AP IMPACT: THE QUILT THAT ISN'T

Kevin Held was earning a living as a self-employed handyman in Peoria, Ariz., when he formed Stage 1 Productions in 2003 to promote the American Quilt Memorial honoring the lives lost on Sept. 11. He said thousands of individual pieces would be crafted together on white, king-sized sheets that, when sewn together, would stretch 1 1/2 miles across an eight-lane highway.
That never happened.
The $713,000 that Held raised from students, school fundraising campaigns, T-shirt sales and other donations is gone. More than $270,000 of that went to Held and family members, records show.
In a July interview, Held said he hoped to finish the quilt in a few months. But he changed his mind a few weeks after the AP began asking questions, abruptly shutting the project because of "tough economic times."
Held has done an impressive job raising money, persuading students to hold "penny drives" and police officers to buy T-shirts promoting the quilt for $20 or more. But he's spent a lot in doing so.
Since 2004, Held paid himself $175,000 in salary, health insurance, other benefits and a weekly car allowance he received for most of that time. He's owed another $63,820 in deferred salary, according to the charity's most recent tax filing. Held argues that he's actually owed closer to $420,000, because he was supposed to receive $60,000 annually since 2003, and has received far less.
He told the AP in July that more than $50,000 paid in 2005 to satisfy a loan never reported by the charity went to his mother to repay "an accumulation of a bunch of small loans." But when pressed last week — after the AP pointed out that his mother died that year — Held said he paid himself more than $45,000 to repay the loan. He said he couldn't explain the other $5,000 without researching it.
He said he paid another $12,000 to his brothers, Dave and John, as consulting fees.
Held also charged the charity more than $37,000 for office rent, utilities and other related expenses, according to the group's tax forms. But the addresses reported by the charity for most years were Held's home and private mail boxes at PostNet and UPS stores in Arizona and south Texas.
Held said he received much of the office payments to cover the cost of working out of his home.
Held spent more than $170,000 on travel since 2004 to promote the quilt. He rarely traveled without his two Alaskan Malamute dogs, one at 120 pounds and the other 200 pounds. He also listed $36,691 in credit card and bank charges since 2005 and $10,460 for an expense listed as "petty" in 2009.
"I loved going out and traveling," he said. "I loved going to the police departments."
Held acknowledges he struggled managing the charity's finances, but he said he didn't live off the nonprofit. "If I made a mistake, I made a mistake. If I did, then crucify me. I never said I was a professional at this."
Still, he's come a long way since serving a few days in a Tampa jail in 1993 for misdemeanor theft and battery. With his wife, he's moving into a $660,000, five-bedroom house overlooking a lake in Chandler, Ariz.
The charity's finances surprised the Rev. Jude Duffy, identified in the charity's tax filings as board chairman. He said he had no idea that Held had collected more than $713,000 for the charity until the AP showed him the documents.
Duffy, who lives in St. Lawrence Friary in Beacon, N.Y., said he became suspicious several years ago after Held created a new fundraising project without finishing the quilt. The latest project — Operation Adopt-a-Soldier — promises students postcards and posters that they can send to soldiers in Iraq and Afghanistan if each class will send Held up to $40.
"Is this some kind of scam?" Duffy said he asked Held in an email. "Are you playing on the emotion of the people with this?"
Held responded that he was insulted by the suggestion and assured Duffy that he would finish the quilt project.
"As we look at it today," Duffy said, "certainly it seems to be that we were duped entirely by whatever he had in mind. I don't know what that is. But I would call it a scam or a clever scheme."
Even Held's story of how the quilt project started is suspect.
For years, he claimed he had come up with the idea for a student-led national tribute after hearing that Dominique Deal, a family friend's high school daughter, crafted her own memorial on a bed sheet.
But she says that story isn't true.
"I think he wanted people to think I came up with it. But I just helped," said the woman, now Dominique Greer, 25, and married in Peoria, Ariz. "I guess he thought it would be weird to say he started it."
Held now admits he made up the story because he didn't want to receive credit.
He insists he has accounted for every dime spent by the charity, even if he can't justify all the expenses.
"It doesn't mean I'm a bad person," Held said. "It just means I made a mistake."

