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Red Cross Reputation Bloodied Again

—published in the April/May 2012 issue of the Charity Rating Guide & Watchdog Report

American Red Cross, which controls nearly one half of our nation's blood supply, was fined almost $9.6 million by the Food and Drug Administration (FDA) in January 2012 for "significant violations" observed at 16 Red Cross blood services facilities during inspections in 2010. The Red Cross has been fined more than a dozen times since 2003 for violations of blood safety standards.

In response to the latest penalty, the Red Cross issued a statement that the organization is "disappointed that the FDA believed it necessary to issue a fine for an inspection conducted so long ago and it is important to know we have already taken corrective steps to address those matters and that improvements in operations have been made." The Red Cross issued a similar response to a $16 million fine levied by the FDA in 2010 due to violations it found during inspections in 2009 and earlier.

According to the FDA letter announcing the 2012 fines, "many of the violations recounted in this letter are virtually identical to violations charged in previous [letters]," and the Red Cross "has known of these continuing problems and has failed to take adequate steps to correct them."

While the near $9.6 million fine may seem like a lot of money, it actually is less than 0.3% (three-tenths of one percent) of the Red Cross' total revenues of $3.6 billion in fiscal 2010. CharityWatch believes that this fine by itself may not be large enough to compel the Red Cross to avoid repeat violations in the future.

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Last Update: August 28, 2012