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June 16, 2016

Grassley Study Blasts Red Cross on Haiti Spending and Openness

Senator Charles Grassley issued a scathing report Wednesday on the American Red Cross’s response to the 2010 Haiti earthquake, saying the charity spent tens of millions of dollars more on internal expenses than it has acknowledged and misled his office about its cooperation with government investigators, ProPublica and NPR report.

According to the review, the Red Cross spent a quarter of the nearly $500 million it raised for Haiti relief on fundraising and management, a contingency fund, and a catchall category the charity calls “program costs.” Red Cross leaders have consistently said the organization spends 9 percent of donations on management and administration, according to ProPublica and NPR, whose investigations of Red Cross disaster response prompted Mr. Grassley, a frequent critic of large nonprofits’ operations, to launch an inquiry early last year.

Among other charges, the report alleges that Red Cross officials repeatedly gave the Iowa Republican’s staff revised estimates of Haiti project costs and that CEO Gail McGovern made false statements about the charity’s cooperation with a Government Accountability Office review of its work and spending. In an interview with the news outlets, Mr. Grassley said getting information from the organization “was like pulling teeth.”

In a statement, the charity said it had not yet seen the senator’s report but it defended its spending and transparency, saying its project costs were “entirely justifiable given the size and complexity of the Haiti program” and the scale of destruction wrought by the quake. “At no point did the Red Cross refuse to provide requested information,” the statement said.