AP IMPACT: Some 9/11 charities failed miserably

By BRETT J. BLACKLEDGE and DAVID B. CARUSO

NEW YORK – Americans eager to give after the 9/11 terrorist attacks poured $1.5 billion into hundreds of charities established to serve the victims, their families and their memories. But a decade later, an Associated Press investigation shows that many of those nonprofits have failed miserably.
There are those that spent huge sums on themselves, those that cannot account for the money they received, those that have few results to show for their spending and those that have yet to file required income tax returns. Yet many of the charities continue to raise money in the name of Sept. 11.
One charity raised more than $700,000 for a giant memorial quilt, but there is no quilt. Another raised more than $4 million to help victims, but didn't account publicly for how it spent all of the money. A third helps support a 9/11 flag sold by the founder's for-profit company.
There are other charities that can account for practically every penny raised — except that all the money went to pay for fundraising, and not the intended mission.
To be sure, most of the 325 charities identified by the AP followed the rules, accounted fully for their expenditures and closed after fulfilling identified goals.
There have been charities to assist ill and dying first responders, to help families of the dead, to help survivors and to honor the memory of victims. And there are charities that revolve around the flag, patriotism, motorcycle rallies and memorials of all sizes and shapes.
But in virtually every category of 9/11 nonprofit, an AP analysis of tax documents and other official records uncovered schemes beset with shady dealings, questionable expenses and dubious intentions. Many of those still raising money are small, founded by people with no experience running a nonprofit.
• The Arizona-based charity that raised $713,000 for a 9/11 memorial quilt promised it would be big enough to cover 25 football fields, but there are only several hundred decorated sheets packed in boxes at a storage unit.
One-third of the money raised went to the charity's founder and relatives, according to tax records and interviews. The chairman of the board, an 84-year-old Roman Catholic priest, says he didn't know he was chairman and thought that only small amounts of money had been raised. He says he was unaware that the founder had given himself a $200 per week car allowance, rent reimbursement and a $45,000 payment for an unreported loan.
• There's a charity for a 9/11 Garden of Forgiveness at the World Trade Center site — only there's no Garden of Forgiveness. The Rev. Lyndon Harris, who founded the Sacred City nonprofit in 2005, spent the months following 9/11 at ground zero helping victims, relatives and first responders. He said he formed the charity to fulfill "our sacred oath" to build the garden. Tax records show the charity has raised $200,000, and that the Episcopal priest paid himself $126,530 in salary and used another $3,562 for dining expenses between 2005 and 2007.
Harris said he sees his charity's work as a success even if there is no garden at the site. "I saw our mission as teaching about forgiveness," he said.
• Another Manhattan 9/11 charity, Urban Life Ministries, raised more than $4 million to help victims and first responders. But the group only accounted for about $670,000 on its tax forms. Along with almost four dozen other 9/11 charities, Urban Life lost its IRS tax-exempt status this year because it failed to show how money was collected and spent.
• The Flag of Honor Fund, a Connecticut charity, raised nearly $140,000 to promote a memorial flag honoring 9/11 victims. The flag, which contains the name of every person killed on Sept. 11, 2001, is on sale today at Wal-Mart and other retail stores. But only a tiny fraction of the money from those sales goes to 9/11 charities, with most going to retail stores, the flag maker and a for-profit business — run by the man who created the flag charity.
The AP examined charities that received tax-exempt status from the Internal Revenue Service by promising to serve victims of the 9/11 tragedy, build memorials or do other charitable works in honor of the dead. The charities were identified using data maintained by Guidestar, a private database of nonprofits that the IRS recommends.
The $1.5 billion donated to these charities was in addition to the billions spent by Congress and states and established nonprofits like the Red Cross.
Most of the 9/11 charities fulfilled their missions, but the AP analysis found dozens that struggled, fell short of their promises or did more to help their founders than those affected by the terrorist attacks.

AP IMPACT: Some 9/11 charities failed miserably

By BRETT J. BLACKLEDGE and DAVID B. CARUSO, The Associated Press – Thu Aug 25, 6:27 am ET

