- The Washington Times - Friday, November 9, 2001

New York Attorney General Eliot Spitzer said yesterday that legal action could be taken against charities if they are found to be mishandling September 11 relief funds.
"My frustration level is rising every day," Mr. Spitzer said at a hearing before the House Ways and Means subcommittee on oversight.
Although a Web site www.wtcrelief.info has been started, it was a "tortured process," he said.
"Turf battles" seemed to be a reason charities balked at developing a victims' database, making a guide to charitable services for families, and providing detailed information to the public about how donations are being spent, he said.
There is also the issue of organizations such as the American Red Cross collecting money at least in the public's perception for victims' families, but then saying they will spend millions of dollars for other purposes, Mr. Spitzer said.
"Those who gave to the Red Cross intended unambiguously that their funds be used for the victims of September 11," he said.
"You cannot as a charity raise funds for Purpose A and then spend them on Purpose B," he said. "If we don't soon see tangible progress" in addressing these problems, "then the nature of my response will be different and it will be through the legal process."
Yesterday's hearing was the second time this week members of Congress took charities to task over their handling of relief funds.
"Many families are hurting and need help now and sadly they're not getting it," Rep. J.D. Hayworth, Arizona Republican, said at the hearing, which was led by Rep. Amo Houghton, New York Republican.
The September 11 attacks were so extraordinary that "we didn't know what we were dealing with," and there was "a lot of innovation in the moment," said Michael Farley, vice president for fund raising at the Red Cross.
He said that the Red Cross was doing a "top-to-bottom" review of its $564 million Liberty Fund to ensure that funds were spent in the way donors intended.
"This entire issue is being reviewed by our board of directors to determine whether or not we are out of step," he said.
"We're all motivated here by the desire to reach tens of thousands of victims," said Joshua Gotbaum, chief executive officer of the September 11th Fund, which received pledges of $337 million.
He reiterated, however, that the purpose of the fund is to serve "the victims, their families and the communities" affected by the attacks.
With $47 million dispersed already to dozens of community-based organizations, he said, "we think we're meeting emergency needs."
Mr. Hayworth, searching for a federal role in the charity matter, floated the idea of a "charity czar."
Mr. Gotbaum discouraged the idea, saying "by the time a charity czar got up and running, it would be six months to a year and I don't think we have the luxury of time."
The best thing Congress can do, he added, is to "shine a light" on charities.
Mr. Spitzer rejected suggestions that Congress pass laws allowing more oversight of private charities. "I'm not sure that legislation and regulations could be created quickly enough" to be of value in resolving the issue, the New York attorney general said.
Earlier this month, Rep. Benjamin A. Gilman, New York Republican, introduced a bill to create a board to act as a clearinghouse and monitor on charitable spending on domestic disasters.


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