Red Cross accused of misusing assets during disasters

A new report by the investigative journalism group ProPublica and NPR are accusing the American Red Cross of mismanagement after Superstorm Sandy and other disasters.

The investigation focuses on the Red Cross response to the two major storms of 2012: Hurricanes Isaac and Sandy, CBS News' Vinita Nair reports.

Over 17,000 Red Cross workers were dispatched to 12 states in the days and weeks following Sandy.

Three hundred eleven million dollars was raised by the Red Cross to help people in the storm zone, but according to the report, during Hurricanes Sandy and Issac, the disaster relief organization had another mission: marketing.

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Red Cross CEO Gail McGovern at post-Sandy press conference on Staten Island, November 2, 2012.

"What they would do is they would take these trucks and emergency response vehicles which have the big Red Cross logo and put them at press conferences and photo-ops," ProPublica writer Jesse Eisinger said.

Together with reporters from NPR, they conducted interviews with current and former Red Cross employees and obtained internal memos where the agency reviewed their response to the disasters.

"It's in their own documents that they diverted assets for public relations purposes," Eisinger said. "I think people expect the Red Cross to be a well-run organization. I think they don't expect their money to be wasted and certainly not on PR exercises."

Another Sandy response report by top management said, "We didn't have the sophistication needed for this size job" and "multiple systems failed."

"There are some very serious allegations being made here," said Ken Berger, president and CEO of Charity Navigator.

His organization is a watchdog group that rates non-profits, including the American Red Cross.

"One of the most vital things that a nonprofit must have to successfully raise money is the public trust," Berger said. "The idea that trucks are being puled from the service to help people to be in front of a media appearance, that's an example of something that would be important to sort out."

Following the Sept. 11 terror attacks and Hurricane Katrina, donors were outraged to discover that millions in Red Cross funds never went toward immediate disaster relief.

"Did we have mistakes and problems?" asked Suzy DeFrancis, the Red Cross' chief public relations officer. "Of course. Are we fixing them? Yes. We made a number of changes."

She would not deny the specific allegations, but called the overall report inaccurate.

"People can understand that the Red Cross did an effective response to Sandy, that we're gonna be there when the bell rings again at the next disaster, and because of the lessons we learned we're gonna strengthen our service delivery and be even better," DeFrancis said.

The Red Cross noted that it responds to 70,000 disasters a year, mostly apartment and house fires.

Of the $311 million raised for Sandy victims, $310 million has been spent on disaster relief to date for hard-hit places.