Red Cross Staying Silent On How It Spent Sandy Money


by on Jun 27th, 2014

Source: DVIDSHUB/Flickr

The American Red Cross is coming under fire for refusing to disclose how it spent more than $300 million in funds raised for Superstorm Sandy relief, claiming that the information is a “trade secret.”

Investigative news outlet ProPublica has been fighting to get the independent relief organization to reveal how it spent donated funds on Sandy between the storm and February 2014, but the organization refuses to give a breakdown.

But the organization did fork over information to New York Attorney General Eric Schneiderman, who is investigating this and other charities – so ProPublica filed a public records request with his office to see what was handed over.

The site reports what happened next:

That’s where the law firm Gibson Dunn comes in.

An attorney from the firm’s New York office appealed to the attorney general to block disclosure of some of the Sandy information, citing the state Freedom of Information Law’s trade secret exemption.

The documents include “internal and proprietary methodology and procedures for fundraising, confidential information about its internal operations, and confidential financial information,” wrote Gabrielle Levin of Gibson Dunn in a letter to the attorney general’s office.

If those 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,” Levin wrote.

The letter doesn’t specify who the Red Cross’ “competitors” are.

The Red Cross is a public charity and occupies a unique place responding to disasters alongside the federal government.

Some of the organization’s redaction requests were trivial: lines that simple read “American Red Cross,” or sections of letter stating they were willing to meet with the attorney general.

Those requests were denied by Schneiderman’s office, but others included information that the attorney general agreed was “proprietary and constitutes trade secrets,” such as “business strategies, internal operational procedures and decisions, and the internal deliberations and decision-making processes that affect fundraising and the allocation of donations.”

ProPublica has not yet received the documents from the attorney general, but the outlet says it will report on them when they do.

UPDATE (6:00 p.m.): Councilmember Mark Treyger, chairman of the Committee on Recovery and Resiliency, asked us to tack this on to the article, following the introduction (with Councilmember Ulrich) of a bill to create a monitor to oversee Sandy relief funding to prevent fraud.

“Citizens who donate to disaster relief efforts, including in the aftermath of Superstorm Sandy, have a right to know that their money is being used to help victims recover and rebuild. With so much funding at stake, and residents still in need of so much assistance, I remain concerned about the potential for misuse of relief funds, including by government agencies, contractors and private organizations. That’s why I worked with my colleague Council Member Eric Ulrich to introduce legislation this week establishing an independent monitor to investigate instances of waste, fraud and abuse in order to maximize the amount of aid delivered to impacted neighborhoods across New York City. To be clear, I am not accusing the Red Cross of any improper activity, but rather am reiterating the need for openness and transparency as the recovery effort moves forward.”

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  • Jim

    OH i know where all that money went! When I used to work in various hotels in the city during that time, Red Cross would be staying in lush hotels in Manhattan as people like me would be going home to a place without power. I saw them in the lobbies grouping together numerous times discussing how excited they were to be in NY and tour the city/discussing breakfast plans(While people were flooded without any power ).

  • Nick the Rat

    it seriously took you all this long to realize red cross are a bunch of douchebags?
    NEVER DONATE TO RED CROSS

  • Effin’ Really?

    All big charities seem to go that way. I remember years ago it coming to light that the CEO of The March of Dimes made over 400k a year. I wouldn’t be able to sleep at night, to justify taking advantage of people who feel their doing good, who sacrifice to send a few bucks that they can’t really afford because they think they are helping. How do they live with themselves? I would like to say thanks to the Red Cross for the snifty blanket I got, like the ones pictured above. We had no heat that entire winter and it sure was nice to wrap around as I ran from the bedroom to the bathroom. It would be nice to know what happened to the rest of the money though…..sure could have used some.

  • BayResident

    So – lets say we all decide to play naive and take the Red Cross at their word – this means that this wonderful altruistic organization, which exists to help people in our cruel merciless world, has a competitive advantage over other charity organizations.

    Now, should these other organizations, god forbid, decide to mimic the Red Cross’ proprietary “business model”, they too would be better able to help people.

    In summary, even if we totally gobble up the Red Cross’ excuse for not disclosing where the money went, we are still left with an organization which admits to seeking to prevent others from providing assistance to those who need it.

    I’m sure many stories for the Red Cross’ shitty existence will be told in this thread, but I too will share a personal experience: Post-Sandy the Red Cross showed up more than THREE WEEKS later and tried to give us food and blankets which we no longer needed. When I told them that we already got everything we needed from Shomrim, who came weeks before, and that our power and heat has long been restored the workers responded that they needed to give the stuff out anyway so I should just take some free food and supplies even if I don’t need them. Thanks guys!

  • Mike

    Can the Red Cross at least tell us where they were during Sandy?

    • Gutterpunk

      They showed up at my place about 2 months after the storm hit to haughtily inform me I had mold in my basement. Since I had already spent a fortune to have the basement cleaned out and de-contaminized, I knew I in fact *didn’t* have mold in my basement. The Red Cross woman started getting huffy and insisting that I DID have mold in my basement (she must have had psychic powers), so I threw her and her cohorts off of my property. What a useless organization.

      • BrooklynBus

        Three months after Sandy, I had a visit from the National Guard who asked me if I needed anything like food or water. Now they could fill out their report and tell how many people they helped to phony up federal statistics. Meanwhile if I really had no food or water for three months I woudn’t have been around to answer their questions.

        • FU

          Good for you Allen! You didn’t need help 3 months later, which means no one needed help, right? Right?

  • susiek

    I got a baloney sandwich and a grape drink from them during Sandy.

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  • jboy61

    I got two or three plates of food from the truck after Sandy. Can’t say anything bad about em.

  • Murry

    Just another scam outfit.