Red Cross Critic Encouraged By Liberty Fund Announcement

By Jim Burns | July 7, 2008 | 8:20 PM EDT

( - A New York lawmaker who proposed legislation to oversee the allocation of charity funds praised the Red Cross Wednesday for announcing it would give all Liberty Fund donations to the victims of the Sept. 11 attacks.

Rep. Benjamin Gilman (R-N.Y.), who called for the establishment of a board to act as a clearinghouse to assure that charity funds reach the people who need them, called the announcement "gratifying."

"It is gratifying that the Red Cross is now taking the necessary steps to ensure that the funds the American people donated to the victims of September 11th is received by those victims and their families," said Gilman.

"Moreover, I am encouraged by the steps they have taken to improve coordination and cooperation with other charities and the public auditing of the Liberty Fund," he said.

The American Red Cross said Wednesday that all the money in its Liberty Fund would be used just as donors intended. "None of it will be reserved for future events," said Harold Decker, the Red Cross's interim CEO.

The Red Cross collected over half a billion dollars in the wake of the terrorist attacks, but it has come under attack for its management of those contributions, with some victims wondering where the money is going.

The American Red Cross announced last month that not all of the $560 million sent to the Liberty Disaster Relief Fund would go to victims of the attacks. It said some $200 million would be held in reserve in case it is needed for other terrorist attacks. That policy caused an uproar in some quarters, prompting Wednesday's announcement.

"However," Gilman admonished, "the Red Cross is only one of more than one-hundred organizations which received funds for victims, widows, orphans, and other family members and purposes.

"With more than $1.2 billion in donations, the federal government should be taking an active role in reviewing these accounts and making certain that victims and contributors are not being defrauded or that the funds are not being misused," he added.

Despite the Red Cross announcement, Gilman is still pushing ahead with his legislation that would establish a five-member board to act as a clearinghouse of information on credible victim relief funds and provide accountability for the victims of domestic disasters, such as the terrorist attacks on Sept. 11th.

Gilman, whose congressional district borders New York City, decided to act when he learned that the Red Cross was planning to use a portion of the funds that had been donated to victims' families to purchase computers and other items instead.