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The Red Cross: A Question of Competence | The Nation

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The Red Cross: A Question of Competence

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The Gulf Coast hurricanes have raised new questions about the integrity and competence of the American Red Cross to respond to national emergencies. In this July 1996 report from The Nation archive (originally headlined "Blood on the Campaign Trail"), Linda Heller raised early alarms.

Research support for this article was provided by the Investigative Fund of The Nation Institute. The article was coordinated by Robert Parry, director of the fund's investigative team.

About the Author

Linda Heller
Linda Heller's writing on medicine and health has appeared in many national magazines.

In the spring of 1995 the American Red Cross launched a new advertising campaign for its national blood drive. The campaign included at its center a television public service announcement that depicted an American flag billowing in the wind. As a voice off-camera issued a dire warning--"When the blood runs out, so does life"--the red stripes began to fade from the flag until only the stars remained.

You're not likely to see this particular announcement or the posters that went with it, however. After thousands of dollars had been spent, the ad campaign was quietly discontinued because the president of the American Red Cross, Elizabeth Hanford Dole, ruled that it was too controversial. Several weeks after the aborted campaign, her husband, Bob Dole, then the front-runner for the 1996 Republican presidential nomination, announced his support of a constitutional amendment to ban desecration of the American flag.

Alone, yanking the flag ad might be viewed as a minor case of Bob Dole's presidential politics influencing a small decision at Elizabeth Dole's Red Cross. But a three-month investigation by The Nation has discovered that the flag incident was just one example of a troubling pattern: A series of political conflicts has steadily affected Red Cross decision-making in vital public health areas, such as protecting the nation's blood supply from disease and training young Americans in how to protect themselves from AIDS.

The Nation investigation found that shortly after her appointment to head the $1.7-billion-a-year charity, Mrs. Dole assembled a special team of longtime political advisers. Their job was to vet important Red Cross actions, both managerial and scientific, with a political sensitivity to what might help or hurt Bob Dole's presidential ambitions.

When her husband was scrambling for the backing of the Christian Coalition prior to the Republican primaries, Mrs. Dole ordered her allies to rewrite an AIDS prevention manual to cater to Christian right orthodoxies about homosexuality, premarital sex and condom use. Also shoring up Bob Dole's standing with the Christian right, Elizabeth Dole took to the hustings while in office at the Red Cross to give frequent speeches about her born-again Christian commitment.

Back at Red Cross headquarters in Washington, Mrs. Dole recommended at-large seats on the Red Cross's prestigious board of governors to Senator Dole's political contributors and longtime backers, including Inez Andreas, the wife of wealthy agribusiness executive and Dole superbooster Dwayne Andreas.

Mrs. Dole's special team interfered in day-to-day Red Cross decisions, frustrating the charity's professional staff and contributing to an exodus of many senior technicians, volunteers and other crucial personnel. Under this politicized leadership, the Red Cross's much-touted "transformation" program to assure a safer blood supply has fallen short of its goals and behind schedule.

The Red Cross has been in a running battle with the Food and Drug Administration, the federal agency charged with overseeing it, over the charity's handling of the nation's blood supply. To force corrective action, the F.D.A. has imposed a legally binding consent decree setting a strict timetable for ending sloppy practices. On the stump, Bob Dole has vowed to fire F.D.A. Commissioner David Kessler--and has been joined by Mrs. Dole at campaign rallies that bashed the F.D.A. as too powerful and overreaching. Simultaneously, in Congress, Dole has sponsored and pushed Republican legislation to clip the agency's wings. One of the G.O.P. bills targets the F.D.A.'s ability to regulate the blood supply.

Though currently on a leave of absence to work on her husband's campaign, Elizabeth Dole's intent to return to the Red Cross helm--even if he wins the presidency--presents another potential conflict of interest: U.S. President Dole could be in a position to sign into law Republican legislation that would let Red Cross president Dole off the hook.

The Image

In February 1991, when the Red Cross board of governors persuaded Elizabeth Dole to head the nation's largest and arguably most cherished charity, they considered her a savior. The American Red Cross was in possibly the worst crisis of its 110-year history. Founded in 1881 by Clara Barton, the organization gathers and distributes about 45 percent of the 13 million units of blood collected annually in the United States, and it assists victims of 68,000 disasters a year [see Matthew Howard's review, page 32]. But in 1989-90, the Red Cross had been taking a beating in the press over the way it had performed during the California earthquake and Hurricane Hugo. It had been the subject of a scathing Congressional hearing that called into question the safety of its blood supply, and it was grappling with falling blood donations, rising blood-testing costs and increased F.D.A. regulation. Health professionals were also turning to the Red Cross to train America's youth in safe-sex practices.

