In March of last year, two months after the devastating earthquake that killed 300,000 Haitians and left more than a million homeless, Sean Penn was faced with a monumental challenge. Penn, who had been spending most of his time in Haiti since the quake, was running a large camp for internally displaced persons in the foothills of a wealthy suburb of Port-au-Prince, on what had been the city’s lone golf course. Nearly 60,000 poor and middle-class Haitians, most from Haiti’s devastated capital, had migrated here, pouring over the crumbled walls of the exclusive country club, and established a spontaneous and overcrowded city of crude dwellings fashioned from plastic sheeting.

One night, a heavy rainstorm reduced much of the golf course to mud. Penn turned to Lt. Gen. Ken Keen, commander of the U.S. military’s Joint Task Force Haiti, a 22,000-strong deployment, which was helping to lead the international relief effort. Keen immediately assigned the Army Corps of Engineers to come up with a drainage plan. Before the work could begin, however, some 5,000 refugees would have to leave the golf course. The question was where to put them.

After Penn and Keen met with U.S. and Haitian officials, it was generally agreed that the best option was to relocate the refugees to an area roughly nine miles north of the capital called Corail-Cesselesse, which had recently been commandeered by the Haitian government. The area was secure, and believed to be less vulnerable to flooding than the makeshift camp. “It wasn’t the ideal circumstance, but it was safe,” recalls Keen. “Given the choice of living in a riverbed that was surely going to be flooded or being safe in Corail, it was a decision made out of necessity.”

It fell to Penn to explain the situation to the Haitians. So he took his translator and walked to the bottom of the golf course, where some of the refugees’ leaders had gathered. The men were suspicious of Penn, believing him to be in cahoots with Haiti’s wealthy landowners, a small and privileged elite who had ruled the country for generations and were now trying to forcibly evict many refugees from their land, often at the point of a gun. To the people living in Penn’s camp, the “optional relocation” he was proposing smacked of a prelude to a larger, mandatory exodus.

“Look,” said the actor, sitting down with the Haitians in a tent. “I don’t give a fuck about the rich guys who own this club.” He didn’t even want them to leave, he said, but what was the choice? He pulled out a map of the drainage plan the military engineers had devised. Those ditches were a necessity, he said – without them, thousands of people might die in a mudslide or flood. Then he took out a Google Earth photo of Corail, a wide swath of land, some 18,000 acres, and laid out the proposal: Each family that agreed to move to Corail would get $50, courtesy of the American Red Cross, and a hygiene kit. They would also get shelter, food rations, clean water, free medical care and a school for their kids. And they would be first in line for jobs in Korean-owned garment factories that the Haitian government pledged would soon be built in the area.

“That’s the plan,” Penn said. “We’ll step outside, you guys decide. If it were me, I would take my kids out there rather than stay here.”

Within days, thousands of refugees had agreed to move to Corail. On Saturday, April 10th, 2010, the first group left the golf course in a caravan of buses, the exodus chaperoned by United Nations peacekeepers. They arrived, disembarking onto a dusty, cactus-strewn patch of land in the shadow of a denuded mountain that turned out to be as vulnerable to the elements as the golf course. Their new homes – bright white tents set up on the baking gravel – were both hot and flimsy; three months after the refugees arrived, hundreds of the tents would blow away in a heavy windstorm. There were no schools, no markets, and the closest hospital was miles away. There were also no jobs, as the hoped-for factories would not be built for months – or even years. To return to the city meant a long walk to a bus stop followed by a several-hour commute. They were marooned.

“I went out there with our engineers, and we were all like, ‘What is this? It looks like Chad,'” recalls Julie Schindall, a spokeswoman for the relief organization Oxfam, which signed on to build latrines and provide water to Corail. “I have no idea how they selected that camp. It was all done very last minute – we had to set the entire structure up in a week.”

In the aftermath of the move, no one in the State Department or the Haitian government seemed willing to take responsibility for the relocation – or even for the rationale behind it. “I’ve yet to see any evidence that proves that anyone was in more danger on the golf course than they would have been anywhere else – though everybody in Haiti thinks they were,” says a senior U.N. official who asked not to be identified. “What the move proved was that it’s possible to ‘save’ 5,000 people if you say they’re in a dangerous situation and put them in what you call a safe situation. It was the most grotesque act of cynicism that I’ve seen for some time.”

