Red Cross yet to spend $200M of tsunami cash

More than three years after the Asian tsunami devastated several countries, $200 million of the $360 million donated to the Canadian Red Cross has still not been spent.

After the tsunami slammed into 11 countries, including Indonesia, Sri Lanka, India and Thailand, on Dec. 26, 2004, killing more than 225,000, Canadians opened up their hearts and wallets.

When the Canadian Red Cross appealed for money, individuals, corporations and the federal government couldn't send cheques fast enough. Most of it came within the first month after the devastation.

When all was tallied, $360 million had been collected and the agency insists the remaining $200 million has been allocated in its quest to build 6,000 homes. The Canadian Red Cross kept the fundraising campaign up for another year, while at least one other charity had long ago stopped.

"It is somewhat startling ... that a good amount of that money has not been deployed for its intentions when Canadians in a mood of outpouring gave money in almost an unprecedented way," said Liberal MP Dan McTeague (Pickering-Scarborough East), who was parliamentary secretary to foreign affairs minister Pierre Pettigrew when the tsunami struck.

"The public must have a reasonable expectation that monies that they contribute are, in fact, spent as they are indicated to be spent. One can understand timelines, but this tsunami took place over three years ago."

The Red Cross in Canada took in far more money than it ever imagined. Some say it was a combination of the time of year and the size of the catastrophe that put people in a giving mood. In all, the worldwide community donated a reported $7 billion in humanitarian aid.

A senior industry source said one of the contributing factors for so much money still being undistributed was that the Canadian Red Cross was thrust into the international stage, forcing it to establish offices in the stricken areas to begin the arduous task of rebuilding.

Jean-Philippe Tizi, director of emergency and recovery for the Canadian Red Cross, stated: "Following the tsunami, the Canadian Red Cross was requested by (the Indonesian Red Cross Society) to drastically scale up our support in response to the overwhelming devastation, ensuring increased capacity and speed of delivery. In order to support our operations and personnel effectively, an office location was secured."

Canadian Red Cross secretary general Dr. Pierre Duplessis has said it will take at least a decade to complete the tsunami relief.

Jenna Clarke, a Canadian Red Cross spokesperson, told the Toronto Star the money, which is invested and making even more money for the charity, is committed to building homes in Sri Lanka, Indonesia and the Maldives.

"I'd like to reinforce the point that of the money that hasn't been spent out the door, the majority has been committed. It's fixed, so it can't be spent on anything else – and the majority of that is on housing," Clarke said.

The Canadian Red Cross has a plan to build 6,000 houses. "We are on schedule to complete the housing by the end of the year ... but then again, it is construction."

Critics say the Canadian Red Cross spends its money slowly because it's a large bureaucracy.

"Anybody trying to spend $360 million would have troubles with capability. They didn't have to take in the money. They could have said, `I'm sorry, we've got enough,'" but they didn't," said the industry source, adding that Doctors Without Borders did exactly that.

David Morley, president and CEO of Save the Children Canada, was executive director of Doctors Without Borders Canada when the tsunami struck.

"After about five or six days, we could see that we would have way more money than we could spend at the time, so we told people we wouldn't take any more. ... We knew that was sort of all we could manage," Morley recalled.

"We could see that we would be" in the same situation as the Red Cross, he said. "It's a great deal of money to have to spend."

Morley noted Save the Children Canada raised about $5.5 million and, as of December, it had spent about $4 million. He said the response to the tsunami was a learning experience for all charities involved.

Source: thestar.com