WASHINGTON, Nov. 6 (UPI) -- Members of a House subcommittee used a Tuesday hearing to sharply criticize the American Red Cross for its handling of donations meant for victims of the Sept. 11 attacks.
The House Subcommittee on Oversight and Investigations looked at how best to protect those charitable contributions against fraud, waste and abuse.
Rep. James Greenwood, R-Pa., subcommittee chairman, said more than $1 billion has been collected in the effort, with the Red Cross accounting for more than $550 million.
This generosity toward victims of the attacks on the World Trade Center and Pentagon represents more than 10 times the amount collected in the wake of 1992's Hurricane Andrew, Greenwood said. Distributing such a massive fund represents a challenge beyond the experience of aid agencies, he said.
"It is critical that the trusts who serve as stewards of these gifts provide the public with an accounting of how they will be distributed and to whom," Greenwood said. "It is equally important that everyone who needs financial assistance receives it."
That goal is yet to be reached, however, based on the emotional testimony of two families who lost husbands and sole sources of financial support at the World Trade Center.
Russa Steiner, of New Hope, Pa., told the committee how weeks of aid applications garnered about $4,000 to cover herself and three children, including two in college. The Red Cross delivered a $27,500 check Tuesday afternoon, said her attorney, Robert Baldi.
Elizabeth McLaughlin, of Pelham, N.Y., said the Red Cross relief procedures were the easiest to deal with, but focusing on applications is very difficult in the face of grieving over her loss. She created an 18-page spreadsheet to keep track of all her requests to charities and government organizations, but said some survivors have given up on getting much help.
"Ironically, I have a master's degree in not-for-profit management. I do understand the magnitude of this project for charitable groups," McLaughlin said. "I appreciate the work they're doing ... but I don't think contributors to the various Sept. 11 funds thought their donations would be caught up in so much red tape and become such a source of frustration for the families."
Dr. Bernadine Healy, who is resigning as American Red Cross president, said there is no excuse for the delay in getting funds to Steiner, and emphasized the group's family charity program remains open for survivors. The charity expects its "Liberty Fund" would spend $300 million on relief efforts over the next six months, and an additional $200 million in the year after that.
Several charities have said donations would benefit survivors directly, Healy said. The Red Cross, however, stated from the beginning of the effort that its fund would support a wide range of programs in the aftermath of Sept. 11, including a strategic frozen blood supply, she said.
"Some people may not agree with some of the categories of use that we've outlined, but we have experience in these areas and exercised our judgment in the best interest of what we thought was wise and caring stewardship of these precious resources," Healy testified.
Subcommittee members and witnesses offered plenty of criticism concerning that judgment, especially after Healy said the Red Cross Board of Directors might wait two years before deciding how any reserve money in the fund could be turned over to victims' families.
New York Attorney General Eliot Spitzer voiced concern over such handling of donated funds. "I hear words like 'continuity of operations,' 'reserves' and 'reprogramming' (of funds) and we have two victims here at (the witness) table who haven't received the money they need," Spitzer said. "This is anathema to what the American public expects. When people were writing their checks ... and sending them in, in response to the (ads) the Red Cross was running, they believed the victims were going to get that money."
Rep. Bart Stupak, D-Mich., was even more blunt. "We came on the heels of Sept. 11 to make sure the money got to the (victims) ... the people opened their hearts and their wallets for the families, and for right now," Stupak said. "If you thought (to fundraise) on the heels of Sept. 11 and put out for everything you ever needed, I think you took advantage of a very tragic situation."
Healy reiterated the Red Cross has been repeatedly upfront in explaining what services would benefit from the Liberty Fund. The charity also will work closely with an initiative, started by Spitzer, to have the various funds coordinate their efforts via a Web-based database and template for aid requests, she said.