Penn, for one, admits that Corail was a problematic choice. “It’s a very vulnerable area,” he says, adding that he realized this immediately, having toured the site soon after it was selected. “It struck me as desolate, but we had an emergency, and this was an emergency-relocation area – I never said it was anything else,” he insists. “I feel like shit. I hope those guys are OK when it rains out there. I feel an extra responsibility – of course I do. But we were betrayed.” Penn says he was assured by international monitors and aid agencies that Corail was a safe place to live, and that shelters would be built within three months. A year later, the shelters, constructed of crude plywood, were just being completed. There were still no hospitals and no factory jobs: Corail, it turns out, doesn’t have enough water to supply the garment manufacturers who promised to locate there.

But the lure of would-be jobs has driven a mass migration of Haitians to the land abutting Corail. By the first anniversary of the earthquake, the population of the once-deserted territory had swelled to more than 100,000 people. “It was like the gold rush,” says one U.N. official, close to the process. “Within about a week of people moving to Corail, you had all these other people rushing out there to stake their claim. People were up there buying and selling plots of land – completely illegally.” The going rate, she says, was about $1,000 a plot.

Dubbed “Canaan,” after the biblical promised land, the Corail region is now one of Haiti’s 10 largest cities, as well as its largest and most squalid camp, a bitter irony lost on no one involved in the relief effort. “Corail is a ton of people living in a flux state, without safe shelter, who don’t know what the future holds,” says Schindall. “It’s Haiti post-earthquake in a nutshell.”

It wasn’t supposed to be this way. In the immediate aftermath of the earthquake on January 12th, 2010, the international community resolved not only to rebuild Haiti, but also to establish new and more efficient models for dispensing humanitarian aid. President Obama, calling the tragedy “cruel and incomprehensible,” pledged “every element of our national capacity” to the response. Former Presidents George W. Bush and Bill Clinton created a special fund for Haiti; the American Red Cross launched a wildly successful appeal, raising close to $500 million in one year. In total, an estimated one in two American households donated more than $1.4 billion to Haiti relief, with close to $11 billion more for reconstruction pledged by donor countries and financial institutions. “We will be here today, tomorrow and for the time ahead,” Secretary of State Hillary Clinton promised during a post-quake visit to Port-au-Prince.

American and international officials gave their plan for Haiti a simple and compelling name: Building Back Better, a term that came into vogue after the tsunami that struck Asia in 2004, and that has since become something of a mantra in the development world. In a radical shift away from traditional approaches to foreign aid, “building back better” attempts to go beyond simple relief and not only to rebuild shattered structures, but to restructure, in a sense, shattered societies. At the forefront of this effort is private-sector investment being leveraged to build the kind of infrastructure needed to promote economic development and attract foreign corporations: roads, power lines, factories, markets. “The hope,” explains Matthew Bishop, co-author of Philanthrocapitalism: How the Rich Can Save the World, “is that using the private sector will be a lot more efficient. Traditional aid has been extremely wasteful. When it is allowed to take the lead, the private sector is more likely to try something new or entrepreneurial.”

But despite all that has been promised, almost nothing has been built back in Haiti, better or otherwise. Within Port-au-Prince, some 3 million people languish in permanent misery, subject to myriad experiments at “fixing” a nation that, to those who are attempting it, stubbornly refuses to be fixed. Mountains of rubble remain in the streets, hundreds of thousands of people continue to live in weather-beaten tents, and cholera, a disease that hadn’t been seen in Haiti for 60 years, has swept over the land, infecting more than a quarter million people.

In the midst of such suffering, only a fraction of the money devoted to Haitian relief has actually been spent. This May, the U.S. Government Accountability Office reported that of the $1.14 billion allocated by Congress for Haiti last year, only $184 million has been “obligated.” In a letter to the Obama administration this spring, 53 Democratic members of Congress blasted the “appalling” conditions in the refugee camps. “The unprecedented relief effort has given way to a sluggish, at best, reconstruction effort,” said Rep. Barbara Lee, who is demanding an accounting of how the relief money is being spent. There is, she said, a “lack of urgency on the part of the international community.”

