Red Cross redirects full Liberty Fund to Sept. 11 victims

WASHINGTON -- The American Red Cross said Wednesday it will use all the money donated to the Liberty Fund for people affected by the Sept. 11 terrorist attacks, changing 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.

Decker called the change a "course correction" and said among those eligible for the money will be survivors of the attacks and their families, those with homes damaged in the attacks and those unemployed because their workplaces are in lower Manhattan.

He said $275 million would be paid out by the end of this year. Grants to families, which had been restricted to just three months of living expenses, will be extended to one year.

About 9 percent of the total fund will pay overhead and administrative costs for distributing the money. Decker said it could take many years before all the money is spent.

Director fears perceptions

Mary Burton, executive director of the organization's Southeast Missouri chapter said the effects from criticism aimed at the national organization is bound to trickle down.

"All of these misperceptions will hurt us locally. It's an erosion of trust we've worked so hard to build," she said.

But Burton said she's optimistic that solid community support will counterbalance that criticism. "I have had predominately positive support locally. I hope and pray the communities around here know us well enough to realize we are working very hard on their behalf."

And local ties are strong, she said. Recently, Cape Girardeau-based television station KFVS12 received the Missouri Good Neighbor Award from the American Red Cross, Missouri State Service Council. The Good Neighbor Award honored the station for creating and sponsoring the annual Heartland Blood Drive, as well as raising $100,000 through the flag magnet campaign.

In all, the Red Cross raised more than $200,000 from sales of the bumper sticker magnets made by the Cape Girardeau company Magna-Tel.

As requested by Magna-Tel CEO Mary Ann Farmer, half the money will be used locally, and the other half was donated to the Liberty Fund.

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.

President stepping down

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.

"I'm proud of the fact that the Red Cross is careful in extending money," Burton said. "People want to know we're spending in a way that's responsible and make sure we're doing the right thing with it."

Since Sept. 11, about 2,500 families have received Liberty Fund benefits, averaging about $25,000 per household.

With more than 47,200 employees, 98 percent of whom are volunteers, the American Red Cross administers almost half the nation's blood supply and provides relief to victims of disasters.

Staff writer Andrea L. Buchanan contributed to this report.