Red Cross says all Fund donations will go to attack victims

Associated Press WriterWASHINGTON (AP) -- The American Red Cross said Wednesday it will use all the money donated to the Liberty Fund for victims of the terrorist attacks, reversing a plan to set aside some of the money for other needs.

The Liberty Fund has collected $543 million. The Red Cross had planned to put about $200 million aside for use in the event of future terrorist attacks. That move drew a sharp rebuke from critics, who said the money donated to the fund was given under the assumption only people affected by the Sept. 11 attacks would get it.

The Red Cross has stopped accepting donations to the fund, saying the amount collected so far is sufficient. The charity already has distributed about $121 million in direct aid to Sept. 11 victims and their families.

Red Cross President Bernadine Healy is stepping down as head of the charity at the end of the year in part because of criticism of the fund. Healy took the unusual step of setting up the Liberty Fund as a separate account to deal with the attacks, over the objections of some Red Cross board members.

Healy was lambasted at a House hearing on charitable contributions last week after two widows who lost their husbands in the World Trade Center attack described how they have had to fight a maze of bureaucracy to obtain financial help.

Lawmakers from both parties said they believed donors to the Liberty Fund contributed as generously as they did because they thought their money would be channeled directly to the victims and families of the attacks.