Facing these challenges, the board of governors, a fifty-member voluntary body comprising prominent business and civic leaders, ordered a change at the top. After the charity's president resigned, it had been looking for a new leader for eighteen months when an executive recruiter, E. Pendelton James, who previously had served as Ronald Reagan's personnel director, suggested his old friend Liddy Dole.

Elizabeth Hanford Dole is the only woman in U.S. history to have held two separate Cabinet posts in different administrations: Secretary of Transportation under Ronald Reagan and Secretary of Labor under George Bush. She has served as a Federal Trade Commissioner and as a consumer advocate, and she has been mentioned more than once in the past as a potential vice-presidential candidate. Gallup polls in both 1987 and 1990 listed her as one of the world's ten most admired women, along with Corazon Aquino and Mother Teresa.

"Elizabeth really dazzled us," recalls Marian Anderson, a longtime volunteer from Omaha who was head of the presidential search committee. "She's purposeful and articulate, and she also has that extra dimension that you don't often see--a real sense of humanity." According to Anderson, whose husband is the retired publisher of the Omaha World-Herald , "Coca-Cola and the Red Cross are the two most recognizable symbols in the world, and we felt strongly that Elizabeth would be a fitting spokesperson for us."

By all accounts, when Mrs. Dole became Red Cross president, she threw herself into the task with real fervor. She hired an impressive group of experts from the pharmaceutical industry, the blood-banking business, the military and the government to help straighten out the organization's problems. At the top of the list, Dole persuaded Fred Kyle, the former head of the worldwide pharmaceutical division of SmithKline Beecham, to come to the Red Cross at a substantial cut in pay to become the new senior vice president of biomedical services--the top officer for that troubled division. She also brought over John William Thomas, former chief fundraiser at the New England Medical Center, who became the Red Cross's new senior vice president for development; and Sharon Ritter Smith, former director of the charity's highly successful Oregon Trail chapter in Portland, who became the senior vice president of chapter services--the division responsible for disaster relief, health and safety programs and other social services performed by the more than 1,600 Red Cross chapters.

Dole also reshaped the board of governors with an impressive roster of names from the public sector and the corporate world. This was an important step because the board is responsible for approving all policy decisions as well as all salaries greater than $50,000. Dole brought in a new chairman of the Red Cross, Norman Augustine, the C.E.O. of giant defense contractor Lockheed Martin, and a new chairman of the board of governors' finance committee, retired Air Force Gen. William Usher, also an executive with Lockheed Martin. She handpicked the at-large members on the board and recommended other members whom the chapters subsequently elected. (The Red Cross board also includes eight members appointed by the President of the United States.)

On the surface, her Red Cross tenure couldn't look rosier. When she took her leave last year, Mrs. Dole said, "I have a continuing concern for at-risk youth and I believe, both as First Lady and president of the Red Cross, I could help the country rekindle its spirit of volunteerism and philanthropic giving."

In a farewell press release, and subsequently in the media, she was given credit for luring top talent to the charity from the private sector, strengthening the Red Cross board, launching a radical "transformation" program that cleaned up the country's blood supply and generally running a tight, nonpolitical ship, which included working out a modus vivendi with the F.D.A. The New York Times's Douglas Frantz recently credited Dole with reinvigorating the Red Cross and said that she "refurbished its coffers with millions of dollars from corporate donors" and "centralized control in Washington." Frantz referred to the "marketing arm" she created, and said she "adopted other tactics more often associated with business than with charity."

In fact, a look at documents from the Red Cross and the F.D.A., along with scores of interviews with former and current Red Cross staff members and volunteers, uncovers a story far more troubling and significantly less sanguine than the publicity Dole generated through these moves.

The Special Team

The real power players at the Red Cross were not the board or the senior vice presidents but rather a small group that appears nowhere on the charity's organization chart, known as Elizabeth Dole's "special team." Although this group had no formal authority, she took no major decision without its approval and often sought its advice prior to consulting the members of her senior staff with operating responsibility in politically sensitive areas. Ostensibly an informal group, it had de facto veto power over matters of both policy and operations. At first her official staff assumed that the special group of advisers, mostly old political cronies, was "cushioning Mrs. Dole against political problems," as Buzz Braley, the former voluntary chairman of the Red Cross biomedical services committee and the president of Braley & Graham in Portland, Oregon, put it. Executives frequently derive much benefit from the use of informal consultants and advisers. But eventually a number of those who saw it in operation concluded that the real function of the special team was to vet Red Cross policies and programs with particular attention to their potential political fallout vis-à-vis Mrs. Dole's personal image and the Dole-for-President campaign.

