Red Cross Answers Critics on Payments

The American Red Cross, its reputation tarnished by its handling of contributions for victims of the Sept. 11 terrorist attacks, said Wednesday that all of the money will be distributed to the families and survivors.

The Red Cross, under outgoing President Bernadine Healy, had planned to reserve for other uses $200 million of the $543 million amassed for the special Liberty Fund. That decision drew protests from donors and sharp criticism from members of Congress, who said the money had been contributed with the belief that it would be used exclusively to help attack victims.

The Red Cross apologized Wednesday.

“Americans have spoken loudly and clearly that they want our relief efforts directed at the people affected by the Sept. 11 tragedies,” Harold Decker, its interim chief executive officer, said at a news conference in New York.

“We deeply regret that our activities over the past eight weeks have not been as sharply focused as America wants, nor as focused as the victims of this tragedy deserve,” Decker said. “The people affected by this terrible tragedy have been our first priority, and beginning today, they will be the only priority of the Liberty Fund.”

Healy created the fund to aid victims of the Sept. 11 jetliner hijackings that killed about 4,300 people at the World Trade Center, the Pentagon and in a field in Pennsylvania. The Red Cross touched off the controversy when it said last month that some of the money would be diverted to other uses, some for victims of future terrorist attacks and some for improvements in the organization’s telecommunication systems.

Some survivors of those who died Sept. 11 complained that they were having difficulty getting anything but small payments from the Red Cross and other organizations that had raised large amounts of money in their name. The complaints were echoed by members of Congress at a hearing in which Healy defended the organization against expressions of anger and incredulity.

Some of those critics attended the news conference to praise the Red Cross for its reversal.

“I am here this morning to enthusiastically, and without reservation, congratulate the Red Cross and to applaud their decision,” Rep. James C. Greenwood (R-Pa.) said at Red Cross offices in Washington.

The Red Cross will distribute $111 million to families of those who died or to those seriously injured in the terrorist attacks, with the money covering basic living costs. By year’s end, $275 million from the Liberty Fund will have been spent, the Red Cross said.

The organization intends to release a plan in January regarding how the rest of the Liberty Fund will be used.

The Red Cross has stopped raising money for the Liberty Fund.

In another response to its critics, the Red Cross will provide other relief agencies with the names of the 25,000 people it has helped since Sept. 11.