Money

American Red Cross Won't Say How Hurricane Sandy Money Was Spent

| by Michael Allen

The American Red Cross reportedly raised $308 million after Hurricane Sandy to aid the decimated parts of New York and New Jersey.

However, the respected charity is not disclosing exactly how that money was spent or other details, which it calls a "trade secret."

ProPublica.org reports that it filed a public records request for papers that the American Red Cross provided New York Attorney General Eric Schneiderman when he was investigating several Hurricane Sandy charities last year.

In October of 2013, the American Red Cross reached an agreement with the attorney general's office to release an additional $6 million to the victims of Hurricane Sandy, after it was revealed in July of 2013 that only 40 percent of the $575 million collected by 90 charities had been distributed to Sandy victims, noted the New York Daily News.

The American Red Cross has now hired the Gibson Dunn law firm to block the disclosure of the papers related to that agreement and investigation.

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Gibson Dunn used to be Gibson Dunn and Crutcher, the law firm that defended George W. Bush against Al Gore during the 2000 presidential recount.

Gibson Dunn wrote a letter to the attorney general's office which claimed the papers include "internal and proprietary methodology and procedures for fundraising, confidential information about its internal operations, and confidential financial information."

"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," stated the letter.

In response to the controversy, Anne Marie Borrego, a spokesperson for the American Red Cross, told ProPublica.org, "We sought to keep confidential a small part of the letter [sent to the AG] that provided proprietary information important to maintaining our ability to raise funds and fulfill our mission."

ProPublica.org reports that the attorney general's office agreed to withhold some parts of the papers that "describe business strategies, internal operational procedures and decisions, and the internal deliberations and decision-making processes that affect fundraising and the allocation of donations."

ProPublica.org is continuing to push for the full release of the papers.

Sources: ProPublica.org and New York Daily News