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AP IMPACT: Tragedy meant big money for NY minister

By David B. Caruso

Associated Press

Published: Saturday, Sept. 22 2012 10:26 a.m. MDT

In this March 3, 2010 photo, the Rev. Carl Keyes speaks to an audience in Harrisonburg, Va., about his life experiences relating to his organization, Aid for the World. Before the Sept. 11, 2001 attacks, Keyes was a little-known pastor of a small New York City congregation searching for members and money. When the twin towers fell, his fortunes changed. Donors poured $2.5 million into the minister’s charity to help 9/11 victims. More opportunities to raise relief money would come later, with at least another $2.3 million collected for efforts along the hurricane-ravaged Gulf Coast, in the poorest corners of West Virginia and Tennessee, and even in remote African villages. Tens of millions more flowed through his fingers from the sale of church properties. But Keyes, a one-time construction worker, did more than help the needy with the millions donated - he helped himself. According to financial records, internal correspondence and interviews with former employees conducted by The Associated Press, Keyes blurred the lines between his charities, his ministry and his personal finances while promoting himself as an international humanitarian.

Ryan Freeland, Associated Press

NEW YORK — Before the Sept. 11 attacks, the Rev. Carl Keyes was a little-known pastor of a small New York City congregation searching for members and money.

When the twin towers fell, his fortunes changed.

Donors poured $2.5 million into the minister's charity to help 9/11 victims. More opportunities to raise relief money would come later, with at least another $2.3 million collected for efforts along the hurricane-ravaged Gulf Coast, in the poorest corners of West Virginia and Tennessee, and even in remote African villages.

Tens of millions more flowed through his fingers from the sale of church properties.

But Keyes, a one-time construction worker, did more than help the needy with the millions donated — he helped himself.

According to financial records, internal correspondence and interviews with former employees conducted by The Associated Press, Keyes blurred the lines between his charities, his ministry and his personal finances while promoting himself as an international humanitarian:

— Keyes diverted large sums donated for 9/11 and Hurricane Katrina into his cash-starved church, then used charity and church money to pay hundreds of thousands of dollars in personal credit card bills and other debts, documents show.

— He failed for years to file required federal and state reports showing how much money his charities received and spent.

— He used large church donations from a wealthy supporter to pay his sons' private college tuition.

— The minister used a big donation meant for one of his charities to clear a mortgage on his family's house, according to an accountant who told Keyes he was quitting, in part because of the transaction.

— And, when his congregation sold its 19th-century church in midtown Manhattan for $31 million, he and his friends benefited.

For example, $950,000 of the proceeds was used to buy his family a country home near the Delaware River in New Jersey. Another $1 million went to support one of his charities, which spent more on failed, lavish fundraisers than on promised programs in Africa.

After paying large debts and buying a building to convert into a new church, the congregation had $13.8 million in cash, according to a February 2008 financial document obtained by the AP. Three years later, it told a court it had to sell that building because only $180,486 remained in its bank account.

The AP first wrote about Keyes and his charities last year, and as the AP expanded its investigation into the minister's operation, the New York attorney general's office opened its own probe. In a recent legal filing, the attorney general's office said it was investigating how the church had used its assets, amid concerns about its "ability (to) properly ... oversee its financial affairs." The church, Glad Tidings Tabernacle, has agreed to cooperate with the state investigation triggered by AP's reporting.

Relatively few people know of Keyes' charities — Urban Life Ministries and Aid for the World. But his story offers a disturbing glimpse into how some nonprofits manage to largely avoid scrutiny and keep finances secret, even while raising substantial amounts of money in the name of tragedy. It's also a story about what can happen to the money of well-meaning donors eager to open their hearts and wallets in the wake of devastation.

Keyes and his lawyer say all payments by his church and charities were proper.

"Sorry that you don't have a real 'story' here, but the truth is actually quite boring since no one did anything wrong," his lawyer, Jennifer Polovetsky, said in an email to the AP on Aug. 22.

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