As the relief effort has dragged on for well over a year, virtually every actor involved has blamed the others: U.S. aid officials pitted against Washington bureaucrats, U.N. agencies against private aid groups. Some veteran insiders blame a new breed of technocrats who, with little to no experience in development, have descended on Port-au-Prince armed with bold theories and PowerPoint presentations, as if the entire country were a case study from Harvard Business School. Others say the goals were too lofty, the plans unrealistic; maybe Haiti, the poorest country in the Western Hemisphere, was simply too damaged to be fixed. Or perhaps the very idea of fixing Haiti at all is a flawed concept, revealing not only the limits of Western humanitarianism but the folly of believing that any country and its problems are ours to set right.

Amid all the finger-pointing, however, nearly everyone taking part in the relief effort is quick to place at least some of the blame on the Haitians themselves. “Corruption is the reason those reconstruction funds haven’t broken loose,” says one U.S. business consultant, who describes most Haitian politicians as “pathological narcissists” with little interest in helping their own country. Such accusations have been made by outsiders for as long as outsiders have tried to help Haiti – which itself may be the biggest problem. “Haitian people have always found a way to get rid of those who’ve tried to control them,” says Raoul Peck, Haiti’s former minister of culture. “It’s very easy to point at the Haitians for being corrupt or weak. What’s much harder is looking at what’s wrong with those who say they are just trying to help.”

Last fall, a line of graffiti began to appear on walls throughout Port-au-Prince: BON RETOUR J.C. DUVALIER (“Welcome back, J.C. Duvalier”). It was a reference to Haiti’s last dictator, Jean-Claude “Baby Doc” Duvalier, who, prior to being deposed in 1986, presided over a kleptocratic police state of such paranoid dimensions that writer Graham Greene dubbed Haiti the “Nightmare Republic.” Today, in a testament to their current-day nightmare, some traumatized Haitians have begun to yearn for the days of Duvalier in the same way that some Iraqis, in the wake of the U.S. invasion, came to idealize life under Saddam Hussein. “It’s selective memory,” explains my translator, a cynical former businessman named John. “At least with Duvalier, we had lights.”

It is a broiling November day, and John and I are driving through the wreckage of what used to be Port-au-Prince. Two-thirds the size of Manhattan, Haiti’s capital is still buried under some 8 million cubic meters of rubble – enough, according to one expert, to build a road from Port-au-Prince across the ocean to Los Angeles and back again. Enormous piles of this debris, some sprouting odd pieces of metal or computer parts, now comprise much of what used to be small neighborhoods. Choking clouds of exhaust hover above the roads, which are clogged with idling cars as well as people, dogs, cows, donkeys, the odd pig. Some 1,000 camps, or “informal settlements,” have sprung up in seemingly every available space in the city: vacant lots, basketball courts, soccer fields, road medians, the large, gated plaza in front of the prime minister’s office, even the Champs de Mars park, across from the National Palace, home now to some 10,000 people.

Filth – whether it’s human waste or the giant heaps of rotted mango peels, empty water bottles and other refuse that line the roads and ditches and canals – is as much a part of life in post-earthquake Haiti as frustration and despair. “There are things in this country you just can’t believe,” one exhausted aid worker tells me. “I’m at this river the other day, and here’s what I see: three men washing some Land Rovers in the water, two pigs having sex, a group of children gutting some pigs and cleaning their intestines right next to the pigs having sex, and a few women washing clothes and bathing – all in the same tiny part of the river. And next to all of that was a hand-washing poster put up by some NGO to teach people good hygiene.”

Haiti’s dysfunction, while undeniably exacerbated by the quake, goes back generations. The first independent black republic in the world, it has been hobbled for most of the past century by a series of repressive dictatorships and military regimes, and so dependent on Western aid groups that since the late 1990s, it has been known throughout the development world as “the Republic of NGOs.” The earthquake didn’t so much destroy Haitian society as it exposed how deeply broken that society already was. In 35 seconds, the quake leveled government ministries and the National Palace, killed an estimated 20 percent of the country’s civil servants, and severely damaged 50 of the nation’s hospitals. Schools collapsed on their students; churches collapsed on their clergy; and houses built into the hillsides crumbled like sand, sliding to the bottom of the ravines. From his home overlooking Port-au-Prince, Charles Henri Baker, a Haitian manufacturing titan, recalled seeing the dust rising from the city, and with it the cries of “3 million people calling to Jesus.”

