Washing My Hands of Dirt at Red Cross
No more writing about the Red Cross this week. The whole thing just depresses me. My quotes in the New York Times are here and here. The Red Cross "subordinate" is identified here and here (it's worse, a lot worse, than just being his secretary). The impact this may have on donors is here. The important questions about transparency (mainly did Everson spend a dime of donor money on this?) are here. And potential replacements for Everson are here.
Labels: American Red Cross, Mark Everson, Red Cross, sex scandal
posted by Trent Stamp at 11:49 AM
12 Comments:
Let's be real here. Hurricane Katrina received the largest outpouring of donor dollars in the history of any catastrophe. The dollar value has been quoted as being $4.25 BILLION (although I suspect the dollar amount may be higher). The Red Cross is known to have received the lion's share of the money: $2.3 billion.
Evacuees, whom I prefer to call SURVIVORS, are still in need. During the past 27 months I have received tons of frantic phone calls, emails and letters from survivors across the country describing in painful detail how they've walked into local Red Cross offices seeking help and have been turned away with the words: "We have no money left."
I have spent a lot of time tracking donor dollars meant to help survivors. If the money hasn't reached its intended target, then the question has always been: "Where is the Money?"
The answer lies in the internal records of the American Red Cross. The same can be said about the records of FEMA, The United Methodist Committee on Relief (UMCOR) who received from FEMA an initial $66 million to set up Katrina Aid Today -- a consortium of 10 nonprofit agencies -- all of whom also received donations earmarked "Katrina."
My advocacy work on behalf of Katrina/Rita survivors is well known and documented.
The fact that I continue to question the lack of accountability on the part of the Red Cross is simple: as stated earlier, most of the donations went to the ARC. Several months ago when I stumbled upon the startling fact that $25 million donated by Kuwait to the Red Cross and used by the ARC for their own infrastructure instead of helping those weary and hungry people who continue to be turned away from their doorstep is a red hot blazing sign that something is just not right at the Red Cross.
We cannot have survivors continue to die of neglect, or go hungry, or remain homeless and not look to these agencies who were entrusted with money that the world believed would help these people.
After my post of yesterday I received several phone calls and emails from both Red Cross and IRS insiders. Surprise, surprise: all of them spoke of misappropriated dollars within the Red Cross and oddly enough, within the IRS, via the leadership of Mark Everson!
So who's watching whom? And who's tending to the blood money once known as Katrina donations?
Hey, it's not difficult to answer this question. The ARC's Board of Directors which consists of White House appointees such as Michael Chertoff, Condoleeza Rice and other "untouchables" are as sympathetic to the needs of the poor and the reality of life post-Katrina as Mark Everson's approach to Katrina recovery.
The fact that Paige Roberts lost her home to Katrina and took solace in the arms of Everson does not fall under "Hurricane Recovery." Nor does it sanction Everson's improper use of donor dollars.
Kirby Sommers
P.O.Box 237073
New York, NY 10023
k_sommers@katrinahomedrive.org
"Several months ago when I stumbled upon the startling fact that $25 million donated by Kuwait to the Red Cross and used by the ARC for their own infrastructure instead of helping those weary and hungry people who continue to be turned away from their doorstep is a red hot blazing sign that something is just not right at the Red Cross."
Actually, the Red Cross did the only thing they could do with the money - per the requirements of the grant. So before you go and spread these harmful rumors, you should do a better job of fact finding
Every choice has a consequence. As an ethics speaker, I address audiences around the country on that very topic. http://www.chuckgallagher.com I understand full well the implications of that statement, as I spent time in Federal prison for my choices. In this case, Mr. Everson's actions don't warrant a consequence as extreme as prison, but he has experienced real consequeces none-the-less. Perhaps others can learn from his very painful mistake.
I appreciate your link to the blog on how it will affect a donor. As the founder of a small non-profit I find non-profits run as corporations hard to take. Selling an image or rattling off the best line is not why I'm in this line of work.
