The Red Cross has been helping people since 1881. You can see us at work in communities across the country, and here in southeastern Pennsylvania and New Jersey, thousands of times a day-teaching first aid or CPR classes, keeping members of the military and their families connected through emergency communications, caring for disaster victims, and collecting and delivering blood. Thousands of area residents participate in that work as volunteers, blood donors and financial contributors.

As one of 36 Red Cross regional blood services, the Penn-Jersey Region is the major supplier of blood in southeastern Pennsylvania and New Jersey.

Continuing a tradition begun more than 50 years ago, the mission of the Penn-Jersey Region is to fulfill the community's need for the safest, most reliable and cost-effective blood products and transfusion support services. In 1994, the Red Cross dedicated the Musser Blood Center, which houses:

• The blood supply for more than 125 southeastern Pennsylvania and New Jersey hospitals;
• The Philadelphia National Testing Laboratory, which provides infectious disease and type- testing of blood donations for four Red Cross blood centers and several non-Red Cross blood centers; and
• The National Reference Laboratory for Blood Group Serology, serving more than 3,000 hospitals nationwide.

Hospitals and patients in southeastern Pennsylvania and New Jersey benefit from an array of transfusion support services, including:

Lifesaving blood products delivered 24 hours a day, 365 days a year, and physicians and technical experts available for consultation around the clock;

• Products to meet special patient needs such as Granulocytes (infection fighting white cells) and HLA-matched platelets;
  Self-donation for planned surgery;
• Perioperative autologous cell salvage-a transfusion option benefiting orthopedic and other surgical patients;
• Reference laboratory services that identify and locate compatible units of platelets and red cells for patients;
• The American Rare Donor Registry-a joint American Association of Blood Banks (AABB) and Red Cross program that assists patients who need rare blood across the country and world;
• Stem cell and therapeutic apheresis services to help patients with cancer and other diseases;
• National Marrow Donor Program participation that helps cancer and other patients through donor recruitment and education; and
• Research activities in support of-
  • Cellular therapies to help cancer patients;
  • Pathogen inactivation techniques that may prevent the transmission of AIDS, hepatitis or bacterial contamination; and
  • Preservation and storage techniques for donated blood platelets so patients will receive the optimal benefit from their transfusion.

Mr. Chairman, last year the Penn-Jersey Region collected more than 262,000 whole blood donations and nearly 11,000 platelet and Granulocyte donations and additionally imported 135,000 blood products to meet the local community transfusion needs of over 800,000 blood products. In southeastern Pennsylvania and New Jersey, the Red Cross conducted over 11,000 blood drive operations, which assisted over 300,000 volunteer blood donors who stepped forward to save lives. The Red Cross takes the confidentiality of our blood donors very seriously. As a regulated service, blood collection is a very detailed process designed to ensure the safety and security of the blood donor, the blood supply, and those who are trained to collect, manufacture and distribute blood products.

The Food and Drug Administration (FDA)'s Center for Biologics Evaluation and Research (CBER) is responsible for regulatory oversight of the U.S. blood supply. FDA promulgates and enforces standards for blood collection and for the manufacturing of blood products, including both transfusable components of whole blood, pharmaceuticals derived from blood cells or plasma, and related medical devices. The American Red Cross, Penn-Jersey Blood Region activity is regulated not only by the FDA, but also on a local level by the State of Pennsylvania, the State of New Jersey, AABB as well as national American Red Cross standards, policies and procedures.

As you may know, an investigation is currently being conducted by federal authorities into identity theft at the American Red Cross, Penn-Jersey Blood Region. Investigators learned that several individual's personal identification information, such as names and social security numbers, had been used to obtain credit and make purchases. A common denominator was that they had all donated at one of four Red Cross blood drives held in the southeastern Pennsylvania area in November and December 2002. We have recently learned that several donors at two additional blood drives during the same period were victims of identity theft.

Social security numbers are utilized during the donation process to uniquely identify each blood donor and help us accurately connect the donor with his or her donation history, which is important for both donor and patient safety. While advances in technology and record keeping have afforded us increased security options, social security numbers remain the universally accepted means of identification.

