US Senate Bill Would Force Red Cross to Open Books to Outside Oversight
Justin Elliott (ProPublica) 07 July 2016

Legislation introduced in the Senate today would open the American Red Cross to outside oversight that it has long resisted.


The bill was introduced by Sen. Charles Grassley, R-Iowa, following a lengthy investigation by his staff that raised questions about the charity's spending after the 2010 Haiti earthquake and documented how Red Cross leaders resisted an earlier congressional inquiry. Grassley launched his probe in response to reporting by ProPublica and NPR.


Grassley's American Red Cross Transparency Act, would amend the group's congressional charter to allow unfettered access to its records and personnel by the Government Accountability Office, the investigative arm of Congress. The Red Cross operates as a private nonprofit but was created by Congress over 100 years ago and has a mandated role to work alongside the federal government after disasters.


As we've documented, Red Cross CEO Gail McGovern tried unsuccessfully to kill a GAO investigation into the group's disaster response efforts. The charity's pushback, which included questioning the GAO's authority, helped to curtail the scope of the investigation.


McGovern later told Grassley's investigators that the Red Cross "gave [the GAO] everything that they asked for" 2013 a statement the investigators later concluded was not true.


If Grassley's bill becomes law, the GAO would have the power to obtain documents from the Red Cross related to its internal governance and disaster response programs. If the Red Cross were to resist such a request, the GAO would have the power to subpoena the charity and take it to court, if necessary.


The bill would also take steps to empower the Red Cross' internal investigative unit, which Grassley's staff found to be severely undermanned and underused. The unit has just three staffers and requests for more have gone unfulfilled.


The bill would remove the unit from under the authority of the general counsel and put it under the control of the charity's board of governors.


A Red Cross spokesperson said in a statement the charity "will review the proposed legislation and make our views known to Congress at the appropriate time."


A similar bill was introduced last year in the House by Rep. Bennie Thompson, D-Miss. That bill also would expand GAO's access to the Red Cross and also would require a series of audits of the charity's finances and disaster response work. At the time, the Red Cross released a statement saying that there were already "existing mechanisms in place to evaluate our disaster response."


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