Mishaps And Graft Mean American Red Cross Is About To Face Tight Government Oversight

The American Red Cross is under scrutiny as a government investigation has determined that the organization should have independent oversight and that it should open its books and operations as part of that oversight.

The investigation was conducted as a result of perceived failures during its responses to Superstorm Sandy in 2012 and the Haiti earthquake in 2010 as well as the fact that the organization’s CEO, Gail McGovern, gave misleading responses regarding how the group has spent millions of donor dollars.

Democrat Representative Bennie Thompson is introducing legislation that requires the American Red Cross to participate in regular audits from the United States government. The legislation also requires that the organization must open its books and cooperate with future Government Accountability Office (“GAO”) investigations.

Thompson stated that that portion of the legislation is particularly important because the Red Cross did not fully cooperate with the current GAO investigation that began 18 months ago. Thompson stated that, “There was initial pushback from the standpoint of getting information.” He then stated that the situation got progressively worse.

He described an encounter he had with McGovern last summer when she wrote to Thompson and requested that he end the GAO investigation. She further asked that if he had any questions, to call her private cell phone and that he refrain from communicating with her in writing.

Thompson stated that McGovern’s request was “unbelievable” and that, “I mean, I don’t know if this is an effort to convince me that anytime you got a problem you can call me on my cell phone and I can answer it . . . but, you know, this is not how Congress normally [does] business.”

Thompson further reiterated that he had never heard of an organization trying to end a GAO investigation. He is disappointed that the Red Cross chose to handle the investigation the way it did. “The public deserves and needs to know that the money is going for [that] which it is intended. If it’s going for the purpose intended, there should not be a problem in demonstrating and documenting that.”

The report that was generated as a result of the investigation stated that, “While coordination in response to disasters is clearly established in written agreements, the Red Cross’s role in recovery has not been as clearly defined up to now. Although the Red Cross plays a significant role in domestic disaster relief, the federal government does not conduct regular ongoing evaluation of its disaster-related services.” It further stated that, “The absence of regular, external evaluations of its disaster services that are publicly disseminated could affect the confidence of both the donating public and the federal agencies that rely on the Red Cross.”

In response to the GAO’s findings, the Red Cross issued a statement that the organization “has well-established plans in place to coordinate with FEMA in responding to disasters,” and that its practices are “consistent with several best practices that are ‘benefitting’ our coordination efforts.”

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