The group, which sometimes convened in toto, sometimes in part, included two official staff members and three outsiders hired as consultants--all of them fiercely political supporters of Mrs. Dole. The insiders were Jennifer Dorn, the Red Cross senior vice president for policy and planning, who had been Dole's top aide at the Departments of Transportation and Labor before a brief stint as the director of strategic planning for Martin Marietta (it became Lockheed Martin in 1995) under chairman Augustine, and John Heubusch, the Red Cross vice president of communications, who recently left the organization to become executive director of the National Republican Senatorial Committee. The consultants included Mari Maseng Will, the wife of conservative columnist George Will, who has spent nearly her entire professional career working as a press officer and speechwriter for Republican Presidents (Reagan and Bush) or nominees. She has held a high-level position in all of the Dole-for-President campaigns, including the current one (until she recently resigned for personal reasons), and she also directed communications in Elizabeth Dole's Transportation Department. Two other members of the special team added as consultants were Michael Goldfarb, a private business consultant and the former chief of staff at the Federal Aviation Administration, and, less actively, Bob Davis, Mrs. Dole's private attorney and counsel for the Dole presidential campaign. Dorn, Will and Davis were all cited in the acknowledgments of the Doles' autobiography, The Doles: Unlimited Partners, written for the 1988 presidential campaign.

The practice of having the special team vet all policy decisions--not just for their public relations potential but for their political implications--is described by Manning Warren III, a professor of corporate law at the University of Louisville and a former member of the Red Cross board's international services committee: "Elizabeth has been virtually inaccessible to most people at the Red Cross," he observes. "If you tried to schedule a meeting with her, she'd have Jenna Dorn or Mari Will or one of her other screeners call to ask you for your agenda. Every meeting was carefully orchestrated, and she was always noncommittal when you asked her about a decision."

Staff members who were also on the special team, like Dorn and, to a lesser extent, Heubusch, derived extra clout from their dual roles and took on politically sensitive assignments beyond their formal authority.

The AIDS Manual

In early 1995 the special team went so far as to intervene in previous Red Cross public health policy in the interests of Elizabeth Dole's private political agenda. That spring, less than a year from the first presidential primary in New Hampshire, the American Red Cross was readying an updated version of what was nicknamed its "AIDS 101" course, which features a lengthy manual, posters, leaflets and a video used by instructors who teach people how to protect themselves from H.I.V. Funded by a $5 million grant from the Centers for Disease Control and Prevention, the H.I.V./AIDS education program sends Red Cross-trained instructors into schools, churches and to civic and medical groups around the country. The largest AIDS education program in the United States, it reaches more than 2 million people every year, and nearly half of those presentations are made to youth.

Early last year, when Bob Dole was courting the Christian right, and religious conservatives in North Carolina, Texas, Mississippi and Oklahoma had recently passed laws that muted the discussion of sex education, Red Cross chapters and AIDS clinics across the country were on hold awaiting the arrival of their new AIDS manual.

"We always had a balanced approach," explained one Red Cross official who participated in production of the manual. "We would teach how to negotiate abstinence and how to negotiate condom use." While the young people would be informed that sexual abstinence is the only way to guarantee against exposure to the disease through sexual contact, they were also told that if they did have sex, they must use condoms and use them properly. The materials also warned about the dangers of contracting H.I.V. through contaminated needles used for intravenous drugs.

The Red Cross professionals had one public health goal in mind: fighting the spread of the fatal virus. They knew from conclusive studies that presenting straightforward, nonjudgmental information is the best way to convey life-saving lessons to young people who come from many cultures and hold diverse attitudes about sex. In spring 1995 the AIDS office put the finishing touches on its new training material, which had already been approved by a volunteer panel outside the Red Cross comprising AIDS experts, university professors and other professionals.

Enter the special team: When Shepherd Smith (no relation to Sharon Ritter Smith), the president of a group called Americans for a Sound AIDS/H.I.V. Policy (A.S.A.P.), which has close ties to the conservative Christian movement, objected to the Red Cross AIDS material, Mrs. Dole consulted with her team and halted publication. She then took the unusual step of asking the Red Cross board of governors to review the manual with an eye toward toning down the language and illustrations. Jennifer Dorn, a member of the special team who shares Mrs. Dole's deeply felt religious views (they first met years ago at a Monday night Bible group), made specific suggestions. The employees in the H.I.V./AIDS program were stunned--never before had there been such high-level interference in what was normally a midlevel bureaucratic function.

