June 27, 2002 | Read Time: 3 minutes
In a 47-page response to lengthy inquiries from an influential U.S. senator, the American Red Cross conceded that it has faced a number of difficulties since September 11 but insisted that new fund-raising practices it recently put into place should satisfy concerns about its operations.
“The last nine months have been challenging ones for the Red Cross,” said Harold J. Decker, the Red Cross’s interim president. “These challenges have tested the Red Cross, but they have also shown the remarkable strengths of this great organization.”
After the terrorist attacks, the public and Congress lambasted the charity about its plans to use money raised for September 11 relief efforts for causes not related to the attacks. The Red Cross reversed that decision, but continues to face questions surrounding its fund-raising tactics.
Mr. Decker’s letter, along with a longer document written by staff members at the American Red Cross’s national headquarters, in Washington, was sent to Iowa Senator Charles E. Grassley, the senior Republican on the Senate Finance Committee, in response to 39 questions he had asked the organization last month about its fund-raising and disaster-relief policies (The Chronicle, May 16).
The senator told the Red Cross that he was bothered by reports he had heard from colleagues in Congress and some of his constituents “that in major fund-raising drives, the Red Cross has been unclear about how it will use donations.”
Besides being delivered to Mr. Grassley, the letter was sent to the chairman of the Senate Finance Committee, Montana Senator Max Baucus; Secretary of Defense Donald H. Rumsfeld; and the attorneys general of New York, Pennsylvania, and Virginia.
Providing New Numbers
The Red Cross’s response provides information about its management structure, finances, and federal oversight. For example, the charity said:
- It had identified 356 suspected cases of fraudulent claims for September 11-related benefits as of June 1. If, after investigations, all the claims turned out to be fraudulent, the average payment would be about $7,500.
- The charity received more than 71,000 inquiries about its September 11 fund-raising practices between October 15, 2001, and May 31, 2002. The organization categorized about 5,600 of those inquiries as complaints.
As requested by Mr. Grassley, the charity listed the compensation of its 50 highest-paid employees, which totaled more than $8-million, including bonuses and benefits.
The five highest-paid employees as of December 31, 2001, were James Krueger, executive vice president of chapter services, $358,137; Donita Rotherham, former chief executive officer of the San Diego chapter, $308,590; J. Logan Seitz, senior vice president of growth and integrated development, $295,118; John D. Campbell, chief financial officer, $273,513; and A. Frank Donaghue, chief executive officer of the Red Cross chapter in Philadelphia, $268,993.
The charity also named and provided the compensation figures for Mr. Decker, $241,197, and the charity’s vice president for armed forces emergency services, Sue Richter, $188,520. The Red Cross did not provide the names or job titles for the remaining figures on the salary list to Mr. Grassley, and declined a request by The Chronicle to identify the employees.
Ms. Rotherham recently received intense criticism for not providing a public accounting of how her organization spent $410,000 it had raised to help victims of a fire in the San Diego area in 2001. Last month, the national office fired her and dissolved the chapter’s board of trustees.
In his letter, Mr. Decker said that the organization’s recently revamped disaster fund-raising practices would allow the Red Cross to be more accountable to its supporters and should assuage the concerns raised by Mr. Grassley. The new practices include changing solicitations to be more candid about what activities donations would support and telling the public when enough money has been raised for a relief effort for a disaster (The Chronicle, June 13).
Mr. Grassley said he appreciated the Red Cross’s lengthy and timely response and that as he reviewed the document he planned to “continue to work with that organization to improve its accountability to the public.”
The Red Cross response to Mr. Grassley is online at http://www.redcross.org/press/disaster/ds_pr/
020614grassleyresponse.html.
