WASHINGTON - The Red Cross, accused by the government of "persistent and serious violations" of blood safety rules, promised in a court settlement Friday to meet all safety requirements and pay substantial fines if it fails to do so.

The Food and Drug Administration said the consent agreement settles concerns stemming from inspections going back 17 years.

Two years ago, the FDA went to court seeking a contempt citation against the Red Cross for not following a 1993 agreement to meet blood safety standards.

Under the new settlement, fines for various violations could total up to 1 percent of the Red Cross's $1.9 billion in annual revenues - or $19 million - in the first year, increasing to a maximum of 4 percent by the fourth year, the FDA said.

"The new financial penalties in the consent decree create an important new incentive for (the American Red Cross) to improve the processes and controls necessary for making safer blood products," said FDA Commissioner Dr. Mark B. McClellan.

Last summer, the Red Cross installed a retired admiral, Marsha Johnson Evans, as its new president. While declining to discuss the blood problems at the time, she promised to act to improve the trust many Americans have in the charity.

McClellan said he is "hopeful that the acceptance of this agreement by ARC's new leadership reflects a new willingness to implement a management culture that expects and achieves good blood safety practices."

McClellan said the acceptance of the decree is a good indication that Red Cross management intends to take significant steps to ensure safe blood practices.

The agreement will be submitted to the court for approval, McClellan said.

Red Cross officials could not be immediately reached for comment on the agreement.

The Red Cross provides about 45 percent of the nation's blood supply. Another 45 percent is collected by independent blood centers and the rest is collected at hospitals.

McClellan said other blood centers have been able to avoid the type of chronic problems that have plagued the Red Cross.

In its most recent inspection of the charity last December, FDA said it found "numerous and troubling problems in producing blood products - including a lack of management control and quality assurance oversight that could lead to a patient receiving potentially unsafe blood."

McClellan said the FDA has long been concerned about the lack of a management culture at Red Cross that promotes blood safety.

Among the problems he cited were alteration of records so blood could be accepted from an unsuitable donor, failure to keep good inventory records so blood could be recalled if necessary and mislabeled blood products.

Potential financial penalties outlined in the decree include:

€ Up to $10,000 per event, and $10,000 per day, for any violation of standard operating procedures, the law, or consent decree requirements and timeline for compliance.

€ $50,000 for the preventable release of each unit of blood for which FDA determines that there is a reasonable probability that the product may cause serious health problems or death.

€ $5,000 for the release of each unit of blood that may cause temporary problems, up to a maximum of $500,000 per event.

€ $50,000 for the improper re-release of each unsuitable blood unit that was returned to ARC inventory.

€ $10,000 for each donor inappropriately omitted from the National Donor Deferral Registry, a list of all unsuitable donors.

---

On the Net:

Food and Drug Administration: http://www.fda.gov

American Red Cross: http://www.redcross.org