American Red Cross reverses plan to set aside money

By Shannon McCaffrey

Associated Press

WASHINGTON – The American Red Cross said today it will use all the money donated to the Liberty Fund for victims of the terrorist attacks, reversing a plan to set aside some of the money for other needs.

The Liberty Fund has collected $543 million. The Red Cross had planned to put about $200 million aside for use in the event of future terrorist attacks. That move drew a sharp rebuke from critics, who said the money donated to the fund was given under the assumption only people affected by the Sept. 11 attacks would get it.

“We deeply regret that our actions over the last eight weeks have not been as sharply focused as the American public wants or the victims of this tragedy deserve,” Red Cross interim CEO Harold Decker said at a news conference.

The Red Cross has stopped accepting donations to the fund, saying the amount collected so far is sufficient. The charity already has distributed about $121 million in direct aid to Sept. 11 victims and their families.

Red Cross President Bernadine Healy is stepping down as head of the charity at the end of the year in part because of criticism of the fund. Healy took the unusual step of setting up the fund as a separate account to deal with the attacks, over the objections of some Red Cross board members.

Healy was lambasted at a House hearing on charitable contributions last week after two widows who lost their husbands in the World Trade Center attack described how they have had to fight a maze of bureaucracy to obtain financial help.

Lawmakers from both parties said they believed donors to the Liberty Fund contributed as generously as they did because they thought their money would be channeled quickly and directly to the victims and families of the attacks.

Since Sept. 11, about 2,500 families have received Liberty Fund benefits, averaging about $25,000 per household. On Monday, the Red Cross said it would return donations to any contributor who requests a refund.

The 37,000-employee American Red Cross administers almost half the nation’s blood supply and provides relief to victims of disasters.