Category: Philanthropy

Haiti: Corporate Charity or Reparations?

After the New Orleans region was struck by Hurricane Katrina in 2005, Wal-Mart scored a public relations coup by delivering emergency supplies quickly while government agencies stumbled. Ignoring the fact that the company’s vast distribution network made the feat relatively easy, awestruck journalists hailed the giant retailer as a “savior” for many of the storm’s victims.

The Behemoth of Bentonville has apparently not been performing any major logistics miracles for the people of Haiti in the wake of the recent devastating earthquake. The company is working mainly through the Red Cross, initially providing $500,000 in cash and food kits worth $100,000.

Although the company’s outlays have apparently increased a bit since its January 13 press release, the amount is still in the neighborhood of $1 million. To put that number in perspective, in 2008 Wal-Mart had profits of $22 billion, which works out to some $2.5 million an hour—every day of the year.

It is hard to be impressed at a commitment of 30 minutes worth of profits to help deal with a disaster of the magnitude facing Haiti. But this is not just an abstract issue of generosity.

Over the years, Wal-Mart has earned huge sums from the impoverished nation. Haiti is one of the low-wage countries where garment contractors have produced the goods that, despite Wal-Mart’s vaunted low prices, can be profitability sold in its network of Supercenters. It’s been going on for many years. A 1996 report on Haiti by the National Labor Committee noted that Wal-Mart was a major customer of sweatshops paying garment workers as little as 12 cents an hour.

In this time of dire need, Wal-Mart should feel pressure to make a commitment to the Haitian people of a magnitude comparable to the wealth it has extracted from the country over the years.

The question of the obligation of a company such as Wal-Mart to a situation such as Haiti is particularly relevant in light of the outrageous ruling by the Supreme Court in the Citizens United case. Thanks to the High Court’s corporate shills, Wal-Mart executives are probably already fantasizing about the unlimited slush funds they will have to sway elections and pressure incumbents to do their bidding.

Now is a good time to launch a movement to push corporations to do something with their money other than buying the political system. The outpouring of support for Haiti could be the springboard for a campaign that demands that Wal-Mart—and other major corporations that have benefited from the country’s cheap labor—provide not a bit of charity but rather a substantial amount in the form of reparations.

Perhaps the way to start is to call for disclosure of an estimate of how much value Wal-Mart has extracted from the Haitian people. Rather than letting the company brag about its pittance of a voluntary contribution, it would be much more satisfying to see it have to negotiate an amount that would make a real difference for the country.

Another Crooked Philanthropist?

A recent article in the Wall Street Journal discussed the ways a person can enhance his or her profile on Google by creating positive material that will displace unflattering references from the top of the search results. R. Allen Stanford, who has just been accused by the U.S. Securities and Exchange Commission of engaging in a “massive, ongoing fraud,” seems to have done something similar in the management of his public image.

Until word got out recently that federal authorities were combing through records at the Houston offices of his Stanford Financial Group operation, Stanford (center in photo) had successfully cultivated his image as a flamboyant Caribbean-based financier, a leading promoter in the world of cricket and an active philanthropist. He began referring to himself as Sir Allen after being knighted by the government of Antigua.

While investors were most interested in the spectacular yields his firm provided on so-called certificates of deposit (which were actually more exotic investments), Stanford seemed to work hardest in his efforts on behalf of St. Jude Children’s Research Hospital in Memphis and his Stanford 20/20 cricket tournaments. He brought his interests in philanthropy and sports together in 2007, when Stanford Financial took over the primary sponsorship of a PGA golf tournament benefitting the children’s cancer hospital. In 2007 the event became known as the Stanford St. Jude Championship.

Until this month, Stanford’s public record in news databases such as Nexis was dominated by articles concerning his charitable and sporting side activities. A little digging, however, unearthed what Stanford may have been trying to suppress: a series of unflattering articles in the late 1990s and early 2000s about his efforts to block legislation in Congress to crack down on offshore money laundering, especially in the Caribbean, where Stanford’s offshore bank, Stanford International Bank, is based.

In June 1999 Shelley Emling of Cox News Service wrote a story suggesting that Stanford was involved in weakening money laundering regulations in Antigua, where he had taken up residence. An article by David Ivanovich published on July 16, 2000 in the Houston Chronicle provided more details on Stanford’s role in strengthening Antigua’s bank secrecy practices, which were a source of frustration for U.S. officials trying to prevent money laundering.

In 2002 Stanford was in the news again after Public Citizen published a report listing Stanford Financial Group as a major provider of soft money contributions to promote the campaign against new U.S. money laundering proposed during the Clinton Administration. The report found that major recipients of the contributions included 527 groups affiliated with Senator Thomas Daschle and Democratic Caucus Chairman Martin Frost.

The Center for Responsive Politics points out that Stanford continued to invest in the political process even after the money laundering controversy died down. The group calculates that Stanford Financial’s PAC and the firm’s employees have given $2.4 million to federal candidates since 1989, and the firm has spent $4.8 million on federal lobbying efforts during the past decades.

It is difficult to know if these contributions helped Stanford thwart earlier investigations of his money management practices. One also wonders how many other possible business crooks are out there deflecting attention from their misdeeds by wrapping themselves in heartwarming activities such as fundraising on behalf of pediatric cancer victims. It is unfortunate that worthy endeavors such as St. Jude have to depend on wealthy supporters who may have much less noble ulterior motives.