Sen. Charles Grassley (R-IA): Red Cross Misled Congress, Refused To ‘Level With the People’ on Haiti Money
Justin Elliott and Laura Sullivan report in ProPublica (and on NPR):
A blistering Senate report on the American Red Cross raises fundamental questions about the integrity of the country’s most storied charity and its stewardship of donors’ dollars.
The report, which was released today by Sen. Charles Grassley, R-Iowa, and contains nearly 300 pages of supporting documents, found:
- After the 2010 Haiti earthquake, the Red Cross spent tens of millions of dollars more than it has previously acknowledged on internal expenses. The Red Cross told Grassley that the money was largely spent on oversight to make sure the Haiti aid was used properly. But Grassley’s office found that the charity “is unable to provide any financial evidence that oversight activities in fact occurred.”
- Red Cross CEO Gail McGovern made false statements to Grassley’s office about whether the charity cooperated with congressional investigators.
- McGovern and her subordinates have kept the charity’s own internal investigations and ethics unit “severely undermanned and underfunded.” The charity is “reluctant to support the very unit that is designed to police wrongdoing within the organization.”
There are “substantial and fundamental concerns about (the Red Cross) as an organization,” the report concludes.
In an interview about the report, Grassley said that even after a year of back-and-forth with the Red Cross, “we did not get satisfactory answers. It was like pulling teeth.”
Grassley launched his investigation following stories by ProPublica and NPR on Red Cross failures in providing disaster relief, including after the Haiti earthquake. The group raised nearly half a billion dollars after the disaster, more than any other nonprofit. But our reporting found that, for example, an ambitious plan to build housing resulted in justsix permanent homes.
Red Cross officials, including McGovern, have repeatedly told the public that the charity retains 9 percent of donations to cover management and administrative costs. But Grassley found that a full 25 percent of donations — or around $125 million — were spent on fundraising and management, a contingency fund, and a vague, catchall category the Red Cross calls “program costs.” . . .