Lawmakers Propose Changes for American Red Cross

By Elizabeth Schwinn

Sen. Charles E. Grassley today plans to introduce legislation to revamp the American Red Cross and make it easier for government officials to investigate the organization, a move that follows widespread criticism of the charity's response to recent disasters.

The proposed legislation — which would be the first change to the Red Cross charter since Congress approved the original charter more than 50 years ago — would enshrine in federal law several changes to the organization's management, as well as impose new reporting and accountability requirements on the Red Cross.

Senator Grassley, an Iowa Republican who is chairman of the Senate Finance Committee, said he hopes Congress will complete action on the legislation this week. Rep. George P. Radanovich, Republican of California, plans to introduce a companion measure in the House of Representatives.

The bill goes beyond the revisions requested by the Red Cross itself in October, when it asked lawmakers to reduce the size of the group's board and limit its role in day-to-day oversight of the organization (The Chronicle, November 9

In addition to making the requested changes, Senator Grassley, who has been a persistent critic of the Red Cross, would add more outside oversight than the charity sought. His legislation would specifically permit the Government Accountability Office, the investigative arm of Congress, and state charity officials to oversee and review the Red Cross. In addition, the measure would require the Red Cross to create a new position, an ombudsman, who would have access to all Red Cross employees and documents, and who would report to Congress every year on the activities of the organization.

Among the changes sought by the Red Cross, the bill would:

Set new limits on the board's role. The Red Cross Board of Governors would focus only on governance and oversight of the organization's strategy, rather than on day-to-day management of the organization. The board chairman would no longer be the "principal officer" of the organization.

Reduce the board's size. The board would shrink from 50 members to no more than 20 by March 31, 2012. The minimum size of the board would be 12.

Simplify the board's structure. All board members would be nominated by a new selection committee made up of members of the Board of Governors. Several board committees would be eliminated, and the executive committee's role would be reduced.

Create an advisory council. Separate from its board of directors, the national office of the Red Cross would get advice from an advisory panel made up of government representatives who are appointed by the president of the United States. Currently, the presidential appointees are voting members of the board.

Red Cross officials said they supported the legislation and hoped for quick passage. "The Red Cross views this legislation as vital to modernizing its governance structure to meet the demands of the 21st Century," the organization said in a statement.