Then why do you rate them with 4 stars? Maybe you need to revamp your rating system. Numbers don't tell the whole story as is apparent here.
It's just a little sad to hear about organizations falling apart because of inner conflicts. It annoys me (but then this is the world we live in) how charities and good causes are put aside in place of personal scandals or business competition. While what Mr. Everson did was inexcusable, I wish there was a better handling of matters. He also has his own family to protect.
Red Cross Cover-up in Firing Mark Everson? Let's take a closer look:
The American Red Cross (ARC) fired CEO Mark Everson on November 27 for having a "personal relationship" with Paige Roberts, CEO of the Southeast Red Cross Chapter. Both are married, and Roberts is pregnant with Everson's child.
This red hot, Red Cross sex scandal has sent shockwaves throughout the nonprofit community. But is there something more sinister here?A conspiracy perhaps? Could the Red Cross' quick as lightning firing of Everson be a cover-up for a much more serious offense?
The ARC has stated it is undertaking a forensic audit of monies spent by Everson to determine if any of the charity's money was used inappropriately as he romanced Roberts. If, indeed, he is found to have dipped into Red Cross funds, then isn't this called "embezzlement?" Don't people go to jail for this?
The whole thing is moving very quickly – too quickly for this sluggish bureaucratic agency for it to make sense to those of us who have kept an eye on their every move for the past several years as we've waited for Katrina recovery donations and grants to filter down to needy survivors.
Personally speaking, I've witnessed so much suffering on the part of individuals and families that every misspent, missing, or misappropriated dollar is one dollar too much to spare. I'd rather see, as well as I imagine all who donated to the Red Cross and all who remain in need, for Katrina donations and grants to be used to relieve the mass human suffering which still exists.
During the past few days I've noticed a lot of Red Cross information regarding embezzlement and fraud within the Red Cross disappear from websites – even AOL web pages! In fact, the entire website for the Southeast Red Cross chapter is gone! All that's left is their address, phone # and the words: "Website under construction."
I noticed the same thing right after the Red Cross was forced to publicly speak about the Means to Recovery program. Other volunteers and a few journalists also witnessed the changing and disappearance of information.
There is no doubt in my mind that Everson misused Katrina donations. He was having an affair with someone connected to Katrina – and with both parties being married those dalliances had to be paid with money neither one's spouse could trace. Red Cross money. Katrina donations. Survivors money.
The questions everyone should demand from the ARC are: how much money was misappropriated (in addition to the $10,000 the Red Cross gave Everson upon his departure for "health care"), and why is the Red Cross not referring to possible misappropriated funds as embezzlement?
I'll tell you why: having the CEO of the American Red Cross accused of embezzlement would mean he would go to jail. And, it would stop people and corporations from donating which would be even more disastrous to the Red Cross than any other fiasco to date – the Everson-Paige affair included.
For this reason, I suspect the Red Cross will never disclose its findings of impropriety against Everson (and possibly Roberts, if they look into the Southeast Mississippi chapter's records) citing confidentiality concerns. The Red Cross will then publicly pat themselves on the back for having done a splendid job and close the door on the whole sordid episode.
But, wait…there have been serious fraud and embezzlement problems we can trace. I'll list some of them here:
RED CROSS MISSAPPROPRIATED DONOR DOLLARS: Quick Review
1. Eileen Therese Saxon of the Asheville, North Carolina Red Cross chapter charged with embezzling $165,000 – 9% of its $1.25 annual budget. (Source Ashville Citizen Times)
2. Karen Shuerger, former assistant director of accounting at the Orange County, California Chapter of the Red Cross has been sentenced to six months in Federal prison, ordered to pay restitution in the amount of $110,000 and when she is released, she will also serve 3 years of supervised release and six months of home detention. (Source: NY Times)
3. Red Cross Director Jonathon A. Jarrell of Virginia indicted on one count of embezzlement. Jarrell allegedly embezzled about $16,452 from the chapter between November 2004 and July 2006.
