AP IMPACT: Tragedy meant big money for NY minister

By David B. Caruso

Associated Press

Published: Saturday, Sept. 22 2012 12:00 a.m. MDT

Babcock reviewed the signature on one check for the AP, and said it wasn't his. He also said he never signed checks while working for Keyes.

The state Department of Taxation and Finance would have referred Kowal's complaint to the state attorney general's office, said finance spokesman Edward Harris. The attorney general's office declined to comment specifically on what happened to it.

Keyes referred questions to his lawyer, Polovetsky, who declined to discuss the check signatures. She said the storage unit, the leased car and other expenditures were legitimate expenses of Urban Life Ministries. She said the storage unit was "used to store equipment and supplies connected to ULM relief efforts."

Michael Messner, who had served as a business manager for the church, also questioned payments to Keyes' credit card in 2008. Messner asked in an email to David Cushworth, another accountant, if Keyes had provided receipts showing that his credit card charges were for church purposes. A church financial statement at the time showed $205,767 in credit card expenses.

"The ugly fact remains that Carl never did an accounting for his expenditures," Cushworth wrote.

Polovetsky said in a written response to the AP that "all church financial transactions were approved by the executive board." She said a newly hired accountant, John Shall, had reviewed the transactions after the AP contacted Keyes.

Without specifying whether Shall's review had uncovered financial problems, Polovetsky wrote, "Any required taxes were paid."

Kowal's complaint also accused Keyes of getting a wealthy supporter to help pay his sons' college tuitions with large church donations that could be claimed as tax deductions, which is not allowed. One $15,000 donation to the church was made in December 2005, and paid in two $7,500 checks a month later to the private college, according to the complaint.

Keyes acknowledged subsequent tuition payments in an email on May 31, 2007, in which he told another accountant to send church money to one of his sons for tuition because the donor "just gave me the money on Sunday and their tuition is late."

Polovetsky declined to discuss the donor's contributions and the tuition payments.


After the AP began investigating, Keyes filed eight years of tax forms for Urban Life Ministries and three years for Aid for the World.

But the records raise more questions.

Urban Life Ministries has taken credit for working on hundreds of storm-damaged homes on Mississippi's Gulf Coast, providing food and housing for thousands of volunteers, and setting up a massive relief depot. Yet the organization's tax filings claim it received only $266,000 in donations from 2005 to 2008.

"That doesn't sound right to me at all. Not even close," said Keyes' brother-in-law, Mark Jones, who managed most of the charity's work in Biloxi.

Jones said he had provided Keyes with bank statements and other financial records last year showing that the group spent at least $800,000 from 2006 through part of 2009.

Polovetsky said Urban Life Ministry's tax filings do not show financial activity from the Gulf Coast relief work because money went through ULM Relief, a separate corporate entity set up by Keyes and Jones.

There is a Mississippi corporation with that name, but Jones said it never obtained tax-exempt status from the IRS. The organization relied on Urban Life Ministries to handle donations so contributors could claim tax deductions, he said.

"The only tax ID I've ever used was for Urban Life Ministries," Jones said.

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