Ottawa -- LIKE thousands of Red Cross workers and volunteers, Judi Fairholm
had no direct involvement with the tainted-blood tragedy of the late 1980s.
But the financial, legal and political legacy of the scandal now threatens
an organization she passionately believes in, and her work on a highly
regarded program to prevent child abuse.
"The principles of the Red Cross, its spirit, its mission to serve the most
vulnerable, are unique. I don't think there is another organization in this
country we could go to to deal with an issue like family violence," an
anxious-looking Ms. Fairholm said in an interview.
At its annual meeting last weekend in Charlottetown, directors of the
Canadian Red Cross Society warned that the charity could go under as a
result of legal liabilities due to lawsuits over contaminated blood,
specifically from a lawsuit from those infected with hepatitis C who have
launched a $3.5-billion claim against the charity and the federal and
provincial governments.
The Red Cross must pull out of the blood system by next September, losing
$300-million in revenue, 2,300 employees and prestige. Until a few months
ago, it would not entertain the idea. Then it fired its combative
secretary-general, Douglas Lindores, and began back-room negotiations for
its survival. In exchange for going quietly, government sources say, the Red
Cross wants the federal and provincial governments to assume its
liabilities.
Virtually all experts agree that the Red Cross has botched its handling of
the tainted-blood tragedy and is at least partly to blame for the crisis it
now faces.
But can the largest, richest and oldest charity in the country really go out
of business? Could Canada actually become one of the few countries in the
world that does not have a national Red Cross Society?
Nova Scotia Health Minister Jim Smith said that at a recent meeting in
Fredericton, his federal and provincial counterparts agreed that, despite
their differences about blood, they are very keen on other services the
charity has to offer. "So many other of their initiatives were very positive
for Canadians and we need those types of programs," he said in an interview.
So it could be politically risky to let the Red Cross die.
There are 188 countries who are signatories to the Geneva Convention, and
all but one has a national Red Cross or Red Crescent society. (The exception
is Israel, which objects to the humanitarian agency's Christian and Islamic
symbols.)
No other group can respond to disaster the way the Red Cross does -- and did
in the case of the Manitoba flood this summer.
With the $300-million-a-year blood program lopped off, the organization
becomes much smaller, with a budget of about $200-million a year.
Paradoxically, it also could become stronger because its remaining core
programs are poised for rapid expansion.
The blood program had become an albatross. In the past couple of years
alone, the agency spent more on the daily operations of the blood program
than it received from the provinces, invested heavily in a fractionation
plant (more than $33-million to date) that is for all intents and purposes a
dead letter, and raised the stakes in its legal battles by challenging the
head of a commission of inquiry into the blood system.
Public respect for and trust in the Red Cross remains strong, particularly
among its 130,000 volunteers.
Janet Jones, a volunteer for more than 30 years, said it is a relief to many
that the Red Cross is getting out of the risky, high-tech business of blood
and back to its humanitarian roots.
"I hope somebody stops to consider what could be destroyed. There is a heck
of a lot of good that the Red Cross does in communities across the country,
and people out there know it," she said in an interview from her home in
Oakville, Ont.
The charity has one of the most recognizable symbols in the world and the
support of millions who have benefited from its services over the years --
particularly those who recall the war years, its halcyon days.
Carole Kerbel, executive vice-president of Hill & Knowlton Canada Ltd. and
an expert in crisis management in the health-care field, said the Red Cross
has many traits that give it a distinct advantage in managing the current
crisis. They include a rich history, loyal stakeholders, and an impressive
recognition factor.
"Goodness knows they have a lot to build on, but the key is having a
strategy," she said.
So far, the agency says it's going to return to its roots. John Mulvihill,
director of operations, said there is no immediate plan to expand, launch
dramatic initiatives or create a new profile for the agency. He said the
grassroots, the local volunteers and workers, will decide the future
direction of the charity.
"We've had one [a strategy]; we've run under our principles, and we belong
to the largest humanitarian movement in the world. And we are proud members
of that as Canadian Red Crossers."
Although the Red Cross has been criticized for its actions as the dangers of
AIDS became evident, it alone was not responsible for the biggest
public-health disaster in Canadian history. Letting it take a financial hit
in addition to public opprobrium may be seen as hypocritical on the part of
politicians.
