A scathing report released by a senator this week found that the American Red Cross spent about $125m in donor money for Haiti aid on fundraising, management and other expenses, and that officials refused to cooperate with investigators.

The Iowa Republican Chuck Grassley found “substantial and fundamental concerns” in the Red Cross, he concluded at the end of a 309-page report. His Senate commission investigation was prompted by a 2015 ProPublica and NPR report in which said the Red Cross had built only six homes in Haiti despite having received $488m from donors.

Grassley’s investigation found that an estimated $125m given to the Red Cross in the wake of Haiti’s devastating earthquake in 2010 went to management and fundraising expenses and “program costs”, a category that includes salaries, contract services, travel expenses and related costs. Most of the remaining $363m was “farmed out”, the report said, to partner organizations which worked on the island.

Partner organizations had their own expenses and overheads, and in one case documents showed the Red Cross gave $4.3m to a partner organization with an additional $2m budgeted for “activities related” to management of the money.

“Despite this explanation, [the Red Cross] is unable to provide any financial evidence that oversight activities in fact occurred,” the report concluded.

In general, Grassley’s investigators found that the Red Cross was unable to calculate the cost of each project and program in Haiti, and “instead it uses a complex, yet inaccurate, process to track its spending”.

In a statement released in response, the Red Cross said it “strongly disagrees” with the report’s conclusions, adding: “We have accounted for every penny spent in Haiti.”

The group provided its own 24-page breakdown of spending, which mirrored documents provided in the Grassley report.

The group noted that the report had not discovered “a single finding of fraud or abuse” and defended its expenses: “These are not overhead costs; they are legitimate expenses to implement humanitarian aid projects – and ensure they are properly implemented by our partners.”

The Red Cross insisted: “Our statement that 91 cents of every dollar donated went to our programs and services in Haiti is absolutely true.”



Grassley called for greater accountability, saying: “People who give generously to any charitable cause expect transparency and the careful use of every dollar.”

The senator also said Red Cross officials were reluctant to cooperate and even intransigent when investigators asked for documents.

“When the information was forthcoming, it became clear that the Red Cross does not know how much each project in Haiti cost,” he said in a statement. That information on expenses, he said, was “hard to come by”.

Grassley accused the American Red Cross president, Gail McGovern, of trying to terminate a review of the aid group, which is not a federal agency but is tax-exempt and chartered by Congress. When the Government Accountability Office tried to audit the group following Hurricane Sandy, the report said, McGovern and the aid group’s attorney were “able to limit the scope of the GAO’s inquiry” after months of disputes about whether the Red Cross had handed over all the documents requested.

In its statement the aid group conceded that it had “raised legitimate issues about [the investigation’s] scope as going beyond that authorized by Congress”. But it added: “At no point did the Red Cross refuse to provide requested information.”

“We did not get satisfactory answers,” Grassley told ProPublica. “It was like pulling teeth.”

The Iowan also found that the Red Cross’s internal ethics and accountability unit has only three people on staff, even though the organization works with hundreds of volunteers and thousands of employees.

International nonprofits largely operate free of oversight, and the Red Cross has been criticized for mismanagement after the September 11, 2001 attacks and hurricanes Katrina and Sandy. The Red Cross retains good ratings from two watchdogs, CharityWatch and Charity Navigator, in large part because of its large and successful blood donation program.

The organization is also more accountable to government than most of its peers. Because of its relationship to Congress, the Red Cross delivers annual reports. The US army audits the group each year.

“We expect that if 100% of donations aren’t going to beneficiaries, it had better be damn close to it,” journalist Jonathan Katz, the author of a book about the world’s chaotic response to the Haiti earthquake, wrote on Twitter.

“But that makes no damn sense. It costs money to buy stuff, ship stuff, hire staff, pay staff, oversee staff, move staff, etc, etc. A lot of money.”

He added: “Overhead in and of itself isn’t a bad thing. All that matters is whether the work that the group is doing is effective. In Haiti, for a lot of reasons, the answer was pretty clearly no. The [Red Cross] had no idea what to do with the money they raised.”

The American Red Cross is one of 185 societies around the world. Each has its own individual status and exercises no authority over the others.