The American Red Cross plans this week to turn over the results of its investigation into allegations of fraud and waste for possible criminal prosecution.
After Hurricane Katrina, the Red Cross did not respond quickly enough in low-income areas, did not reach remote Gulf Coast communities, could not manage its overwhelmed phone lines for storm victims, failed to cooperate with local organizations and was unclear in telling donors how their gifts would be spent.
The American Red Cross has faced the toughest challenge of its century-old special relationship with Congress. Lawmakers have called for a reconsideration of the Red Cross' official designation as the charity the government relies on first after national disasters.
Senator Grassley, chairman of the Senate Finance Committee which has jurisdiction over tax-exempt organizations such as the Red Cross, expressed concerns about the structure and effectiveness of the 125-year-old organization, which has had three presidents resign since 1999.
Fraud was predictable as both the Red Cross and FEMA were, in effect, giving away cash, and they were doing so because the public was clamoring for them to do so.
The giant charity has now launched its biggest overhaul in decades after complaints about how it reacted to the epic hurricane season, criticism of its treatment of minority evacuees and unhappiness from Congress about how it governs itself.
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