[X] [LOOT] Distribute it evenly between the Red Guard and the militia. A popular move, but the sheer numbers involved means there will be little improvement in the capability of either group.
[x] [LOOT] Give it all to the Red Guard. This will cause some grumbling among the other sections of the military, but will lead to a significant improvement in their capabilities as they will be as well-armed as the regular army.