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.
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.