Accountability @ Red Cross and NYC Lacking With Sandy Recovery Funds; and More Fraud

By Gary Snyder

Donors gave $312 million to the American Red Cross following Superstorm Sandy but the organization will not give a breakdown showing how, where, and when the money was spent.   

Billions of dollars coming from the U.S. Department of Housing and Urban Development has seemingly yet to make its way to individual homeowners in New York City.

American Red Cross

A year and a half after the Sandy storm, the American Red Cross, it is surprisingly hard to get a clear answer as to how exactly the money was spent. This is particularly troubling because the ARC is the first call for many people moved by images of a tornado, flood, or fire ravaging a community. In many instances, the money hasn’t immediately been put to work helping victims.

The Red Cross weathered intense criticism almost immediately after Sandy hit in October 2012. As donations poured in, partly on the strength of appeals from President Obama and a star-studded televised benefit concert, residents on Staten Island and the Rockaways complained the Red Cross was missing in action.

The Red Cross told ProPublica, it keeps 9 percent of total Sandy donations for “general operations support” even on the $78 million it has passed on to other organizations, which in turn have their own overhead and other expenses.

Unfortunately this latest disaster is an apparent rerun of attempts (here, here) to document previous relief efforts fund distribution. For 911, the Red Cross had raised more than $564 million for the Liberty Fund, which was set up in response to the attacks on the World Trade Center and the Pentagon. Its president was hammered for the Red Cross' decision to put aside nearly half of the money raised for future needs that may include terrorist attacks. This was not consistent with donors' intent. 

A series of CEOs were forced out — one after Sept. 11, another after Katrina, and a third following an affair with a subordinate. Congress in 2007 imposed a set of governance reforms, including reducing the size of the organization's 50-member board---a highly unusual intervention by Congress and the Administration.

In Haiti, after one year, The American Red Cross said it has helped hundreds of thousands of Haitians and had spent more than a quarter of a billion dollars in the past year. It raised nearly twice that amount, however, and had been criticized for not spending more. Seemingly there is not a total accounting of the Haitian funds.

That may be because The Red Cross acknowledged to ProPublica that it produces after-action reports following disasters like Sandy to figure out what went well and what didn’t. But the organization said they are for “internal use” and declined to provide copies.

No public responsibility?

NYC

A frustrated group of City council members liberally peppered officials from the mayor's Office of Management and Budget with questions during a Wednesday hearing about the pace of spending of Superstorm Sandy recovery money. The members urged the agency, if nothing else, simply to comply with a recently passed law that requires the city to track where the cash is going.'

Sandy Relief Fraud

Two more New Jersey homeowners were charged for allegedly filing fraudulent applications for federal relief funds made available to victims of Hurricane Sandy, the state Attorney General's Office said. This is on the heels of last month’s frauds where New Jersey homeowners have been charged with fraudulently collecting tens of thousands of dollars in Hurricane Sandy relief money from the federal government, the state Attorney General's Office said..

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