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A Bait-and-Switch Charity

The Scandalous History of the Red Cross

by JOE ALLEN

Iin 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an institution with such a dubious history continues as the symbol of "humanitarian leadership," when it should have been replaced by a far more effective agency decades ago.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.