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Red Cross Under FBI eye for Alleged Katrina Fraud


100 Homes 100 Day Program brings Red Cross under Scrutiny Again


The American Red Cross, the largest recipient of Katrina donations to the tune of $2.3 billion, is once again accused of impropriety and fraud. The FBI was tipped off this week regarding harsh allegations within the hurricane recovery community that 100 Homes in 100 Days, a hurricane relief program in Mississippi is riddled with problems.

The accusations include failure to follow required Red Cross procedures, improper use of money and supplies, and “partnering” with a possible felon, which is in violation of Red Cross rules. The allegations are wide ranging and may prove to be criminal. A Red Cross Press Release dated March 26, 2007 states:

“Five organizations lead a coalition effort to renovate and rebuild 100 homes in 100 calendar days. The American Red Cross, Salvation Army, Mississippi Home Again, Hope Has a Face Foundation and Jackson County Community Services Coalition have created a project process that focuses on rebuilding entire neighborhoods in a compressed timeframe.”

100/100, as it is referred to within the agencies, was funded through the Red Cross’s Means to Recovery program allotting a cap of $20,000 to be used per home. The Salvation Army added another $10,000.

Allegedly, Paige Roberts, head of the Southeast Mississippi chapter tapped into all monies available up to $30,000 per household for the program. That would be the same Paige Roberts that Mark Everson, former CEO of the American Red Cross got fired for on November 27, 2007. The Red Cross cited his “personal relationship” with Roberts reflected poor judgment on Mr. Everson’s part diminishing his ability to lead the organization in the future.

Among the specific problems was that monies used by the program for each home were not used for the homeowner in whose name the money was drawn. Also in question by those working in hurricane recovery is that all money for all homes was “taken” even though the home may not have been repaired or rebuilt.

Within the $30,000 disbursements was a charge in the amount of $2,200 for each house for garbage removal. “We were told $1,600 was to be spent as salary for a supervisor for every home in the 100/100 program, with the balance of $600 going for a dumpster,” a former recovery specialist said. “That did not happen, no one saw these people. But these checks were issued.”

“Other organizations did most of the work on those homes before 100 Homes ever got to them. So they may have painted someone’s home, or did some minor work, but they pulled down $30,000 per house without ever telling the family about the money.” Carla Poole a case manager said of the program. “I even sent an email to the Means to Recovery people in national regarding our concerns, but our efforts for accountability were met with a brick wall,” Poole added.

“Those houses only needed minor work,” said David Kilbern who turned his retirement into a commitment to help the rebuilding effort.

“The way Paige Roberts behaves, well, it’s like she’s not accountable to anyone. Like she had a connection higher-up. She doesn’t follow the rules and she’ll tell you to your face, she doesn’t have to,” said Michelle Wilson executive director of Rebuild Jackson County. “After we found out about some of the things that were happening with the 100/100 program, we weren’t going to fund any of it. Paige wanted me to approve a request, but without documentation, without receipts, I denied it.”

Fact of the matter is many folks involved in the hurricane recovery process have complained about lack of paperwork on all homes in the program. No paperwork, no receipts and even more disturbing are the accusations that monies withdrawn in the name of a family were not fully used for that family. Complaints of commingling and of outright fraud are rampant. The question: Where is the money continues to echo throughout the community.

Only 65 homes were completed, if one can use that term in light of these revelations, on July 4th when the program officially came to a close.

Some involved with the rebuilding effort have also alleged the program spearheaded by Jim Yancey of Jackson County Coalition and Keith Canfield of Hope Has a Face requested from homeowners they hand over their grant money before they did any work on their homes. Both men were contacted for this story, but neither one returned the calls.

Additionally, Mr. Canfield is reportedly someone with a dubious history. There are reports substantiating claims Canfield was involved in selling the same home twice in Tennessee.

Another partner organization has also come under fire. MS Home Again created by former Red Cross volunteers Annie Card of Peterborough, NH and Tammy Agard of Montana lost their non profit 501 (c) 3 status. Both women reportedly left town “in a hurry,” said a recovery specialist who wishes to remain anonymous. “Those two are hiding something, they ran off the day after the program closed and people are looking for them,” he added.

Gary Frank, a 53-year old disabled homeowner, said he spent $52,000 of his own money before the group arrived to help him. “They painted and they called Roto Rooter,” Frank said of the 100/100 group. “But I didn’t know anything about the money and I hadn’t heard about it until now.” Mr. Frank said he received a Red Cross voucher in the amount of $3,200 for furniture and another one for Lowe’s for $1,500. But added, “if I add that amount up it sure isn’t $30,000 and I think people have a right to know about this.”

Annie Garry, a feisty 70 year old also lives in one of the homes with her daughter. “They were supposed to have put screen windows in for me, but never did, she said. “One side of my house got siding, one side, and I still need some help with my air conditioner. I got a sofa from the Red Cross and they paid off my Lowe’s bill. I think that was for $1,300, but I still need screen windows,” she added.

In fact, none of the residents I spoke with had any knowledge of the monies that were allegedly collected in their names, nor had received any of the case management work that is supposed to be done in tandem with applying for and receiving Red Cross Means to Recovery long term financial help.

Russ Paulsen, executive director of the Red Cross Hurricane Program told the New York Times in a piece called “Red Cross Faces Criticism Over Katrina Aid Program for Hurricane Victims: “Many organizations use case management as a way of preventing fraud.”

If this is the case, then Red Cross with their partner agencies in the 100/100 program certainly did nothing to ensure donor dollars were safe and spent for recipients. Most question the exact amount of help given to Katrina survivors from the monies collected in their name by this organization.

When the Red Cross recently ousted Mark Everson, it promised accountability in the form of a “forensic audit.” On December 7th just days after firing Everson, the American Red Cross quietly stated they found no financial wrongdoing. According to Carrie Martin, a Red Cross spokeswoman, the review of Mr. Everson’s spending focused on travel costs and expenses reports. It was conducted in-house by the charity’s office of investigations, compliance and ethics, under the direction of the general counsel.

A forensic audit was supposed to have taken place. These types of audits aren’t usually concluded as quickly as Everson’s was. No documentation was ever produced to the public, nor is any forthcoming.

These new allegations continue to raise concerns about the ability of the Red Cross to self-govern themselves.

“This is the boldest thing I’ve ever seen in my life,” one of the recovery specialists stated. The sentiment was echoed by the FBI agent who is looking into the allegations, “This was bold, right in front of everyone.”

“All we want from the Red Cross is accountability,” said a volunteer. “They can’t be immune from the law. If that’s the case, then they should change their name to The Untouchables,” she added referring to a film about the FBI.

2008 Copyright Kirby Sommers


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