Legislation to give the Government Accountability Office (GAO), Congress’ impartial investigative arm, complete access to American Red Cross records for oversight purposes was introduced today by Rep. Bennie G. Thompson (D-MS) and Sen. Chuck Grassley (R-IA).
The bipartisan, bicameral American Red Cross Transparency Act of 2017 (HR 1327) “responds to concerns that the Red Cross tried to quash a review by GAO of its practices, successfully limiting the scope of the review, and has failed to be as transparent as it should be,” the lawmakers’ announcement stated.
“Response to and recovery from large-scale emergencies and natural disasters the scale of Hurricanes Katrina, Rita and Sandy are complicated and difficult and we must always look for ways to improve,” Thompson said. “If the Red Cross continues to thwart oversight and stall goodwill attempts to be investigated, their operational challenges are sure to persist and improvement will never happen. To ensure that Red Cross will respect the GAO’s audit authority, I am partnering with Senator Grassley to introduce bipartisan legislation that clarifies Congress’ intent regarding GAO’s oversight authority and give GAO new tools to enforce it. We owe it to our constituents to ensure the Red Cross is subjected to the oversight necessary to ensure funds Americans so generously donate are not misused and that the Red Cross is a reliable response and recovery partner to the federal government.”
Pointing out that, “The Red Cross is congressionally chartered and is a federal instrumentality” which “receives federal tax dollars for some of its disaster responses, and receives the financial benefits of tax exemption and tax-deductible donations … Congress has a responsibility to make sure the Red Cross answers questions asked on the public’s behalf and is operating up to the standards required of it during national disasters,” Grassley said. “The Red Cross has shown an unwillingness at times to answer questions. This legislation strengthens transparency to help make the Red Cross more accountable to the public.”
“The American people rely on the Red Cross to respond when tragedy strikes,” Grassley said.
According to the Red Cross, "In 2007, the American Red Cross embarked on comprehensive governance reform including the most significant amendments to the Congressional Charter in 60 years. Changes were signed into law bythe President of the United States to modernize the board to focus on strategic oversight and governance."
The American Red Cross Transparency Act would give GAO complete access to the Red Cross’ records when needed to conduct oversight. If the Red Cross refused to comply, the legislation provides GAO with the authority to bring an action in court to force compliance.”
Providing the background that led to the legislation they’ve introduced, Grassley and Thompson pointed out that 10 years ago Congress gave the GAO the broad authority to “review [Red Cross’] involvement in any federal program or activity the government carries out under law.”
But, “Despite clear legislative intent, the Red Cross essentially stonewalled GAO when it tried to carry out an investigation requested by Thompson in September 2013,” the lawmakers said, noting, “After two years of stall tactics, delays and a request from the Red Cross’ president that Thompson cancel his GAO request and conduct future oversight via cell phone, GAO analyzed information the Red Cross begrudgingly made available to complete its investigation.”
Grassley investigated GAO’s access problem as part of his inquiry of problems with the Red Cross’ Haiti earthquake response, and in 2016 sent the results as a memo to fellow committee members on both the Judiciary and Finance committees.
The Red Cross is congressionally chartered and considered a federal instrumentality, unique among tax-exempt organizations. Taxpayers pay for some of the Red Cross’ work directly through federal tax dollars for disaster responses and indirectly through the tax dollars foregone to the Red Cross through its tax exemption, and through tax deductions donors take for charitable donations to the organization.