November 15, 2001
Facing a mounting wave of public and Congressional criticism, the American Red Cross announced it will spend the entire $543 million "Liberty Fund" on victims of the Sept. 11 terrorist attacks. The agency apologized for its earlier plans to use some of the money for other purposes.

Red Cross CEO Harold Decker said he heard the public "loud and clear" and has made the necessary "course correction." Decker replaced Bernadine Healy who resigned as a result of the controversy.

The Red Cross had planned to use about half of the Liberty Fund to build up blood supplies and prepare for possible future terrorist attacks. Instead, Decker said the organization will spend $275 million by the end of the year for food, housing and other assistance to the families of those killed or injured in the attacks. Plans for spending the rest of the money will be announced early next year, he said.

So far, the Red Cross has spent about $137 million, including emergency checks averaging $18,000 to more than 2,300 families and individuals. An additional 23,000 families have received smaller amounts.

The public responded with outrage to the disclosure that not all of the donated funds were being spent on victims of the attacks.

"I donated money three times for the people directly affected by the attack on America, Sept. 11th. I did not donate money for the Red Cross to use as they wished. If the Red Cross was going to take, or should I say steal part of the money, that should have been disclosed beforehand," said Carolyn Ianncelli in the a posting to the ConsumerAffairs.com Forum.

By mid-week, the Forum carried 46 messages similar to Ianncelli's condemning the Red Cross. Only three consumers wrote to defend the agency.