During the first few days after the quake, not a single Haitian official – not the president, the prime minister or any cabinet member – emerged to make a public statement. “Their excuse was they were in shock,” says Raymond Joseph, Haiti’s former ambassador to the United States. “OK, you’re in shock, I understand. But act like leaders. Summon the people, tell them something of comfort – do something. No one did.”

Over the next few weeks, the amount of aid pledged to Haiti began to outpace the nation’s ability to absorb it. Just a few days after the quake, Doctors Without Borders shut down its appeal for Haiti relief funds, informing donors that it simply couldn’t spend any more. But most aid groups continued to fundraise for Haiti long after their emergency-relief capacities were maxed out. The American Red Cross has raised $479 million for Haiti, for example, yet it had “spent or signed agreements to spend” only $245 million by the one-year anniversary of the tragedy. The rest remains in an interest-bearing account, awaiting the commencement of “building back better.”

Aid workers in Haiti concede that their efforts remain as focused on relief as on reconstruction. “We are ramping up recovery – building more stable housing, a medical infrastructure, that kind of thing – but we’re still out there digging ditches, sandbagging hillsides, replacing tarps and tents,” says Julie Sell, the Red Cross spokeswoman for Port-au-Prince. “The relief phase, to be honest, is still ongoing. We all wish we were further along than we are.”

Sell, like most other aid officials, is trying to put a rational spin on a situation that is both irrational and, by the looks of things, completely unmanageable. On top of the earthquake, aid workers in Haiti are contending with a cholera crisis, a disease of poverty spread through poor sanitation and contaminated drinking water. These are all things that NGOs like the Red Cross have expertise in fighting, but larger structural issues often trump their best intentions. Because international NGOs get most of their money from large government agencies, they are beholden to the broader policy imperatives of their funders. “The big problem is that most NGOs are only really accountable to their donors, when we should really be accountable to the people we’re trying to serve,” says Dr. Louise Ivers, senior health and policy adviser for Partners in Health, a Boston-based NGO that has worked in Haiti for 25 years. Some organizations, she notes, “exist only to write grant proposals that respond to specific donor requests. If your mandate is just to follow the money, then the money determines what happens.”

The money that poured into Haiti after the earthquake was focused almost solely on relief efforts in and around Port-au-Prince. As a result, dozens of health-oriented NGOs in Haiti focused their work in the capital, all but ignoring the countryside. So last October, when reports of people dropping dead of cholera in the rural Artibonite Valley 90 miles from the capital began to emerge, many in the aid community were blindsided. Even as the epidemic made its way to Port-au-Prince, some relief organizations still didn’t respond. “It was as if, somehow, those 400 or 500 deaths in the Artibonite weren’t registering,” says Ivers, who had an office in St. Marc, where the outbreak started. “If you haven’t really seen it with your own eyes, it’s hard to believe how quickly cholera can become a major catastrophe.” Within a month, cholera had become a national epidemic.

One morning, during the height of the epidemic, I attend a meeting organized by the U.N. to coordinate efforts to contain the cholera outbreak. About 60 relief workers from groups like Oxfam, the World Health Organization, UNICEF, the American Red Cross and Save the Children crowd the small room at the offices of Haiti’s ministry of water and sanitation, sitting on tables or on the floor. There is a representative from USAID and another from the Centers for Disease Control. There are also a few U.N. peacekeepers and a U.S. Army captain in Oakleys. There are only a handful of Haitians in the room, half of whom are translators.

The meeting, which is held in French, begins with a PowerPoint presentation on the scope of the cholera epidemic, conducted by a frazzled aid official named Pierre-Yves Rochât. Word has come down from the Haitian health ministry that there are only 800 cholera cases in Port-au-Prince, a number everyone in the room knows is a lie. “They’re dropping like flies,” a CDC official whispers. At one hospital on the outskirts of town, there were 1,200 cases in a single day.

