The Morning Report
Get the news and information you need to take on the day.
Barely a year into his tenure as head of the local American Red Cross chapter, CEO Bill Earley is facing allegations he agreed to swap private donor information for personal gain.
The claims are made in a wrongful termination lawsuit lodged in federal court in April by Joy Chesbrough, hired last year as the chief development officer of the American Red Cross of San Diego/Imperial Counties. She was let go Jan. 5 after only four months on the job.
In the suit, Chesbrough claims Earley retaliated against her for voicing objections to his actions, which she says violate American Red Cross policy and state and federal laws.
“Plaintiff walked into a culture of mismanagement and unethical practices,” according to the lawsuit. “It came to Plaintiff’s attention that sharing donor information externally was previously practiced by, and acceptable to, the Red Cross-SD. When Plaintiff refused to participate in this conduct and sought to put an end to it, she was faced with retaliation and ultimately the wrongful termination of her employment.”
Both local and national American Red Cross officials declined to comment on the reason for Chesbrough’s departure, but deny any wrongdoing or privacy breaches occurred.
“Her allegations are untrue. The Red Cross cannot perform its mission without the generosity of our donors and their personal information is not shared,” a statement released by both offices says.
Earley, a longtime labor attorney hired by the Red Cross last July, declined a request for an interview.
Chesbrough claims that on two occasions Earley agreed to release confidential donor information: Once promising his former law firm McKenna Long & Aldridge an 800-plus attendee list for the Red Cross’ hallmark Real Heroes charity event after sponsoring a table. Another time, she said Earley planned to hand over information about the region’s top 15 donors to a real estate consulting firm, McKinney Advisory Group, in exchange for hosting a small fundraiser “so McKinney could obtain leads for potential new clients.”
According to Chesbrough, the American Red Cross database contains donor names, addresses, phone numbers, emails, wealth data, as well as information about spouses, children, prior gifts and donor leadership roles on other boards, although she’s unsure how many details were going to be given or whether they ever were released.
“She was concerned about the gracious people of San Diego and not wanting their personal information shared to third parties,” said Chesbrough’s attorney, Alreen Haeggquist. “She intercepted and stopped Bill Earley from disclosing the information, but she’s not sure if it was released after she left.”
The local Red Cross chapter has faced major turnover of its top leaders and can’t seem to shake controversy. It has been scrutinized multiple times in recent years over various decisions and missteps, including the handling of money donated for an Alpine fire in 2001.
Earley was hired to lead the beleaguered organization last summer, mere months after the previous CEO, Tony Young, abruptly resigned. Young said at the time his departure just 14 months into his tenure was driven by a difference of opinion with national American Red Cross leaders, not performance. Three board members left their posts days later.
Young, who had stepped down from his post as San Diego City Council president to take the Red Cross job, said the local chapter operates more as a franchise than an independent group.
“It’s more of an organization where you raise money, and the money doesn’t go straight to San Diego. It goes other places,” Young said. He said donor information was never wrongfully released on his watch.
Chesbrough isn’t the first local American Red Cross official to allege wrongful termination.
Former CEO Dodie Rotherham unsuccessfully sought $2 million in a wrongful termination lawsuit against the local chapter and national American Red Cross in 2002. Rotherham and the entire San Diego Red Cross board were removed from their posts by national organization leaders after facing intense criticism over the minimal donation money spent helping victims of a 2001 fire in Alpine. Concern mounted when it was discovered that audit results were misrepresented and toned down by local officials.
In the wake of that shakeup, the organization hired an ethics expert and set up a corruption hotline while it struggled to regain the trust of the community.
When Earley was hired, he told U-T San Diego his primary goal was to get more San Diegans prepared for wildfires and other disasters.
An inaugural Disaster Preparedness Academy offered July 29 attended by nearly 100 business owners and employees is just one sign Earley is doing his job, board chairman Stan Hartman said in a statement.
“Bill Earley is a tremendous leader and we’re proud of the work he has done in a short time with the Red Cross in San Diego. We look forward to continued growth under his leadership,” said Hartman.
Hartman, who declined to discuss Chesbrough’s allegations, also cited a No. 1 national survey ranking in client and volunteer satisfaction, and progress made installing 1,000 smoke alarms as part of the American Red Cross Home Fire Preparedness Campaign.
But Chesbrough says in the lawsuit that Earley’s leadership is hurting the organization. The longtime charity worker and graduate of USD’s Institute for Nonprofit Education and Research was recruited by the Red Cross from the nonprofit World Vision International. Chesbrough’s resume also includes senior posts at nonprofits PetSmart Charities and MAP International.
“Earley started yelling at Plaintiff and speaking to Plaintiff as if she were a dog. Earley demanded Plaintiff to ‘sit!’” repeating it several times while pointing to a chair, the lawsuit asserts.
She also claims she was lied to about the organization’s finances and was made staffing promises during her interviews that weren’t kept, hampering fundraising efforts, a primary part of her job. Shortly after her start date she learned the organization was $600,000 in the red, an amount totaling 16 percent of the budget. Layoffs followed.
Four months of mail was also discovered at the Post Office, containing substantial donations, “Hence, none of the donated money was being allocated in accordance with the donor’s intentions” and donors weren’t receiving receipts as required by the IRS and Red Cross policy, the lawsuit states.
Though the alleged wrongdoing occurred in San Diego, the case is being heard in federal court because the American Red Cross headquarters is in Washington, D.C. and “the amount in controversy exceeds $75,000, excluding interest and costs.”
Court records show a mandatory settlement conference is scheduled for next May ahead of trial.