Red Cross, Humane Society Under Investigation

By Jacqueline L. Salmon
Washington Post Staff Writer
Sunday, March 26, 2006

The Louisiana attorney general has launched inquiries into two of the country's best-known charities -- the American Red Cross and the Humane Society of the United States -- after receiving complaints that they misused some of the millions of dollars they raised in the fall to help the human and non-human victims of Hurricane Katrina.

Attorney General Charles C. Foti Jr. plans to announce tomorrow that he is looking into allegations that Red Cross volunteers diverted money and supplies meant for hurricane victims in New Orleans, spokeswoman Kris Wartelle said. And the attorney general's office has begun an inquiry into whether the Humane Society spent the money it raised after Hurricane Katrina appropriately.

The Red Cross said yesterday that it has dismissed three of its volunteers who had been involved in food and shelter operations in the stricken city after the storm. The volunteers "have been relieved of their duties" after it was determined that "allegations involving waste and abuse were substantial enough to warrant their immediate removal," said a senior Red Cross official, who spoke on condition of anonymity.

He said the organization expects to refer its findings -- including possible criminal activity -- to law enforcement agencies.

Such controversies over how nonprofit organizations have used the more than $3 billion raised from the American public for the Katrina relief effort are severely damaging public confidence in charities, Paul Light, a professor of public service at New York University, said yesterday.

Trust in charities, which dropped sharply after the Sept. 11, 2001, terrorist attacks when questions arose over how billions raised to help victims was spent, has dropped further since Hurricane Katrina, Light said. More than 40 percent of the American public has "no confidence or not much confidence" in U.S. charities, Light said, compared with about one-third who said they lacked such trust before Katrina struck.

And the crisis in confidence hasn't affected just the charities involved in Katrina relief efforts, he said.

"I don't know of a single nationally known charity whose confidence has managed to hold up in the wake of Katrina. It's serious," Light said. "It's almost like the beating that businesses took after Enron. It didn't matter how clean you were, the public lost confidence."

Foti's examination of Katrina charities might extend beyond the Humane Society and the Red Cross, which is also under investigation by the Senate Finance Committee.

Wartelle said her office is looking into complaints lodged against a number of charities that raised money for Katrina victims, although it has opened only these two formal inquiries.

"In general, the attorney general's office is very concerned about the number of charities that raised money for the Katrina disaster," she said. Often in disasters, "the money doesn't necessarily go to the people" affected.

Yesterday, Red Cross volunteer Jerome Nickerson Jr., a Baltimore lawyer who was asked by the Red Cross in the fall to team with another volunteer to investigate complaints of misuse of supplies and cash, said he found numerous problems in the disaster-relief operation.

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