Investigation finds Red Cross agreed to withhold Orleans aid, operates in tandem with Homeland Security

Jennifer Van Bergen


Top Red Cross official Bush appointee, donor

New information surrounding relief efforts by the American Red Cross in New Orleans raises questions about whether the organization provided adequate relief and whether funds are actually being directed to Katrina victims, RAW STORY has found.

Previous investigations have shown that the Red Cross mishandled its 9/11 fund, attempting to divert more than half into a "war fund" before Congress intervened, and moved $10 million from a fund in 1989 for earthquake victims towards other uses. Allegations of similar holdbacks following the Oklahoma City bombing and several later disasters, coupled with the discovery that the Red Cross, mandated by its Code of Conduct to remain independent of government, is officially part of the Bush Administration's national security apparatus, led RAW STORY to dig deeply into the Red Cross and its recent disaster relief efforts.

Why did the Red Cross not enter New Orleans?

While many were outraged that the Red Cross failed to enter New Orleans, unsafe conditions and reports of shootings and lootings may have informed the decision. The Red Cross is not chartered to conduct search and rescue operations.

We "will not put [our] own workers in harm's way," Red Cross spokesperson Renita Hosler told RAW STORY.

Hosler explained that the Red Cross was "at the table" with "Emergency Management" numerous times while conditions deteriorated in New Orleans and that a decision was reached that if the group set up shop within the city, it might encourage others to come back, creating a secondary crisis.

Hosler confirmed that authorities turned down repeated offers by the Red Cross to enter New Orleans with supplies. New Orleans, she asserted, was considered too unsafe for the Red Cross to enter.

The Emergency Management Team, Hosler says, was comprised of city, state, and federal officials.

The Associated Press reported Sept. 8 that Col. Jay Mayeaux, deputy director of the Louisiana Office of Homeland Security asked the Red Cross not to enter the city at least for the first 24 hours after the storm in order to have to time to "set up a feeding station to feed a large number of people." By Saturday, there was a large-scale evacuation under way.

New Orleans artist Daniel Finnigan told RAW STORY there were helicopters everywhere, mostly military.

"That's what confused us," Finnigan said, "there was such a huge presence of military in the air but nothing on the ground."

Amid reports that thousands were trapped in the Superdome and the Convention Center, the Red Cross did not distribute or drop supplies to either location. The group's explanation that its presence would keep people from evacuating and encourage others to come into the city mirrors a National Guard decision not to drop food supplies, saying they did not want to spark riots.

The Red Cross is still not distributing supplies in the city.

Hosler says that although the city is now fully occupied by the National Guard, the Red Cross remains outside the city and is not distributing supplies, largely because of the decision to forcibly evacuate those who remain.

Some residents have been forced to travel at least 17 miles for water.

"Goods that the government personnel are bringing in are for their own forces," one eyewitness report states. "They are not distributing provisions to people who desperately need them?Thousands of troops are in New Orleans but water is premium and still not available."

New Orleans resident and construction worker Mark Klar confirmed this account.

Klar managed to stay in his Garden District home in until Sept. 7, when he was handcuffed and forcibly removed by police. Klar's home is above flooded areas and he was able to gather water and distribute to those in need, in the absence of relief from officials.

Humanitarian imperatives first?

The Code of Conduct for the International Red Cross and Red Crescent Movement declares that humanitarian imperatives come first, that "the prime motivation of our response to disaster is to alleviate human suffering" and that "the need for unimpeded access to affected populations is of fundamental importance in exercising that responsibility."

The Red Cross was incorporated by Congressional Charter in 1905 in order to "provide volunteer aid in time of war to the sick and wounded of the armed forces" in accordance with the spirit and conditions of various treaties, among which were the Geneva Conventions.

Unknown to most Red Cross donors, Congress incorporated the Red Cross to act "under government supervision" and eight of the fifty members of the Board Governors are to be appointed by the President, seven of whom are federal officials.

Though not a government agency, the Red Cross may purchase supplies from the armed forces and use government buildings for its offices and storage. Its employees may in some cases be provided meals and housing while serving with the Army. Commissioned officers of the Army, Navy and Air Force may be detailed for duty with the Red Cross.

While courts have considered the Red Cross a "government instrumentality" immune from state taxation, they have not viewed it as such for purposes of religious discrimination or Freedom of Information Act claims. In other words, the Red Cross obtains the tax benefits of being a "government instrumentality," but is exempt from the obligations that government carries.

One federal court noted that, "Close cooperation with government is essential to the work of the Red Cross. A perception that the organization is independent and neutral is equally vital."

The Supreme Court has found that "time and time again, both the President and the Congress have recognized and acted in reliance upon the Red Cross' status virtually as an arm of the Government."

Questionable affiliations

In recent years, affiliations between the Red Cross and federal agencies have grown. Prior to 9/11, the Red Cross was a key organization in what is known as the Federal Response Plan, enacted in 2000.

