Red Cross Says How It Raised And Spent Hurricane Sandy Money Is A 'Trade Secret'

| by Jared Keever

The American Red Cross has sought to block a Freedom of Information Act request for records that show how it raised and spent more than $300 million in the wake of Hurricane Sandy. 

The Charities Bureau of the New York State Attorney General’s office currently has that information and investigative reporters from ProPublica filed the request to review the documents. But the charity retained the services of law firm Gibson Dunn to appeal the office’s decision to release the information saying that the documents contained “trade secrets.”

Gabrielle Levin, an attorney with the law firm, wrote a letter to the attorney general’s office saying the documents contained the charity’s "internal and proprietary methodology and procedures for fundraising, confidential information about its internal operations, and confidential financial information.”

Should that information be 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," Levin wrote without specifying who those “competitors” are. 

Red Cross spokeswoman Anne Marie Borrego said keeping some of that information secret was important to the charity. 

"We sought to keep confidential a small part of the letter [sent to the attorney general] that provided proprietary information important to maintaining our ability to raise funds and fulfill our mission,” she explained.

Levin did not request that all of the documents be withheld, only that they be redacted to exclude the information the charity sought to protect.

The attorney general’s office found that some portions of the documents "describe business strategies, internal operational procedures and decisions, and the internal deliberations and decision-making processes that affect fundraising and the allocation of donations.” 

Some of the redactions requested by Levin were denied.

Ben Smilowitz, with the watchdog group Disaster Accountability Project, said he was surprised by the charity’s efforts to block the information.

"Invoking a 'trade secret' exemption is not something you would expect from an organization that purports to be 'transparent and accountable,’” he said.

Some disaster relief experts had criticized the Red Cross for not spending the money it raised fast enough following the storm that ravaged the New York and New Jersey area in October 2012. Many felt the charity was holding on to the money to fund long-term relief projects.

But Kathleen McCarthy, of the Center for the Study of Philanthropy and Civil Society at City University of New York, said it would be hard to justify that decision.

“People were cold. Homes mildewed. There wasn’t enough decent housing,” McCarthy told the New York Daily News last year. “It’s hard to understand the argument that, ‘We are setting money aside.’”

ProPublica has promised to report how the money was spent — if it is able — once it receives the redacted documents. 

Sources: ProPublica, New York Daily News