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Seeing red at the Red Cross

The Red Cross said Friday it is already more than $100 million in debt from Hurricane Katrina, even as Americans donate record amounts. What's going on? Evacuees and volunteers within the organization say the money isn't being spent wisely.

Never before has the Red Cross been called on to do so much for so many. And Americans have opened up their pocketbooks like never before, donating more than $1 billion to the Red Cross.

But among some evacuees — and volunteers on the ground — there is anger.

"When we get back to headquarters, I think I'm going to turn in my Red Cross card," says volunteer Janie Duncan, "because I'm ashamed. I'm ashamed."

Duncan's ashamed at seeing hundreds of thousands of dollars worth of extra food thrown away because Red Cross coordinators wouldn't listen to estimates from volunteers on the ground. Volunteer John Lupton showed us receipts from last week, when $75,000 worth of food was thrown out in Algiers, La.

"We could have taken that $75,000," he says, "had $500 cashier’s checks made up and walked through the neighborhood giving $500 to everybody."

Friday, Red Cross President Marsha Evans insisted the organization does not take its donors or their money for granted.

"If there are incidents where perhaps decisions are made, when in the cold light of 20/20 hindsight, the decisions aren't the best, we'll look at that," she says. "And we'll try to improve."

But for evacuees trying to reach the Red Cross for promised financial help, all too often all they hear is a phone recording saying, "Currently, phone lines are being overwhelmed."

Earlier this week, hundreds waited in 96-degree heat to make the call.

"I never get through, that's the problem," said one man.

NBC News has also tried to get through also, making nearly 200 calls over the past week. So far, no luck. A month into this, shouldn't this phone system be working?

"Well, actually," explains Red Cross President Evans, "we had to invent this whole new system and scale it up." 

There are 1 million phone calls each day to the Red Cross, but so far the system can only process 35,000.

Even with those problems, the Red Cross results are impressive. Consider the numbers: 15 million meals to more than 700,000 families and 80,000 people still in Red Cross shelters. That's food and shelter they wouldn't otherwise have, as an agency, stretched to the limits, struggles to help families in need.