4. Joseph Lecowitch, CEO of the Hudson County Chapter in New Jersey, and his bookkeeper Catalina Escoto. Escoto gave herself $75,000 in bonuses. According to prosecutors, these two stole well over $1 million Red Cross donor dollars squandering it on gambling and each other. (Source: NY Times).
This doesn't include all the money that was lost to volunteers and paid staff during the early days of Katrina, nor does it include reports by Red Cross personnel about bags and bags of cash disappearing.
In a New York Times piece by Stephanie Strom, titled "Red Cross Quietly Settles Case of a $120,000 Theft," Strom states that the Connecticut chapter of the American Red Cross settled for less than half of the money from its insurance company. And goes on to add that this isn't an isolated case. If the Red Cross is accustomed to going to their insurance company and taking less than what has been stolen, rather than pursue the matter in court just to keep it out of the headlines – then both donors and their intended recipients have been wronged.
Daniel Borochoff, president of the American Institute of Philanthropy, a charity watchdog group, has said that the Red Cross should be subject to state oversight like other charities. The Red Cross is only subject to federal oversight – which they claim is enough vigilance.
Apparently not.
The New Jersey $1 million Red Cross theft is reported to have been discovered due to sloppy bookkeeping. I would venture to guess this would not be the case if Mark Everson is discovered to have used Red Cross money inappropriately. As former head of the IRS, Everson would have knowledge of the most intricate schemes imaginable. It makes the mind race with all sorts of heart crushing scenarios.
According to The NonProfit Times there have been cases during the past few years where the charities involved refuse to make the full facts known to the public. "In our view," they state, "this sort of selective disclosure (spin) is wholly inadequate. When a charity is using funds raised from the general public, it has a duty to account fully to the public. If that is not happening, then it is time to make it happen."
If Everson is found to have ripped off donor dollars, he should go to jail. Additionally, the Red Cross should replace every stolen dime from all sources and put this money back into the till. No more lies, no more spin. Give us accountability or don't continue at all.
Donors to the American Red Cross should be outraged.
Kirby Sommers
I haven't seen anything that verifies possible misuse of Red Cross funds by Everson or Roberts. It is good that there will be a forensic audit, in order to verify if funds were indeed misused.
It is not unusual for Red Cross employees and volunteers to travel for training and conferences in order to learn ways to make the organization better able to serve its clients, so travel expenses in and of themselves do NOT equate to misuse.
What I would like to know is why the Board of Governors can't keep a President? What is the common demoninator here -- the President, who seems to come and go, or the Board? The Board seems pretty stable. Sooo, maybe it is the Board of Governors that is the problem and not all the different Presidents and interims. Have Presidents made mistakes -- yes, they are human. But apparently they can only make one or maybe only one that is perceived to be a spectacular error. Maybe the "errors" were not as spectacular as reported, once thoroughly researched, investigated, etc. but by that time there is no saving the person.
Unfortunately, Red Cross chapters will have to face the fall-out even if only one of the 750+ chapters was "at fault". But it is the chapters that always have to deal with the fallout of whatever "debacle" happens.
And, of course, chapters are not immune to their own issues -- employee embezzlements, failure to provide stellar customer service, failure to educate the public on just what emergency disaster relief is all about.
And it isn't just the Red Cross that has "misuse" issues. I read a statistic a number of years ago in an article about theft bonds for employees and internal accounting controls. The statistic cited, as I remember it, stated that the vast majority of non-profit embezzlements happen in churches. Go figure -- what is going on in peoples hearts and heads?
As the local ARC chapter is preparing to sending off a team of volunteers to help with the flooding disasters in the Pacific Northwest, having already sent a team to So Cal to help with the fires, I want to reiterate that this charity is still effective on a local and regional level.
Also keep in mind that they provide half the nation's blood supply.
This scandal and their continuing CEO debacle not only reduce dollars coming in but volunteers, as people do not want to work with an unworthy charity.
