Congress scrutinizes charity disparity.

The carnage and destruction of September 11 left thousands of people with immediate and long-term needs. In addition to food, shelter, and blood, substantial emergency assistance was needed to help victims' families keep their homes, pay bills, and provide food. The more than $1 billion that Americans have already donated dwarfs the combined contributions totaling $155 million that followed Hurricane Andrew in 1992 and the Oklahoma City bombing in 1995.

This giving is distinct from the September 11th Victim Compensation Fund, which was created by Congress for a different purpose--potential recovery for legally cognizable economic and noneconomic damages--and as an administrative alternative to the traditional liability system.

By September 18, just a week after the attacks, various charities collectively had raised more than $200 million. The Red Cross alone had received $118 million in pledges or cash. The Salvation Army had raised $4 million. The September 11th Fund, formed by the United Way and the New York Community Trust, had raised more than $100 million.

Internet service providers such as America Online solicited subscribers for contributions. Ebay launched an auction to raise $100 million in 100 days. Corporations donated tens of millions of dollars at a time, and children emptied their piggy banks and sold lemonade to collect money. Two Oklahoma radio stations collected food for rescue dogs helping in the recovery efforts. As of this writing, more than 200 charities are still raising money for the terrorist attack victims.

Donors expected a certain level of accountability regarding the distribution of the money that they had contributed. As disbursement proved uneven and poorly managed, it was inevitable that when Congress investigated constituents' concerns, its findings would raise some tough questions for charitable organizations.

Newspapers reported accounts of victims' relatives who had spent days and weeks going from one charity to the next, filling out forms, providing copies of missing-person reports and death certificates, and telling and retelling the stories of their family members' deaths.

The repetition was frustrating and draining. Many families worried that funds would not be distributed equitably.

Groups that monitor charitable organizations expressed concern on behalf of victims and those who had given so generously. Congress did the same. On October 30, Sen. Charles Grassley (R-Iowa), ranking member of the Senate Committee on Finance, sent a letter to four federal agencies--the Federal Emergency Management Agency, Federal Trade Commission, Department of Justice, and Internal Revenue Service--and attorneys general in New York and Virginia.

Grassley questioned oversight and distribution of relief funds and asked for responses to an extensive list of requests--from providing a distribution timetable to describing how the agencies were coordinating to minimize waste and fraud. He wanted the responses in two weeks' time, with supplements as more information became available.

At the same time, the House Energy and Commerce Committee's Subcommittee on Oversight and Investigations announced that on November 6 it would hold a hearing to examine allegations of fraud, waste, and abuse of charitable contributions. It took the American Red Cross, in particular, to task.

A week before the hearing, the Red Cross had announced that it was halting appeals for donations to the Liberty Fund, which it had created to help the terrorist attack victims. It reported that the organization would not distribute the entire fund amount--about $540 million--directly to victims.

Bernadine Healy, former president of the American Red Cross, told the subcommittee that to her knowledge, the Red Cross had "never believed or stated that its work or its request for donations were limited only to those who were lost on 9/11 and their families."

Subcommittee members said the organization's fund-raising efforts misled the public into thinking that donations were specifically for families.

The next day, Rep. Billy Tauzin (R-La.) said on Fox News's O'Reilly Factor, "[J]ust keep in mind, the Red Cross is a federally chartered institution. They can only go so far, and, at some point, if they continue to persist in the notion that they can raise money for one purpose and use it for another, they may just find themselves in big trouble."

The Red Cross avoided immediate trouble by announcing three changes regarding the Liberty Fund. It said the fund would meet the immediate and long-term needs of those affected by the September attacks; that the agency would provide additional funding to cover a year's basic living expenses--housing, food, utilities, tuition, child care, and health care--for families that had lost loved ones; and that it would work with other relief agencies, including sharing the names of 25,000 families it had already helped.

The Red Cross also said it would not tap the Liberty Fund to finance a blood-reserve program, telecommunications infrastructure, and other proposed plans.

When the Red Cross made these announcements in full-page ads in newspapers across the country, it noted that the ads were not paid for with Liberty Fund dollars.

Kristin Loiacono is media relations coordinator for ATLA.