The documents, which were made available by Red Cross officials, show that the revisions place a greater emphasis on "individual responsibility"--the politically salable euphemism often used by the extreme right in discussions ranging from welfare to teen pregnancy. The revisions emphasize the difference between prevention of AIDS and risk reduction, downplaying the use of condoms and instead stressing abstinence.

"We got word that the [AIDS training] program cannot be released without approval from on high," a Red Cross official told The Nation from her house in the Washington area. More than a year after the dispute began, the soft-spoken woman still had a quaver of nervousness in her voice when discussing the fight over the manual. "The manual was sent to [Mrs.] Dole's office. It got pretty much a line-by-line review."

"The Red Cross will not teach individuals how to engage in behavior which is against the law, but will assist people in finding help to stop engaging in such behavior in order to prevent or reduce their risk of getting HIV/AIDS," read the board of governors' policy statement. In addition, the Red Cross governors ordered restraint in language and pictures. "The Red Cross will not utilize profane language or graphics in its teaching materials, nor encourage the use of such language or materials by Red Cross instructors in classes," said the policy statement.

As the editing progressed, the AIDS professional staff felt under siege. "Dole personally blamed the office," said the Red Cross official, who discussed the internal struggle only on condition that she not be identified. "This was very frightening to people. The Red Cross was crashing and burning its own safety services division."

Sharon Ritter Smith, the senior vice president who oversees the Red Cross health and safety programs, "tried desperately to keep these changes from happening, but she was overruled by Jenna Dorn," adds a former Red Cross AIDS official.

Mrs. Dole and her team paid particular attention to the remarks of A.S.A.P. president Shepherd Smith. He had submitted a scathing attack on the material on the ground that teaching condom use encourages sexual activity among youngsters. He argued that the Red Cross should instead use its influence to promote monogamy. "Not acknowledging such basic tenets of American life undermines the credibility of your message," he wrote in a letter obtained by The Nation. "Values, attitudes and beliefs that are fundamental to character development should--no, must be retained," he continued.

According to the Red Cross employee involved in the bitter negotiations, the complaints against the AIDS teaching materials were "no longer based on biology or science. They were starting to come from religious points of view."

Last September, when chapter executives began to complain to the press that Dole's decisions seemed to be informed by political motives, Red Cross officials quickly fired off an Orwellian, agency-wide "alert" to employees to explain how they should defend the handling of the program. The memorandum, obtained by The Nation, sets forth the official line: "Mrs. Dole asked the Board to become involved in order to ensure there would be no false perception that politics had entered into the issue." At the time, Bob Dole defended his wife for carefully avoiding potential conflicts between her job and his campaign. "Elizabeth has been very scrupulous in trying to keep the Red Cross out of it," he said.

But Red Cross chapter executives were not placated. At a time when AIDS has been a significant cause of death among 15-to-24-year-olds, they were angry that their new program materials were held up for months because of political considerations, and that the contents of the AIDS manual were watered down. The revisions not only cost the Red Cross financially, they cost it professionally. "Anytime you have a delay like this you lose a little credibility," said one state coordinator for the AIDS program. Unfortunately, this wasn't the first time that public health considerations at the Red Cross had lost out to political exigencies.

The Transformation

In 1988 the American Red Cross had signed a voluntary agreement with the F.D.A. to fix its error-plagued blood program. But the charity continued to have problems, and it became the subject of a Congressional hearing in 1990 and 1991. As Gilbert Gaul reported in The Philadelphia Inquirer, by April 1991 the Red Cross had begun to plan an overhaul of its blood program that executives hoped would meet the F.D.A. standards.

Mrs. Dole's special team strongly urged her to announce the program formally in a major press conference only three months after her arrival to give the impression of action, to buy time with the F.D.A. and to score a significant public relations victory. Not bothering to consult field personnel in advance, Mrs. Dole called a news conference on May 20, 1991.

Asserting that "because of the AIDS epidemic nothing short of a transformation is needed," she announced "beginning today a five-part transformation program to be implemented over the course of the next two and a half years." Its centerpiece: "We will temporarily shut down every Red Cross blood center throughout the nation. We will do so in stages, region by region, for eight weeks at a time." During the shutdown, Dole promised, staff would be retrained and new computer systems would be installed to track donors and double-check blood samples.