Keep in mind that it would not be seamless to replace them.
the real tragedy is that ARC management since Catherine Pauls ran the MACS Project has just about destroyed what used to be the most well-oiled machine in I.T. These days it is pathetic -- servers are being relocated to Chicago but don't work, NBCS bugs continue to waylay tier 2 and 3 support, and management is so clueless all they know to do is re-orgs recommended by them by some newbie consulting firm. Divisions have been redefined and/or randomly scrapped so much that no one knows where to even forward a Clarify case! So who gives a d*mn about mark everson? ARC is in triage and needs to go back to what they looked like in 1999 ASAP.
The response of the ARC to me is a smoke screen. The organization has a long history of cover-up -- such as volunteer complaints being swept under the rug -- and I mean serious things -- such as staff card fraud, assaults, large amounts of missing product. So now they want us to believe that they are on top of things by firing Everson and subjecting his activities to a forensic audit?
I'd like to see a forensic audit of the Investigations, Compliance, and Ethics group. That would really show what the organization is up to!
Red Cross under FBI Eye for
Alleged Katrina Fraud, by Kirby Sommers
100 Homes 100 Day Program brings Red Cross under Scrutiny Again
IN FOCUS: ACCOUNTABILITY
The American Red Cross, the largest recipient of Katrina donations to the tune of $2.3 billion, is once again accused of impropriety and fraud. The FBI was tipped off this week regarding harsh allegations within the hurricane recovery community that 100 Homes in 100 Days, a hurricane relief program in Mississippi is riddled with problems.
The accusations include failure to follow required Red Cross procedures, improper use of money and supplies, and “partnering” with a possible felon, which is in violation of Red Cross rules. The allegations are wide ranging and may prove to be criminal. A Red Cross Press Release dated March 26, 2007 states:
“Five organizations lead a coalition effort to renovate and rebuild 100 homes in 100 calendar days. The American Red Cross, Salvation Army, Mississippi Home Again, Hope Has a Face Foundation and Jackson County Community Services Coalition have created a project process that focuses on rebuilding entire neighborhoods in a compressed timeframe.”
100/100, as it is referred to within the agencies, was funded through the Red Cross’s Means to Recovery program allotting a cap of $20,000 to be used per home. The Salvation Army added another $10,000.
Allegedly, Paige Roberts, head of the Southeast Mississippi chapter tapped into all monies available up to $30,000 per household for the program. That would be the same Paige Roberts that Mark Everson, former CEO of the American Red Cross got fired for on November 27, 2007. The Red Cross cited his “personal relationship” with Roberts reflected poor judgment on Mr. Everson's part diminishing his ability to lead the organization in the future.
Among the specific problems was that monies used by the program for each home were not used for the homeowner in whose name the money was drawn. Also in question by those working in hurricane recovery is that all money for all homes was “taken” even though the home may not have been repaired or rebuilt.
Within the $30,000 disbursements was a charge in the amount of $2,200 for each house for garbage removal. “We were told $1,600 was to be spent as salary for a supervisor for every home in the 100/100 program, with the balance of $600 going for a dumpster,” a former recovery specialist said. “That did not happen, no one saw these people. But these checks were issued.”
“Other organizations did most of the work on those homes before 100 Homes ever got to them. So they may have painted someone’s home, or did some minor work, but they pulled down $30,000 per house without ever telling the family about the money.” Carla Poole a case manager said of the program. “I even sent an email to the Means to Recovery people in national regarding our concerns, but our efforts for accountability were met with a brick wall,” Poole added.
“Those houses only needed minor work,” said David Kilbern who turned his retirement and into a commitment to help the rebuilding effort.
“The way Paige Roberts behaves, well, it’s like she’s not accountable to anyone. Like she had a connection higher-up. She doesn’t follow the rules and she’ll tell you to your face, she doesn’t have to,” said Michelle Wilson executive director of Rebuild Jackson County. “After we found out about some of the things that were happening with the 100/100 program, we weren’t going to fund any of it. Paige wanted me to approve a request, but without documentation, without receipts, I denied it.”
