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Schneiderman warns Sandy charities about transparency

Gas stations accused of post-hurricane price gouging

By Jena Lagonia
Staff writer

Attorney General Eric Schneidermanís office sent out 75 letters to non-profit organizations warning them to use money they raised effectively for Sandy relief activities, in addition to notifying 25 gas station operators due to potential price gouging after Superstorm Sandy. Photo by courtesy of the governorís office.
December 03, 2012
Attorney General Eric Schneiderman has taken on the role of consumer watchdog in the wake of Hurricane Sandy, keeping a close eye on how charities are spending money collected for storm victims and punishing businesses trying to raise prices on gas and other essential goods and services.

Schneiderman's office has sent 75 letters to nonprofit organizations warning them that he will be keeping tabs on how much money they raised post-Sandy and how those funds are being distributed. The goal is to instill confidence in donors who want to help with Hurricane Sandy relief activities.

"In the name of transparency and accountability, we must ensure that funds raised for Hurricane Sandy relief are used for that purpose," said Schneiderman.

The letter signed by Jason Lilien, head of the Attorney General's Charities Bureau, requested from charities the amount of money they raised and spent to date for Sandy relief, whether donations will be used solely for Hurricane Sandy relief, specific services provided to victims of the damaging storm, and whether the organization is taking donations for other organizations or making direct financial grants to individuals, families and businesses in need.

"... We are requesting information about your organization's fundraising efforts and relief efforts," Lilien wrote in the letter. "In light of the enormous amount of money raised in such a short period of time, and with donations still to come, it is important that donors remains confident that their contributions are helping victims as quickly and effectively as possible."

The 75 organizations who received letters include the AARP Foundation, American Red Cross, The Salvation Army and the Empire State Relief Fund.

"Our office commends all of the charities, and their volunteers and donors who have come to the assistance of New Yorkers after Hurricane Sandy," said Schneiderman.

Additionally, Schneiderman launched an investigation of at least 25 gas station operators due to potential price-gouging violations in the wake of Hurricane Sandy and the gasoline shortages that resulted. Schneiderman notified 13 gas station operators last month and 12 more last Thursday, bringing the number of targeted retailers to 25 thus far.

"Our office will continue to take enforcement actions against price gougers because ripping off New Yorkers is against the law," said Schneiderman. "We are actively investigating the hundreds of complaints we've received from consumers of business preying on victims of Hurricane Sandy."

The New York State Price Gouging Law prohibits merchants from taking advantage of their consumers by bumping up prices during an "abnormal disruption in the market" including weather events, power failures, strikes, civil disorder, war, military action, national or local emergency and other causes. The law applies to vendors, retailers, suppliers, including but not limited to supermarkets, gas stations, hardware stores, bodegas, delis and taxi and delivery cab drivers.

The 25 accused gas stations are located in Nassau County, Suffolk County, Staten Island, Westchester, Brooklyn, Queens and the Bronx. Under the terms of the statute, retailers cannot raise the prices of gasoline dramatically during a natural disaster to this effect because gasoline is considered a "consumer good," and is vital to the health, safety and welfare of the consumer.

The gas stations brands accused of price-gouging include Shell, Mobil, Sonomax, Delta, Getty, Babylon Gas Station/ Express Mart, USA Petroleum, Coastal, BP, Liberty Petroleum, Ultra, Rio, Gulf and Sunoco.

Schneiderman's legal actions against the gas operators were based upon customer complaints and independent pricing information. According to the terms of the law, "before and after" price analysis can be used as evidence of price gouging.

Schneiderman points to a Mobil station located in the Bronx where a customer paid $50 for 5 gallons of gas after waiting in line for one hour, while other stations close by were charging $3.95 per gallon.

"We will do everything we can to stop unscrupulous individuals from taking advantage of New Yorkers trying to rebuild their lives," said Schneiderman.

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