Senator Grassley Demands Red Cross Disclose Haiti Spending – and Gives Them a Deadline

Sen. Charles Grassley is demanding the American Red Cross explain how it spent nearly half a billion dollars raised after the 2010 Haiti earthquake.

In a letter yesterday to Red Cross CEO Gail McGovern, the Iowa Republican gave the venerated charity until July 22 to answer 17 detailed questions, many of which it has never addressed publicly.

Grassley’s letter was prompted by a ProPublica and NPR report last month on how the charity broke multiple promises in its effort to help the impoverished country, including by building just six permanent homes.

“A few months ago I met with you and your team to discuss performance, improvements and whistleblower issues,” Grassley wrote. “I was assured that the Red Cross had made substantial steps forward in improving efficiencies and reducing waste, fraud and abuse within the organization. However, the recent news articles cast doubt on some representations made by the Red Cross.”

Red Cross spokesperson Suzy DeFrancis said in a statement the charity “is proud of our work to help the people of Haiti and we welcome the opportunity to respond to Senator Grassley’s questions and set the record straight.”

Some of the information Grassley is asking for:

• A breakdown of all the projects the American Red Cross funded in Haiti, how much was spent on each project, and how many people were helped. As we noted in our story, the Red Cross has so far declined to give a detailed breakdown of its spending in Haiti.
• The criteria used to determine that a person in Haiti was successfully helped. The Red Cross has previously said it helped nearly half the population of the country, but Haitian officials doubt that figure.
• Just how much of the money donated for Haiti went to overhead and management. Our reporting found it was less than the 9 percent that the Red Cross has claimed.
• An explanation of what McGovern meant when she floated a “wonderful helicopter idea” in an email grasping for ways to spend remaining Haiti funds. We asked the Red Cross about the email and they didn’t explain the reference.
• An explanation of the Red Cross’ response to a 2011 memo by the then-director of the Haiti program, who warned of “serious program delays cause by internal issues that go unaddressed.”
• A breakdown of how many employees and whistleblowers contacted the Red Cross’ internal ombudsman about its Haiti program, what types of issues were raised and whether those disclosures have resulted in positive change.

Grassley, chairman of the Judiciary Committee, is well known for his scrutiny of the nonprofit sector and particularly the Red Cross. His oversight of the group began more than a decade ago, after a controversy involving the use of money donated for victims of the September 11 attacks.

In 2007, Grassley pushed through a law overhauling the Red Cross’ governance structure and creating the ombudsman’s office following another scandal after Hurricane Katrina.

Grassley asked the Red Cross earlier this year to explain misleading statements by McGovern about the portion of donations it spends on overhead after previous reporting by ProPublica and NPR.

While the Red Cross is not a federal agency, it was created by congressional charter more than a century ago and has a formal role to work with the government after disasters.

Meanwhile, the Government Accountability Office, the investigative arm of Congress, is finishing up work on a report that will cover the Red Cross’ flawed response to Hurricane Sandy in New York, among other issues. That report is expected later this summer.