Fact of the matter is many folks involved in the hurricane recovery process have complained about lack of paperwork on all homes in the program. No paperwork, no receipts and even more disturbing are the accusations that monies withdrawn in the name of a family were not fully used for that family. Complaints of commingling and of outright fraud are rampant. The question: Where is the money continues to echo throughout the community.
Only 65 homes were completed, if one can use that term in light of these revelations, on July 4th when the program officially came to a close.
Some involved with the rebuilding effort have also alleged the program spearheaded by Jim Yancey of Jackson County Coalition and Keith Canfield of Hope Has a Face requested from homeowners they hand over their grant money before they did any work on their homes. Both men were contacted for this story, but neither one returned the calls.
Additionally, Mr. Canfield is reportedly someone with a dubious history. There are reports substantiating claims Canfield was involved in selling the same home twice in Tennessee.
Another partner organization has also come under fire. MS Home Again created by former Red Cross volunteers Annie Card of Peterborough, NH and Tammy Agard of Montana lost their non profit 501 (c) 3 status. Both women reportedly left town “in a hurry,” said a recovery specialist who wishes to remain anonymous. “Those two are hiding something, they ran off the day after the program closed and people are looking for them,” he added.
Gary Frank, a 53-year old disabled homeowner, said he spent $52,000 of his own money before the group arrived to help him. “They painted and they called Roto Rooter,” Frank said of the 100/100 group. “But I didn’t know anything about the money and I hadn’t heard about it until now.” Mr. Frank said he received a Red Cross voucher in the amount of $3,200 for furniture and another one for Lowe’s for $1,500. But added, “if I add that amount up it sure isn’t $30,000 and I think people have a right to know about this.”
Annie Garry, a feisty 70 year old also lives in one of the homes with her daughter. “They were supposed to have put screen windows in for me, but never did, she said. “One side of my house got siding, one side, and I still need some help with my air conditioner. I got a sofa from the Red Cross and they paid off my Lowe’s bill. I think that was for $1,300, but I still need screen windows,” she added.
In fact, none of the residents I spoke with had any knowledge of the monies that were allegedly collected in their names, nor had received any of the case management work that is supposed to be done in tandem with applying for and receiving Red Cross Means to Recovery long term financial help.
Russ Paulsen, executive director of the Red Cross Hurricane Program told the New York Times in a piece called 'Red Cross Faces Criticism Over Katrina Aid Program for Hurricane Victims': “Many organizations use case management as a way of preventing fraud.”
If this is the case, then Red Cross with their partner agencies in the 100/100 program certainly did nothing to ensure donor dollars were safe and spent for recipients. Most question the exact amount of help given to Katrina survivors from the monies collected in their name by this organization.
When the Red Cross recently ousted Mark Everson, it promised accountability in the form of a “forensic audit.” On December 7th just days after firing Everson, the American Red Cross quietly stated they found no financial wrongdoing. According to Carrie Martin, a Red Cross spokeswoman, the review of Mr. Everson’s spending focused on travel costs and expenses reports. It was conducted in-house by the charity’s office of investigations, compliance and ethics, under the direction of the general counsel.
A forensic audit was supposed to have taken place. These types of audits aren’t usually concluded as quickly as Everson’s was. No documentation was ever produced to the public, nor is any forthcoming.
These new allegations continue to raise concerns about the ability of the Red Cross to self-govern themselves.
“This is the boldest thing I’ve ever seen in my life,” one of the recovery specialists stated. The sentiment was echoed by the FBI agent who is looking into the allegations, “This was bold, right in front of everyone.”
“All we want from the Red Cross is accountability,” said a volunteer. “They can’t be immune from the law. If that’s the case, then they should change their name to The Untouchables,” she added referring to a film about the FBI.
2008 Copyright Kirby Sommers
contact info: http://kirbysommers.blogspot.com
Post a Comment
<< Home