The federal government regulates the blood system and the provincial
governments fund it. Testimony at the Commission of Inquiry on the Blood
System in Canada has shown nobody was in charge of the system or accountable
for safety decisions.
Three thousand Canadians are expected to die as a result of contaminated
blood and blood products. About 1,200 were infected with the AIDS virus and
another 12,000 with the virus that causes hepatitis C.
But it was its actions in the aftermath of the tragedy -- as much as the
actions and inaction in response to infectious diseases -- that appear to
have cost the Red Cross dearly.
The humanitarian agency opted to challenge the commission head, Mr. Justice
Horace Krever, in court and to criticize him publicly. And it has spent more
than $10-million destined for good deeds in doing so. (The Supreme Court of
Canada will rule next Friday on whether the Red Cross is successful in its
bid to suppress parts of the inquiry report.)
John Hutchinson, a history professor at Simon Fraser University and author
of Champions of Charity: War and the Rise of the Red Cross,said nothing did
more to sour public opinion than its refusal to apologize categorically.
"Instead, those who might otherwise have supported its work are treated to
the spectacle of lawyers hired by the Red Cross tying up the courts and the
Krever inquiry in order to protect who knows how many vulnerable backsides."
In many ways, the Red Cross fell victim to its history and its privileged
status in society, believing itself to be infallible because its goal was to
do good.
Organized along military lines, (it was not until 1984 that it appointed a
secretary-general who was not a senior military officer), the charity has
always been secretive and intolerant of dissent.
Unwilling to take political realities into account or to bow to public
opinion, it was pilloried in the media. This paved the way for health
ministers to do what was previously unthinkable -- unceremoniously firing
the Red Cross from a program it ran for 50 years.
Ms. Kerbel, the public-relations consultant, said from her vantage point as
an outsider, the Red Cross seems to have handled the crisis badly, by being
defensive and bitter rather than moving on.
"What they really have to change is their state of mind. When you're an icon
like the Red Cross is in Canada, it's sometimes hard to look forward. But
it's not too late for them."
Ms. Kerbel said she is surprised that the organization has not set out to
aggressively sell its non-blood programs and to reassert its strengths, an
approach that has allowed many corporations to successfully weather
calamities.
"The Exxon Valdez spill was not the end of Exxon. The Tylenol scare was not
the end of Johnson & Johnson. There is no reason tainted blood should mean
the end of the Red Cross," she said.
Henry Mintzberg, a management professor at McGill University, said there is
really no precedent for a non-profit corporation being stripped of its core
service, but he too is convinced the Red Cross can survive because it has
many other areas of specialty.
"This type of catastrophe occurs in the private sector and companies manage
to get through it. The key is managing the change properly," he said.
Related Web site
<http://www.redcross.ca>
Array of programs
Even losing the blood program, the Red Cross would remain one of Canada's
biggest charities, with a budget of almost $200-million, 5,400 employees and
130,000 volunteers. There are several other Canadian Red Cross Society
programs:
Homemaker Services, $121-million, 4,549 homemakers
In Ontario, Nova Scotia and New Brunswick, the agency cares for almost
80,000 sick and disabled people in their homes. With the provinces seeking
alternatives to institutional care, this is a major growth area.
International Services, $33-million, 81 missions abroad
Humanitarian relief is the charity's original raison d'être,and it remains a
major conduit for disaster relief in the world's trouble spots.
Community Services, $18-million
This involves a panoply of services, including equipment loans to the
disabled, meals-on-wheels, respite care, fitness programs for seniors and
sexual-abuse prevention for young hockey players. In the past year, the Red
Cross has started an ambulance service and a breakfast program in schools.
As governments turn increasingly to community health and to contracting out
services, this is also a growth area.
Water Safety Services, $7.2-million, one million people enrolled in programs

A mainstay since the war years, the water-safety programs continue to be
popular, with virtually every lifeguard and swimming instructor in the
country depending on the Red Cross for training.
First Aid Services, $7.1-million, 215,000 people enrolled
While its traditional rival, St. John Ambulance, is best known in this area,
the Red Cross has a major clientele. One of its most innovative programs is
baby-sitter training, which it offered to 41,000 young people last year.
Emergency Services, $5.1-millionThe Red Cross has been a fixture at the site
of domestic emergencies since the 1917 Halifax Explosion. Most recently, it
did highly publicized work during the Manitoba flood and collected more than
$32-million for the Saguenay flood in Quebec.-- Staff

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