November 27, 2007
Red Cross President Resigns Under Pressure
By Grant Williams
Washington
The beleaguered American Red Cross announced today that it asked for and received the resignation of its chief executive, Mark W. Everson, after the organization’s board learned that Mr. Everson had “engaged in a personal relationship with a subordinate employee.”
Mr. Everson had been hired just last May and is the fourth Red Cross chief executive to step down since 1999.
The Red Cross named its general counsel, Mary S. Elcano, as its interim chief executive. The organization said its board has formed a search committee “and will immediately undertake the process of selecting a new CEO.”
In a statement on its Web site, the Red Cross said that its board had “acted quickly after learning Mr. Everson engaged in a personal relationship with a subordinate employee. It concluded that the situation reflected poor judgment on Mr. Everson’s part and diminished his ability to lead the organization in the future.”
Bonnie McElveen-Hunter, chairman of the Red Cross board, said in the statement that “although this is difficult and disappointing news for the Red Cross community, the organization remains strong and the life-saving mission and work of the American Red Cross will go forward.”
She added: “Mary Elcono, who has ably served as our general counsel for the past five years, will continue to provide leadership, stability, and continuity until a successor is chosen.”
In a statement of his own, Mr. Everson said he was resigning “for personal and family reasons, and deeply regret it is impossible for me to continue in a job so recently undertaken.”
The Red Cross took a year to select Mr. Everson, who previously had served as the head of the Internal Revenue Service.
The organizaton’s previous top executive, Marsha J. Evans, resigned in 2005 amid criticism of the charity’s response to Hurricane Katrina.
At about the same time that the Red Cross announced Mr. Everson’s appointment earlier this year, Congress passed legislation to reduce the size of the Red Cross board and clarify the authority of its chief executive within the organization. The Red Cross, which operates under a federal charter, had asked for the legislation.
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OPEN LETTER TO RED CROSS DONORS: Is Mark Everson’s Abrupt Firing a Cover-up?
The American Red Cross (ARC) fired CEO Mark Everson on November 27 for having a “personal relationship” with Paige Roberts, CEO of the Southeast Red Cross Chapter. Both are married, and Roberts is pregnant with Everson’s child.
This red hot, Red Cross sex scandal has sent shockwaves throughout the nonprofit community. But is there something more sinister here?A conspiracy perhaps? Could the Red Cross’ quick as lightning firing of Everson be a cover-up for a much more serious offense?
The ARC has stated it is undertaking a forensic audit of monies spent by Everson to determine if any of the charity’s money was used inappropriately as he romanced Roberts. If, indeed, he is found to have dipped into Red Cross funds, then isn’t this called “embezzlement?” Don’t people go to jail for this?
The whole thing is moving very quickly – too quickly for this sluggish bureaucratic agency for it to make sense to those of us who have kept an eye on their every move for the past several years as we’ve waited for Katrina recovery donations and grants to filter down to needy survivors.
Personally speaking, I’ve witnessed so much suffering on the part of individuals and families that every misspent, missing, or misappropriated dollar is one dollar too much to spare. I’d rather see, as well as I imagine all who donated to the Red Cross and all who remain in need, for Katrina donations and grants to be used to relieve the mass human suffering which still exists.
During the past few days I’ve noticed a lot of Red Cross information regarding embezzlement and fraud within the Red Cross disappear from websites – even AOL web pages! In fact, the entire website for the Southeast Red Cross chapter is gone! All that’s left is their address, phone # and the words: “Website under construction.”
I noticed the same thing right after the Red Cross was forced to publicly speak about the Means to Recovery program. Other volunteers and a few journalists also witnessed the changing and disappearance of information.
There is no doubt in my mind that Everson misused Katrina donations. He was having an affair with someone connected to Katrina – and with both parties being married those dalliances had to be paid with money neither one’s spouse could trace. Red Cross money. Katrina donations. Survivors money.
The questions everyone should demand from the ARC are: how much money was misappropriated (in addition to the $10,000 the Red Cross gave Everson upon his departure for “health care”), and why is the Red Cross not referring to possible misappropriated funds as embezzlement?
I’ll tell you why: having the CEO of the American Red Cross accused of embezzlement would mean he would go to jail. And, it would stop people and corporations from donating which would be even more disastrous to the Red Cross than any other fiasco to date – the Everson-Paige affair included.
For this reason, I suspect the Red Cross will never disclose its findings of impropriety against Everson (and possibly Roberts, if they look into the Southeast Mississippi chapter’s records) citing confidentiality concerns. The Red Cross will then publicly pat themselves on the back for having done a splendid job and close the door on the whole sordid episode.
