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Red Cross says how it used Hurricane Sandy funds is ‘trade secret’

Published time: June 27, 2014 10:42
ARCHIVE PHOTO: Residents who returned to their homes damaged by Hurricane Sandy line up for a hot meal served from a red Cross vehicle on Samson Avenue in Seaside Heights, New Jersey November 12, 2012 (Reuters / Tom Mihalek)

ARCHIVE PHOTO: Residents who returned to their homes damaged by Hurricane Sandy line up for a hot meal served from a red Cross vehicle on Samson Avenue in Seaside Heights, New Jersey November 12, 2012 (Reuters / Tom Mihalek)

American Red Cross has been reluctant to make public details over how it raised and spent over $300 million in Hurricane Sandy relief funds. The charity’s lawyers say the disclosure would inflict “competitive harm” on the group.

The Red Cross supplied some of the information concerning its Sandy activity to New York Attorney General Eric Schneiderman, whose office has been investigating the issue.

When a New-York based independent non-profit media outlet ProPublica filed a public records request for the same information, the charity’s lawyers argued that journalists could only be given a redacted version, as some of the facts mentioned in the report constituted a “trade secret.”

If such details were disclosed, "the American Red Cross would suffer competitive harm because its competitors would be able to mimic the American Red Cross's business model for an increased competitive advantage," Gabrielle Levin of the Gibson Dunn law firm wrote in a letter to the attorney general's office.

Disaster Accountability Project, a watchdog that monitors aid groups, found Red Cross’ citing trade secret exemption was a strange thing to do.

"Invoking a 'trade secret' exemption is not something you would expect from an organization that purports to be 'transparent and accountable,'" said Ben Smilowitz the group’s executive director.

ARCHIVE PHOTO: U.S. National Guard and American Red Cross volunteers unload donated supplies for hurricane Sandy victims at a FEMA and American Red Cross aid and disaster relief station in the hard-hit Staten Island section of New York City, November 2, 2012 (Reuters / Mike Segar)

The attorney general's office agreed to redactions for which the Red Cross asked, but not all of them. The response to the charity’s lawyers, which has been made public, lists 10 instances in which requests for redactions have been denied.

The NY attorney general has for quite a while been pressing the Red Cross on greater transparency over its Sandy activity. In a letter sent to the charity a year ago, the office expressed “continuing concerns about fundraising and relief efforts conducted by the American Red Cross in response to Hurricane Sandy.

Last April, the Red Cross said it still possessed a third of donations raised for Sandy relief. The group’s officials said the money will be spent on that particular storm recovery.

Some disaster relief experts then criticized the Red Cross for not spending the money more urgently in the weeks following the storm, but keeping the funding instead for long-term recovery.

Government spending of the Sandy relief aid has also been questioned. New Jersey Governor Chris Christie has faced allegations he misspent millions of dollars in relief aid received from Washington. Federal officials have been investigating whether Christie used some of the $25 million in aid to produce tourism ads that starred him and his family.

Comments (24)


ehjay 30.06.2014 05:07

No one should invest in a business, or contribute to a church, charity, NGO, that does not fully divulge where the money is spent. That is just common sense. Corruption flourishes when there is no demand for full Accountability.


Charles Hayes 30.06.2014 04:48

Like the Good Book says the love of money is the root of all evil...


Charles Hayes 30.06.2014 04:47

So now the Red Cross is onwed and controled by the Red Mob, Perhaps?

View all comments (24)
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