MICHAEL T. TEXAS CHAJRMAN BENNIE G. THOMPSON, MISSISSIPPI RANKING MEMBER @112 Zliunhreh i?nurtzenth 13.5). Ell-lunar: uf ?Representatives mt illuminant: Security; E01 211515 Ms. Gail McGovern President and Chief Executive Of?cer American National Red Cross 2025 Street, NW Washington, DC 20006 December 23, 2015 Dear Ms. McGovern: I am writing to learn how the American National Red Cross (Red Cross) is addressing challenges identi?ed over the past year in a series of articles published by ProPubZica and National Public Radio (NPR) as well as in a report published by the Government Accountability Of?ce (GAO). Given the Red Cross? important role in responding to both domestic and international disasters, it is critical that it acts quickly to address the serious problems ProPubZi?ca, NPR, and the GAO uncovered this year. As you may be aware, ProPublica, NPR, and GAO investigations of Red Cross have revealed challenges ranging in scope from management to operation of Red Cross? response and recovery programs. For example, on December 14, 2015, ProPubZica reported that Red Cross had eliminated thousands of jobs and shut down hundreds of local chapters, and those cuts appear to be undermining Red Cross? ability to execute its mission. Following the recent wild?res in Northern California, local of?cials relieved Red Cross of its responsibilities because its response was disorganized and its staff inexperienced.I ProPublica identi?ed similar challenges related to organization and trained staf?ng in Red Cross? response to both Hurricane Sandy and the 2010 earthquake in Haiti.2 To complicate matters, the GAO found that, in spite of Red Cross?s Congressional Charter, Red Cross is not subject to any regular, continuous Federal oversight of 1 Justin Elliott, ?The Cerporate Takeover of the Red Cross,? ProPublica (Dec. 14, 2015), (last visited Dec. 17, 2015). 2 See Justin Elliott and Laura Sullivan, ?How the Red Cross Raised Halfa Billion Dollars for Haiti -and Built Six Homes,? ProPuin?ca and NPR (June 3, 2015), (last visited Dec. 17, 2015); Justin Elliott and Jesse Eisinger, ?How Fear Of Occupy Wall Street Undermined the Red Cross? Sandy Relief Effort,? ProPub/ica (Dec. 11, 2014), (last visited Dec. 17, 2015). . . . . 1ts performance in disasters; therefore, important opportunities to address problems jeopardizing effective disaster relief activities are being missed. Red Cross enjoys a unique relationship with the Federal government in light of its Congressional charter. Since 1943, every American President has designated March, Red Cross Month.4 Accordingly, President Obama has urged the American public to donate to the Red Cross after many major disasters that have occurred during his tenure.3 Additionally, Red Cross has been delegated responsibilities under the National Response Framework (NPR) and the National Disaster Recovery Framework (NDRF). As Ranking Member of the Committee on Homeland Security, 1 have a responsibility to ensure that Federal response and recovery partners are able to carry out their missions under the NRF and NDRF and to ensure that the donations the Federal government urges Americans to make to particular organizations are used deliberately and for the purposes for which they were made. Accordingly, pursuant to Rule and Rule XI of the House of Representatives, please respond to the questions below by January 27, 2016. Management and Personnel at the Red Cross In July 2013, I wrote to you to express my concerns regarding a ?disaster re?engineering? plan, which involved initiatives to restructure Red Cross? workforce and how the organization delivered its disaster services.6 Among my major concerns was that the ?re-engineering? plan could unintentionally be disruptive and that it could have the effect of undermining the role local Red Cross chapters play in planning for, managing, and executing disaster relief services.7 In your response to my inquiry, you assured me that: ?No positions were transferred from one state to another,? and that ?these changes will place more responsibility and decision?making authority into the hand of our regional chapter executives and the division disaster staff.?S Nevertheless, on December 14, 2014, ProPublica reported that payroll was cut by more than a third, thousands of jobs were eliminated, and hundreds of local chapters were closed.9 ProPublica noted further that ?[1n]any veteran volunteers . . . have also left, alienated by what many perceive as an increasingly rigid, centralized management structure.?10 1. Are payroll reductions, job cuts, and local chapter closures that have occurred during your tenure the product of the 2013 ?re-engineering? effort? 