By his own account, Gilbert Andrews would rather be kicking through piles of junked hospital gurneys and X-ray equipment than preparing for a legal showdown with one of the world’s largest and most revered charitable organizations. But to Andrews, the bold crimson insignia most people associate with lifesaving heroes has become a symbol of corruption, a Red Cross he bore for eight months while struggling to extricate himself from a Mexican penitentiary. In 1998, the talk radio airwaves buzzed with the story Andrews was telling from a prison pay phone in Mexico: how a used medical equipment dealer had unwittingly become entangled in a smuggling operation run through the Red Cross chapter in El Paso, and how the charity had left him to rot in a Third World jail cell rather than admit to the fraud they perpetrated upon him.
Andrews is a free man now, but he says the American Red Cross has to pay for placing his life and liberty in jeopardy. Andrews’ $24 million lawsuit, filed under anti-racketeering law in U.S. District Court in El Paso, accuses the ARC of (1) participating in an illegal scheme to ship medical supplies and other goods into Mexico without paying import taxes, and (2) conspiring to keep that scheme a secret even after Andrews was wrongfully imprisoned as a direct result of it. If the case makes it to court, perhaps as early as May, the list of defendants could include former Red Cross president and long-shot vice-presidential candidate Elizabeth Dole.
The Red Cross denies they had anything to do with Andrews’ troubles, arguing that Andrews masterminded his own plot to illegally ship medical equipment to a Mexican Red Cross hospital across the border, bungled the deal, and then blamed the charity, hoping for a payoff. Andrews was jailed in Mexico because the Mexican Red Cross, which operates independently of the ARC, accused him of taking $130,000 in exchange for equipment they said he failed to deliver.
So far, Andrews, a 51-year-old businessman who has crisscrossed the United States and Mexico for 20 years hauling used medical equipment, has spread his story virtually unchallenged in the press. While Andrews was incarcerated, El Paso radio talk show host Paul Strelzin led a boycott of the local Red Cross chapter that reduced its donations to a dribble, and in February of last year, Geraldo Rivera’s CNBC show, Upfront Tonight, reported on Andrews’ ordeal at length.
Red Cross officials, meanwhile, remained loftily tight-lipped as they braced for Andrews’ promised lawsuit. The charity had already taken a nasty black eye from the Food and Drug Administration in 1998, when it was censured for failing to screen donated blood for HIV and other pathogens in the early Eighties. But now the world’s largest humanitarian organization is rolling up its sleeves to trade licks with Andrews, both in the courtroom and in the media. Lawyers representing the American Red Cross flew into Austin recently to present documents they say not only implicate Andrews in the scheme that led to his arrest in Mexico but show that it was he, not the Red Cross, who tried to conceal it.
Damaged Goods
Andrews’ version of events is that in the fall of 1994, he contracted with Mexican Red Cross officials in Mazatlan, Sinaloa — a major shipping outpost on the Western coast of Mexico — to furnish $130,000 worth of used equipment for their new hospital in Mazatlan. Andrews says he held up his end of the bargain, making the goods available for pickup in his El Paso warehouse in April of 1995. But without his knowledge, Andrews says, the Mazatlan officials decided to evade import fees (about $40,000, Andrews estimates) by asking the Red Cross in El Paso for a letter stating that the El Paso chapter was donating those goods to Mazatlan. El Paso complied even though, Andrews’ lawsuit claims, chapter employees knew that the equipment had in fact been purchased in the U.S. and that the list of items purportedly being “donated” was in fact the inventory of goods Andrews had sold to the Mazatlan hospital. Mexican officials, in fact, were fairly open about the ruse. In a letter dated Feb. 2, the chair of the Red Cross chapter in Mazatlan, Oses Cole Isunza, informed the El Paso director that Mazatlan had purchased $130,000 in equipment from Andrews and was now requesting a letter from El Paso “stating that such equipment is given as a donation” from the El Paso Red Cross to the hospital in Mazatlan. Five days later, the president of the Juarez Red Cross, Luis Rauda Esquivel, wrote to the El Paso chapter with the same request, asking for help “in accordance with our telephone conversation.”
On Feb. 10, the El Paso chapter wrote a letter to the border customs office in Juarez saying that Mazatlan was receiving donated equipment on which they hoped officials would waive all tariffs. Mexican and El Paso Red Cross officials then filed a phony shipper’s export declaration with the U.S. Dept. of Commerce, Andrews’ suit alleges, listing the El Paso Red Cross as the origin of the shipment and effectively erasing Andrews’ bill of sale. This arrangement, the suit claims, left Andrews with an obligation to furnish $130,000 worth of equipment, but no shipping documents to prove it was sent.
