Red Cross: How We Spent Sandy Money Is a ‘Trade Secret’
The charity is fighting our public records request for information on how it
raised and spent money after the superstorm.
Just how badly does the American Red Cross want to keep secret how it raised
and spent over $300 million after Hurricane Sandy?
The charity has hired a fancy law firm to fight a public request we filed
with New York state, arguing that information about its Sandy activities is a
"trade secret."
The Red Cross' "trade secret" argument has persuaded the state to redact some
material, though it's not clear yet how much since the documents haven't yet
been released.
As we've reported, the Red Cross
releases
few details about how it spends money after big disasters. That makes it
difficult to figure out whether donor dollars are well spent.
The Red Cross did
give
some information about Sandy spending to New York Attorney General Eric
Schneiderman, who had been
investigating
the charity. But the Red Cross declined our request to disclose the details.
So we filed a public records request for the information the Red Cross
provided to the attorney general's office.
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.
Among the sections of the documents the Red Cross wanted redacted was "
a
two-line title" at the top of a page, one line of which was "American Red
Cross."
The attorney general's office denied that redaction, writing that it "can not
find disclosure of this two line title will cause the Red Cross any economic
injury."
Asked about the effort to have Sandy materials kept secret, Red Cross
spokeswoman Anne Marie Borrego told ProPublica: "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."
Doug White, a nonprofit expert who directs the fundraising management program
at Columbia University, said that it's possible for nonprofits to have trade
interests — the logo of a university, for example — but it's not clear what a
"trade secret" would be in the case of the Red Cross. He called the lawyer's
letter an apparent "delaying tactic."
Ben Smilowitz of the Disaster Accountability Project, a
watchdog group, said,
"Invoking a 'trade secret' exemption is not something you would expect from
an organization that purports to be 'transparent and accountable.'"
In agreeing to withhold some details, the attorney general's office found
that portions of the documents the charity wanted to redact "describe business
strategies, internal operational procedures and decisions, and the internal
deliberations and decision-making processes that affect fundraising and the
allocation of donations."
The attorney general's office also found "that this information is
proprietary and constitutes trade secrets, and that its disclosure would cause
the Red Cross economic injury and put the Red Cross at an economic
disadvantage."
Another section the Red Cross
wanted
redacted was a paragraph that noted the charity's "willingness to meet with
the [Office of the Attorney General.]" The attorney general's office denied that
part of the request
Borrego, the Red Cross spokeswoman, declined to say how much the charity is
paying Gibson Dunn but said, "we do not use funds restricted to Superstorm Sandy
to cover those expenses."
We'll let you know when we get the documents we asked for — at least the
parts that aren't trade secrets.
http://www.propublica.org/article/red-cross-how-we-spent-sandy-money-is-a-trade-secret
