The Red Cross is so reluctant to disclose how it spent the more than $300 million it raised for Hurricane Sandy that it hired a law firm to block a Freedom of Information Act request and declared its Sandy information is a "trade secret," according to ProPublica.
ProPublica has been investigating the way the Red Cross spends donor money for several months now and the organization hasn't been exactly forthcoming with details. Recently, ProPublica asked the Red Cross to disclose documents being provided to New York's attorney general's office (which is also investigating the charity). The Red Cross declined, which led to the ProPublica FOIA request, which led to the hot shot law firm petitioning the attorney general on the basis that the information is a "trade secret."
Specifically, disclosing the documents could cause the Red Cross "competitive harm because its competitors would be able to mimic the American Red Cross's business model for an increased competitive advantage," according to a letter sent to the attorney general by the Red Cross's lawyers. Because apparently other charities want to know how an organization being investigated by the press and the government does business. The attorney general agreed to redact parts of the documents.
(Update, Saturday: The Red Cross released the following statement on documents:
The vast majority of our 25-page July 29, 2013 letter to the New York Attorney General is being released and details our response efforts following Superstorm Sandy. We sought to keep confidential a small part of the letter that provided proprietary information important to maintaining our ability to raise funds and fulfill our mission.
The statement also argued that the Red Cross does have publicly available information on its pending, and sent a link to this chart that breaks things down into vague categories like "relief items" and "food and shelter.")
This isn't the first time Red Cross spending has been under scrutiny. In May 2013 the charity was criticized for holding on to over $100 million in Sandy aid seven months after the storm, even as people lacked decent housing and heat during the winter months, according to the New York Daily News. The organization has also been accused of mismanaging emergency funds after September 11 and Hurricane Katrina. CEOs were pushed out of the company after both disasters. In both cases, as with Sandy, there were questions of how money was being spent and where it was being spent.
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