Upon learning of the problem in February 2003, we immediately contacted the U.S. Attorney's Office for the Eastern District of Pennsylvania, and requested that an investigation be opened and a task force of federal law enforcement officials be developed to fully investigate the matter. We are also working closely with the Federal Bureau of Investigation and the U.S. Postal Inspection Service. We have acted aggressively and cooperated fully with investigators to assist them in resolving this matter quickly and thoroughly. We also launched a rigorous review of our security procedures. We have no reason to believe that our electronic database has been compromised. This continues to be an open case and, consequently, I am sharing with you only the details that have been made public and will not hinder the ongoing investigation. We want to make clear that the safety of the blood supply has in no way been compromised.

To date, the investigation has been contained to the southeastern Pennsylvania area and limited to six blood drives in the November through December 2002 timeframe. We are aware of at least 23 individuals who were blood donors and were also victims of identity theft. Our first concern is for those who may have been victimized. I have personally contacted representatives of four blood drive sponsor groups and I am in the process of contacting the two new groups we learned about last week. We have notified 1,400 donors in writing who participated in the first four blood drives and letters are going out to all donors from the two additionally identified blood drives. I have attached a generic copy of that correspondence for the record. This letter gives step by step actions they should take if they are concerned about the security of their personal information. The information was provided to us by federal law enforcement officials.

In addition to the information in the letter, we have set up a special Red Cross toll-free telephone number to assist donors who believe they may have been victims. This line is answered by specially-trained staff to provide more detailed information about security of donor information and to assist donors in checking their credit reports.

Despite this isolated situation, you can be certain that specific steps are taken throughout the Penn-Jersey Region's blood donor centers to ensure that blood donor information is secure. Some of them include:

• Donor records are handled exclusively by authorized personnel trained to deal with confidential information. Before interacting with the public, our Blood Services Region employees go through in-depth training that also requires signing a confidentiality agreement and a Code of Conduct agreement.
• Information entered on the blood donation record form completed by donors at the blood drive is protected from view by others during the donation process.
• Access to information is limited to authorized staff who need it in order to process the blood donation.
• Every person who handles this information is known/identified to us.
• Once donor information is entered into a computer at the blood center, the blood donation record form is shredded.
• Access to our computers and computer databases is strictly limited.

Mr. Chairman, the Red Cross relies on voluntary donations to ensure a safe and adequate blood supply. We regret that any donor has had to question his or her desire to give blood because of security concerns. We are committed to ensuring the safety and privacy of our donors and are working diligently to ensure that this situation is not repeated. We are appreciative of the thousands of donors who continue to support us everyday. Without their generous donation of the gift of life, lives would be lost. Finally, we are proud of our people, and the job they do. We hope that the details surrounding this case will not discourage people from donating in the future.

Increasing the available supply of blood is critical to healthcare in our community, because much of modern medicine is only made possible because of blood donations. Yet, donations do not always keep pace with demand.

Philadelphia is a major regional medical center with teaching hospitals that provide advanced care, such as organ transplants, specialized pediatric and neonatal care, cancer and cardiac are, all of which require a stable blood supply.

For our region, blood donations given locally only meet 70 percent of our true need. Through planning and coordination, the Red Cross is able to ship blood from communities where there is an excess to those where there is a need. Still, history shows that our reserves of blood have not been strong enough to compensate for seasonal swings in donations and weather-related disruptions of normal blood collection activities. Additionally, blood shortages seriously affect patient care. As the population ages, the need for blood is predicted to grow.

Experts agree that a stronger blood supply is an essential part of community preparedness. After the terrorist attacks of September 11, 2001, a multi-disciplinary task force of representatives from government agencies and the blood banking community was formed to study this issue. The task force concluded that the single biggest determinant of the success of the blood community's first response to a disaster is the blood already on the shelves of blood centers and hospitals. It recommended that planning for future disasters include the requirement that all blood centers have available a seven-day supply of all blood types at all times.

To meet our responsibility to the people we serve, the Penn-Jersey Region will continue to increase our blood supply by asking more people to donate blood, asking those already giving blood to donate more often, and asking business and community groups to increase their support.

On behalf of the Red Cross, thank you again, Chairman Greenwood, for the opportunity to testify before this subcommittee. It is imperative for our national preparedness, and the daily treatment of those with life-threatening conditions, that Americans generously donate blood. This act can, and does, save lives. I would be happy to respond to your questions.

