'A celebrity in our midst who would have thought Bill O'Reilly would join us?' says the actor.
Eagles rock star Glenn Frey, who was co-hosting the auction at St Matthew's Parish School in Pacific Palisades, California, jokes: 'This is as close to diversity as we'll get at St Matthew's.' The man with the blacked-up face has been identified as investment banker James Montgomery, who was a fellow parent at the £18,000-a-year primary school.
On the video a presenter at the event, which happened in 2004, is heard saying: 'This school is so conservative that Jamie Montgomery was almost not let in', and joking that Mr Montgomery 'handled Idi Amin's account back in the 1980s'.
The video is a huge embarrassment for 55-year-old Forrest Gump star Hanks, who is known for his squeaky clean image. The actor now faces demands that he is dropped from a campaign video he appears in supporting US President Obama.
Right-wing groups have urged the President to disassociate himself from the actor, who narrated a 17-minute campaign video calling for Mr Obama's re-election this November.
Niger Innis, spokesman for the right-leaning Congress of Racial Equality, said: 'I call upon President Obama, who has Tom Hanks doing the narration to his campaign video, to cease, to remove Mr Hanks's voiceover from his video, and end any association or affiliation with Mr Hanks.
'It is gross, it's coarse, and it is shocking that something like this would be done in California. Not Mississippi in California!'
Responding to the controversy, Hanks told Hollywood news website The Wrap: 'In 2004, I was blindsided when one of the parents got up on the stage in a costume that was hideously offensive then and is hideously offensive now.
'What is usually a night of food and drink for a good cause was, regrettably, marred by an appalling few moments.'
The footage was given to US website The Daily Caller by a woman who filmed the event. She called Hanks a 'hypocrite'. 'Tom would be the first to scream racist if a conservative put their arm around a Wall Street banker in blackface while their co-MC made racists remarks,' she said.
- DAILY MAIL