Much of the meeting is spent complaining. An official from an international aid agency notes that Port-au-Prince is now overflowing with waste, yet 52 disposal trucks that have been imported to handle it are still sitting in customs. Another says that waste from cholera-treatment centers has been dumped at the Truitier landfill, which happens to be located on a major aquifer. Rodrigo Silva, a Portuguese waste-management specialist, offers what seems like a reasonable proposal: Perhaps the NGOs should consider composting the cholera waste instead of dumping it. In unison, officials from Doctors Without Borders, the Pan American Health Organization and UNICEF shoot him down, insisting that chlorine, an extremely effective bacteria-killer, is the only sensible option to neutralize cholera waste. Dejected, Silva leaves the room.

I find him outside smoking a cigarette. A skinny guy in his early thirties, Silva has been in Haiti for months trying to initiate projects that rely on “ecological sanitation,” which many development specialists advocate for undeveloped countries like Haiti. So far, though, Silva has had almost no luck except with small NGOs like Give Love, founded by the actress Patricia Arquette. “I go to these meetings, and everybody’s talking about problems, not solutions,” he says. “I try to make suggestions, but no one listens. I don’t know why.”

In the end, nothing is decided. After two hours, the aid workers, who have spent most of the meeting arguing, make a dash for the door, getting into their cars to sit for hours in Port-au-Prince’s traffic en route to the next meeting. These weekly gatherings, which are designed to streamline relief efforts, wind up seeming like an exercise in futility. “What sucks is that we spend all of our time sitting in traffic going to all of these meetings,” says one veteran aid worker, who has been working in Haiti for a year, “and wasting even more hours of our day when we could be doing something else – like helping Haiti.”

Many of the decisions about how best to help Haiti, in fact, were conceived well before the earthquake struck. In the spring of 2009, Hillary Clinton, having recently assumed her post as secretary of state, identified Haiti as a top priority. Both she and Bill Clinton shared a deep and difficult history with the country. The former president “fell in love” with the island during his honeymoon there in 1975, and the Clinton homes in New York and Washington were decorated with Haitian art. But his policies only drove the country deeper into despair. Clinton imposed harsh sanctions on the island after its democratically elected leader, Jean-Bertrand Aristide, was deposed by a military coup in 1991. He also backed an ambitious program of “structural adjustment” designed by the World Bank and the International Monetary Fund to turn Haiti into a Caribbean Taiwan, refocusing its resources away from farming toward more lucrative sectors like export manufacturing. It was known as the “American Plan.”

The strategy was a disaster. Small farms were crushed by a sudden influx of subsidized food imported from the United States. No longer able to sell their produce, hundreds of thousands of peasants were driven off their farms and into the cities and shantytowns, mostly in Port-au-Prince, where they competed for jobs at American-owned assembly plants, earning less than $2 a day. Last year, Clinton apologized for the plan. “We made this devil’s bargain, and it wasn’t the right thing to do,” he said. “It was a mistake that I was a party to. I did that. I have to live every day with the consequences.”

The earthquake, say some involved with the relief effort, seemed to offer Clinton a chance to make amends. “Personally, I think Bill Clinton wants to redeem himself,” says Joseph, Haiti’s former ambassador. “He realizes he made mistakes. So now, if he can do something good for Haiti, leave a legacy, then he can say, OK, I cleared my name.”

In the fall of 2008, a year and a half before the earthquake, Clinton appealed to world leaders and other members of his Clinton Global Initiative to help Haiti recover from a series of devastating hurricanes. By the end of the year, CGI members had committed more than $100 million to Haiti relief. The U.N., which had launched its own appeal, raised less than half that amount.

In the winter of 2009, U.N. Secretary General Ban Ki-moon invited Clinton to Haiti, and soon afterward asked him to serve as his special envoy, using his unique brand of star power and political clout to garner much-needed investments for the country. It was a job Clinton had done before, drumming up aid after the catastrophic tsunami in Asia. In Haiti, he hoped to do even more. “Clinton had this idea of a grid,” one adviser recalls. “He was going to figure out what all the needs were in Haiti, chart them, and then match them up with the people who had the money. The idea was to get every base covered, to fill in all those boxes, not just the ones that were sexy. And he thought he could do it quickly.”