Mazatlan Red Cross officials came to inspect their order in late March, but Andrews had not yet assembled all of the equipment he owed them in his El Paso warehouse. A few days later, the Mazatlan officials tried to amend their deal with Andrews and demanded a portion of their money back. Andrews says they did so because they learned they could get similar equipment donated to them from another source and had changed their minds about what they wanted from him. But the Mazatlan Red Cross representatives who testified against Andrews in Mexican court said that Andrews didn’t have the supplies they ordered and tried to swap them alternative equipment which was in such disrepair that they refused it.
Regardless of whose story is true, what is known is that Andrews offered to exchange some of the original goods he had sold to Mazatlan for different items, plus throw in additional equipment for no charge. What is disputed is whether the truck that arrived from Mazatlan shortly thereafter picked up the goods that Andrews had sold them or only the equipment he had donated. Whichever it was, what arrived in Mazatlan was a truckload of wreckage. Andrews alleges that the truck’s drivers failed to secure the load properly, allowing it to be tossed about on the torturous mountain roads.
“They get the stuff there, it’s been ruined in transit. They didn’t buy any insurance on it. So what do they tell the public, where they raised this $130,000 and then turned it into junk? They’ve got to have some kind of a story. So their story is, ‘this man in El Paso stole our money,'” Andrews says. Shortly after they picked up the goods from Andrews’ warehouse, Mazatlan officials told Mexican police that Andrews had failed to deliver the equipment they had been promised, and had him indicted for breach of contract.
Three years later, unaware that he he had been indicted in Mexico, Andrews emerged from a hospital in Juarez, where he had been summoned to fix a centrifuge, and was seized by Mexican police. He would spend the next eight months fighting the Mexican Red Cross officials’ charges in court while sharing a 10- by 12-foot cell with convicted murderers. Against his lawyers’ advice, Andrews refused to sign a plea bargain that would have let him walk in exchange for refunding the $130,000.
Attorneys for the American Red Cross say testimony given in Andrews’ trial supports their contention that the dispute between Andrews and the Mazatlan Red Cross had nothing to do with any “phony donation letter” written by the El Paso Red Cross, as Andrews’ suit claims. They say Mazatlan representatives never referred to any such letter; nor did they say they picked up donated items from the El Paso chapter. Rather, the American Red Cross claims, the Mazatlan officials insist that Andrews donated the equipment and that it was picked up in his warehouse.
Andrews’ lawyers respond, however, that the original complaint the Mazatlan delegation filed with police clearly states that the damaged supplies came from the El Paso Red Cross, not Andrews’ warehouse. The point is crucial, because if the Feb. 10 letter written in El Paso did not lead to Andrews’ arrest and imprisonment, the American Red Cross can more easily argue that they hold no liability for Andrews’ misfortune. But if it did, that strengthens Andrews claim that he truly is a victim of the El Paso Red Cross’s actions.
Unless, of course, he knew about that donation letter all along.
Who Is ‘El Gil’?
Meeting Andrews for the first time, one might get the impression that “El Gil,” as he’s known among those he does business with in Mexico, is the type who minds his own affairs and steers clear of trouble. With his soft leather sneakers, Wranglers, and thick, plastic-rimmed glasses, Andrews, 51, looks like a man who spends a lot of time puttering around warehouses and going through the salad bar at the Sirloin Stockade.
In fact, Andrews has a litigious past and extensive connections in government and business. A former U.S. Army soldier trained in military intelligence, Andrews owned pawnshops and strip shopping centers near the military base in El Paso, served a term on the state Credit Union Commission, and, ironically, served as a Red Cross volunteer for many years. Trained as a medical technologist in the military, Andrews tapped into the medical supply business while working for the Mexican government, after discovering that hospitals in Mexico needed help locating used equipment in the U.S.
Along the way, Andrews, who says he holds no particular affection for lawyers, racked up a slew of lawsuits in connection with his business affairs, filing once for bankruptcy in 1992. Andrews brought two suits against attorneys for malpractice. In another case, settled out of court, he was sued for breach of contract when he withheld full payment for the construction of a carwash; Andrews claimed the contractor took too long to build it.
But is Andrews the sort who would approach doctors in an impoverished city in Mexico, offer to equip their new hospital, and then sweeten the deal by telling them he knew how they could import that equipment without paying taxes? That’s the Gil Andrews the American Red Cross plans to depict in court. Exhibit One is a Feb. 6 letter addressed to the Mexican Red Cross chapter president in Juarez, Dr. Luis Rauda, thanking him for his assistance in importing donated medical equipment for Mazatlan’s hospital.
