Wyclef Responds To Yele Scandal

 |  January 19, 2010
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wyclefWyclef Jean has responded to recent reports of tax evasion and the improper allocation of funds within his Yele Haiti charitable organization.  The Smoking Gun reported that Yele did not file tax returns for its first 10 years at least, and that when they finally did there were hundreds of thousands of dollars in expenses sent to Wyclef and a business partner personally.  Yele shows on their financial reports that on more than one occasion, $100,000 or more was sent to a company or companies that Wyclef also has ownership in, and that on one occasion Wyclef himself was paid $250,000 for an appearance at a Yele benefit concert.

With all of this news breaking out while Wyclef was in Haiti personally assisting with the nation’s earthquake relief, he finally responded to these reports after returning from Port-Au-Prince.  Essentially, Wyclef completely denounces any of this negative thinking, and pledges his total support to raising money and awareness for Haiti through Yele and his other work.

Personally, I’m skeptical of all of this Wyclef / Yele hate.  While there is certainly something shady about not filing your tax returns for 11 years, there is also a lot to be said about dedicating your life to the wellness of your home land, something Wyclef has stood for since the beginning of his career and has continuously worked towards.  See what you think below, where The Smoking Gun article is re-printed and Wyclef‘s response video is featured.

JANUARY 14–The Haiti earthquake has already triggered hundreds of thousands of donations to musician Wyclef Jean’s charitable foundation, which expects to raiseupwards of $1 million a day in the disaster’s wake. However, Internal Revenue Service records show the group has a lackluster history of accounting for its finances, and that the organization has paid the performer and his business partner at least $410,000 for rent, production services, and Jean’s appearance at a benefit concert. Though the Wyclef Jean Foundation, which does business as Yele Haiti Foundation, was incorporated 12 years ago–and has been active since that time–the group only first filed tax returns in August 2009. That month, the foundation provided the IRS with returns covering calendar years 2005, 2006, and 2007–the only periods for which it has publicly provided a glimpse at its financial affairs. In 2006, Jean’s charity reported contributions of $1 million, the bulk of which came from People magazine in exchange for the first photos of a pregnant Angelina Jolie (the actress reportedly directed that the publication’s payment go to Jean’s charity, not her personally). As seen on the following pages from the foundation’s 2006 tax return, the group paid $31,200 in rent to Platinum Sound, a Manhattan recording studio owned by Jean and Jerry Duplessis, who, like Jean, is a foundation board member. A $31,200 rent payment was also made in 2007 to Platinum Sound. The rent, tax returns assure, “is priced below market value.” The recording studio also was paid $100,000 in 2006 for the “musical performance services of Wyclef Jean at a benefit concert.” That six-figure payout, the tax return noted, “was substantially less than market value.” The return, of course, does not address why Jean needed to be paid to perform at his own charity’s fundraiser. But the largest 2006 payout–a whopping $250,000–went to Telemax, S.A., a for-profit Haiti company in which Jean and Duplessis were said to “own a controlling interest.” The money covered “pre-purchased…TV airtime and production services” that were part of the foundation’s “outreach efforts” in Haiti. No further description of these services was offered, though the return claimed that “the fees paid are below market” and that the use of Telemax was the “most efficient way of providing these services.” The group’s tax returns also report “consultant” payments totaling $300,000 between 2005-2007, while the 2006 return reported nearly $225,000 in “promotion and PR” costs. These expenses are not itemized further in the IRS returns.