Dole also talked about permanently shutting down many of the more than fifty blood-testing laboratories and consolidating them into a few select labs, increasing quality control and replacing the twenty-eight separate computer systems with one national computer system that would maintain records of the medical history and test results of donors. She declared that the Red Cross would spend some $120 million on the sweeping reorganization, and she described the plan as "the most dramatic and far-reaching public safety step the Red Cross has taken in its history."

The announcement had the intended short-term effect. Representatives John Dingell, who had been one of the most vocal critics of the Red Cross, told The New York Times, "This is evidence that the new leadership of the Red Cross takes the issue of blood safety very seriously and has the courage to face up to the problems they have had in the past." And Dole's speech generated glowing editorials in newspapers around the country. But executives in the blood industry had a different opinion of the transformation program. "Shutting down all of our blood banks for eight weeks would have caused total chaos in the medical community--it simply couldn't be done," says Tony Dombroski, principal officer of the Northeastern Pennsylvania Region of American Red Cross Blood Services.

Don Thomson, then the director of the Red Cross Greater Ozarks Blood Region, first heard about the transformation program on National Public Radio while sitting in his room at a San Diego hotel, where he was attending a national conference of the Red Cross. "No one had bothered to tell us about the transformation program before Mrs. Dole announced it to the world, even though it would involve massive layoffs," says Thomson, whose former Red Cross region spanned thirty-nine counties, including parts of Arkansas, Kansas and Missouri. "This was the first in a series of major decisions which Mrs. Dole announced first and planned later."

In other words, the transformation program (the brainchild of Dr. Jeffrey McCullough, Kyle's predecessor as senior vice president of biomedical services; McCullough was already working on it when Dole arrived) was prematurely launched for political rather than public health considerations. When asked, McCullough, now professor of laboratory medicine at the University of Minnesota Hospital and Clinic, denies feeling rushed by Dole's decision to announce the transformation while planning was still in process, and even says that members of the special team, particularly Will and Goldfarb, "brought a valuable perspective to our discussions about the blood supply." But he left shortly after the announcement, and Dole hired Kyle to replace him.

"Kyle found out that the transformation program was more show than substance, and that this grand scheme to shut down the blood banks simply wasn't very practical," recalls Jim MacPherson, executive director of the Council of Community Blood Centers (C.C.B.C.). "The Red Cross wound up not shutting them down, because they couldn't have collected enough blood to make up for the shortfall."

Meanwhile, the Red Cross corporate headquarters began to generate scores of press releases crowing about the transformation program. But instead of buying time from the F.D.A., the bold statements promised more than the organization could deliver in two years, and that began to have disastrous consequences. "Elizabeth's announcement may have set the clock running at the F.D.A., and when we couldn't meet the two-year deadline for transformation, they came after us," says Buzz Braley.

Indeed, in 1993, two years after Dole's announcement of the transformation program, the F.D.A. cited the Portland, Oregon, Blood Collection Center for improper procedures. Most of the criticism was for minor clerical errors and failure to follow strict federal guidelines, according to Braley. "To allay the fears of the people of Oregon, a blue-ribbon panel of experts from the local area, including doctors and hospital executives, analyzed the procedures at the center and declared it safe," he says. "No tainted blood was ever released in Oregon, and no one at the Red Cross was seriously worried about the blood supply." But the local press was running stories about the F.D.A. finding, and John Heubusch of the special team, pointing out that the Doles didn't need the negative publicity, recommended firing the director.

Kyle, who declined to comment for the record, was asked to fire the Portland center head but refused on the ground that the director (who was ultimately forced to take early retirement) was being made a scapegoat. Braley and others in the industry say that Kyle became increasingly disillusioned. "Fred Kyle had had a distinguished career in the pharmaceutical industry, and he came to the Red Cross at a tremendous cut in pay because he thought it was a noble cause," says MacPherson of the C.C.B.C. "We began to hear that Kyle was disgusted with the way things were going at the Red Cross and especially the micro-management by Mrs. Dole's personal advisers and consultants."

Kyle couldn't get Dole to make decisions without her team's input, adds Braley. "She tended to use her personal advisers as her sounding board for issues involving the blood banks, when she should have used Kyle and his medical experts."

With lack of clear guidance from corporate headquarters, the transformation program began to lag further and further behind schedule, and to run millions over budget.

The Consent Decree

In spite of these problems, by 1993 the Red Cross's biomedical division had begun to make some of the changes called for in the transformation program. Although the much-heralded idea of shutting down blood centers had ultimately been abandoned, the organization had begun to consolidate some of the testing laboratories, to upgrade its computer system and to provide additional training for the staff at the many different blood banks. But the F.D.A. still wasn't satisfied.

