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Senior officials at the Canadian Red Cross knew in 1981 that a test was available that could prevent transmission of some cases of hepatitis C through blood transfusions, according to newly obtained documents.

The revelation could open the door to compensation for thousands of victims of tainted blood who have been denied payouts.

The federal government has set aside $1.2-billion to compensate Canadians who were infected by hepatitis C in tainted blood. However, the money is available only to those infected from 1986 until testing began, on the assumption that cases before that date were not preventable.

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Newly revealed memos, in documents obtained by The Kansas City Star, show that the Red Cross decided to hold off implementing the tests because of the cost, in dollars and in lost donations, and because the agency figured it would have no liability unless regulators made testing mandatory.

Testing for hepatitis C did not begin in Canada until 1990.

In the meantime, tens of thousands of transfusion recipients were infected with the potentially debilitating liver disease.

"The evidence is so overwhelming that governments can no longer, in good conscience, deny compensation to the pre-1986 victims," said Mike McCarthy, the lead plaintiff in a class-action lawsuit filed by victims.

The documents could also influence a continuing criminal trial. Among 32 criminal charges laid last year related to tainted blood, a handful concern the alleged failure of the Red Cross and senior officials to implement surrogate testing from 1986 to 1990.

In a lengthy investigative series, The Kansas City Star has revealed that officials with U.S. blood banks gathered at the headquarters of the American Red Cross in Washington on Jan. 9, 1981, to discuss the problem of non-A, non-B hepatitis in the blood supply. (The disease was renamed hepatitis C, or HCV, in 1986.)

Much of the discussion focused on using a surrogate, or indirect, test for alanine amino tranferase. ALT is a blood enzyme that indicates liver dysfunction, a telltale sign of hepatitis infection.

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The test was far from perfect. It would detect only about half the cases of HCV, resulting in the loss of about 3 per cent of blood donations, and would cost about $3 per unit of blood. But HCV was becoming such a widespread problem that the meeting concluded: "Blood-collection agencies in the U.S. should prepare to test ALT levels of all blood units."

Senior officials with the Canadian Red Cross monitored developments from the meeting and in July, 1981, visited Washington to investigate the issue of surrogate testing.

John Derrick, director of operational research at the Canadian Red Cross, said testing was "premature" but blood banks in the U.S. were "gearing up" for the move. He noted that as long as the ALT test was not part of standard operating procedures, the Red Cross "can not be held legally responsible for any illness resulting from transfusion of blood with high ALT levels."

Dr. Derrick concluded the memo by saying there was a "general strong feeling . . . that no one should test on a routine basis since all blood centres would be obligated to test." In May, 1981, Dr. Patrick Moore, director of the National Reference Laboratory of the Canadian Red Cross and one of the country's foremost experts on hepatitis, had demanded immediate implementation of surrogate testing. But his recommendation was rejected by his superiors, largely for financial reasons. They decided instead to do more testing.

Germany had implemented surrogate testing in 1978. The New York Blood Center, the largest blood collector in the U.S., instituted the ALT surrogate test in May 1982. While the test cost $2.40 per unit (U.S.), the New York Center estimated that it prevented at least 10,000 HCV cases a year there.

Soon after, HIV-AIDS took centre stage, casting hepatitis C into the shadows, but the disease spread silently and inexorably until testing was finally implemented in 1990.

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The compensation fund for tainted-blood victims infected with hepatitis C was established in 1998, after an intense public campaign. Five years later, only about $300-million has been paid out, to people infected in 1986 or later.

The initial estimates were that as many as 22,000 people who were likely infected from 1986 to 1990 would make claims. To date, only about 4,000 victims have come forward, as have another 3,000 or so estates of deceased victims.

"Money isn't the problem," Mr. McCarthy said. "The government is just being pigheaded about this because they don't want to admit they were wrong."

Mr. McCarthy, who is himself infected with hepatitis C, said he is hopeful that Paul Martin will move swiftly to rectify the matter when he becomes prime minister.

"Mr. Martin has some new facts before him and, hopefully, that will make it easier for him to do the right thing and extend justice to the pre-'86 victims," he said.

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