3 Government Accountability Office, ?American Red Cross: Disaster Assistance Would Benefit from Oversight through Regular Federal Evaluation,? GAO-15665 (Sept. 2015). 4 ?March Proclaimed Red Cross Month," American Red Cross, (last visited Dec. 17, 2015). 5 Justin Elliott, Jesse Eisinger, and Laura Sullivan, ?The Red Cross? Secret Disaster,? ProPuinca and NPR (Oct. 29, 2015), (last visited Dec. 17, 2015). '3 Letter from the Honorable Bennie G. Thompson, Ranking Member, Committee on Homeland Security, United States House of Representatives to Ms. Gail McGovern, President and CEO of the American National Red Cross (July 15, 2013) (letter on ?le with Committee). Id. 8 Letter from Ms. Gail McGovern, President and CEO of the American National Red Cross to The Honorable Bennie G. Thompson, Ranking Member, Committee on Homeland Security, United States House of Representatives (July 13, 2013) (letter on file with Committee). 9_Elliot, supra n. 1. 10161. 8.. If so, how did these changes advance your stated goal of ?plac[ing] more responsibility and decision?making authority into the hand of our regional chapter executives and the division disaster staff What is your response to criticisms that the management structure at Red Cross is ?increasingly rigid [and] centralized?? If not, what was the purpose of the pay roll reductions, job cuts, and local chapter closures? And how were those goals advanced by the ?re-engineering? plan? In either case, what efforts did the Red Cross undertake to ensure that the payroll reductions, job cuts, and local chapter closures did not hinder its ability to execute its day?today emergency response responsibilities as well as its missions under the NRF and 2. I understand that the number of Red Cross chapters has dropped from 700 to 250 and that the number of employees has dropped from 36,000 to 23,000 under your leadership.?2 a. b. C. How many rounds of lay?offs have occurred during your tenure? How many lay-offs can be attributed to the ?re?engineering?? Although Red Cross closed certain chapters, some of?ces remain open. How many former Red Cross chapter of?ces have closed since 2008? Please provide a list of the former Red Cross chapter of?ces that have closed since 2008. In light of the chapter closures and staff reductions, what efforts is the Red Cross undertaking to ensure that it can respond to major and small?scale disasters, particularly in small towns and rural areas? How is Red Cross ensuring that the now?consolidated chapter of?ces have the capacity to serve larger service areas? 3. ProP-ublica?s December 14, 2015, article suggests that troubling morale issues exist for both Red Cross employees in local chapters and seasoned volunteers. a. b. How is Red Cross addressing these morale issues? According to ProPubZica, only 35 percent of Red Cross employees reSponded favorably to the statement: trust the senior leadership of the American Red Cross.?13 How is the senior leadership working to earn the trust of the Red Cross employees? What efforts is Red Cross undertaking to retain these experienced employees and volunteers? According to ProPubZica, at the beginning of your tenure, you focused heavily on addressing financial challenges at the Red Cross that pre-dated your appointment as President and CEO.14 In addition to modifying business practices, you also engaged in efforts to drive donations 1: McGovern, supra n. 8. 12 . Elhot, .S'upra n. l. 13 Id. 1? 1d. through marketing and branding. Despite these efforts, Red Cross is expected to Operate at a de?cit until 2017 and receipts have fallen below 2011 levels.? Indeed, the United Way of Western Nebraska has stopped funding Red Cross due to concern that the donation would no longer fund local activities. 4. 16 I understand that you executed a plan to increase revenue through ?consolidated, powerful, breathtaking marketing?? Was the development and implementation of the marketing plan paid for with donated funds? If so, would the funds used for the marketing plan have been drawn for those designated by donors to support the ?where it is needed most? category? How much money has the Red Cross invested in carrying out the ?consolidated, powerful, breathtaking marketing?? How much funding can Red Cross attribute to its marketing plan? Have shortfalls in receipts affected Red Cross? ability to respond to major disasters or small scale disasters? If so, how? 5. The number of Red Cross chapters in the United States has gone from 700 to 250 since you began your tenure.?8 How has closing chapters, thereby losing close ties with the community, affected Red Cross? fundraising and efforts to recruit volunteers? Red Cross and Domestic Disasters 6. a. I understand that some emergency planners have chosen to write Red Cross out of their emergency response plans because the organization has become an unreliable partner. 