AAN Investigates: Is This Well Known Charity a Fraud?

Is the American Red Cross a total fraud? The charity was once famously called out by Fox News Bill O'Reilly for only planning to donate 25 percent of the proceeds of their "Liberty Fund" to the families of those killed on 9-11.

It seems like the historic, controversial charity is at it again. As the Huffington Post reports:

In late 2011, the Red Cross launched a multimillion-dollar project to transform the desperately poor area, which was hit hard by the earthquake that struck Haiti the year before. The main focus of the project — called LAMIKA, an acronym in Creole for “A Better Life in My Neighborhood” — was building hundreds of permanent homes.

Today, not one home has been built in Campeche. Many residents live in shacks made of rusty sheet metal, without access to drinkable water, electricity or basic sanitation. When it rains, their homes flood and residents bail out mud and water.

The Red Cross received an outpouring of donations after the quake, nearly half a billion dollars.

The group has publicly celebrated its work. But in fact, the Red Cross has repeatedly failed on the ground in Haiti. Confidential memos, emails from worried top officers, and accounts of a dozen frustrated and disappointed insiders show the charity has broken promises, squandered donations, and made dubious claims of success.

The Red Cross says it has provided homes to more than 130,000 people. But the actual number of permanent homes the group has built in all of Haiti: six.

After the earthquake, Red Cross CEO Gail McGovern unveiled ambitious plans to“develop brand-new communities.” None has ever been built.

Aid organizations from around the world have struggled after the earthquake in Haiti, the Western Hemisphere’s poorest country. But ProPublica and NPR’s investigation shows that many of the Red Cross’s failings in Haiti are of its own making. They are also part of a larger pattern in which the organization has botched delivery of aid after disasters such as Superstorm Sandy. Despite its difficulties, the Red Cross remains the charity of choice for ordinary Americans and corporations alike after natural disasters.

This is nothing new. In a piece scrutinizing the charity's work in the wake of Hurricane Katrina, blogger Allan Bellows noted:


The three million unpaid volunteers for the Red Cross are an able, well-intentioned bunch… and they certainly do a lot of good. But recently the Red Cross organization itself has undergone some close scrutiny, and there are some troubling findings.

According to Richard M. Walden (president and CEO of Operation USA), it is estimated that 70% of the $1.2 Billion donated to Katrina-related donations went to the Red Cross, yet the Red Cross is fully reimbursed by the government for any shelters or emergency services they provide. Repeatedly, the Red Cross has run into trouble for spending much less on disaster recovery than they collect, shuffling the extra funds into their “national disaster account,” where it can be used for purposes other than that it was collected for. That’s the sort of trouble they saw in the aftermath of the 1989 San Francisco Bay Area earthquake, and after 9/11.

Despite landing in trouble for soliciting more donations than they need and squirreling the rest away, the Red Cross continues to operate this way. The organization makes a total of about $3 billion annually, about half of which is from selling donated blood. Some of this surplus money ends up in disaster relief, but it seems that much does not. Last year alone, the Red Cross spent $111 million in fund raising, and their CEO Marsha Evansmade just under $652,000. It seems the the main value they offer is the free help of their volunteer force.

In the wake of Hurricane Sandy, which destroyed the east coast. There the organization didn't do much better:

In addition, the investigation found that Red Cross officials in the nation's capital deepened the charity's incoherent response by "diverting assets for public relations purposes," according to this internal Red Cross report. Furthermore, the distribution of relief supplies was "politically driven."

Red Cross supervisors during Isaac directed dozens of trucks that are most commonly used to deliver aid to be driven around mostly empty, "just to be seen," according to one of the drivers, Jim Dunham.

"We were sent way down on the Gulf with nothing to give," Dunham told investigative reporters. In many ways, he added, the Red Cross's relief effort was "worse than the storm."

During Sandy, which ravaged the East Coast, emergency vehicles were diverted from relief work to be used as props for press conferences, which angered disaster response personnel who were attempting to mitigate the storm's damaging effects.

Following both storms, the investigative report continued, problems inherent in the Red Cross left a number of victims in dangerous circumstances in which they were vulnerable to harm, as the charity's internal assessments even stated. For example, victims who were handicapped "slept in their wheelchairs for days," because Red Cross officials had failed to secure adequate numbers of cots.

The verdict? The Red Cross is a complete and utter disaster.

Source: AAN