But, wait…there have been serious fraud and embezzlement problems we can trace. I’ll list some of them here:
RED CROSS MISSAPPROPRIATED DONOR DOLLARS: Quick Review
1. Eileen Therese Saxon of the Asheville, North Carolina Red Cross chapter charged with embezzling $165,000 – 9% of its $1.25 annual budget. (Source Ashville Citizen Times)
2. Karen Shuerger, former assistant director of accounting at the Orange County, California Chapter of the Red Cross has been sentenced to six months in Federal prison, ordered to pay restitution in the amount of $110,000 and when she is released, she will also serve 3 years of supervised release and six months of home detention. (Source: NY Times)
3. Red Cross Director Jonathon A. Jarrell of Virginia indicted on one count of embezzlement. Jarrell allegedly embezzled about $16,452 from the chapter between November 2004 and July 2006.
4. Joseph Lecowitch, CEO of the Hudson County Chapter in New Jersey, and his bookkeeper Catalina Escoto. Escoto gave herself $75,000 in bonuses. According to prosecutors, these two stole well over $1 million Red Cross donor dollars squandering it on gambling and each other. (Source: NY Times).
This doesn’t include all the money that was lost to volunteers and paid staff during the early days of Katrina, nor does it include reports by Red Cross personnel about bags and bags of cash disappearing.
In a New York Times piece by Stephanie Strom, titled “Red Cross Quietly Settles Case of a $120,000 Theft,” Strom states that the Connecticut chapter of the American Red Cross settled for less than half of the money from its insurance company. And goes on to add that this isn’t an isolated case. If the Red Cross is accustomed to going to their insurance company and taking less than what has been stolen, rather than pursue the matter in court just to keep it out of the headlines – then both donors and their intended recipients have been wronged.
Daniel Borochoff, president of the American Institute of Philanthropy, a charity watchdog group, has said that the Red Cross should be subject to state oversight like other charities. The Red Cross is only subject to federal oversight – which they claim is enough vigilance.
Apparently not.
The New Jersey $1 million Red Cross theft is reported to have been discovered due to sloppy bookkeeping. I would venture to guess this would not be the case if Mark Everson is discovered to have used Red Cross money inappropriately. As former head of the IRS, Everson would have knowledge of the most intricate schemes imaginable. It makes the mind race with all sorts of heart crushing scenarios.
According to The NonProfit Times there have been cases during the past few years where the charities involved refuse to make the full facts known to the public. “In our view,” they state, “this sort of selective disclosure (spin) is wholly inadequate. When a charity is using funds raised from the general public, it has a duty to account fully to the public. If that is not happening, then it is time to make it happen.”
If Everson is found to have ripped off donor dollars, he should go to jail. Additionally, the Red Cross should replace every stolen dime from all sources and put this money back into the till. No more lies, no more spin. Give us accountability or don’t continue at all.
Donors to the American Red Cross should be outraged.
Kirby Sommers
— Kirby_Sommers Dec 2, 08:56 PM #
My my… such outrage unleashed by Kirby Sommers.
— D. Moore Dec 5, 12:52 PM #
I believe the Red Cross, Mark Everson and Paige Roberts did the unleashing. My participation is only in the reporting.
— Kirby_Sommers Dec 5, 04:41 PM #
Very good article. I cannot get information from the Red Cross about the $350,000,000 of the $600,000,000 collected for the tsunami fund. Three years later the money still sits there. I spent two years as a volunteer in the tsunami zone and witnessed deaths and suffering from lack of funds. Whenever we inquired about funding we were told “the Red Cross” does not have any money! How much interest is that money earning? Whose friends bank is it in? Three years later – Why are they still holding the money? Too many questions and too much fraud.
PS. The American Red CRoss did not help any AMERICANS whose lives were destroyed by tsunami
— Henry Aruffo Dec 6, 10:09 AM #
Of course, “only in the reporting” makes you seem unbiased, whereas you are probably the same KS looking for donations for some little “hurricane relief” group. Gee, I wonder why you want people to stop donating to a proven organization (the Red Cross is much bigger than a few individual disasters); could it be you would like them writing you checks instead?
— Jason Dec 6, 10:54 AM #
Jason, some facts:
I am an American citizen who has paid for my Katrina Relief efforts out of my own pocket. I have had no time to fundraise for the “little hurricane relief group” which has to date put close to $100 million DIRECTLY from DONOR to RECIPIENT into the hands of Katrina and Rita survivors. I have not seen one dime of this money and that’s fine with me. I have worked probono, sometimes 16 hour days, 7 days a week for 27 months and counting.
If my first-hand experience with tens of thousands of Katrina survivors who have been lied to, mistreated by help agencies, and used by the Red Cross (among others) to fill their coffers to the brim with donor dollars offends you, perhaps you should consider starting your own “little hurricane relief group”.
Kirby Sommers
— Kirby_Sommers Dec 6, 11:28 AM #