ATTACHMENT

May 8, 2003

Dear Blood Donor:

The American Red Cross has recently experienced a breach of donor record confidentiality at the Penn-Jersey Blood Service Region. Your donor information, provided at the time of your blood donation, which included your Social Security Number (SSN), address and telephone number, etc., regrettably may have been compromised.

At this time a number of blood donors have been identified as having their donor record information compromised and are victims of identity theft. Although we do not know the full extent of this breach in confidentiality, we want to advise you that your personal information to include your SSN, may have been accessed and/or misused placing you at risk to be a victim of identity theft.

The American Red Cross has been fully cooperating with the Department of Justice, the US Postal Inspection Service, the Federal Bureau of Investigations, as well as other law enforcement agencies and has implemented additional security measures to safeguard all existing and future donor records stored in our computer systems and data files.

The American Red Cross along with law enforcement officials strongly encourages you to follow the steps provided in the attached Fact Sheets. If you have not already done so, we suggest that you contact the three major credit bureaus as soon as possible to help determine if you have been victimized and indicate to them that you may be a victim of identity theft. If you determine there has been unauthorized activity concerning your identity, immediately call the American Red Cross Blood Services office at 1-866-281-8733. This information will be kept in strict confidence and is very important to the investigating law enforcement officials and will help determine the full extent of any and all crimes identified through this security breach.

The American Red Cross will fully compensate you if any costs are incurred in contacting the three credit bureaus. You can send a brief letter with any supporting documentation concerning those costs to Edward Bauman, at the Penn-Jersey American Red Cross Blood Service address listed above.

We deeply regret any inconvenience that this possible compromise may cause you. We greatly appreciate your continued support of the American Red Cross blood program. If you have any questions regarding this letter, please call the American Red Cross office of Edward Bauman at 1-866-281-8733.

Sincerely,

Brigid O'Neill-LaGier
Chief Executive Officer
American Red Cross Blood Services
Penn-Jersey Region

Fact Sheet

What can you do to safeguard against identity theft or fraud?

If you suspect that your personal information has been misused to commit identity theft, take the following steps and keep a record of all your actions.

• First, contact the fraud departments of each of the three major credit bureaus. Request that a "fraud alert" be placed in your file. Also ask them to place a statement that asks creditors to call you before opening any new accounts or changing any existing accounts. The credit bureau fraud departments are listed below. Their normal operating hours are Monday - Friday 8:30 a.m. to 4:30 p.m.

TransUnion
www.transunion.com
Fraud Victim Assistance Department Phone: 800-680-7289
P.O. Box 6790 Fax: 714-447-6034
Fullerton, CA 92834

Equifax Credit Information Services
www.equifax.com Phone: 800-525-6285
P.O. Box 105069
Atlanta,GA 30348

Experian
www.experian.com
Experian's National Consumer Assistance Phone: 888-397-3742
P.O. Box 1017
Allen, TX 75013

• Second, close or suspend any accounts you know or believe have been tampered with or opened fraudulently.
• Third, file a police report with you local police or the police in the community where the identity theft took place.

The Social Security Administration - www.ssa.gov - is an excellent source for information about Social Security Number theft or misuse. If you suspect that your SSN has been misused then you should call the SSA Fraud Hotline at 1-800-269-0271. You should also periodically contact the SSA at 1-800-772-1213 to verify the accuracy of the earning reported on your SSN, and may request a copy of your Social Security Statement. The following SSA resources are available on the Internet:

• SSA Fraud Hotline for Reporting Fraud - www.ssa.gov/oig/guidelin.htm
  Social Security: Your Number and Card (SSA Pub. No. 05-10002) - www.ssa.gov/pubs/10002.html
  When Someone Misuses Your Number (SSA Pub. No. 05-10064) - www.ssa.gov/pubs/10064.html
  

If you know that you are a victim of identity theft, file a complaint with the FTC by contacting the FTC's Identity Theft Hotline. Their toll-free telephone is 1-877-IDTHEFT (438-4338) or by direct dial to: 202-326-2502. You may also write to them at:

Identity Theft Clearinghouse
Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, D.C. 20580

You can also access their website at: www.consumer.gov/idtheft. Ask for a copy of ID Theft: When Bad Things Happen to Your Good Name, a free comprehensive consumer guide to help you guard against and recover from identity theft. One of the best ways to catch identity theft is to regularly check your credit record. Order your credit report from each of the three major credit bureaus each year and make sure all the information is correct.