Iowa Senator Pushes Red Cross to Reorganize

Sen. Chuck Grassley (R-IA) releases thousands of pages of internal documents that raise questions about the Red Cross' ability to respond to the next big disaster. He began investigating the charity in the wake of Hurricane Katrina.

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New documents released today are adding to the pressure on the Red Cross to reorganize. They detail complaints about the organization and allegations of misconduct. The papers were released by Republican Senator Charles Grassley. He's Chairman of the Senate Finance Committee, and as NPR's Howard Berkes reports, the documents raised questions about the Red Cross' ability to respond to the next big disaster.

HOWARD BERKES reporting:

The Red Cross has been under Congressional scrutiny since some of its own volunteers complained about the response to Hurricane Katrina. One in particular has been cited by members of Congress and reporters. Betty Bruner took off her Red Cross vest forever after 10 days of trying to get help for Hancock County, Mississippi, ground zero for Katrina.

BETTY BRUNER (Red Cross Volunteer): I've always been a volunteer for the Red Cross for 36 years because they came in Hurricane Camille immediately they started helping. But this time I was ashamed to be wearing the Red Cross vest. I'll never put it on again.

BERKES: It was also the sudden resignation in December of Red Cross CEO Marsha Evans, the group's fourth leader in six years. That and the Katrina performance attracted the attention of Charles Grassley, Chair of the Senate Finance Committee, who today revealed more complaints including allegations of criminal and staff misconduct.

Senator CHARLES GRASSLEY (Republican, Iowa): The public needs to have full confidence in the Red Cross, and I think that certain things happening not only in Katrina but going back to 9/11 have shaken that confidence and it's important to rebuild public confidence.

BERKES: Grassley wouldn't describe the allegations of criminal and staff misconduct, and documents detailing them were not released today by the Senate Finance Committee. But thousands of other pages were made public including a report from Red Cross Katrina volunteers from Grassley's home state of Iowa.

Sen. GRASSLEY: They said that there was not the effort to work with local charitable organizations, buying so many meals that they had to throw a lot of meals away. A lot of money being wasted, basically. And no one really being in charge.

BERKES: Grassley blames the failures of Katrina and the repeated resignations of CEOs on the way the Red Cross is governed. He and others describe the group's board as bloated with 50 members. Some come from the President's Cabinet and are appointed by the White House, but they don't attend board meetings according to documents released by Grassley's office. Others are selected by local chapters, but they tend to have parochial interests according to Grassley and Jay Lorsch of the Harvard School of Business.

Mr. JAY LORSCH (Harvard School of Business): The current board is really made up of too many people who have an ax to grind. It might be a good idea for the American Red Cross to follow more the model that's been set up in corporate American with more independent directors.

BERKES: The documents released today also show a half-million-dollar public relations effort to boost the image of the Red Cross as it cuts staff and programs and as its disaster relief fund dried up. Again, Jay Lorsh of Harvard.

Mr. LORSCH: It may take a little longer to build a reputation and rebuild its reputation by continually doing a good job, by being competent if you will. That's what's really going to build a long-term, positive image of the Red Cross and enhance its relationship with the American public.

BERKES: The Red Cross declined NPR's request for interviews for this story, but it did issue a written statement saying it is committed to learning from its challenges. The Red Cross says it bears an exceptional burden to meet and exceed expectations. And it is organizing what it's calling a summit meeting on governance. Harvard's Jay Lorsh will be among the governance experts providing guidance. That'll be the second time Lorsh has done that for the Red Cross. Howard Berkes, NPR News.

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