The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

The Red Cross Cash Machine

Nov 21, 2005

Under the pretext of aiding the victims of Hurricane Katrina, the Red Cross is well on its way to collect two billion dollars.

This generosity doesn’t mean that the money will go toward helping the huge numbers of people who have lost their homes and jobs. In the first days after Hurricanes Katrina and Rita hit, the Red Cross didn’t even provide most of the victims with shelter, food, water or medical care. From New Orleans to Mississippi and Alabama, the Red Cross was nowhere to be found.

The Red Cross has been my biggest disappointment,” said Tim Kellar, the administrator of Hancock County, Mississippi. “I held it in such high esteem until we were in the time of need. It was nonexistent.” Some volunteers quit in disgust.

In the weeks that followed, much of what the Red Cross did proved completely inadequate. There were long lines at assistance centers. Debit cards for emergency cash didn’t work. Then in mid-October, the Red Cross was forced to admit it had wildly overestimated how many people it was helping. It billed the government 11 million dollars a day for putting up 600,000 people in 200,000 motel and hotel rooms. In reality, it was providing shelter for only 200,000 people in 71,000 rooms.

The Red Cross argues it was overwhelmed by this disaster of record proportions. But the Red Cross has operated the same way during other disasters as well, leaving scandal and anger in its wake. On the one hand, it systematically uses disasters to collect huge amounts of money – but then keeps much of it, what salesmen call a bait-and-switch tactic.

After 9/11 in New York City, the Red Cross collected one billion dollars under the guise that the money would go to help the victims. When the Red Cross tried to keep half of it, the uproar was so big that the president of the Red Cross was forced to resign. Eventually, the Red Cross had to pay out much of that money. But it funneled much of it to aid businesses and the wealthy, for example, by paying utility bills for upscale residents of Manhattan.

After the 1989 San Francisco earthquake, the Red Cross raised 55 million dollars, but spent only 12 million on disaster relief. After the attack on the federal building in Oklahoma City in 1995, it spent only about a quarter of the money raised.

The Red Cross can’t even use the excuse that it needs the extra money for future disasters, since it is reimbursed by the Department of Homeland Security for most of the money it spends on shelters, food and other aid. Even the blood that it collects – it sells. Neither can it claim it needs a lot of money for administration, since much of the work – certainly the best work – is done by three million volunteers.

In fact, the Red Cross is just a huge cash machine. It pours much of the money that it collects into fund raising or high salaries for its top officials, big amounts on bloated administration, or big charity events for the wealthy. The organization is now connected to the Department of Homeland Security. This semi-official status means it is harder to investigate and control.

In fact, the Red Cross is managed as a political payoff to the party in power and to the biggest corporations. Eight of the people on the Board of Governors are appointed directly by the president. Thus, the chair of the board is Bonnie McElveen-Hunter, the CEO and owner of Pace Communications, which has donated more than $130,000 to the Republican Party since 2000. Pace is the largest private custom publishing company in the U.S. The president and CEO of the Red Cross is Marsha J. Evans. She is a former rear admiral in the U.S. Navy and a director of Lehman Brothers, the investment firm.

When we donate to the Red Cross, we think we are helping those in need. Instead we are helping to throw parties for the wealthy and the greedy.