In Washington, meanwhile, Hillary Clinton was pursuing a Haiti strategy that dovetailed neatly with her husband’s efforts. Within the State Department, Haiti was viewed, in the words of one official, as a “laboratory”: a petri dish in which America could prove that it could be a force for good in the world. The impulse falls squarely within the Clinton doctrine known as “smart power,” which stresses the importance of diplomacy and development to further U.S. interests. For too long, Clinton believed, the West had embraced “development for development’s sake,” throwing money at poor countries without demanding either accountability or results. Haiti had received so much foreign assistance over the years – more than $300 million annually from the U.S. alone – that it had become a virtual, albeit dysfunctional, ward of the West, and a poster child for the inadequacies of foreign aid.

In April 2009, Clinton ordered a thorough review of U.S. policy toward Haiti. She wanted a new strategy grounded in “evidence-based solutions.” “The idea,” recalls Cheryl Mills, Clinton’s chief of staff, “was that if we’re putting in the assistance, we need to know what the outcomes are going to be.”

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Mills was chosen by Clinton to steer the review. An elegant, 46-year-old graduate of Stanford Law School, Mills was as strong a Clinton loyalist as anyone in Washington. She had worked in the White House office of legal counsel throughout Bill’s presidency, defending him during his impeachment hearing. She also served as Hillary’s chief counsel and unofficial campaign manager during her 2008 presidential campaign. “If something’s on the other side of a brick wall and the Clintons need it,” said one former White House colleague, “she’ll find a way to get to it: over, around or through.”

But Mills, to some minds, was a questionable choice to lead what became the State Department’s Haiti Task Force. She had no prior experience in international development, nor did she think she needed it. Her role, as she saw it, was as a problem solver: In order to come up with the best policy possible, the United States needed to maximize its resources, cut costs and leverage the expertise of as many people as it could, including those in the private sector.

“Cheryl Mills came in and started asking very hard questions, like ‘Why is it that we’ve put all this money and all this time into Haiti and gotten nothing out of it?'” recalls Robert Maguire, chairman of the Haiti Working Group at the U.S. Institute of Peace, who was part of a kitchen cabinet of experts who met with Mills to discuss Haiti policy. Mills was appalled, Maguire recalls, by the abysmal record of U.S. aid in Haiti, and was particularly critical of the NGOs, many of which had spent decades there without producing any lasting change. She was unhappy that so much money was outsourced to private development agencies, whose accomplishments rarely justified their exorbitant fees. Mills was also frustrated with the inflexibility of development purists in accepting new ideas.

The purists, in turn, criticized Mills as a political operative who, for all of her good intentions, was “not qualified to engineer sophisticated development approaches to Haiti,” as one puts it. Maguire, however, was impressed. “This old, established system had been deficient in the worst possible way, and Cheryl was determined to figure out a new way of doing things that would be more effective, both for the U.S. and for Haiti,” he says. “She was not accepting business as usual. And because of that, she stepped on a lot of toes.”

Mills was particularly unpopular at USAID, the long-troubled, deeply understaffed agency that has been at the helm of development programs for the past five decades. Since the end of the Cold War, USAID has suffered tremendous budget cuts that have resulted in its role being almost entirely absorbed by the State Department, which controls its budget. For those at USAID who resented this loss of autonomy, Mills became a symbol of their agency’s emasculation. To those she favored, Mills could be warm, funny, witty and supportive. But like the Clintons, she could also be vindictive to those who crossed her. “I don’t doubt that Cheryl means well,” says one State Department official, “but she scares the shit out of everyone.”

During the summer and fall of 2009, Mills dispatched several teams of experts to Haiti to assess the best investment options. They paid particular attention to a strategy drawn up by Oxford University economist Paul Collier, who maintained that with its low-paid workforce and loose labor regulations, Haiti could become a major supplier for the apparel industry. The ideas weren’t dissimilar from the policies that had been foisted on Haiti as far back as the Duvalier era. “That same model of T-shirt manufacturing was tried in the 1970s, and was an utter failure,” notes a U.N. official. “The entire model is based on paying people so little that it doesn’t activate the economy. It keeps the labor force subsisting, but there’s not enough surplus in their salaries to do more than keep their family alive.”

