“This story wasn’t about us,” said Rob Shapiro, agitation beginning to seep into his otherwise even-toned voice at the other end of the phone.
Shapiro is the public relations director for the American Red Cross of Southeastern Virginia. Our conversation followed a recorded phone message he had left expressing “our concerns here at the Red Cross about the picture on Page 1 of a Red Cross card, in a story that had nothing to do with the Red Cross and … everything to do about FEMA.”
The Red Cross, Shapiro said, had received “a lot of calls” concerning the layout design for a front-page story Feb. 14 about disaster aid that was fraudulently collected after hurricanes Katrina and Rita. The story detailed, among other things, how some recipients used debit cards issued by the Federal Emergency Management Agency to make luxury purchases.
“Look what Katrina aid cards bought …,” screamed our above-the-fold headline, followed by photos of a Red Cross debit card and a FEMA card, with arrows pointing to photos illustrating the following: “$400 massages,” “a $1,300 handgun,” “a $450 tattoo,” “a $1,100 engagement ring” and “gambling.”
All topped by an overline: “Accounting report finds waste, mismanagement.”
But Shapiro, I discovered after investigating the matter, was right and justifiably concerned.
While there has been documented evidence and news stories of abuse of Red Cross debit cards, which were funded by private donations, our story was about waste and fraud involving federal dollars as revealed by an audit by the Government Accountability Office.
“We only looked at federal dollars; our report had nothing to do with the Red Cross,” Gregory D. Kutz, GAOs managing director for forensic audits and special investigations, told me in a phone interview from Washington. Kutz recently detailed the findings in testimony before the Senate Committee on Homeland Security and Governmental Affairs.
The examples of inappropriate use of debit cards we illustrated is found on Pages 21-22 of the GAO report, under the heading “FEMA Debit Card Transactions.”
So why did we use the Red Cross debit card as the most prominently featured one, at that?
Shapiro said he was originally told by Pilot editor Denis Finley that display of the card was intended as an “iconic” use. That would have been an incorrect use one that Shapiro, a former TV news producer, noted would be “misleading and damaging” to the Red Cross.
Finley told me that, since talking with Shapiro, he learned that both the FEMA and Red Cross cards were involved with fraud. He suggested that I talk with Pilot presentation designer Robert Suhay.
Suhay, who was responsible for the page layout, said that based on his computer searches, he “believed that both cards were involved in the report.”
Originally, I did, too. For the same reasons as Suhay. Some news stories at the time mentioned that federal prosecutors had filed fraud, theft and other charges against 212 people accused of scams related to the Gulf Coast hurricanes. Among those who had pleaded guilty were many individuals accused of trying to obtain emergency aid, “typically a $2,000 debit card, issued to hurricane victims by FEMA and the American Red Cross,” according to news stories mentioning the Justice Department’s Hurricane Katrina Task Force report.
The Pilot’s story, a compilation from several news sources, included the Justice Department’s information, but it omitted any mention of the use of debit cards in relation to it.
Suhay said he searched file images to find photos of the FEMA and Red Cross debit cards and found both. A caption on one showed a Katrina evacuee displaying “his FEMA debit card” near the Houston Astrodome last Sept. 9. The caption for another showed a New Orleans native “showing her Red Cross debit card.” The caption said that FEMA had not started distributing its debit cards.
Because stories indicated that both FEMA and American Red Cross debit cards had been fraudulently used, Suhay said, he believed that both had been involved in the fraud report.
But the Justice Department’s report was separate from the GAO report that was the focus of the story we published. “And the Red Cross was not connected to that story,” to quote Shapiro.
