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Millions Unaccounted For: 9/11 Charities Under Investigation

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  • 9/11 memorial
    (Photo: www.911memorial.org)
    A live image of the construction of the National September 11 Memorial and Museum is seen here on Wednesday, July 13, 2011.
By Meagan Johnson, Christian Post Contributor
September 1, 2011|3:04 pm

New York and Arizona have launched investigations into several 9/11 charities to determine whether they failed to follow state laws. A recent report last week revealed that dozens of 9/11 charities have squandered millions and did not disclose to the public how they raised and spent money.

According to the AP report, charities across the country accepted money under the premise it would be used to assist and honor those affected by the terrorist attacks; however, these nonprofits have failed to create memorials or contribute to 9/11 causes as promised.

Based on the AP investigation, some charities spent obscene amounts on themselves and now cannot account for the money received. There are those unable to provide documentation of their spending and others who have yet to file income tax returns. Nevertheless, many of these charities are continuing to raise money despite having no experience running a nonprofit.

The investigation identified 325 charities created after 9/11 that collected $1.5 billion for programs designed to serve victims and their relatives by creating memorials and providing cash assistance. Most of the charities followed public disclosure rules and accounted for their expenditures.

However, at least a dozen paid salaries and benefits to their founders without delivering on promises of charity; raised and spent money without publicly documenting their finances; or spent most of the money raised on programs or events, such as a motorcycle ride, with only a small amount going to charitable purposes, reported the AP.

In New York, state lawyers are conducting their own “broad review” of 9/11 charities, said New York Attorney General Eric Schneiderman, to ensure that all documentation for charities in relation to 9/11 is in order.

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New York officials did not comment on the specific nonprofits under review, but noted the probe will ascertain whether rules on fundraising and public disclosure were followed.

A statement by officials said that under state law, charities based in New York or raising money from citizens are required to register with the state; exceptions to the law are religious and parent-teacher groups. The law also mandates that charities file annual reports and more detailed reports if they collect over $100,000 a year.

Lauren Passalacqua, a spokeswoman from Schneiderman’s office, told the AP that the attorney general “takes issues involving charities and nonprofit abuse very seriously, and encourages anyone with information about such matters to immediately contact our office.”

According to the AP report, a Manhattan nonprofit, Urban Life Ministries, said it raised more than $4 million to help 9/11 victims but the group only accounted for $670,000 of its expenditures. Urban Life Ministries has not filed a financial statement with New York State since 2001 to demonstrate how the millions were spent and lost its IRS tax-exempt status this year.

Jim Riches, a New York City firefighter whose son died on 9/11 while trying to rescue victims inside the World Trade Center, said he was disturbed by the information the AP discovered in its investigation.

“I don’t even know where these people come from with these charities. Everybody latches onto 9/11, making money,” he said. “It’s disgusting. They’re taking advantage of 9/11. I think its blood money.”

In Arizona, state Attorney General Tom Horne said officials are investigating Stage 1 Productions, a nonprofit that raised $713,000 to create a massive memorial quilt honoring those killed in the attacks on Sept. 11.

Arizona officials began the probe after reading the AP’s report, which uncovered that the charity’s founder paid himself and relatives more than a third of the money raised, including $141,000 in compensation, over $45,000 to repay an undocumented loan and $200 a week in car allowance. Kevin Held, creator of the nonprofit, also spent more than $170,000 on trips he said were necessary to promote the quilt project and raise money.

Horne would not discuss the particular investigation but said, “…as a general matter with respect to charities, if somebody represents that he’s raising money for the charity, he needs to represent it for the charity. If he’s raising it for himself, rather than the charity, that’s really theft.”

 

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