican Republic. Is anything 
happening with that?
    Mr. Adams. Sure. I will be glad to speak to that.
    On September 23rd, the Dominican Supreme Court issued a 
ruling which basically said that those residing in the country 
of Haitian origin were only transients and weren't entitled to 
citizenship. This prompted the Government of Haiti to withdraw 
its Ambassador, and a number of international organizations, 
U.N. agencies, protested this result as being in violation of 
international law and norms, and particularly a 2005 judgment 
by the Inter-American Court of Human Rights, which states that 
children do not inherit the illegal status of their parents.
    So there is a lot of controversy here. We have engaged, at 
very senior levels, with the Government of the Dominican 
Republic in a way to figure out how we can ameliorate this 
situation, and there are a number of avenues that could take 
place on that, but it is fairly complicated. I will be glad to 
brief you on that separately, but rest assured, we are engaged 
diplomatically in this.
    Ms. Wilson. Thank you.
    Chairman Royce. Okay. We go now to Yvette Clarke from New 
York.
    Ms. Clarke. I thank you, Mr. Chairman, and I want to thank 
Congressman Engel for extending the invitation to sit in and to 
listen. And I think most of the colleagues have really hit some 
of the more salient points and concerns that I have. I look 
forward to the responses that were requested by colleagues. 
However, I do have a question about the minimum wage.
    During the questioning of Dr. Gootnick, he spoke to the 
issue of the minimum wage. And Haiti's minimum wage is among 
the lowest among countries that export apparel, and it is the 
lowest in the Western Hemisphere. In addition, garment factory 
owners, including those in the Caracol Park, which is heavily 
subsidized by U.S. funding and benefits from trade preferences 
under HOPE II, are violating U.S. law and Haitian laws. The 
Better Work Haiti Program established by the International 
Labor Organization and the International Finance Corporation 
reported that every single one of Haiti's 24 garment factories 
is failing to pay the minimum wage. Therefore, is the State 
Department and USAID aware of this issue, and if so, are you-
all engaging the factory industries to be more compliant?
    Mr. Adams. That is an excellent question, and let me give 
you a fairly extensive answer on that.
    The Haitian minimum wage law requires a base wage of 200 
gourds a day for those involved in export industries. The 
Better Work Haiti report found that all the export factories 
are pretty much in compliance with that lower wage tier. The 
Haitian law is unclear, however, and requires that piece work 
in these factories--anyone engaged in piece work be given an 
opportunity to earn a higher 300-gourd wage, but it never 
defined how that wage was to be established.
    Ms. Clarke. Can you translate the gourd in gourd dollars?
    Mr. Adams. About 44 gourds to a dollar.
    Ms. Clarke. Okay.
    Mr. Adams. Okay.
    Ms. Clarke. 44 gourds to a dollar
    Mr. Adams. So, the 200-gourd wage is about 5 bucks. The 
300-gourd wage is about 7 bucks.
    Ms. Clarke. And that is 5 bucks a day?
    Mr. Adams. Yes, ma'am, which is higher than Asian wages, I 
might add.
    But at any rate, the Government of Haiti has worked with 
the factory owners, with labor and others to define how that 
300-gourd wage is reached, and I think they have gotten 
everybody in agreement, and when that is promulgated by the 
Government of Haiti, it will clarify this whole area.
    All of the factories in Haiti cannot export to the U.S. 
unless they meet core labor standards. So we have found that 
with--with--as we resolve these issues, they are very 
resolvable, there is incentive on both sides to do it, and I am 
firmly convinced that this--this unclear area of Haitian wage 
law will be clarified very shortly, and that the factories will 
be in compliance with it.
    Ms. Clarke. I think it is critical, because if we are 
subsidizing that, then we become complicit. And, you know, we 
are here to help the Haitian people, that is our moral 
obligation, and for us to sit and twiddle our thumbs while 
these folks are exploited does not bode well for us as a 
Nation.
    Mr. Adams. Rest assured, we are not twiddling our thumbs. 
The U.S. Department of Labor is engaged in this, providing help 
and assistance to both sides.
    Ms. Clarke. Do we have a sense of when this will be 
resolved, how this will be proclaimed, how people will know 
their rights as workers, and, you know, how we hold these 
factories accountable? I mean, if you are inclined to get away 
with paying people, you know, below minimum wage, then you are 
inclined to do that notwithstanding, you know, what we set. You 
know, we should not have our dollars invested in these types of 
companies.
    Mr. Adams. No, I think this has been a good story by and 
large, the compliance with core labor standards, and I think 
this will continue to be a good story.
    Ms. Clarke. I would just like to add my voice to that of 
Congresswoman Waters about the governance concerns. We have got 
to fix that. You know, everything else we are saying here 
becomes moot if this government tilts toward a dictatorship. 
And, you know, this is a very, very serious issue. Whatever we 
must do, we must do to get them on the right track and make 
sure that democracy continues down the road to strength.
    Thank you.
    Mr. Chairman, I yield back, and I thank you for the 
opportunity today.
    Chairman Royce. I thank the gentlelady. And let me also 
thank our witnesses for their willingness to come here and to 
testify today, Ms. Hogan, Mr. Adams. And as I said in my 
opening statement on this issue of lack of rule of law and lack 
of transparency in Haiti, both the Haitians and the U.S. 
taxpayers deserve better.
    I would like to share some good news. Earlier this year 
some private charitable groups were having problems getting an 
air ambulance program approved for Medor, Haiti, and we raised 
this issue with Tom Adams, and we want to express our 
appreciation because you along with the Haitian authorities, 
helped resolve the issue. The committee learned just yesterday 
that verbal permission has been given by the civil aviation 
authorities to proceed with a free emergency air ambulance 
program into Medor, and, additionally, that you were present at 
the meeting with the Haitian Government when this happened. So 
we thank you for that, Mr. Adams, and just want to convey that 
the committee appreciates your good work on behalf of these 
charitable groups.
    And again, thank you both for your testimony here today.
    Mr. Adams. Thank you, sir
    Chairman Royce. We stand adjourned.
    [Whereupon, at 1:10 p.m., the committee was adjourned.]
                                     

                                     

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