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What every American needs to know about
The Red Cross

A Bait-and-Switch Charity - The Scandalous History of the Red Cross
by Joe Allen - Socialist Worker Thursday, Oct. 20, 2005 at 9:43 AM
Charity Navigator gives the Red Cross a Five Star Rating - yet the history of this corporatized organization tells a story of unparalleled corruption.

In recent years, the image of the Red Cross has been tarnished. The worst scandal came after the September 11 attacks, when it was revealed that a large portion of the hundreds of millions of dollars donated to the organization went not to survivors or family members of those killed, but to other Red Cross operations, in what was described by chapters across the country as a "bait-and-switch" operation.

Recently, long-simmering concerns about the Red Cross' disaster relief operations were expressed by Richard Walden, of the humanitarian group Operation USA, in the Los Angeles Times--prompting a vitriolic response by the Red Cross.

But these recent scandals are nothing new for the Red Cross. In fact, the whole history of the organization is one gigantic scandal--stretching from its racist policies toward African Americans to its corporate mentality toward human beings.

It is a tribute to the feebleness of the U.S. media--and the Red Cross' powerful Republican allies--that an institution with such a dubious history continues as the symbol of "humanitarian leadership," when it should have been replaced by a far more effective agency decades ago.

* * *

The Red Cross was founded in 1881 by Clara Barton, who became famous during the Civil War for organizing the distribution of food and medical supplies to Union Army soldiers.

The Red Cross is specifically mandated, according to its Congressional charter adopted in 1905, to "carry out a system of national and international relief in time of peace, and apply that system in mitigating the suffering caused by pestilence, famine, fire, floods and other great national calamities, and to devise and carry out measures preventing those calamities." The organization was also to carry out its work in accordance with the Geneva Conventions concerning the treatment of prisoners of war. Later, the Red Cross would also be entrusted with control of a large part of the nation's blood supply.

But who got relief after disasters has always been affected by the racism that has been part of the Red Cross' long history.

For example, during the Great 1927 Flood that destroyed large parts of the Mississippi Delta and Louisiana, Black farm laborers and sharecroppers without a doubt suffered the most. As John Barry documents in his epic history of the flood, Rising Tide, delta plantation owners refused to evacuate them out of the region for fear--rightly--that most wouldn't return to their miserable, slave-like conditions.

The Red Cross came in to provide temporary housing and food aid. What African Americans of the Delta got was prison-like camps where they were routinely beaten by white, racist National Guardsmen. Food distributed by the Red Cross was given to whites first, and if anything was left, it went to Black survivors.

On the eve of the Second World War, the Red Cross stockpiled large amounts of blood because of techniques developed by the brilliant African American scientist Dr. Charles Drew. Drew himself became director of the Red Cross's Blood Bank in 1941, but resigned his position after the War Department ordered that the blood of Black and white donors be segregated.

Drew called the order "a stupid blunder," but the Red Cross complied and imposed Jim Crow in the blood supply. The Red Cross even initially refused to accept the donation of blood by African Americans at the beginning of the war effort--though it was willing to accept cash donations from them. Throughout the war, the NAACP investigated complaints by Black servicemen of racist treatment by Red Cross.

The Red Cross desegregated the blood supply after the Second World War nationally, but it allowed its Southern chapters to continue segregating blood through the 1960s.

People who think of the Red Cross as a "private charity" would be shocked to discover its actual legal status.

Congress incorporated the Red Cross to act under "government supervision." Eight of the 50 members of its board of governors are appointed by the president of the United States, who also serves as honorary chairperson. Currently, the Secretaries of State and Homeland Security are members of the board of governors.

This unique, quasi-governmental status allows the Red Cross to purchase supplies from the military and use government facilities--military personnel can actually be assigned to duty with the Red Cross. Last year, the organization received $60 million in grants from federal and state governments. However, as one federal court noted, "A perception that the organization is independent and neutral is equally vital."

The leading administrators and officials of the Red Cross are almost always drawn from the corporate boardroom or the military high command. Among the past chairs and presidents of the Red Cross are seven former generals or admirals and one ex-president.

The current president Marty Evans is a retired rear admiral and a director of the investment firm Lehman Brothers Holdings. Bonnie McElveen-Hunter, the chair of the Red Cross, is also CEO of Pace Communications, whose clients include United Airlines, Delta Air Lines and AT&T--a group of companies known for their vicious treatment of workers.

The Red Cross has become particularly tied up with the Republican Party in recent decades. Both McElveen-Hunter and Evans are Bush appointees--for her part, McElveen-Hunter has donated over $130,000 to the Republican Party since 2000.

* * *

THOUGH IT is technically a nonprofit, the Red Cross is run more like profit-hungry corporation than what most people think a "charity" would act like. The most deadly example of this was the Red Cross' criminally negligent response to the early stages of the AIDS epidemic in the 1980s.

The Red Cross has been for many decades, and remains today, the largest blood bank in the country. In 1982 and especially 1983, when it would have possible to contain the outbreak--or at least stop the spread of the disease through infusions of infected blood--major blood banks, led by the Red Cross, opposed national testing of blood for HIV.

