Bloodletting

South Florida Blood Bank scrambles to make ends meet while paying its CEO big bucks

Back in May, the South Florida Blood Bank brought in former surgeon general David Satcher and a cadre of local politicians to break ground on its new headquarters in northern Palm Beach County. Things seemed peachy as the blood bank announced a campaign to raise $10 million to pay for the new office and a massive outpost planned to open later this year in Miramar. To top it off, officials bragged of the $1 million gift by Countess Henrietta de Hoernle of Boca Raton, who will get her name on the new digs, across from Sports Authority on North Lake Boulevard.

So two months later, what happened to those heady times? Employees recently received a letter along with their paychecks explaining that financial troubles have crippled the charity. The note, signed by CEO John Flynn and dated June 10, encouraged employees either to take a 13-week unpaid vacation or drop down to working four days a week. "As most of you know, our blood collections have not met goal for several months," Flynn wrote, "and it looks like we will have a very slow summer."

Just how bad things are at the blood bank, which supplies hospitals from Palm Beach County to Miami, isn't clear. Most members of the board of directors didn't return phone calls last week. The only board member to respond to questions, Michelle Eassa, was on maternity leave for the last board meeting and hadn't been informed of any financial trouble or the need to cut back workers. A manager of one branch, who asked that her name not be used, said that the troubles won't force the closure of any offices but that the blood bank might begin operating with a skeleton crew at donation centers in hopes of making ends meet.

What's strange about the supposed financial trouble is the blood bank's history of profitable returns (see "Blood Trade," November 28, 2002). The blood bank reported a surplus of $1.36 million in 2001, the last year it released financial paperwork. But the charity has taken criticism for paying Flynn, its CEO, a salary of more than $300,000 and channeling more than $2.3 million into companies run under his name. The charity managed those hefty returns by using some harsh tactics in competing with its main rival in the blood business, Lauderhill-based Community Blood Centers of South Florida. Former employees of South Florida Blood Bank have accused managers there of telling workers to badmouth the competitors and to undercut rivals' blood drives by sending their trucks to locations staked out by other blood drives.

Several former employees claim South Florida Blood Bank's troubles are the result of bad treatment of its workers, who routinely quit or are fired with no explanation. Sharon Briggs, who headed the department in charge of organizing blood drives, says she was fired in November for speaking out against mismanagement. "There's really no need to have a shortage of blood," says Briggs, who's now selling real estate. "If the blood center treated employees, who are doing the job day in and day out, with respect and compensated them fairly, then they wouldn't have such problems."

After receiving notes in their paychecks, several South Florida Blood Bank employees have applied for jobs at its Lauderhill competitor, says Dr. Charles Rouault, president of Community Blood Centers. Rouault says South Florida Blood Bank has few recruiters left, meaning its supplies are likely dwindling and hospitals under contract could soon have shortages. "It's tough to draw donations if you don't have any employees to recruit donors," Rouault says.

Worst of all, there's no backup plan if South Florida Blood Bank goes under. Rouault says his blood bank doesn't have the supplies to take over. Hospitals would likely be forced to buy blood off the nationwide market from other banks at a much higher cost; it's a price that would likely be passed on to patients. "I don't know what we can do if they run out of blood," Rouault says. "If they run out, then the hospitals run out."

 
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