The letter appears to be from by Mazatlan Red Cross chairman Cole Isunza, but Red Cross lawyers say it’s a fraud, that it really originated from Andrews’ office. It’s not printed on the Red Cross letterhead, Cole Isunza’s title is misspelled, and a fax imprint near the bottom of the letter, dated Jan. 31, attributes the letter’s origin to “Omega Medical.” That’s the imprint from Andrews’ fax machine, and what it shows, say Red Cross lawyers, is that Andrews asked Rauda, who was more familiar to employees at the El Paso chapter, to help accommodate Cole Isunza’s Feb. 2 request. Doesn’t it make sense, the Red Cross argues, that a used-equipment dealer who had been selling goods in Mexico for years would know more about methods for shipping them tax-free than doctors in a coastal town in Mexico?
Andrews’ camp has laughed this letter off, saying it’s nothing more than “Rauda going crazy with a copy machine” to cover his tracks and shift blame to Andrews. For one thing, as is evident on other documents from that period, Andrews’ fax machine prints at the top of the page, not the bottom. Rauda obviously employed some low-tech and clumsy chicanery to fabricate the letter, they say.
Andrews’ fax line does show up along the top of another document, however, one that is known to be legitimate. This is the list of supplies that Mazatlan states they are expecting to receive from Andrews, filed with the general director of Control of Commodities in Mexico City on March 3, that clearly states that the goods are being given “como donativo.” The Omega Medical fax line reads March 31, a day when representatives from Mazatlan were in El Paso inspecting equipment in Andrews’ warehouse. Items on the document are checked off, scratched out, and amended, a probable result of the swapping that took place at the warehouse.
Did Andrews ever see this document? He says he didn’t, adding that he may have let the Mazatlan representatives use his fax, which Andrews says was located a short distance away in his ex-wife’s home, to communicate with officials back in Mexico. Transporting the equipment was never his concern, Andrews adds, so even if he had seen the word “donation” it wouldn’t have raised a red flag. “I just wanted them to get their stuff and get on the road, [so I could] do another deal,” says Andrews.
The Plot Thickens
To refute Andrews’ claim that he was ignorant of the methods used to illegally ship the equipment he sold, Red Cross lawyers question why Andrews waited more than three months after his arrest in Juarez on April 15, 1998, to contact the ARC back in the States and ask for help. And once he did call ARC general counsel, on July 28, why did he refuse to let their counsel speak to his attorneys in Mexico, and why did he withhold the court proceedings from his case?
The Red Cross also claims that when Andrews did finally agree to release the court file in September — not to ARC headquarters in Washington but to Mitch Moss, chairman of the El Paso chapter — he removed portions of the testimony. Furthermore, they contend, Andrews’ lawyer in Mexico virtually admitted in conversations with an ARC attorney that Andrews knew about the import “shenanigans.”
But Andrews says he didn’t know that the American Red Cross was a part of the web that ensnared him until July, and it was only through a stroke of good luck that he ever laid hands on the telling documents at all: An employee happened to remember the name of the Mexican customs importer who owned the truck that picked up the shipment to Mazatlan, he says, and that importer turned over his shipping records.
The Red Cross says that the court testimony given in Andrews’ case shows that he, but not the Mazatlan delegation, seemed to know all about those import scheme before he ever took hold of those shipping documents. But in the copies of court records given to the Chronicle, the matter is not so clear: Andrews does say in an April deposition that he told Mazatlan representatives in 1994 that “there is a way to avoid this 30% charges [sic] by using an exemption the Mexican Red Cross has for importing devices and not paying [value-added tax] nor duties,” but adds that he wasn’t “fully aware of how it worked.”
Andrews now says he had heard it rumored that certain people knew how to import purchased shipments without paying import taxes, but he didn’t know how to set it up. He says the Mazatlan delegation told him they had an “in” with someone in the Mexican Treasury Dept. In court, Andrews did question whether the Mazatlan officials had made arrangements to ship the equipment they purchased from him as a donation, but he didn’t mention the El Paso Red Cross.
So how much Andrews knew about the Mexican Red Cross’s import scheme remains a mystery, but one thing is for sure: At some point, Andrews concluded that his ticket out of the mess was to loudly announce, through the media and phone calls to legislative officials, that the El Paso Red Cross had made the arrangements that allowed his goods to cross the border as a donation. Andrews demanded that the American Red Cross send a witness to Mazatlan to admit what their El Paso Chapter had done. The Red Cross countered that Andrews had contrived a desperate stunt to involve the ARC, figuring the organization would finagle his release to avoid the bad publicity.
For nearly three months after Andrews first called ARC headquarters in Washington for help on July 28, the ARC refused to acknowledge his claims. Andrews says he waited a month for them to respond, then hit the airwaves. Taking advantage of phone privileges he earned by treating patients in the prison clinic and teaching English, Andrews says, he dialed talk radio stations collect to do on-air interviews.
