Senator rips Red Cross

WASHINGTON – The American Red Cross was warned years before Katrina hit to resolve its internal disputes or risk a repeat of snafus that plagued the Sept. 11, 2001, relief effort, according to internal documents made public by a Senate panel Monday.

Thousands of pages of Red Cross e-mail, corporate documents and whistleblower complaints paint a picture of an organization whose mammoth structure contributed to the charity’s uneven response to Hurricane Katrina.

Sen. Charles Grassley, R-Iowa, calling for immediate changes, warned the Red Cross board Monday that ” ‘business as usual’ cannot continue.” He said the documents raise questions about the Red Cross’ ability to keep close watch on billions of dollars in donations.

Grassley, as Finance Committee chairman, oversees charitable organizations. His committee released the documents Monday.

In a statement, the Red Cross said it would fully cooperate with the committee’s review.

“The American Red Cross is committed to learning from our prior challenges and making the necessary changes,” the charity said Monday, noting it had recently launched an independent audit to review operations.

A House report earlier this month on the Katrina response found the Red Cross was overwhelmed by water, food and supply shortages as well as a disorganized shelter process. Some lawmakers have called for a change to the national response plan that gives the Red Cross the primary role and the dollars that flow with it.

Replying to a Senate inquiry, the Red Cross said this month it was working to improve coordination with FEMA and local charity groups.

According to the documents, the Red Cross:

* Spent $1.77 billion of the roughly $2 billion it raised for the 2005 Gulf Coast hurricanes; it says its disaster relief effort will cost $2.12 billion.

Of that unaudited cost estimate, about 6 percent will cover administrative costs of fundraising and management; the amount does not include $265 million the charity expects to receive from FEMA as reimbursement for housing.

* Acknowledged it had spent $169.3 million, less than one-third, of the $570.1 million it raised for disaster relief following Indonesia’s tsunami in December 2004.

The remaining money will be disbursed over the next five years for rebuilding efforts, including disease control, job growth and disaster readiness.

* Reported it had no fixed deadline for hiring a CEO to replace Marsha Evans, who stepped down in December. Interim CEO Jack McGuire is serving in the meantime.

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