Wyclef Jean's Yele Charity Not The Only One With Dirt

American Red Cross, United Way faced scrutiny too.

ByABC News
January 19, 2010, 4:33 PM

Jan. 22, 2010 — -- Haitian-born musician Wyclef Jean has come under intense scrutiny over alleged mismanagement of his Yele charity. But the Grammy-award winning star isn't the first to spark a scandal in his quest to do good. The American Red Cross, Salvation Army and United Way, to name a few, have all come under attack in recent years for inappropriate, and in some cases criminal, actions.

The financial misconduct at Jean's Yele charity has thrown some nasty light on Haiti's relief efforts. Jean has not admitted to wrongdoing, but the group's most recent tax filing shows some financial imprudence.

Yele, also known as the Wyclef Jean Foundation, raised more than $2 million after the earthquake through text messages, after Jean called on fans to donate $5 by texting "Yele" to 501501.

Most of the criticism against Jean has focused on what's considered dubious spending, and records show that in 2007, the most recent year for which a filing is available, Yele earned $79,126 but spent $569,050. Critics also point to the close connections between Jean's business and charity ventures, pointing out a $250,000 payment made to buy airtime on a Haitian television station owned by the Grammy award- winner and his business partner.

"Have we made mistakes? Yes," Jean said at a press conference Monday. "Did I ever use Yele money for personal benefit? Absolutely not."

Hugh Locke, a spokesman for Yele said the airtime was used to publicize the charity's activities and produce a hip-hop competition for youths from Haitian slums. Buying time from Jean's station was cheaper than going through competitors, he said.

Experts said Jean's missteps don't amount to a crime but admit that the organization is facing some "administrative challenges."

"There's no fraud here. You'd be hard-pressed to find anyone who cares more about Haiti than Wyclef Jean," said Art Taylor, president and CEO of the Better Business Bureau's Wise Giving Alliance. However, Jean could allay donors' concerns by offering more information about how he intends to spend donations. "People are seeing a lot of money coming in, and they're not quite sure how the money is going to be distributed," said Taylor.

Of course, Yele is just one of many charities helping with the recovery in Haiti, and donors have a wide range of choices. In fact, 29 U.S. nonprofits collected more then $275 million in donations in the first week following the earthquake, outpacing support following the Asian tsunamis of 2004, according to the Chronicle of Philanthropy.