Mills nonetheless embraced Collier’s idea, as did Bill Clinton, who made a special trip to Haiti in the fall of 2009, escorting international CEOs around Haiti’s farms and factories and promoting its tourism potential. Manufacturing, Clinton believed, was “a great opportunity, not only for investors to come and make a profit but for the people of Haiti to have a more secure and a more broadly shared, prosperous future.” He also envisioned a myriad of other possibilities, from tourist hotels to outsourced call centers.

By that Christmas, Mills and her team had identified four key pillars for aid – health, energy, agriculture and security – that promised what seemed like the highest return, and were preparing to send a report on the new Haiti strategy to the National Security Council for review. Bill Clinton’s hands-on approach had also begun to pay off: Two international hotel chains had committed to projects in Haiti, and new industrial parks were in the works with interest from American, South Korean and Irish investors. The Vietnamese military was in negotiations to buy a controlling share of Haiti’s state-owned telephone company, and the Hotel Montana in Port-au-Prince was making plans to open a shopping arcade.

Then came the earthquake. The tragedy put “a dent in expectations,” as one State Department official puts it, but it “didn’t completely destroy the underlying economic opportunities.” Immediately after the quake, in fact, Bill Clinton was not only talking about Haiti’s reconstruction but was casting the tragedy as an opportunity for the country to “re-imagine” itself, using a modified version of the Collier plan that had already been endorsed by both the U.S. and Haitian governments. “Is this going to be hard? Yes,” Clinton said in a teary-eyed interview with The Miami Herald. “Do I think we can do it? Absolutely, I do.”

Around the same time, Hillary Clinton met in Montreal with representatives from a long list of donor countries and financial institutions to begin to plan for Haiti’s reconstruction. Bill Clinton, meanwhile, attended the world economic forum in Davos, Switzerland, where he appealed to private-sector leaders to invest in Haiti as part of what Clinton and others would call a new “Marshall Plan.” A 56-page document, known as the “Action Plan for National Recovery and Development,” was released in March 2010. Its author was Haitian Prime Minister Jean-Max Bellerive, a European-educated technocrat, well liked by the international donors, with support from officials at the World Bank and the U.N. The vision represented a radically overhauled Haiti: a country bursting with mango-processing plants, fish farms, solar-powered irrigation facilities, industrial parks and duty-free zones, financed, to a large degree, by the private sector. “The plan suggests social engineering on a vast scale,” noted The Washington Post, “which would involve levels of public and private investment in Haiti never really imagined before.”

Leslie Voltaire, a former Haitian minister and U.N. envoy who consulted on the plan, put it more succinctly. “Disaster,” he said, “is a terrible thing to waste.”

Shortly after the recovery plan was unveiled, the Haitian government announced the creation of the Interim Haiti Recovery Commission, a new oversight body charged with managing the reconstruction. Though its members were roughly split between Haitian officials and international donors, it was clear from the outset that Bill Clinton, who was appointed co-chair, would drive the IHRC. “There is a degree of political pressure that only President Clinton, and Secretary Clinton, can exert on the Haitian government,” says Sam Worthington, the CEO of InterAction, a consortium of American-based relief organizations. “It’s a crucial role, and Bill Clinton is at his best when he plays it.”

Bill Clinton was already a major donor in Haiti, bestowing hefty grants through both the Clinton Bush Haiti Fund and the William J. Clinton Foundation. Now, as co-chair of the IHRC, he would have final approval, with Prime Minister Belle-rive, of every major reconstruction project. It was an extraordinarily powerful position for a single person to hold. It was also, to many minds in both Washington and Port-au-Prince, the best possible arrangement given the circumstances. “Bill Clinton is the most powerful advocate that Haiti is ever going to have,” says Johnny Celestin, a Haitian-American investor who heads a private philanthropy called the Haitian Fund for Innovation. “We can’t let this opportunity pass.”