19 How many emergency planners on the State and local level have informed you that they are no longer incorporating the Red Cross into their emergency response plans? What efforts is the Red Cross taking to address criticisms that it has become unreliable and to restore relationships with State and local emergency planners across the country? 7. According to ProPubZica, the Red Cross has struggled in its recent response to disasters in West Virginia and Northern California. Red Cross was unable to provide adequate food or shelter following these incidents.20 That Red Cross struggled to response to these events is troubling because Red Cross is a designated support agency under the National '8 Id. ?9 Id. Response Framework?s Emergency Support Function 6 Emergency Assistance, . . 2] lemporary l~-Iousrng, and Human Serv1ces Annex. a. Has the Red Cross performed an After Action assessment of its response to these disasters? If so, please provide copies. b. How is Red Cross addressing the challenges it experienced responding to the incidents in West Virginia and Northern California? 8. The Red Cross participated in the response to the October 2015 floods in South Carolina. a. How did the Red Cross implement lessons learned from its responses to previous disasters from Hurricane Sandy22 to the Northern California wild?res23 in its response to the South Carolina ?oods? b. What efforts did the Red Cross undertake to ensure that it was able to provide services to diverse communities and was able to partner with diverse organizations to deliver disaster services? c. Is the Red Cross currently engaged in recovery activities in South Carolina? If so, in what recovery activities is Red Cross engaged? 9. In response to criticism about its response to the Northern California Wild?res, the Red Cross responded that it ?continues to work with local Long-Term Recovery Groups . . . to develop and execute long?term recovery plans.?24 The GAO, however, reported that within Red Cross, ?there has been a lack of clarity about what services to provide? and that there has been ?little centralized direction or guidance? for recovery activities.?3 a. I understand that Red Cross issued guidance to staff regarding baseline recovery services in 2014.26 Please provide a copy. To which staff was the 2014 recovery guidance provided? c. How is Red Cross utilizing the recovery guidance as it works with communities in Northern California to recover from the wildfires? d. In which recovery activities is the Red Cross engaged in response to the Northern California Wildfires? _Red Cross and International Disasters 10. In a recently published op?ed, you stated that the Red Cross ?played a leading role in supporting relief operations in Nepal after the devastating 7.8 magnitude earthquake in 2' Federal Emergency Management Agency, National Response Framework, Emergency Support Function 6 Mass Care, 130726- 19 3-25045-41 3050 1 .pdf. 22 See Elliott, supra n. 4. 33 See Joseph Mayton and Halima Kazem, ?California Residents Condemn Red Cross for Slow Response to Wild?res," The Guardian (Sept. 17, 2015), condemn-red-cross-wild?res. 24 Elliot, supra 11. l. 25 Government Accountability Of?ce, supra n. 3 at 14-15. 2? Id, at 15. April.?27 In the past, the Red Cross has been criticized for its inability to effectively provide relief services and carry out recovery missions internationally, particularly in Haiti.28 In light of the challenges Red Cross faced in responding to the disaster in Haiti, many of which I have raised with you in the past and which were also raised in the ProPubZica piece, I am interested to understand how Red Cross has improved its ability to deliver disaster relief services internationally. a. What services did the Red Cross provide in Nepal? b. Did the Red Cross engage in targeted fundraising or otherwise raise money that was designated for the earthquake in Nepal? If so, how much money was raised? How much has been obligated to date? c. How did the lessons learned from the Red Cross? response to Haiti inform its activities in Nepal? Thank you for your attention to these issues. I look forward to working with you to make the Red Cross a strong, accountable organization upon which both donors and disaster survivors can rely. If you have any questions or require additional information, please contact HOpe Goins, Chief Counsel for Oversight, at (202) 226-2616. Sincerely, Bennie G. Thompson Ranking Member 27 Gail McGovern, ?American Red Cross, Always There When Disaster Strikes,? Huj?ngton Post (Dec. 18, 2015), 28 See Elliott, ?How the Red Cross Raised Haifa Billion Dollars for Haiti -and Built Six Homes," supra n. 2. 6