The Arizona Republic
3/26/06
Jacqueline Salmon (Washington Post)

WASHINGTON - 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 Monday 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 Saturday 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 non-profit 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 Saturday.

Trust in charities, which dropped sharply after the Sept. 1, 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.

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.

On Saturday, 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.

He said they found “rogue warehouses” filled with Red Cross supplies that they believed were being sold. Also, some disaster staffers were ordering suspiciously large volumes of such supplies as cooking oil, coffee and canned food from Red Cross warehouses for areas in which they weren’t needed.

In the case of the Humane Society, Wartelle said her office is in the initial phase of fact-finding regarding for what purpose the money was raised and whether it was used for the intended purpose. She declined to identify the charity, but Humane Society officials confirmed that it was their organization.

Humane Society officials said they are cooperating with Foti’s inquiry, but they believe they have done nothing wrong.