"We continued to find extreme unevenness in the performance of the regional Red Cross blood banks, and the organization wasn't taking advantage of its best regions and using them to set an example for the others," says Jane Henney, a former F.D.A. regulator who today is vice president of health sciences at the University of New Mexico. "The informal arrangement we had had with the Red Cross clearly wasn't enough to get them to take matters more seriously. Ultimately, we had no choice but to take them to court."

At 6:30 on a spring night in 1993, a fax machine in the corporate counsel's office of the Red Cross began receiving a rather lengthy document. The thirty-two-page consent decree stated that the Food and Drug Administration had just filed suit against the American Red Cross in Washington district court accusing the organization of broad regulatory violations in its blood centers. The document set timetables for a far-reaching overhaul of the blood centers, and it said that criminal charges would be filed against Red Cross executives if the organization did not make those changes in the allotted time. Heading the list of those whom the F.D.A. held legally responsible was Elizabeth Dole.

According to a former vice president of the Red Cross, Mrs. Dole quickly called Representative Dingell and Secretary of Health and Human Services Donna Shalala to reassure them that the blood supply was safe. Meanwhile, Karen Lipton, the former Red Cross general counsel, along with Kyle and other officials, negotiated an alternative version of the consent decree with the F.D.A.--one that omitted Dole as a defendant and didn't hold her senior staff legally responsible for failing to meet the terms of the agreement. But the decree still imposed--and continues to impose--tremendous reporting and training requirements on the Red Cross. It stipulates that all the different regions, and even the thousands of Red Cross bloodmobiles, have to operate under a single set of standard operating procedures. It also charges the Red Cross for the costs of all subsequent F.D.A. inspections that the regulatory agency conducts to evaluate compliance with the decree.

"The F.D.A. was pushing us so hard at that point, we actually talked about getting out of the blood business altogether," recalls Lipton, who is now the C.E.O. of the American Association of Blood Banks.

According to a well-placed source privy to the negotiations, "Elizabeth became extremely concerned to the point of paranoia about our failing to meet the conditions of the decree--and especially how that would look for her politically."

Because of that concern, Dole asked a member of her special team, Michael Goldfarb, and the senior vice president of the Red Cross's national operations group, retired Gen. William Reno, to begin an investigation of the biomedical services division, even though that division had just spent thousands of dollars on an internal audit that found no safety problems in the Red Cross blood supply.

"Elizabeth asked her own team to go behind the scenes to find out where the money was being spent, and why certain projects weren't completed," says Braley. She didn't tell Fred Kyle about her decision until the review was about to begin.

"Kyle and his staff had no choice but to resign," Braley adds. "The review came as a direct slap in the face. Going behind people's backs to find out what they were doing totally demoralized the troops." With more than 14,000 employees and several million volunteers in the biomedical services division, the director's resignation also created chaos in the chapters.

"Between the consent decree, all of the changes we were being asked to make and all of the turmoil in national headquarters, morale within the Red Cross reached the point of crisis," recalls blood services regional officer Tony Dombroski. "All around the country, doctors and nurses and lab technicians left the organization. We saw a mass exodus of all of the best staff who had worked at the Red Cross who really knew blood banking."

Karen Lipton became the interim chief of blood services, and during the eight-month search for a chief, the F.D.A. frequently voiced concerns about the lack of stability in the organization. Says Lipton: "To be in a position of trying to run your business while someone is looking over your shoulder is very difficult. Just imagine if you're working in a situation where there's an internal review going on, and the people in charge of it don't want you to make any major changes until they're done and they've made certain recommendations. But meanwhile you're operating under a consent decree, so you have to get certain things accomplished within a tight period of time. We had a hard time filling the director's position, because it's a no-win job."

By the time Elizabeth Dole took her leave, not just Kyle but also Lipton and John William Thomas, the senior vice president for development, had resigned as well.

According to Brian McDonough, a veteran of the Red Cross and its new executive vice president and chief operating officer for blood services and biomedical services, the Red Cross has so far spent at least $162 million on the transformation program, and it will not be completed for at least two to three more years.

In 1995, the last year for which Elizabeth Dole had responsibility, the blood division reported its largest deficit ever--$113 million, after losing $50 million the year before. This resulted in an $84 million loss for the Red Cross, the largest in its history. To finance the major deficit, national headquarters has borrowed $11 million from blood services regions; more than $60 million from the chapters, including a substantial sum from the disaster relief fund, which was recently repaid; and $22 million from the pension reversion fund. It has also responded the way many organizations respond when they're looking down the barrel of a major deficit: It froze wages, cut its staff by more than 5 percent and raised prices on the blood products it sells to hospitals.

