Red Cross Effort To Shut Down Inquiry Fails; Report Calls For Outside Oversight

The American Red Cross is facing new criticism today as government investigators and a congressman call for independent oversight over the long-venerated charity.

Federal legislation is being unveiled that would force the Red Cross to open its books and operations to outside scrutiny — something it has repeatedly resisted.

The proposed American Red Cross Sunshine Act comes in response to a report by the Government Accountability Office, also being released today, that finds oversight of the charity lacking and recommends that Congress find a way to fill the gap.

The GAO inquiry cites reporting by NPR and ProPublica about the Red Cross' failures during Superstorm Sandy and misleading statements by CEO Gail McGovern about how the group has spent hundreds of millions of donated dollars.

Investigators concluded that the Red Cross needs "regular, external, independent and publicly disseminated evaluations."

Rep. Bennie Thompson, a Democrat from Mississippi, is introducing the bill, which he says he hopes will make that possible. The legislation calls for regular audits from the departments of Homeland Security and Treasury, and from USAID. It also says the Red Cross must open its books and cooperate with all future GAO investigations.

Thompson said that part is especially important because he says the Red Cross did not fully cooperate with this GAO inquiry that began 18 months ago.

"There was initial pushback from the standpoint of getting information," Thompson said in an interview. Then, he says, the situation got worse.

Last summer, he says, he received a letter from McGovern. She wrote to Thompson, ranking member of the House Committee on Homeland Security, and asked him to "end the GAO inquiry," according to a copy of the letter obtained by NPR and ProPublica. McGovern gave the congressman her private cellphone number and asked that he not communicate with her in writing.

It was "unbelievable," Thompson says. "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 cellphone and I can answer it ... but, you know, this is not how Congress normally [does] business."

The GAO report was completed despite the Red Cross' efforts to end the investigation. But Andrew Sherrill, who led the GAO work, confirmed that investigators did not receive the access they wanted.

Thompson says he has never heard of an organization trying to end a GAO inquiry and says he is "disappointed" that the Red Cross did not comply with the spirit of the inquiry into how it spent donors' money and what it accomplished.

"The public deserves and needs to know that the money is going for [that] which it is intended," Thompson says. "If it's going for the purpose intended, there should not be a problem in demonstrating and documenting that."

The Red Cross declined requests for an interview and did not respond to a question about its cooperation with the GAO inquiry.

In a statement, the Red Cross stressed that it is not a federal agency. The group said it "believes there are several already existing mechanisms in place to evaluate our disaster response that provide considerable oversight." The statement cited among other things the group's ombudsman office, its board of directors, and regular after-action reviews.

The Red Cross was chartered over a century ago by Congress and operates as a public-private hybrid: While it is funded mostly by private donations, it has an official role in the United States' disaster response plan. The Red Cross receives a variety of benefits from the government, including tens of millions of dollars in funding in recent years. It also enjoys a $1, 99-year lease on government land in Washington, D.C., that the charity uses for its headquarters.

Patrick Roberts, a professor at Virginia Tech who specializes in disasters and emergency response, says the Red Cross has lagged behind other charities when it comes to oversight.

"The Red Cross is a quasi-public organization," Roberts says. "It has a responsibility to the public above and beyond other nonprofits. It is possible to track money and numbers in a better way and figure out how much the Red Cross is spending on what."

In the meantime, the Red Cross is also under review on the other side of Capitol Hill, by Senate Republican Chuck Grassley of Iowa, over the charity's work in Haiti.

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