The Red Cross' opposition was based on the financial cost. As investigative journalist Judith Reitman wrote in her book Bad Blood: "It appeared it would be cheaper to pay off infected blood recipients, should they pursue legal action, than to up the Red Cross blood supply."

Earlier this year, the Canadian Red Cross pleaded guilty to distributing contaminated blood supplies that infected thousands of Canadians with HIV and hepatitis C in the 1980s. This scandal is a large part of why the Canadian Red Cross was removed from running the country's blood supply in the late 1990s--but not the American Red Cross.

Enron-style bookkeeping, deceptive advertising and outright theft of funds have also been a big part of the Red Cross' recent history.

For years, the organization has been criticized for raising money for one disaster, and then withholding a large chunk of it for other operations and "fundraising." For example, the Red Cross raised around $50 million for the victims of the 1989 San Francisco earthquake in San Francisco, but it's estimated that only $10 million was ever turned over to the victims.

Similar charges were made against the Red Cross following fundraising operations after the Oklahoma City bombing in 1995 and a San Diego fire in 2001. There was also a huge scandal involving the embezzlement of millions of dollars in donations in the New Jersey chapter in the late 1990s.

These scandals and the potentially embarrassing political fallout from them were muffled by the media and the Red Cross' political allies. But the truth couldn't be contained after September 11.

Soon after the attacks, Dr. Bernadine Healy, who was appointed president of the Red Cross in 1999, appealed for donations to help survivors and the families of those killed. In record-breaking time, the organization raised nearly $543 million.

Then the controversy began. A congressional investigation revealed that--though it had promised that all 9/11 donations would all go to victims' families--the Red Cross held back more than half of the $543 million. During congressional hearings, Rep. Billy Tauzin (R-La.)--soon to become a lobbyist for Big Pharma--declared: "What's at issue here is that a special fund was established for these families. It was specially funded for this event, September 11. And it is being closed now because we're told enough money's been raised in it, but we're also told, by the way, we're going to give two-thirds of it away to other Red Cross needs."

Healy was forced to resign, and her successors promised to allocate all of the money to September 11 survivors and their families.

* * *

THE HURRICANE Katrina catastrophe on the Gulf Coast has revealed the same old problems with the Red Cross. In late September, the organization was ordered out of a suburban Atlanta relief center because, according to the New York Times, its "application process had resulted in long lines and the group had made false promises of financial payments."

In an even more bizarre incident in Chicago, students were turned away from volunteering for a multi-agency relief center because they refused to sign a loyalty oath to the U.S. government!

Some more scrutiny of the Red Cross is beginning to take place. As Richard Walden, of Operation USA, wrote in the Los Angeles Times, "Its fundraising vastly outruns its programs because it does very little or nothing to rescue survivors, provide direct medical care or rebuild houses."

Walden noted (and the Red Cross now confirms) that the organization has raised $1 billion in pledges and gifts for hurricane relief. He also revealed that "FEMA and the affected states are reimbursing the Red Cross under pre-existing contracts for emergency shelter and other disaster services. The existence of these contracts is no secret to anyone but the American public."

How many people would donate to the Red Cross if they knew all this?

In the richest country in the history of the world, it is a travesty that such an organization is responsible for lifesaving. We deserve so much better.

Joe Allen writes for the Socialist Worker.

Section Front

FDA inspectors found more than 200 safety violations.......The Red Cross shipped infected blood, failed to screen out risky donors, even some who admitted having HIV, and lost track of more than a thousand units, including small amounts infected with HIV or Hepatitis C. And some Red Cross employees were told to skip safety steps or falsify records to allow infected blood to be released.  Despite years of violations, the Red Cross has insisted things can't be that bad because not many people are getting sick from transfusions.

The FDA needs to, if not take over, heavily oversee a re-design of the blood system. And in some cases they need to start from scratch," .......

Red Cross Under Fire
WASHINGTON, Jan. 2, 2003

(CBS) FDA inspectors found more than 200 safety violations by the Red Cross. And as CBS News Correspondent Sharyl Attkisson reports, many of the violations were offenses the Red Cross has repeatedly been ordered to fix.

The Red Cross shipped infected blood, failed to screen out risky donors, even some who admitted having HIV, and lost track of more than a thousand units, including small amounts infected with HIV or Hepatitis C. And some Red Cross employees were told to skip safety steps or falsify records to allow infected blood to be released.

Despite years of violations, the Red Cross has insisted things can't be that bad because not many people are getting sick from transfusions.

But the new FDA report finds the Red Cross failed to adequately investigate infections to even determine if bad blood was to blame.

One man got deadly hepatitis C from a transfusion with infected Red Cross blood - but only found out after he forced an investigation. He told CBS News the Red Cross couldn't have cared less about what went wrong.

When he notified the Red Cross that he had gotten hepatitis C from their blood, the response was apathetic.

"They told me that certain publications I could read about hepatitis C," he says.