Although F.D.A. Commissioner Kessler has praised the Red Cross for making progress in addressing its problems, in a 1994 letter to the organization, obtained by The Nation under the Freedom of Information Act, the F.D.A. continued to express concern about the Red Cross's blood banks. In the letter, associate F.D.A. commissioner for regulatory affairs Ronald Chesemore called the Red Cross's proposed quality assurance program "unacceptable" and the changes in its computer systems "inadequate," and said the "ARC has not adequately addressed several critical areas of operation."

Soon after that letter, in 1995, Senate majority leader Bob Dole introduced legislation to curb the power of the F.D.A. Coincidence? Maybe. A conflict of interest? No doubt about it.

This year, Bob Dole's close ally, Senator Nancy Kassebaum, is pushing a bill specifically targeting the F.D.A.'s regulatory duties, while House Republicans are advocating a more extreme bill that would allow the blood-banking industry to hire its own private contractors to inspect blood banks. The same bill allows the pharmaceutical industry to hire its own consultants to test the safety of drugs and other medical devices, and would take away the F.D.A.'s power to review computer programs used by blood banks--a particular concern of the American Red Cross, which has spent millions of dollars trying to satisfy the F.D.A.'s requirements and still hasn't completed its computer revamping.

A new internal F.D.A. assessment of the Republican legislation, obtained by The Nation, states that the "F.D.A. would be unable to protect the nation's blood supply" if the House version became law. "F.D.A.'s current enforcement powers to act against violative blood banks would be limited, and the agency could not even force the recall of contaminated blood. Also, blood processing and handling organizations would be able to inspect themselves, in lieu of current F.D.A. inspections."

Because the nation's principal blood banks belong to the Red Cross, the legislation would benefit that organization more than any other blood-banking group. If Bob Dole reaches the White House, he will be in a position to sign a Republican- passed bill that would protect his wife's organization from legal liability and federal regulation.

The Red Cross and the Green

Despite Red Cross staff criticism, Mrs. Dole has many defenders, especially on the board of governors. "She is the best leader I have come across in my ten years with the Red Cross," declared Robert Dilenschneider, one of the at-large gover-nors and head of the public relations firm The Dilenschneider Group. "This is one of the finest human beings I have ever known.... She has done a herculean job." Dilenschneider especially praised Dole for reshaping the board of governors by pulling in quality representatives from the public sector and "people from the corporate side who can do some heavy lifting."

But the high-powered corporate executives on the board raise yet more questions about potential conflicts of interest. The files at the Federal Election Commission reveal that a number of board members have contributed to Bob Dole's campaign. For example, in 1995 chairman Norman Augustine contributed $1,000 to the Dole-for-President campaign and the Martin Marietta Political Action Committee contributed another $3,000. Board members Edward Rensi, president and C.E.O. of McDonald's; Jonathan Linen, vice chairman of American Express; John Clendenin, chairman and C.E.O. of BellSouth; Emilio Nicolas Jr., president of Heart of Texas Pizza; Charles Heimbold Jr., president and C.E.O. of Bristol-Myers Squibb; and several others gave the maximum allowable individual contribution to the campaign. Heimbold has also given $15,000 to Bob Dole's Campaign America, a special political action committee that he has used to support other Republican candidates and to pay for his air travel. And board member Abigail Wexner chipped in $4,000 for Campaign America.

A number of Red Cross governors share Mrs. Dole's frustration with the F.D.A. Dilenschneider's P.R. firm, for instance, has represented the breast implant industry in its struggle against the F.D.A. and women suing over alleged side effects from the implants. Heimbold's pharmaceutical company would benefit from the proposed legislation to weaken the F.D.A.'s regulatory power.

Still, it is the Doles' close friendship with Dwayne Andreas, the multimillionaire head of agribusiness conglomerate Archer-Daniels-Midland, that has perhaps raised the most eyebrows. As a senator, Bob Dole had long supported federal tax breaks for A.D.M.'s projects converting corn to ethanol, and in turn, Andreas has backed Dole's political campaigns. But the financial relationships have been even more personal. In 1982 Andreas sold Mrs. Dole and her brother a condo at the Sea View, a resort in Bal Harbour, Florida, at a price substantially below its market value.

Interestingly, it was not until Dole took over the Red Cross in 1991 that Andreas began giving significant donations to that giant charity. Since then, his company and foundation have contributed about $3 million in money and food to the Red Cross, The Washington Post reported recently. In 1992 Andreas's wife, Inez, was appointed to fill one of the at-large seats on the board of governors.

