Red Cross Mismanagement?

This is a partial transcript from The O'Reilly Factor, October 11, 2001.

BILL O'REILLY, HOST:  In the "Unresolved Problem" segment tonight, we've been investigating how the generosity of Americans is being handled by the mega-agencies, such as the United Way and the Red Cross.  So far, the results are mixed.  And there have been problems in the past.

In 1989, a devastating earthquake hit the San Francisco area.  $52 million was donated by generous Americans to help those affected in the quake.  However, the mayor of San Francisco was extremely disappointed in how much money the Red Cross, at first, actually gave the victims.

Joining us now from San Francisco is former Art Agnos and from the Red Cross, Jim Krueger, the senior vice president who is in Washington tonight.

All right Mayor Agnos, tell me what your frustration was?

ART AGNOS, FMR. MAYOR SAN FRANCISCO:  Well first of all, let me say, Bill, that the Red Cross is a wonderful institution and an important part of the safety net of emergency services in our country, but every now and then, they need to be reminded and helped to shape their mission.  And that happened here in San Francisco in 1989, when they raised all that money, but were only spending it for what they thought in their formula style approach at that time, to giving the services to the people who needed it.

And one size doesn't fit all.  So they were spending approximately $10 million for their standardized formula of service, which really didn't fit the needs of the people of San Francisco at that time.

O'REILLY:  All right, let's get specific though.  They had $52 million raised, and you're saying they kicked you $10 million, right?

AGNOS:  That's right.  And they planned to spend some more over a period of time.

O'REILLY:  Yes, later.

AGNOS:  But in essence, they were taking about $30 million back, as was their policy at that time, to their headquarters and put in the bank for future disasters.

O'REILLY:  And then of course, Americans didn't know that when they donated.  How do you answer that, Mr. Kruger?

JIM KRUGER, AMERICAN RED CROSS:  Well, in the case of Loma Prieta, we actually ended up raising $90 million, of which every penny was spent in the -- in northern California.  And I think the approach that Art is talking about in terms of looking at new leads and expanding service and so forth, when you had a mega-disaster in the height of the World Series, it was a tremendous outpouring.

And as we worked the city and all the clients with their needs in mind, it became an expanded way of...

O'REILLY:  All right, but did you guys take $30 million back for the home office for other things?  Did you do that?

KRUGER:  No, at the time...

O'REILLY:  So Mayor Agnos has it wrong?

KRUGER:  At the time that that fund-raising was going on, and it was so successful, the chairman of the Red Cross Board of Governors worked with our national board and they said, "All the money that's earmarked for the San Francisco area, the Loma Prieta area, well be spent."

O'REILLY:  Is that what happened, Mr. Agnos?

AGNOS:  Only after a fierce protest from the contributors, both small and large, corporate and individual that forced the Board of Governors there in headquarters to change what was their existing policy.  To their credit, they saw what was necessary, and they did it.

O'REILLY:  How long did it take, the fierce protests?

AGNOS:  Oh, it was going on for several weeks until they recognized that it was not going to go away and that all of the money raised in the name of the Loma Prieta earthquake ought to be spent here.

O'REILLY:  And what it in the end -- did the Red Cross come through in the end?

AGNOS:  They sure did.

O'REILLY:  All right, fine.

AGNOS:  And...

O'REILLY:  Well, I'm glad we got that.  Now Mr. Kruger, what disturbs me about this story is number one, I know our Art Agnos is an honest guy.  And I know he's given me exactly what happened.  And he's been generous to you in crediting you at the end, after what he calls a fierce protest that you do anything.

And we almost have a parallel situation here with the Red Cross and the terror victims in New York City, in the sense that it took you four weeks, to start to get the stuff out.  And my contention is that these people, whether it be in the earthquake in San Francisco, or the terror attack in New York, are so traumatized by their loss, that they don't have time to go fill forms out.  They don't have time to worry about the money.

But you guys should be right there giving them the money, without all the red tape, without the $30 million going back to headquarters.  Am I wrong here?

KRUGER:  Well, and I want to be perfectly clear, that at this point, we are expanding $3 million a day going out the door in direct assistance.  We have people on-site that are writing checks so people can immediately pay their rent, their utilities and so forth.  And I think the other thing is that we have this wonderful family assistance center, where everybody is gathering and being supportive.  And I think the...

O'REILLY:  All right, I mean, look, we told the audience off in the top.  We gave them your number.  We said you're doing it now, but I had to hammer you guys.  I had to hammer you.  Almost like Mayor Agnos had to get what he called "fierce" with you.  I had to hammer you.

Now what I want to see here, not just the Red Cross, but I want to see the United Way and the other 138 charities is to be more proactive, is to go out and try to get people the stuff quicker, so you can help quicker.  That's what Americans want.

Let me give you the last word, Mr. Kruger.

KRUGER:  Well, and the real difficulty is certainly locating the families.  We did do a door-to-door damage assessment in all the living areas around the area.  We have tried to work with employees to get, you know, to get names and information quickly.  We have a one page form, that's filled out.

O'REILLY:  All right.

KRUGER:  You know, and we really have tried because this is such a...

O'REILLY:  Try harder, Mr. Kruger.

KRUGER:  OK.

O'REILLY:  Try harder, OK?  I mean, you're doing it OK now, but you took a little bit too long.

Mr. Agnos, as always, thank you very much.

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