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Red Cross Briefing on Liberty Fund

Aired November 14, 2001 - 11:34   ET


MILES O'BRIEN, CNN ANCHOR: We're going to turn it to Washington, now, where officials of the Red Cross are holding a briefing. The short story here is they are offering some money back. Let's listen for details.


DAVID MCLAUGHLIN, CHAIRMAN OF THE BOARD, AMERICAN RED CROSS: -- counseling to those who were in need of it. It is what the American Red Cross does. Also, Harold Decker, our CEO, was on the site at Rockaway yesterday afternoon to provide his support and encouragement to those. So it was another sad and difficult day for this country and certainly for New York.

Since the terrorist attacks on September 11, the people of this country have given to the Red Cross certainly their hard-earned dollars, their trust and very clear direction for our relief effort. They have made it abundantly clear to us that the Americans want 100 percent of the funds directed to support the people who were affected by the September 11 attacks.

And while our relief efforts have always put those affected by the disaster as our very first priority, we also followed a plan to prepare the American Red Cross for other weapons of mass destruction incidents. These were plans that were developed before September 11. But it has been made increasingly clear that there is a significant gap between the focus of our efforts and the expectations of the American public.

And regrettably, it took us sometime, somewhat longer than I think probably it should of, to address that creditability gap. But today we are making a course correction for the Red Cross Liberty Disaster Fund. One hundred percent of that fund and our efforts will be devoted to support those who are affected by the terrible tragedies that occurred on September 11.

And with this action, we hope to restore the faith of our donors, the trust of the American public and to empower thousands of Red Cross workers and volunteers on the front line to devote themselves to their relief efforts and to help make those who were affected by the tragedies their lives better. We have already touched 25,000 of these individuals and we will continue to work at it.

Disaster relief is difficult work, but it is what the Red Cross does and does well every day of the year. This has been a disaster of unprecedented dimensions. It presents unique challenges to this organization. We do not always get it exactly right, but we are a transparent organization and will make the changes when it serves the interests of the American public that we do so.

Harold Decker, our CEO, will explain those changes. But before I turn to him, I should point out that Harold assumed his CEO role two weeks ago, and I'm sure for him that seems like a long, very long time. He has provided very strong leadership in this intervening period. He made a quick examination of the current policies of the Red Cross. He identified problems within the Liberty Fund. They developed solutions to those issues. They were presented to the full executive committee and the board of governors last weekend who approved them unanimously.

I am delighted that Harold is on the job. He's helping steer the Red Cross in a way that serves the interests of the American public, but also victims of the disasters which occurred on September 11. So with that, Harold, we turn this over to you. I turn it over to you, but with my very sincere thanks.


HAROLD DECKER, INTERIM CEO, AMERICAN RED CROSS: Thank you all for coming this morning, and thank you, David.

Let me say at the outset that David's leadership has helped bring this organization together in the past two difficult weeks which was necessary before we could consider a change in course.

David, I thank you for your leadership and for the leadership of our volunteer board of governors; 50-person board of governors, and your strong endorsement of our new direction.

I want to say now that America has spoken loudly and clearly and that America wants our Liberty Relief efforts directed solely at the people affected by the September 11 tragedies. We deeply regret that our activities over the past eight weeks have not been as sharply focused as America wants and the victims of this tragedy deserve. The people affected by this terrible tragedy have been our first priority and beginning today, they will be our only priority.

In addition, we will move more money to the families of the victims quickly by extending Red Cross' family grief program to cover a full year of basic living expenses and by providing payments for the next six months before the end of this calendar year.

We will also make it easier for people affected by the tragedies to get help by creating a database with other relief agencies and public officials that will greatly improve coordination as we respond to the terrible events of September 22, 2001 (sic).

With these changes and the commitments planned, we project by the end of this year the American Red Cross will have spent $275 million overall in support of people effected by the disasters, about one half of the $543 million that has been received to date in the Liberty Fund. Now, let me give you some more details of these changes.

First, as to the Liberty fund. As I mentioned, we will narrow the focus of the Liberty Fund; a segregated fund established to respond to the September 11 terrorist attacks, and going forward, the Liberty fund will be used exclusively to meet the immediate and long- term recovery needs of the people affected by the attacks of September 11. That means that three programs initially included in the Liberty fund activities -- the strategic blood reserve, community outreach program and the armed forces services program -- will not be funded by the Liberty Fund unless donors made such designations. We will find other sources of funding to continue those valuable programs.

We are not going to abandon our armed forces, we're not going to abandon our efforts to make a safe and available blood supply, and we're not going to abandon our efforts to outreach to the community, but we are going to make every effort to fund them in some way other than the Liberty Defense Fund. It also means that all of the Liberty funds will be used to meet the needs of people affected by September 11 disasters; none of it will be reserved for future events.

Also, the direct support costs of the Liberty Defense Fund, including such items as toll free lines that have been used to locate victims, will be covered to the extent possible by the interest earned on the Liberty Fund income. Let me also reiterate that the Liberty Fund will remain a separate segregated fund. As we announced a few weeks ago, we have stopped the active solicitation of fund-raising for the Liberty Fund, because we believe that we have enough money to meet the immediate and long-term needs of people affected by the disasters.

Finally, the fund will be independently audited by the accounting firm of KPMG, and we have also invited the United States Army Audit Agency to participate in the audit process.

Second, as to the Family Gift Program. As many of you know, the Family Gift Program provides tax-free cash gifts to families of victims to help them pay basic living expenses, like housing, food and utilities. Families only have to fill out a one-page, single-page form that tell us what needs they have now. The Red Cross then verifies the identities and sends out checks, working with our social workers, often within 48 hours.

In the first weeks after the disaster, we identified nearly 3,000 families of victims, and most -- about 2,300 -- applied for and received three additional months of living expenses -- three months of living expenses. We will now extend this program for up to one year and will send checks before the end of this year to cover the next six months of expenses for all families of victims who need this support.

We estimate that this will total about $111 million in additional support.

O'BRIEN: We've been listening to the CEO of the Red Cross, Harold Decker talk about narrowing the focus of that Liberty Fund, under public fire.




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