Proposed Legislation Would Open Red Cross to Outside Scrutiny

Legislation proposed in response to findings from the Government Accountability Office's inquiry into the American Red Cross would force the charity to open its books and operations to outside scrutiny, ProPublica and National Public Radio report.

Following an eighteen-month investigation, the GAO report released this week, American Red Cross: Disaster Assistance Would Benefit From Oversight Through Regular Federal Evaluation (57 pages, PDF), found that although the Red Cross has a government-mandated role in responding to disasters, "no regular, independent evaluations are conducted of the impact or effectiveness of the Red Cross's disaster services." Rep. Bennie Thompson (D-MS), the ranking member of the House Committee on Homeland Security, who requested the inquiry, has unveiled the American Red Cross Sunshine Act (9 pages, PDF), which would require regular audits of the organization's finances and its response to disasters in the United States and abroad by the Treasury inspector general for tax administration, the Homeland Security inspector general, and the USAID inspector general. The bill also requires the Department of Homeland Security to submit to Congress an annual report on its partnerships with the Red Cross on "preparedness and response capabilities," and the Red Cross to "make prominent on its website" information about how to submit concerns to the organization's ombudsman.

The GAO report cites media coverage of the Red Cross's failures in its response to Superstorm Sandy and misleading statements by CEO Gail McGovern about how the group has spent hundreds of millions of donated dollars. McGovern had attempted to end GAO's inquiry in a 2014 letter to Thompson, who told ProPublica and NPR that the Red Cross did not cooperate fully with the inquiry. The organization also has faced questions about its work in Haiti from Sen. Charles E. Grassley (R-IA).

In a statement on its website, the Red Cross said it "believes there are several already existing mechanisms in place to evaluate our disaster response that provide considerable oversight of the American Red Cross," pointing out that it "the American Red Cross is not a federal agency, and our disaster relief activities are almost entirely funded by our generous donors — not the government — and carried out by a largely volunteer workforce."

"The public deserves and needs to know that money is going for which it is intended," said Thompson.

Justin Elliott, Laura Sullivan. "'American Red Cross Sunshine Act' Would Open Charity to Outside Scrutiny." ProPublica and National Public Radio 09/16/2015. "Report Finds Lack of Federal Oversight of Red Cross Disaster Assistance." House Committee on Homeland Security Press Release 09/16/2015. "American Red Cross: Disaster Assistance Would Benefit From Oversight Through Regular Federal Evaluation." U.S. Government Accountability Office Report 09/16/2015. "Statement by the American Red Cross on GAO Report." American Red Cross Press Release 09/15/2015.