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Healy Left Red Cross With Hefty Settlement

The Plain Dealer

May 1, 2003


by Sabrina Eaton

Washington - Former American Red Cross President Bernadine Healy got salary and settlements totaling $1.9 million the year she left the charity in a dispute over how it handled donations it received after the Sept. 11 terrorist attacks.

The nonprofit's latest tax filings show it gave Healy $1.63 million on top of her $296,661 partial-year salary when it forced the Gates Mills resident from office at the end of 2001.

Healy's attorney, Robert Duvin of Cleveland, said the extra money was "a negotiated settlement."

"She was, for good reason, bitterly unhappy about the traumatic ending of her career at the Red Cross, at the height of her service," said Duvin.

He com pared his cli ent to Joan of Arc trying to "do the right thing" for the public good in the face of the organization's "ugly politics."

Healy had created a special fund to accept donations after the terrorist attacks.

Although she never said the money would be devoted solely to the disaster's victims and their families, some donors were angry after learning that only 60 percent of the money would go for that purpose.

She was forced from office during the controversy.

Red Cross spokesman Phil Zepeda said the charity couldn't discuss Healy's severance package or departure because of its agreement with her. He said Healy's successor, Marsha Evans, launched an analysis of "compensation practices for senior Red Cross executives" when she took the job in August, but he refused to say whether the study was prompted by Healy's severance package.

Red Cross board member Bill Gagliano of Cleveland said the board had an outside compensation consultant examining appropriate pay for executives long before Healy's departure and said Evans' move is "nothing new." He also declined to discuss details of Healy's severance package.

"Executive compensation analysis is part of good governance for any organization," said Gagliano. He said the Red Cross continuously examines compensation so it can "make the decisions that are necessary to bring the best people to the Red Cross that we can afford."

Zepeda said Evans makes $450,000 annually, the same as Healy's 12-month salary.

Kyle Waide of Charity Navigator, a watchdog group that evaluates the effectiveness of nonprofit organizations, said he thought Healy's severance package was appropriate.

"If she was running an organization that size in the private sector, it would have been a lot more," said Waide, the group's deputy director.

But Daniel Borochoff of the American Institute of Philanthropy, another watchdog group that monitors charities, said people within the Red Cross were upset when they learned how much Healy received.

"People were justifiably unhappy because she caused all these problems and walked away with an incredible payout," said Borochoff.

But Borochoff said other nonprofit executives have received bigger severance packages. He cited former Boy Scouts of America head Jere Ratcliffe, who received $2.6 million when he left the office after 37 years.

Healy, a physician who formerly headed Ohio State University's medical school and the National Institutes of Health, now works as a senior writer for U.S. News & World Report, covering science and medicine. She referred calls to Duvin, who described her as "happy as a lark."

To reach this Plain Dealer reporter:

seaton@plaind.com, 216-999-4212

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