In an interview with The Nation, Inez Andreas contended that she didn't know why she had been recruited to the board. "I got a letter from the board of governors saying I was up for election," she said. "It was kind of out of the blue for me." But she grew annoyed in the interview when asked about possible conflicts of interest in her husband's close relationship to Bob Dole and Andreas's contributions to Elizabeth Dole's Red Cross. "Would they rather that we throw [the money] around on the street?" Mrs. Andreas asked. "We could throw it out the window."

The Christian Right

Mrs. Dole has been widely praised for her decision to volunteer her services for her first year as president of the Red Cross and to work for $200,000 a year after that. She agreed to this arrangement after the charity gave her permission to continue her lucrative speaking career, according to a former board member. But in 1992, when William Aramony, then president of the United Way of America, was forced to resign under allegations of mismanagement and financial corruption, Dole decided to give up her speaking fees as well. Although no one had suggested that Elizabeth Dole, who comes from a wealthy North Carolina family, had used her position for financial gain, she didn't want to take the chance of embarrassing her husband's campaign with such an allegation. So, following the Aramony scandal, when the press began to make inquiries about other charity executives, she pledged to donate most of her speaking fees to a Red Cross program for needy youth--after deductions for taxes, expenses and a contribution to her personal retirement fund. This was not an insignificant offer. Between 1991 and 1995, she earned almost a million dollars in speaking fees and donated about half that amount to a Red Cross youth-at-risk fund set up in her mother's name in her hometown of Salisbury, North Carolina. Dole placed another $292,950 in her individual retirement account, records show. (When the Los Angeles Times suggested that she had kept more than she donated, a Dole spokesperson came forward and said that her tax preparer had, in fact, overestimated her taxes on the speeches. After several other news stories reported the discrepancy, Mrs. Dole sent a check to the Red Cross for $74,635 in February, and has since switched accounting firms, according to her attorney, Bob Davis.)

Accounting problems aside, her nonpartisan speeches on behalf of the Red Cross were calculated to have maximum political impact. Of her dozens of speeches annually, many are before Christian right organizations or dovetail with Bob Dole's political trips. When the Senator spoke at an Archer-Daniels-Midland board of directors meeting in Fort Lauderdale in 1993, Dole rendezvoused with his traveling wife, and Dwayne Andreas's company picked up the tab for flying both of them back to Washington, according to Dole's disclosure forms.

For years Elizabeth Dole had traveled the country speaking to Christian right groups about her faith. By continuing to do this after she came to the Red Cross, she helped address some of Bob Dole's strategic political problems. Thus in a 1994 speech before the Here's Life group sponsored by the Campus Crusade for Christ in Jacksonville, Florida, Mrs. Dole told her audience about her spiritual reawakening:

I had built up my own little self-sufficient world. I had God neatly compartmentalized, crammed into a crowded file drawer of my life, somewhere between "gardening" and "government." That is, until it dawned on me that I share the predicament, that the call to commitment Mordecai gave to Esther is like the call which Jesus Christ presents to me.... Life is not just a few years to spend on self-indulgence and career advancement. It's a privilege, a responsibility, a stewardship to be lived according to a much higher calling--God's calling. This alone gives true meaning to life.

Even in her lectures to nonreligious groups, Dole's rhetoric often reflects that of the religious right. For example, in an address she made at Pepperdine University in Malibu, California, in 1994, she said, "In our effort to create a more tolerant society--through government, our schools, our entertainment industry and elsewhere--we may be edging dangerously close to knocking out the moral underpinnings of a virtuous society, the checks on behavior that allow freedom to function. And as we do, we are in danger of losing the claim on the hearts of our children that America has always had on our own."

Pleasing the Christian right is of course important for the presumptive G.O.P. candidate for President. On April 2, Pat Robertson, head of the Christian Coalition, stated that Bob Dole would probably not be the Republican Party's nominee for President without the backing of his group, and indeed its support was seen as crucial in Dole's decisive victory over Pat Buchanan and his other rivals in the South Carolina primary in March.

In The Doles: Unlimited Partners, Elizabeth told why she decided to leave her job as Secretary of Transportation so she could hit the 1988 campaign trail full time for her husband. On the surface it appears her remarks could as easily apply to her current leave from the American Red Cross: "I was setting aside one important cause to take up another, to play a significant part in the drama of national politics and in the selection of the leader of the free world."

But as her actions, the documentary evidence and the professionals around her testify, she seems to have been playing that part during her entire four years at the Red Cross, making politics a true blood sport.

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