The Federal Response Plan could only be triggered by a request for support by a governor and a declaration of emergency by the President. In providing relief and assistance under the Act, the President was given authorization to utilize the personnel and facilities of the Red Cross and to enter into agreements with it to coordinate disaster relief efforts.

In 2002, the Federal Response Plan was superseded by the similarly-named National Response Plan. This Plan was created under the 2002 Homeland Security Act. FEMA and the Red Cross were brought under the Department of Homeland Security.

The Red Cross again became a signatory.

The National Response Plan "establishes multi-agency coordinating structures at the field, regional and headquarters levels" which "execute the responsibilities of the President."

Under the Plan, the Red Cross "provides relief at the local level and also coordinates the mass care element" to include mass care, disaster housing, and human services. It is obligated to timely deliver these resources.

The Red Cross is an active participant and works closely with federal agencies to formulate disaster responses.

Who runs the Red Cross?

The day-to-day activities of the Red Cross are run independently of the government. The Board of Governors is, by the Congressional Charter, the governing body. President Bush has appointed six persons to the Board.

The Red Cross' leading officers are Bonnie McElveen-Hunter, Chair of the Board, and Marsha J. Evans, the President and CEO.

McElveen-Hunter was appointed by Bush in June 2004. Her Red Cross bio says she is the "former U.S. Ambassador to Finland (2001-2003) and the CEO and owner of Pace Communications, Inc., the largest private custom publishing company in the United States. The company's clients include such Fortune 500 companies as United Airlines, Delta Air Lines, AT&T, Carlson Hotels, and Toyota."

McElveen-Hunter donated more than $130,000 to the Republican Party since 2000, RAW STORY has found. Her largest donations were $25,000 to the Republican National Committee in April 2004 and $100,000 in July 2000. In May 2000, she gave $1000 to "Bush for President, Inc."

Marsha J. Evans, President and Chief Executive Officer of the Red Cross, is a Rear Admiral in the Navy and the Director of Lehman Brothers Holdings, Inc., a global investment bank serving the financial needs of corporations, institutions, governments and high-net-worth investors worldwide, according to the corporation's web site. Evans also sits on the boards of the May Department Stores Company and Weight Watchers International and was recently elected to the board of the Huntsman Corporation, a large chemical and plastics manufacturer. She is also a presidential appointee to the Board of Visitors of the U.S. Military Academy.

Evans donated $500 to the Republican National Committee in 2004.

Red Cross mishandling donations?

As of Sept. 11, 2005, the American Red Cross estimated that it had received $578 million in gifts and pledges for the Hurricane Katrina relief effort.

During previous disaster relief efforts, however, the Red Cross has withheld funds intended for victims and placed them into a reserve fund for future use, including for what one Red Cross president described as a 뱖ar fund."

The Red Cross has repeatedly been cited for poor handling of donations for disaster victims. Some have even referred accused them of "bait-and-switch fund raising."

An investigation by the House Energy and Commerce Committee's oversight panel after 9/11 revealed that while pledging that 9/11 donations (minus overhead) would all go to victims, the Red Cross held back more than half of the $543 million it had raised.

The Red Cross says they funneled these monies to prepare for terrorist attacks.

"We had planned for a weapon of mass destruction attack," former Red Cross President Dr. Bernadine Healy said, saying funds were diverted to a "Liberty Fund."

"The Liberty Fund is a war fund," Healy added.

During the oversight panel's hearings, Representative Bill Tauzin (R-LA), declared: "What's at issue here is that a special fund was established for these families. It was specially funded for this event, September 11. And it is being closed now because we are told enough money's been raised in it, but we're also told, by the way, we're going to give two-thirds of it away to other Red Cross needs."

The subcommittee asked the Red Cross to provide the exact language of its television and newspapers appeals for donations to determine whether it had intentionally deceived the public. The Red Cross responded by refocusing the Liberty Fund back to meeting the needs of 9/11 relief.

Red Cross holdbacks were also evident after the 1989 earthquake in San Francisco, where it was alleged that the Red Cross turned over to victims only $10 million of the $50 million raised, keeping the difference for future disasters and organizational expansion. According to one researcher, critics also protested holdbacks following the Oklahoma City bombing in 1995, Red River flooding in 1997 and a San Diego fire in 2001.

Red Cross spokesperson Janine Moss says the organization has always had two ways to contribute. People may contribute to a specific relief fund (such as the Katrina Relief Fund) or to a general Disaster Relief Fund.

Moss told RAW STORY that the Red Cross has always had these options but that the 9/11 hearings brought the issue out into the open more. According to Moss, all Katrina-designated donations to the Red Cross will be used only for Katrina victims.

Moss said she was uncertain how funds obtained through supermarkets and other local donation boxes would be used.

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