June 16, 2016; WBUR-FM (Boston Public Radio)
Senator Charles E. Grassley of the Senate Judiciary and Finance Committees issued a letter on Thursday essentially declaring that the American Red Cross (ARC) is stonewalling his investigation on questions of accountability where its activities and spending in Haiti are concerned. The ARC received approximately $487 million dollars to provide food and shelter in the aftermath of the 2010 earthquake.
Eventually, questions began to be raised about the organization’s effectiveness in Haiti, with charges about inefficiencies and waste. Grassley mentioned that reports also surfaced about the ARC viewing the disaster as a public relations and fundraising opportunity.
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Most of the work the ARC did in Haiti under the Haiti Assistance Project (HAP) was in fact subcontracted to other organizations. Still, the Red Cross retained around 25 percent of that money, or $124 million, for its own operations and program costs. The rest, around $367 million, went to contracts with partner agencies, but the whole picture is obscured by a “complex yet inaccurate process to track…spending.” Consequently, the organization has been unable to answer questions about, for instance, how much went to oversight and evaluation activities—an important accountability measure, as far as Grassley is concerned. He writes that the ARC blames its lack of precision on its reliance on “nonprofit accounting standards which allow for the use of estimates rather than actual numbers.”
In the same vein, Grassley charges that the ARC attempted to stop and then successfully limited a GAO audit, whereupon it still refused to respond to requests for information. And, finally, it has downsized its own Investigations, Accountability and Ethics (ICE) unit from 65 full-time employees in the immediate aftermath of Katrina to just three today. Further, that unit reports to the organization’s general counsel, who was the contact pushing limits on the purview of the GAO review.
All of this, writes Grassley, creates substantial and fundamental concerns about ARC as an organization. Readers can go here to read the letter and the Red Cross’s response to queries.—Ruth McCambridge