Results of Internal Katrina Probe Going to FBI, Red Cross Says

Washington Post | April 1 2006

The American Red Cross, plagued by continuing controversy over its Hurricane Katrina relief effort, said yesterday that it is turning over to federal law enforcement officials results of its investigation into possible wrongdoing at a food and warehouse operation in New Orleans.

It also thanked volunteers who brought the matter to their attention.

"We've conducted a broad investigation, and we have seen enough to be able to turn it over to the FBI," said Jack McGuire, interim chief executive for the charity, which last week ousted three New Orleans volunteers after allegations surfaced that food and supplies for storm victims had been diverted.

But two Red Cross volunteers, who wrote a detailed report in December accusing New Orleans relief workers of operating a "rogue" operation using donated goods and equipment, said yesterday that they have already reported their findings to the FBI. And they expressed bitterness that the charity has not contacted them.

"I have not heard one word from the Red Cross -- not one word," said Jerome Nickerson, a Baltimore lawyer who, with partner Michael Wolters, looked into the operation at the request of the Red Cross last year before, they say, the charity forced them to stop. "This is nonsense."

McGuire declined to comment on Nickerson's and Wolters's claims but said that weeks ago the charity began a probe, whose results the FBI will get.

McGuire declined to say what that probe uncovered, but Nickerson said he and Wolters had found "rogue warehouses" in New Orleans filled with Red Cross supplies that they believed were being sold and that a Red Cross kitchen in New Orleans was ordering meals that clearly were not needed.

"I don't want to bash the Red Cross, because they do good for the people, but they need to change their practices and policies," said Wolters, a Wisconsin security guard. When he and Nickerson tried to investigate the New Orleans operation, he said, "the resistance from management and other workers there was just unbelievable."

The embattled charity has spent much of the last six months defending how it used $2.1 billion in donations it received for victims of hurricanes Katrina, Rita and Wilma.

Hurricane evacuees have complained that the charity's response was slow and chaotic. Minority groups are angry at the charity over its perceived poor treatment of blacks and Hispanics in shelters. Its management is in turmoil after the sudden departure of its chief executive in December. The Senate Finance Committee and the Louisiana attorney general are investigating. And Congress is considering overhauling the Red Cross's 105-year-old charter.

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