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Target Real Fraud, Not the Red Cross By: Larry Elder
FrontPageMagazine.com | Friday, November 09, 2001


HOLD the Red Cross accountable!

The headlines seemed unmerciful. Red Cross CEO Bernadine Healy, on the job only two years, suddenly announced her retirement. According to the Los Angeles Times, "Healy resigned ... saying she had been forced out by her board over policy disputes."

A USA Today editorial urged Americans to hold the Red Cross' feet to the fire. The organization raised over $500 million since the tragedy of Sept. 11, 2001. People gave expecting the victims to receive all of the monies, said USA Today. "Now the Red Cross appears intent on diverting a significant share to other purposes. That isn't illegal, and the other causes may be worthy, but the switch appears a mismatch with donors' intent ... The Red Cross and all non-profits need to make certain that donors' wishes are followed and that money flows quickly and efficiently to those who deserve it."

Let's string the CEO up. Trial to follow!

The Red Cross, according to its Web page, gave out $153,800,000 of the over $320 million donated specifically for its September 11 disaster relief fund. Healy's resignation concerns policy disputes rather than, say, missing money.

Fine, let's apply this Red Cross zero-tolerance standard elsewhere. Remember the lawsuits against tobacco companies? In selling its citizens on these lawsuits, state attorneys general said they filed suit to collect monies for anti-smoking programs. But what happened? When the states agreed to a settlement of $246 billion, some spent much of the money on non-tobacco-related programs. Rhode Island, having repealed its state auto tax, used the money to replace the "shortfall." In Alabama, legislators debated a proposal to spend some of its $3.2 billion for programs designed to attack gangs and satanic worship. In Montana, legislators wanted to spend some on a boot camp for juvenile offenders.

And remember the sales pitch for state-run lotteries? Why, after all, the lottery monies will go to education. But, for the most part, the states' lotteries failed to expand the total educational budget. Instead, legislators anticipated a certain dollar amount from lotteries, and simply subtracted an equal amount from what they otherwise expected to spend on schools. Oh.

And what about the federal government? Sen. Fred Thompson, R-Tenn., presided over the Senate Governmental Affairs Committee. Thompson concluded, "Because of its size and scope, and the terrible way it is managed, the federal government wastes billions and billions of your tax dollars every year. The waste, fraud and abuse reported to the Governmental Affairs Committee each year is staggering. Of course, no one knows exactly how much fraud, waste and mismanagement cost the taxpayers because the federal government makes no effort to keep track of it."

About the Department of Defense, the Thompson report said, "Despite the massive audit effort, the Department of Defense could not overcome the fundamental inadequacy of its financial-reporting systems and produce reliable data. The department continues to confront pervasive and complex financial-management problems that can seriously diminish the efficiency of the military services' support operation. There is no major component of the Defense Department that can balance its books."

In fact, following a Department of Defense audit of their fiscal year 2000 financial statement, Insight magazine said, "At the end of the last full year on Bill Clinton's watch, more than $1 trillion was simply gone and no one can be sure of when, where or to whom the money went."

As for the Department of Agriculture, its accounting practices would land any self-respecting CEO of a publicly held company in jail. According to Insight magazine, "Because its financial management is so deficient, the department can't ensure that its financial statements are reliable and presented in accordance with generally accepted accounting principles. For fiscal 2000 – the seventh straight year – the Agriculture Department failed its annual financial audit."

About the Department of Education, Insight said, "With the exception of fiscal year 1997, the Department of Education has not received an unqualified or 'clean' opinion on its financial statements since its first agency-wide audit. That means it can't even balance its books once a year. Needless to say, it can't manage its money on a day-to-day basis."

In "Feeling Your Pain -- The Explosion  and Abuse of Government Power in the Clinton-Gore Years," James Bovard said, "The vast majority of government agencies can neither be reinvented nor reformed. If Americans want good government, hundreds of failed government programs must be abolished and legions of laws that turn government into a public nuisance must be repealed. All other 'reforms' will merely prolong the abuse of the American people."

Rep. Dick Gephardt, D-Mo., wants to use federal workers for airport security. "If (federalization of workers) is good enough for (Congress), it's good enough for the American people." No, let's hope not. Americans deserve more. How about the Red Cross zero-tolerance standard?


Larry Elder is the author of the newly-released Showdown. Larry also wrote The Ten Things You Can’t Say in America. He is a libertarian talk show host, on the air from 3-7 pm Pacific time, on KABC Talkradio in Los Angeles. For more information, visit LarryElder.com.


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