The Man-Made Disaster That Is Now The Red Cross

red_cross.jpg?width=300The American Red Cross has become a man-made disaster. It wasted millions of dollars in Hurricane Sandy aid through mismanagement and poor judgment. It compounded the problem by covering up its errors, hiring lawyers to prevent the public from finding out what happened to its donations.

Earlier this year, I expressed my disappointment in the Red Cross. It had raised $312 million for storm relief, but then stonewalled on how the money was spent.

This morning, we found out why. Thanks to the dogged investigation by Justin Elliott and Jesse Eisinger of ProPublica and Laura Sullivan of NPR, we learned how poorly the Red Cross responded to the Sandy disaster. Their article "The Red Cross’ Secret Disaster" is must reading for anyone who contributes to philanthropies.

The details are shocking. The Red Cross wasted millions of donated dollars through mismanagement, bad judgment and poor priorities, including a show of the appearance of providing assistance, at the expense of delivering the aid itself.

Anyone involved in emergency assistance or other charitable work should read the report. It is a primer on what not to do when providing emergency relief after a natural disaster.

The details of how it botched the relief efforts are laid out in Red Cross documents and are simply stunning:

• Despite plenty of advance warning of Sandy, the Red Cross lacked basics such as food, blankets and batteries to distribute to victims after the storm.

• Red Cross workers weren't provided with the usual GPS devices. Many got lost driving around the New York area and were unable to deliver aid and supplies.

• As many as half of the emergency meals prepared for Sandy victims were wasted or never delivered.

• The Red Cross failed to deliver food, water, shelter, cleaning supplies, blankets to survivors of Sandy until weeks after the storm. Mormon and Amish volunteers, on the other hand, were delivering supplies just three days after the storm.

• Red Cross supervisors ordered dozens of empty trucks to be driven around, “just to be seen,” in lieu of delivering relief supplies.

• Emergency response vehicles and other assets were also diverted from disaster aid to be seen as backdrops at news conferences for PR purposes; the Red Cross did this after other storms too, including Hurricane Isaac.

Perhaps most damning is evidence that the Red Cross fabricated claims of how many people were actually served by the charity. The Red Cross said that “17 million meals and snacks were delivered, there were 74,000 overnight stays in shelters, more than 7 million relief items like blankets and flashlights.” Internal documents cast doubt on those numbers, saying the charity’s ability to actually count what was delivered was “crippled.”

Now we know why the Red Cross hired the law firm Gibson Dunn to fight public disclosures of how Sandy money was spent. Gibson Dunn distinguished itself by making the absurd claim that Sandy activities were a “trade secret.” Eventually, the Red Cross backed away from that stance.

Regardless, there was lots of flailing to hide the mismanagement that took place after Sandy.

In June, I wrote, “Until it opens its books on Sandy, it's off my list of charities.”

The Red Cross takes in more than $1 billion a year in donations, but seems to have lost the ability to manage that money.

In light of the ProPublica and NPR investigation, I am crossing the Red Cross off my list of charities until the senior management is fired and a full audit is done of its accounting. Based on the investigation, it appears to be a terribly mismanaged charity.

Until that changes, it is unworthy of your money.

Courtesy of BloombergView

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  •  SNAFU they operate like the feds.

  • off my list

  • It is indeed a sad and dishonorable predicament the once venerable organization has come to. It is reduced to waste, fraud, abuse and greed at the top levels.

    In addition to the Red Cross scandal has there been any audits of how the federal dollars awarded to states has been spent?

    Shame on the Red Cross.

  • So the IMF is somehow controlling ISIS, Al Qaeda, Boko Haram, the Muslim Brotherhood and all the dictates in the Qur'an to take over the world and make it submit to sharia?

  • Yes, take off the tin hat!

    The Red Cross is a political servant of the Islamic Red Crescent who has kept Israel's version of the Red Cross out of the International Red Cross.  This, in spite of Red Crescent vehicles frequently being seen used to transport numerous terrorist, missiles and other weapons.

    Try dealing with reality instead of cuckoo conspiracy theories.

  • I have seen the Red Cross go down hill over the years just in terms of blood donations.  Their phlebotomists have gradually become more insensitive and often just plain stupid, their waits longer, shirts no longer being given, etc.

    The Red Cross faced a crisis as it performed very poorly during 9/11, wasting a lot of blood donations.

    Sadly, this does not surprise me that they handled Hurricane Sandy so poorly.  It may be that many previous great American institutions are just going down the hill as the U.S. goes further into debt and their are fewer resources.  Ordering the trucks to drive around to be seen is just pathetic. I'm glad the article came out, and I hope that this will be a call to the RC to get its act together, not just try to patch up its image.

    • The Red Cross CEO is paid $500,000 a year which sets the benchmark for those "Peter Principle  Promoted" managers below her.  

      In government and other large organizations (not-for-profit types) the "Peter Principle" dominates management and operations.  It's most profound results are in the current Regimes operations . . . always a "day late and a dollar short", or adjusting for the 21st Century, "months late and Billions of Dollars incinerated in the process".

      http://archive.rgj.com/article/20120604/NEWS20/306040030/Does-Red-C...

      http://en.wikipedia.org/wiki/Peter_Principle

      Until people in management positions (from obama on down) are held to standards of the Free Market the "Peter Principle" will continue to erode America; i.e., screw-ups by managers should cost them salary or get them summarily and immediately, FIRED, and in many positions, replaced by an incandescent light bulb . . . turned off.

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