Feb. 28 – Recent allegations and long-simmering problems have critics of the nation’s premier short-term disaster-response agency asking if the American Red Cross deserves the prominence it enjoys.
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For last summer’s hurricanes alone, the American Red Cross raised more than $2 billion. It also received millions in reimbursements from federal coffers for services provided in lieu of government agencies.
But the iconic and well-connected disaster-relief organization has been under fire in recent years for mismanagement of funds and inadequate recovery plans. Now, US lawmakers are asking whether the agency can handle emergency response and recovery operations when the next disaster arrives.
The US Senate Finance Committee, which oversees nonprofit organizations, released thousands of pages of internal Red Cross documents yesterday that some lawmakers say demonstrate the agency’s inability to effectively manage billions of dollars in donations.
US Senator Charles Grassley (R-Iowa), who chairs the committee, asked the organization to provide meeting minutes, financial documents, internal evaluations and e-mails, some of which focus on disputes among board members. In a letter to Red Cross Chair Bonnie McElveen-Hunteron Monday, Grassley expressed discomfort at information he gathered from volunteers who complained about misuse of funds and property, and possible criminal activity within the organization.
"The volunteers [said they] were ignored, told to leave or otherwise made to feel like the skunk at the picnic," Grassley wrote. "This type of culture – a culture that discourages people from coming forward, management that does not want to hear the bad news and is more concerned about good press than good results – is a theme that I am hearing too often from Red Cross volunteers."
Two House members from states affected by the storms, Bennie Thompson (D-Mississippi) and Jim McCrery (R-Louisiana), said the Red Cross is unable to fulfill its role as the government’s de facto disaster relief agency. They accused the organization of neglecting low-income areas and remote Gulf Coast communities, refusing to cooperate with local relief agencies and failing to set up an adequate system for dealing with the massive number of phone calls from people seeking help.
The lawmakers’ concerns echo those expressed by survivors of Hurricanes Katrina and Rita along Louisiana’s Gulf Coast in interviews with The NewStandard last year. New Orleans residents, as well as those in more remote Louisiana bayous, recounted spending hours on the phone, repeatedly calling the Red Cross for help, to be greeted only with busy signals. In the small, predominately Native American community of Dulac, southwest of New Orleans, residents told TNS that the Red Cross did not start providing supplies until nearly a month after Hurricane Rita flooded their homes.
At a House Ways and Means Committee hearing last December, McCrery said: "It was clear from the beginning that the Red Cross simply did not have the sheltering capacity to meet immediate needs. Small, independent shelters began popping up by the dozens across Northwest Louisiana. At the peak, there were over forty shelters in my district, while fewer than ten of those were operated by the Red Cross."
In addition to what critics see as the organization’s chronic inefficiency in distributing supplies, volunteers and former employees accuse the Red Cross of misusing donor funds on expensive hotel rooms, excessive travel costs and unnecessary food.
The largest relief organization in the US, the Red Cross lost two chief executive officers over the last five years due to internal turmoil and harsh criticism of its operations. Marsha Evans quit after Hurricane Katrina, citing problems with the board of directors.
Her predecessor, Bernadine Healy, resigned in the face of accusations that she mismanaged Sept. 11 relief efforts by diverting hundreds of millions of dollars earmarked specifically for families of people killed in the terrorist attacks to other programs. After a congressional investigation, Red Cross officials said it would reapply the funds to benefit the victims of the terrorist attacks.
Critics slammed the organization yet again yesterday, charging that the Red Cross spent a half-million dollars over the last three years on public relations and celebrity endorsements – all while cutting staff.
According to Charity Navigator, a watchdog group that provides information on charities to potential donors, the organization spent more than $170 million on administrative costs and about $111 million on fundraising expenses in 2004. Interim CEO Jack McGuire makes a salary of $416,010. The organization spent about $2.8 billion on programs.
In its response to Senator Grassley, the Red Cross disputed allegations that it had poor working relationships with community relief groups, but acknowledged "challenges in working with local charity leaders to best deploy resources to meet community needs." Also, in a statement issued Monday, the organization admitted its response was "not perfect" and pledged to improve volunteer recruitment, communication mechanisms and collaborative partnerships with local nonprofits and governments.