Even Red Cross workers told FDA inspectors there's a "culture to hide problems" meaning they'd been instructed to "falsify documents ... to hide mistakes" and feared retaliation if they reported problems.

In response to the latest FDA findings, the Red Cross says it "understands more work needs to be done to further strengthen our processes" and they're committed to working with the FDA "to enhance our systems." The Red Cross has also just beefed up its work force on quality, and promises to improve employee training.

But some critics say the charity has broken repeated promises to fix the blood supply and argue it's time for a radical change.

"The FDA needs to, if not take over, heavily oversee a re-design of the blood system. And in some cases they need to start from scratch," Paul Cololery, editor in chief of Non-Profit Times tells Attkisson.

That's something the government apparently isn't willing to take on, at least not now. Critics say the Red Cross is counting on the fact that even if it's not managing the blood supply the way it should be - nobody else is eager to have the job.

© MMIII, CBS Broadcasting Inc. All Rights Reserved.

    Gilbert M. Gaul, Inquirer Staff Writer
    SUNDAY September 24, 1989

    First in a series

    The potential for fatal mistakes is "a ticking time bomb," said Frank E. Young, commissioner of the Food and Drug Administration........No one - not the federal government, not the blood banks themselves - knows for sure how much blood is bought and sold on the open market. There are no requirements that sales be reported; no government agency keeps track.........All of which should be of grave concern to Americans, for the very safety of the nation's blood supply is at stake....... Blood collectors say they have done everything possible to ensure the safety of the blood supply. Yet confidential documents show the industry ignored or delayed using readily available tests and procedures to make blood and transfusions safer.

    * At a time when AIDS was showing up in the blood supply in the early 1980s, the FDA reduced its inspections of blood-collecting facilities from once a year to once every two years.

    * Thousands of pints of suspect blood and other blood components have been released by blood banks and commercial plasma centers as a result of testing errors, computer problems and other mistakes.

    This haphazard system exists because the United States has failed to develop a comprehensive blood program that ensures adequate, safe supplies to all regions of the country at fair prices.....The United States is one of only a handful of Western nations that leave the collection and distribution of blood scattered among a patchwork of private and quasi-public groups....."What we have is not so much a system as a non-system," said Norman R. Kear, administrator of the Red Cross' blood center in Los Angeles. "Blood-collecting groups like the Red Cross cooperate when it is in their interest to cooperate, and when it's not in their interest, they fail to cooperate."  Los Angeles. "Blood-collecting groups like the Red Cross cooperate when it is in their interest to cooperate, and when it's not in their interest, they fail to cooperate."

    • Disease spread as blood test was delayed
      Link includes original communication memos and letters.

      2003 The Kansas City Star

      WARNING SIGNS: In the 1970s, about 1,500 hospital patients participated in the Transfusion-Transmitted Viruses Study. Researchers concluded that ALT testing could slow the spread of hepatitis C. However, the blood testing was delayed for years. The infected blood from the study is stored at BBI Biotech in Gaithersburg, Md., for future research.


    • Special to
      A simple blood test might have prevented hundreds of thousands of cases of  hepatitis C.... 
      A study back in 1959 showed that blood donors with raised ALT levels were three to five times more likely to transmit hepatitis  “Perhaps Congress should investigate why ALT testing was not implemented until 1986.” “  might want to inquire why the Food and Drug Administration never issued a formal regulation requiring ALT testing and how blood industry representatives who sat on government health committees may have influenced decisions about testing.”  “Is this a typical example of what governments do after they miss an opportunity to prevent the spread of an illness, and is the government liable in this case? 

Alexander Aitken,
Canadian Hepatitis C Network

     As one who has had the fine privilege of an in dept view of the Canadian Red Cross's financial records, all I can say is that I was shocked to see how they abused those in Canada who felt the charitable need to donate to those less fortunate during a disaster. Millions of dollars were sitting in accounts from past disasters that had long passed. After so many years these monies were transferred to general operating accounts. I did ask why these monies could not be transferred into an account for the biggest man made disaster in Canadian history. I was told that at the time since the Red Cross felt they had no responsibility for infecting and killing thousands of Canadians, there was no need to even comment or answer my reasonable question. The chief executive finally after years of prompting apologized to those they had murdered and infected with HIV and HCV this past year, via a video tape. This apology was part of a structured deal in the wake of a criminal trial for gross wrongdoing on the part of the Canadian Red Cross.

     My personal opinion is they are the dirtiest of the slime that crawl across the path of charitable organizations. Their response to Katrina only reinforces this belief. The efforts by many brave persons to take on the Holy Grail of non profits in Canada was an effort that took the most skill and discipline to achieve success as in the early days of the tainted blood wars, attacking the Red Cross was seen as the most horrendous of sins. My God man they are the bloody Red Cross, have you lost it?

     To date thousands of Canadians are dead, or near death because of the Canadian Red Cross and others involved in this national tragedy. To date thousands are still waiting for promised compensation from this national shame. The American Red Cross is complicit in this matter, but has sailed along, worry free, without ever accepting any form of responsibility for the damage caused to citizens of the United States and the World.


Canadian Hepatitis C Network