Red Cross Cites 'Trade Secrets' to Redact Details of Sandy Donations

In refusing to disclose in full detail how it raised and spent nearly $300 million in donations after Superstorm Sandy, the American Red Cross is arguing that such information constitutes "trade secrets," ProPublica reports.

The disaster relief organization is fighting a public records request filed by ProPublica to release information it provided to the New York State Attorney General's Office, which is investigating the charity. Citing the trade secret exemption in the state's Freedom of Information Law, the firm retained by the Red Cross asked the attorney general's office to redact parts of the requested documents, as they include "internal and proprietary methodology and procedures for fundraising, confidential information about its internal operations, and confidential financial information." If those details were to 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."

In a letter to the law firm, the AG's office agreed to withhold some of the information, noting that it is in fact "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." The redacted documents have not yet been released to ProPublica. Red Cross spokesperson Anne Marie Borrego told ProPublica that no funds restricted to Superstorm Sandy relief were being used to pay the law firm.

"Invoking a 'trade secret' exemption is not something you would expect from an organization that purports to be 'transparent and accountable,'" said Ben Smilowitz, executive director of the Disaster Accountability Project.

Doug White, who directs the fundraising management program at Columbia University, said that while it's possible for nonprofits to have trade interests, 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."

Justin Elliott. "Red Cross: How We Spent Sandy Money Is a 'Trade Secret'." ProPublica 06/26/2014.