NEW YORK – Americans eager to give after the 9/11 terrorist attacks poured $1.5 billion into hundreds of charities established to serve the victims, their families and their memories. But a decade later, an Associated Press investigation shows that many of those nonprofits have failed miserably.
There are those that spent huge sums on themselves, those that cannot account for the money they received, those that have few results to show for their spending and those that have yet to file required income tax returns. Yet many of the charities continue to raise money in the name of Sept. 11.
One charity raised more than $700,000 for a giant memorial quilt, but there is no quilt. Another raised more than $4 million to help victims, but didn't account publicly for how it spent all of the money. A third helps support a 9/11 flag sold by the founder's for-profit company.
There are other charities that can account for practically every penny raised — except that all the money went to pay for fundraising, and not the intended mission.
To be sure, most of the 325 charities identified by the AP followed the rules, accounted fully for their expenditures and closed after fulfilling identified goals.
There have been charities to assist ill and dying first responders, to help families of the dead, to help survivors and to honor the memory of victims. And there are charities that revolve around the flag, patriotism, motorcycle rallies and memorials of all sizes and shapes.
But in virtually every category of 9/11 nonprofit, an AP analysis of tax documents and other official records uncovered schemes beset with shady dealings, questionable expenses and dubious intentions. Many of those still raising money are small, founded by people with no experience running a nonprofit.
• The Arizona-based charity that raised $713,000 for a 9/11 memorial quilt promised it would be big enough to cover 25 football fields, but there are only several hundred decorated sheets packed in boxes at a storage unit.
One-third of the money raised went to the charity's founder and relatives, according to tax records and interviews. The chairman of the board, an 84-year-old Roman Catholic priest, says he didn't know he was chairman and thought that only small amounts of money had been raised. He says he was unaware that the founder had given himself a $200 per week car allowance, rent reimbursement and a $45,000 payment for an unreported loan.
• There's a charity for a 9/11 Garden of Forgiveness at the World Trade Center site — only there's no Garden of Forgiveness. The Rev. Lyndon Harris, who founded the Sacred City nonprofit in 2005, spent the months following 9/11 at ground zero helping victims, relatives and first responders. He said he formed the charity to fulfill "our sacred oath" to build the garden. Tax records show the charity has raised $200,000, and that the Episcopal priest paid himself $126,530 in salary and used another $3,562 for dining expenses between 2005 and 2007.
Harris said he sees his charity's work as a success even if there is no garden at the site. "I saw our mission as teaching about forgiveness," he said.
• Another Manhattan 9/11 charity, Urban Life Ministries, raised more than $4 million to help victims and first responders. But the group only accounted for about $670,000 on its tax forms. Along with almost four dozen other 9/11 charities, Urban Life lost its IRS tax-exempt status this year because it failed to show how money was collected and spent.
• The Flag of Honor Fund, a Connecticut charity, raised nearly $140,000 to promote a memorial flag honoring 9/11 victims. The flag, which contains the name of every person killed on Sept. 11, 2001, is on sale today at Wal-Mart and other retail stores. But only a tiny fraction of the money from those sales goes to 9/11 charities, with most going to retail stores, the flag maker and a for-profit business — run by the man who created the flag charity.
The AP examined charities that received tax-exempt status from the Internal Revenue Service by promising to serve victims of the 9/11 tragedy, build memorials or do other charitable works in honor of the dead. The charities were identified using data maintained by Guidestar, a private database of nonprofits that the IRS recommends.
The $1.5 billion donated to these charities was in addition to the billions spent by Congress and states and established nonprofits like the Red Cross.
Most of the 9/11 charities fulfilled their missions, but the AP analysis found dozens that struggled, fell short of their promises or did more to help their founders than those affected by the terrorist attacks.

