FIRST BLOOD: HOW THE RED CROSS WOUNDED A RESUME

By ERIK LARSON

The scene repeats itself over and over on the campaign trail. Elizabeth Dole stands by, beaming, while her host, using talking points prepared by her staff, praises her work as president of the American Red Cross--in particular her role in leading its "most ambitious" effort ever, the "total transformation of the way the Red Cross collects, tests and distributes one half of the American blood supply."

While no one expects full disclosure on the campaign trail, there are crucial elements missing from this image. One of them is that Mrs. Dole's heroic restructuring campaign was largely forced on her by the U.S. Food and Drug Administration after its inspectors found the Red Cross to possess dangerously little control over its blood operations. Another is that the FDA became so fed up with the lack of progress in the first two years of her administration that the agency went to federal court to compel the Red Cross to clean up its act. In this juxtaposition of spin and reality lies an example of the image-burnishing skills that have helped Mrs. Dole survive jobs under six different Presidents.

Mrs. Dole took the helm of the Red Cross in February 1991, after resigning as George Bush's Labor Secretary. "I had looked at it very carefully," she recalls. "I had a couple of people go in ahead of me and look at what the challenges were going to be." Indeed, she encountered a deeply troubled organization--far more troubled, according to a source close to Mrs. Dole, than she appreciated. Since the mid 1980s, in response to the onslaught of AIDS, the FDA had begun to toughen its inspection of blood banks. In the process, its field inspectors found widespread and potentially dangerous problems with the way the Red Cross tracked blood donors and tested blood for infectious agents. In 1988, under FDA pressure, the Red Cross agreed to assert tighter control. But by the time Mrs. Dole arrived three years later, the organization had made little progress. Dr. Jeffrey McCullough, then serving a temporary stint as senior vice president for biomedical services, remembers vividly the meeting where he told Mrs. Dole that they were in the midst of a crisis. "Elizabeth," he said, "what I'm trying to tell you is we're not getting far enough and fast enough to get on top of this."

But Mrs. Dole recalls things a bit differently and casts them in a more take-charge light. She insists she fully understood the gravity of the situation. "What I recall is asking Jeff to come up with a program, because I knew before I went in that we were going to have to take very bold action. And I asked him to come up with a program we could move on very quickly."

Mrs. Dole considered several drastic options, a senior Red Cross official says, including a proposal to sever the Red Cross's historic link to the nation's blood supply by setting up the blood unit as an independent operation. Instead, Mrs. Dole announced a sweeping campaign to modernize and centralize blood operations and improve the training of blood staff, a revolutionary effort that threatened to bankrupt the blood operation--the equivalent of a $1 billion company--and alienate its outlying blood banks, accustomed to a high level of autonomy. At a time of great worry about the blood supply, the bold plan drew widespread praise; at first glance, it seemed another example of Elizabeth Dole's bureaucratic magic at work.

Despite glowing reports from the Red Cross press office, however, the problems cited by the FDA persisted. In fact the agency's concerns intensified, peaking when an inspection of the Red Cross's national headquarters found that officials still had little control over their nationwide operation. Says James Simmons, director of the FDA's biologics compliance office: "There simply was not a lot of evidence of changes or improvements." Two years into Mrs. Dole's presidency, the FDA, still frustrated, went to court to force the Red Cross to act. The result was a May 1993 consent decree setting out a stringent five-year plan for reform.

Resolutely positive, Mrs. Dole says the FDA sought the consent decree merely as a yardstick to measure improvement. She was so prepared for this conversation with TIME that she read aloud remarks by Health and Human Services Secretary Donna Shalala and FDA commissioner David Kessler praising her management. The consent decree, she says, "literally was a ratification, it was a ratification of what we were doing."

Well, not exactly. In 1994, in its first annual progress assessment, the FDA noted that a Red Cross quality-assurance plan submitted to meet the decree was "unacceptable," and that "several of your submissions on computer systems and databases are inadequate." According to the assessment, obtained by TIME under the Freedom of Information Act, at some blood centers the FDA's inspectors had found continued failures to keep accurate records and follow required testing procedures.

To be sure, the Red Cross is finally showing some real progress. It opened a new training center, built nine central testing laboratories and began a costly centralization of its computer systems; the FDA's Simmons estimates it has achieved "75% to 80%" of what the consent decree requires. But the Red Cross still has much to prove. A second progress assessment--delivered in June 1995--applauded improved communication between the Red Cross and the FDA, but also included a long list of violations, some of them troubling. Its Birmingham unit, for instance, drew blood from donors with histories of malaria and Hodgkin's disease. "One of the continuing problems," the FDA warned, "is the failure of employees to follow prescribed procedures."

The Red Cross blood network simmers now with discontentment arising primarily from the perception among its outlying blood banks that the new plan, with its emphasis on headquarters control, has devalued the contributions of local volunteers. Last year a group of employees and directors of the Red Cross's Ozarks unit quit and established an independent blood bank. At a time of such stress and dislocation, officials of some blood regions express unhappiness with Mrs. Dole's decision to take leave. "Frankly I was shocked that they would allow her to take a one-year leave of absence and then come back," says Bob Bordogna, chairman of the Red Cross blood unit in Louisville, Kentucky. "That's pretty hard for an organization to deal with, while [its] president goes on hiatus to campaign for her husband."

It is her potential return, however, that competitors to the Red Cross fear most. Jim MacPherson, executive director of the Council of Community Blood Centers, which represents independent blood banks that manage the other half of the nation's blood supply, says her assumption of the dual role of First Lady and head of the Red Cross could give the supposedly neutral organization a political edge and an unfair competitive advantage. "It's not reality. How could she come back?...How could any action that she would ever make be viewed objectively?" Especially if Bob Dole were to make good on his campaign promise to fire David Kessler, chief of the FDA.