Cuba money trail: Tale of two Miami non-profits

Cuba money Project

Credit: Cuba Money Project

Several readers have asked me for more information about the Foundation for Human Rights in Cuba. So I dug around and am passing along some background on the FHRC and one of its critics, the Directorio Democratico Cubano.
The FHRC is a non-profit group that is tied to the Cuban American National Foundation, or CANF. Both list an address of 1312 SW 27 Ave. in Miami.
The U.S. Agency for International Development, or USAID, awarded the FHRC a grant of $3.4 million this fall, one source told me.
That would be the largest government grant the organization has received since at least 2005, or perhaps ever.
The FHRC’s sister organization, the CANF, has advocated for greater transparency in the use of government grants. In a 22-page report dated March 2008, the CANF found that U.S. democracy-promotion programs in Cuba were “utterly ineffective due to restrictive institutional policies and a lack of oversight and accountability” within USAID. The report stated:

…a significant majority of the funds destined for Cuba’s beleaguered opposition, are actually spent in operating expenses by U.S. based non-profits. This reality runs counter to the purpose of USAID-Cuba’s program goal to: ‘promote a peaceful transition to democracy in Cuba by assisting the development of Cuban civil society.’ and is atypical of the agency’s proven track record of efficient and effective promotion of development and democracy in other parts of the globe.

The CANF paper said “less than 46% of total USAID-Cuba funds from 1998 to 2006″ helped build solidarity with Cuban human rights activists. Most of the USAID funds “were distributed among Universities and think-tanks for the purpose of studying different elements of the process of transition to democracy in Cuba,” the paper said.
Phil Peters, who writes The Cuban Triangle blog, summarized the paper’s findings when it was published in 2008. He wrote:

CANF examined four grantees that received $24.5 million from USAID between 1998 and 2005 – the Center for a Free Cuba, the Directorio Democratico Cubano, the Grupo de Apoyo a la Democracia, and Accion Democratica – and found that 36 percent of funds were spent on resources that reach Cuba; the rest are spent off the island, an “egregious misdirection of resources,” CANF says. The percentage of funds reaching Cuba for these four organizations was, respectively, 19 percent, four percent, 81 percent, and 27 percent.

The CANF paper angered some Cuba exiles. Orlando Gutierrez of the Directorio, accused of spending just 4 percent of grant money on humanitarian aid in Cuba, said at the time (download his statement):

We are profoundly disappointed and dismayed that CANF has chosen this time in history to attack and lie about a fellow Cuban pro-democracy organization. We need to be united against the regime; not telling lies about each other. In the name of all Cubans, we call upon CANF to cease this divisive smear campaign, which surely the Cuban dictatorship must enjoy.
Directorio is proud of its 18 years of struggle against the Communist suppression of democracy in Cuba. Directorio is a force for democratic change in Cuba.

Readers trying to figure who to believe may want to examine the Form 990s of both organizations. Below are links to some of those forms, which non-profit organizations must file with IRS.

• Directorio, Form 990, 2007
• Directorio, Form 990, 2008
• Directorio, Form 990, 2009
• FHRC, Form 990, 2008
• FHRC, Form 990, 2009
• FHRC, Form 990, 2010

According to the Directorio’s 2007 form, the organization reported spending $3,691,633. Expenses included:

• Travel, $569,969.
• Salaries, wages and employee benefits, $758,329
• Radio programming, $796,349
• Furniture, office, communications and computer equipment, $524,056
• Subcontracted personnel services, $346,799
• Telephone, $121,507
• Dominican Republic, $200,557
• Argentina office expenses, $126,412
• Mexico office expenses, $56,936
• Costa Rica, $58,988
• Czech Republic, $13,968
• Slovakia, $20,118
• Spain, $73,076
• Conferences, conventions and meetings, $40,457
• Humanitarian aid in Cuba: $15,967

According to the Directorio’s 2008 form, the organization’s spending included:

• Salaries, wages and employee benefits, $752,147
• Travel, $212,930
• Solidarity committee offices in Central and South America and in Europe, $204,311
• Humanitarian aid in Cuba, $11,785

In 2009, the Directorio’s expenses included:

• Salaries, wages and employee benefits, $768,237
• Travel, $130,267
• Subcontracted personnel services, $304,443
• Solidarity committee offices in Central and South America, $126,393
• Humanitarian aid in Cuba, $15,840

In 2008, the FHRC reported spending:

• $316,799 for assistance to groups in Cuba – or 68.5 percent of the organization’s spending that year.

In 2009, the FHRC reported spending:

• $112,327 for assistance to groups in Cuba – or 46 percent of the organization’s spending.

In 2010, the organization’s expenses included:

• $271,072 for assistance to groups in Cuba – or 59 percent of the organization’s spending.

Salaries and employee benefits for all three years was listed as zero.