His story got so much attention, Andrews says, that a friend of his at Dateline NBC was preparing to send cameras to Mazatlan in October. On Oct. 14, however, the American Red Cross agreed to admit that the El Paso chapter had played a role in the importation of Andrews’ equipment; in exchange, Andrews agreed to shut down his media campaign. This followed closely on a Sept. 18 letter written to then-ARC president Dole by El Paso chair Moss, in which Moss explained that the Mazatlan Red Cross had asked his chapter for a donation letter to import supplies purchased from Andrews and that “we complied with the request.”
Andrews now claims that the ARC knew that their organization was partially responsible for landing him in prison but chose to leave him at the mercy of the Mexican Red Cross rather than admit their complicity in an illegal scheme. If not for his own pluck and resourcefulness, Andrews says, he’d still be a prisoner. “[ARC officials] made a conscious decision. They found these documents in [July] and lied to me and told me they didn’t have them. [But] they knew what was going on, and they figured that they’re in this thing up to their armpits. If I ever got out of that prison and came back to the U.S., they’d really have a problem,” Andrews says.
Attorneys for the Red Cross say they had no reason to hide anything, that U.S. State Dept. officials told them in August that they didn’t appear to be involved, and that Andrews was free to subpoena any documents he wanted. Furthermore, they point out, Andrews’ release from prison wasn’t some “parting of the Red Sea” occasioned by their decision to turn over documents in October. Andrews had already won a decision from a lower court to have his case dismissed because the Mazatlan Red Cross had not properly documented that their board chair, Cole Isunza, had been duly appointed to represent them in court. When an appellate court upheld that decision in December, Andrews was set free. Moss, who helped establish a relief fund for Andrews’ family while he was incarcerated, has since given the Red Cross lawyers a deposition in which he admits that when he wrote his Sept. 18 letter to Dole his understanding of Andrews’ case was based entirely on Andrews’ version of events. Moss says he’s now less sure of what actually occurred.
Conspiracy of Silence?
The Red Cross has also tried to discredit another key witness for Andrews’ camp, Margaret Randall, a former El Paso Red Cross director, who Andrews’ attorneys in El Paso say will testify that hundreds of other “phony donation letters” were sent out by her chapter throughout the Nineties. The Chronicle has not seen the Red Cross attorney’s questions to the director, but the attorney was sanctioned by a 5th Circuit judge for the way he conducted his cross-examination. Red Cross lawyers also hint that they could produce witnesses testifying that they saw Andrews offer bribes to El Paso chapter employees.
In the complaint that Andrews’ lead attorney, Thomas Stanton, has filed in U.S. District Court in El Paso, Stanton includes six incidences dating from 1992 in which he alleges that the El Paso Red Cross wrote phony donation letters to ship purchased goods into Mexico.
The Red Cross attorneys dismiss Stanton’s alleged “pattern of fraud” as a few instances out of thousands in which the El Paso chapter might have unwittingly papered purchased goods with tax-free status. They say that, far from being the conspirators Andrews’ case makes them out to be, the El Paso employees were low-paid, unskilled workers who sent out form letters when they were requested and had no means to verify where shipments originated.
The El Paso chapter has long been the primary conduit for the mountain of donated relief supplies that have flowed into Mexico since the disastrous 1985 earthquake in Mexico City, they say. The employee who signed the donation letters, Carmen Ruiz, who is named as a defendant in Andrews’ lawsuit, said in a deposition taken by Stanton that she did not recall ever writing a donation letter to accompany shipments of purchased goods into Mexico.
But Andrews’ defense team isn’t buying Ruiz’s claim that she can’t remember even one of the hundreds of letters Andrews’ lawyers allege were issued from her office and attached to shipments bought in the U.S. by Mexican hospitals and doctors. One attorney says the team will present correspondence in which Randall informs ARC higher-ups as early as July, 1998, that her chapter wrote a donation letter for the equipment the Mazatlan Red Cross bought from Andrews. The director will also testify that she was told to keep the matter quiet, he says.
Andrews says he’s confident that he’ll eventually be vindicated for the long ordeal he says the Red Cross has put him through. Having refused to cave to the charges brought against him by respected Red Cross doctors in Mexico, despite the temptation to walk away from the daily perils of rats, violence, and other deprivations that made him fear for his life, Andrews says he’ll have the last laugh. He admits that the primary enemies who caused his suffering were the Mazatlan Red Cross officials, but he still reserves a lot of venom for Red Cross officials in Washington, particularly Dole.
Andrews made a lot of phone calls to Dole’s office while in prison, but she never spoke to him personally. “You know what they told me?” says Andrews, referring to Dole’s office staff. “That what I was doing was deplorable, that their time was better spent helping people in need. — I gave [Dole] every chance to appear presidential. She could have gone down there with cameras running, and my family crying in the background, and helped get me out of that friggin’ prison. And they chose to hide under a rock and not get involved.” 
This article appears in February 25 • 2000.