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N.Y. Attorney General Pressed Red Cross on Post-Sandy Spending, Then Retreated

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Posted on May 28, 2014

By Justin Elliott, ProPublica

    The Seagate neighborhood in Brooklyn, N.Y., after Hurricane Sandy hit. Anton Oparin / Shutterstock.com

This piece originally ran on ProPublica.

Last month we explored the role of the American Red Cross after Hurricane Sandy and the lack of transparency in how the charity spent more than $300 million raised after the storm. Experts criticized the group for not offering a detailed accounting of its post-Sandy efforts.

It turns out New York’s attorney general had similar questions for the prominent charity, according to a previously unpublished letter the office sent to the Red Cross.

The office of Attorney General Eric Schneiderman last year asked the Red Cross for much of the same detailed financial information that we sought from the group. But no such information was released.

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And when the attorney general’s office later came to an agreement with the group about its reporting of financial information after disasters, there were no requirements for anything beyond summary data. That means that it will continue to be difficult to assess the response of the Red Cross to future disasters.

The attorney general’s office requested information from the Red Cross starting soon after Sandy in late 2012 and managed to get some answers.

But in a June 2013 letter, which we obtained through a Freedom of Information Law request, the head of the attorney general’s charities bureau expressed “continuing concerns about fundraising and relief efforts conducted by the American Red Cross in response to Hurricane Sandy.”

The letter asked the Red Cross to:

  • detail its post-Sandy spending including “how much was spent on personnel, supplies, transportation, fuel, rental fees, professional fees, administrative costs, and any other relevant categories.”
  • separate figures it commonly combines as “spent or committed,” a practice that makes it impossible to determine how much aid has been distributed versus merely promised.

No such details have been released. The Red Cross didn’t provide the breakdowns when we asked for them either. (Neither the Red Cross nor Attorney General’s office would say whether the numbers were provided privately.)  

Several months later, in October, Schneiderman announced an agreement with the Red Cross covering, among other things, how the group will release information after future disasters. But the deal does not specify how much detail the Red Cross must provide in its post-disaster financial reports. Instead, it simply requires the Red Cross to regularly report  summary financial information.

“The central question that drove the attorney general’s correspondence with the Red Cross—what’s going on with the Sandy money?—was thrown out the window in the final agreement,” said Doug White, a nonprofit expert who directs the fundraising management program at Columbia University.

The Office of the Attorney General did not respond to requests for comment. When we originally reported on the lack of transparency, the Red Cross it issues “regular reports about our spending and programs for disasters such as Sandy.”

They declined to comment this time.  

While the agreement doesn’t require the Red Cross to release much in terms of financial details, the organization did agree to stop referencing a particular disaster in fundraising appeals once it determines it has raised enough money to meet the need.

If you have experience with or information about the American Red Cross, including its operations after Sandy, email justin@propublica.org


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