Still, handing over that much power to Clinton made others nervous. “Behind closed doors, the feeling of the Haitian government was this was just another foreign group they’d given permission to come in and take over their country,” says a senior international aid official. “But what could they do? The Haitian government knew it didn’t have the capacity to tackle this reconstruction on its own.”

Much of the work of coordinating the recovery effort fell to Cheryl Mills and Rajiv Shah, the newly appointed head of USAID. Neither Mills nor Shah, a 38-year-old physician and food-security expert who had worked for the Gates Foundation, had any disaster-response experience. Shah, in fact, had been at his post in the State Department less than two weeks when the earthquake hit. “It all happened so fast. You do your absolute best and listen and try to make the right decisions,” says Shah, who had received an orientation to USAID’s emergency response “situation room” the day before the earthquake. “The initial goal was to save lives, move quickly, and be coordinated and aggressive in the response. If you look at the response from early January to the middle of March, it all came together in a pretty coordinated way, given the challenges.”

Moving beyond emergency relief, though, proved next to impossible. Aid groups were maddeningly disorganized, and the Haitian government was overwhelmed. While President René Préval had given the recovery commission the authority to oversee the reconstruction, final approval on every project had to be given by Haitian ministries, most of which were so broken that they could barely support a staff. “There just aren’t a lot of talented bureaucrats,” says an aide to Bill Clinton. “And the ones they do have are so busy putting out day-to-day fires, they don’t have time to do any planning.”

The dysfunction, say reconstruction officials, was like nothing they’d ever seen. “I wish I could organize a trip of Tea Party activists and take them to Haiti, so they could see what happens if they have a country with no government,” says Earl Kessler, an urban-disaster consultant for USAID. A central complaint was the lack of strategy: The “Action Plan,” while laying out the core priorities for Haiti’s recovery, didn’t go into many specifics. That left it up to Haiti’s ministries to devise their own plans. Some, like the health and agriculture ministries, came up with robust strategies. But in other key areas – housing, debris removal, waste management – nothing happened. Some Haitian ministers simply refused to pick up the phone; others demanded large payoffs before they’d sign off even on small plans.

“I’ve had two ministers come up to me this week, personally, and ask what’s in it for them,” says a frustrated IHRC official. “But that’s how this game gets played down here. He who has the most money buys the best minister, and gets the work. And since money grows on trees in this disaster, the attitude among Haitian officials is: Just call up your buddies in Washington, and they’ll send another check.”

Then there was another major obstacle to reconstruction: the Haitian ruling class, a handful of prominent industrial families that collectively control most of the country’s wealth. Haiti’s elite has maintained dominance for generations through strategic alliances with Haitian politicians who provide lucrative government contracts in exchange for patronage. Some of those same influential Haitians owned much of the land now needed to house refugees – and with national elections coming up that November, government officials weren’t going to alienate their major benefactors. “Préval wasn’t about to go around seizing up property,” says a U.N. official who has spent much of the past year trying to find land for resettlement camps. “It became readily apparent that he was not going to do anything to offend his supporters.”

With the Haitian government in disarray, some 98 percent of foreign aid was directed to partners more trusted by donors – mostly to the NGOs, which had worked in Haiti for years. But these groups, while experienced in relief, were not as knowledgeable about what it takes to rebuild a nation. “I got a call from a U.N. agency asking me how to buy equipment for rubble removal,” recalls Michael Wyrick, vice president of the Haiti Recovery Group, a disaster-recovery firm that has been vying for debris-removal contracts in Haiti. “These guys were essentially planning to start a new company: They were looking to purchase equipment, hire management personnel, rent office space. Much of the money on these contracts to NGOs goes to their overhead. Before long, you’ve spent tens of millions, and what’s really been done?”

Things weren’t moving much faster in Washington. Cheryl Mills had marginalized many of the bona fide experts on Haiti at USAID, leaving her with a random assortment of aid officials, many from far-off posts like Panama and South Africa. For insight, she scoured the research on previous recoveries: How long did it take for the debris to be cleared after the tsunami in Indonesia? What about Katrina? It took more than two years to remove the rubble from Ground Zero, she learned from her reading, and the World Trade