Red Cross faces criticism over Hurricane Harvey relief distribution

The Red Cross is defending the way it's spending the $429 million raised to help victims of Hurricane Harvey. Texas officials worry some people in need were neglected. And this isn't the first time the Red Cross has faced criticism after a major disaster. One crisis expert says the organization should be better equipped to respond to natural disasters after decades of experience. 

The Red Cross told CBS News it spends an average of $360 million per year to help disaster victims. It also says more people have stayed in their shelters overnight this year than in the past five years combined.

After Hurricane Harvey dumped unprecedented flooding on parts of Texas in August, the Red Cross rolled out a new online system to help victims. Apply online or on your phone for relief funds, and the Red Cross would let you know via text or email if you qualified for a $400 aid payment, reports CBS News' Omar Villafranca.

But some residents of a neighborhood that received nearly three feet of water during the storm are saying they're not getting the help they need.

"I thought somebody would help. We don't need a lot. And I got nothing," Jackie Bailey said.

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Jackie Bailey

CBS News

Twenty-nine inches of water flooded Bailey's Houston-area home during the hurricane. When her daughter Geneva helped her apply for $400 in assistance from the Red Cross, she found out they were denied over text message.

While some may say it's only $400, Bailey says it's "the thought" that matters. 

"You know, the thought that people are going to help you, but there's no help," Bailey said.

Earlier this month, Texas Gov. Greg Abbott expressed his own worries over Red Cross funds raised to help Harvey victims.
 
Abbott told reporters he was concerned Harvey relief was not getting into the hands of the people who need it. The governor's office confirmed to CBS News that they've met with Red Cross officials as part of an ongoing process to make sure Texans are getting the help they deserve.

During an August interview on "CBS This Morning" Red Cross CEO and president Gail McGovern defended the organization's spending and distribution of resources.
  

"We are really proud of the fact that we keep our overhead low," McGovern said. "We are going to make sure that every designated dollar that is going to this storm is used appropriately."

Gov. Abbott and the Baileys aren't alone in their concerns. Iowa Sen. Chuck Grassley criticized the Red Cross's response to the 2010 earthquake in Haiti that killed more than 300,000 people. 

In a 2016 memo, Grassley claimed the Red Cross spent "one fourth of the $487.6 million" raised on administrative fees. He also accused the organization of trying to "quash a congressional watchdog review of its practices." The Red Cross told CBS News it "strongly disagrees" with Grassley's report.

The Red Cross says it's distributed more than $229 million in financial assistance to Harvey victims so far, more than half of what was donated. Another $45 million was spent on providing meals, shelter and health services.

"We're very transparent with the data, how much we've raised," said Harvey Johnson, senior vice president for Disaster Cycle Services at the Red Cross.

"We focus on what qualifies someone for the awards. You had to live within the 41 declared counties. We asked a few pretty simple questions. Were you severely impacted by the disaster? Were you displaced for three days or more? If you were less than three days you wouldn't qualify," Johnson said of the $400 award's eligibility requirements.

The Red Cross says they've handed out emergency funds to more than 500,000 households. For some homeowners, that $400 they received was a lifeline.
 
Four feet of water flooded Theresa Martin's home. She applied for help from the Red Cross and received $400 in cash.

"Every little bit helps. It buys groceries," Martin said.
 
The grandmother of 11 is living in a trailer while her house is repaired.

The Baileys never found out why they didn't qualify, but said they only left home for two days because they were worried about looting.

"It made me feel like I didn't suffer, I didn't have a storm, I didn't lose my stuff. Like I wasn't worthy," Bailey said.

The Red Cross told CBS News they still have $108 million to give out toward long-term recovery, which will be distributed through a different program. Even if you applied for the $400, you can apply for these funds as well. Some people were under the impression you have to pay back the $400. The Red Cross says you do not.