East Coast checks bridges, readies plans for Irene

By MARTHA WAGGONER

BUXTON, N.C. – From North Carolina islands connected to the mainland by just a handful of bridges to the waterlogged shores of New England, officials are calculating what they need to do if Irene becomes the first major hurricane to strike the East Coast in seven years.
They're scrambling to inspect bridges, dusting off evacuation plans and getting sandbags ready for potential floods. And considering where and when to move people out of harm's way.
"You have to recognize that you're living here on an island, and island living represents certain risks," said Edward Mangano, county executive in Long Island's Nassau County, where school buses were being moved to higher ground in case they're needed to evacuate residents to storm shelters. "And those risks appear now, at least, to be tracking toward us."
Irene could hit North Carolina's Outer Banks on Saturday afternoon with winds around 115 mph (185 kph). It's predicted to chug up the East Coast, dumping rain from Virginia to New York City before a much-weakened form reaches land in Connecticut. Finally, it should peter out in Maine by Monday afternoon.
Even without hurricane-force winds, northeastern states already drenched from a rainy August could see flooding and fallen trees.
"You want to go into a hurricane threat with dry soil, low rivers, a half moon," New Jersey state climatologist David Robinson said.
That is not the case. The Garden State has gotten twice as much rain this month as in a normal August, and high tide happens at 8 a.m. EDT on Sunday, when Irene might be passing by.
Early Thursday, the storm was thrashing the Bahamas with widespread damage reported on at least two southern islands. It was a powerful Category 3 hurricane with winds at 115 mph (185 kph). Forecasters said the winds will ramp up quickly over the next day and Irene was expected to blow into a monstrous Category 4 with winds at least 131 mph (210 mph).
Hurricane and tropical storm watches would likely be issued for parts of the Carolinas later Thursday.
While the storm's path isn't definite, officials are taking nothing for granted.
In Maryland, inspections of bridges looking for cracks in the support piers and other structural features found no damage, according to state transportation agency spokeswoman Teri Moss. In Virginia, with a southeastern corner that could be in Irene's way, cities along the coast are reviewing their evacuation plans, said Laura Southard, spokeswoman for the state Department of Emergency Management.
"If there is an evacuation, people don't have to go to Richmond or Williamsburg," she said. "They just have to get to higher ground. There are multiple routes out. Cities and localities work hard year-round on their plans."
North Carolina's Outer Banks, which look the likeliest to get a serious hit from Irene, have a long history of hurricanes, and building codes and emergency plans reflect that. Structures in the region are designed to withstand up to 110 mph sustained winds and gusts of up to 130 mph for three minutes. Evacuation routes are meticulously planned, down to the order in which counties hit the road.
Ocracoke Island, a tiny Outer Banks community, has already ordered visitors off, but it has special challenges since it's only accessible to the mainland by boat. Dare County ordered evacuations to start Thursday and Currituck County was weighing its decision.
Some of the region's most popular destinations rely on the ailing Bonner Bridge, which was built in 1963 and intended to last 30 years, to connect Hatteras Island to the northern Outer Banks. There's no other way to reach Hatteras except by boat.
The bridge handles about 2 million cars a year and the state DOT ranks it a 2 on its safety meter, with 100 being the highest, or most safe, designation.
"We're going to shift people and resources around to do what we need to do and keep the roads open," said North Carolina Department of Transportation spokeswoman Nicole Meister. The 2.7-mile bridge won't stay open if it's deemed unsafe — which happened during Hurricane Earl last year — but the state has an emergency ferry terminal ready in that case to get people off the island, Meister said.
Farther north, precautions so far were mainly wait-and-see as officials watched for developments in the forecast.
New York City officials had begun preparations to evacuate residents from low-lying areas of the city if necessary. The city's subway stations and tunnels would likely be flooded in places, and officials plan to shut the system down ahead of time to reduce damage to the infrastructure.
"The sense is that we're going to be facing a strong tropical storm" with winds of 40 to 60 mph, said Office of Emergency Management Commissioner Joseph F. Bruno.
But Bruno added that the city's agencies were preparing for a Category 1 hurricane with winds surpassing 74 mph and waters surging dangerously in low-lying areas. With five hospitals and nursing homes in the area, officials were readying to possibly evacuate the most frail and needy.
Roads and bridges in Massachusetts are likely to bear the weather in good condition, said Peter Judge, a spokesman for the Massachusetts Emergency Management Agency. But the agency is planning for flooding and is keeping an eye on the 3,000 public and private dams throughout the state.
The Office of Dam Safety regulates about half the dams in Massachusetts and earlier this year a state audit rated 100 of those owned by 62 cities and towns as unsafe or in poor condition.
For longtime residents of the Outer Banks, getting off the island isn't always the biggest problem.
"The problem is getting back on," said Mary Morgan, who works at the Lighthouse View Motel in Buxton.
Inland flooding can close roads for days in severe situations, making it impossible to get back on the island until the water level falls. That makes people who live here far more reluctant to leave than tourists visiting for a week.
"I am prepared to evacuate," said Jen Ray, owner of The Space Between, a boutique and espresso bar in Frisco. "I'm not sure I'm going to."

AP-GfK poll: Views on economy, Obama role sour

By TOM RAUM

WASHINGTON – Americans' views on the economy have dimmed this summer. But so far, the growing pessimism doesn't seem to be taking a toll on President Barack Obama's re-election prospects.
More people now believe the country is headed in the wrong direction, a new Associated Press-GfK poll shows, and confidence in Obama's handling of the economy has slipped from just a few months ago, notably among fellow Democrats.
The survey found that 86 percent of adults see the economy as "poor," up from 80 percent in June. About half — 49 percent — said it worsened just in the past month. Only 27 percent responded that way in the June survey.
That can't be good news for a president revving up his re-election campaign. Yet there are several hopeful signs for Obama.
Despite the perception of a weakening recovery, there has been no significant change in the number of people who say he deserves re-election: 47 percent as opposed to 48 percent two months ago. That's a statistical dead heat with those who favor a change in the White House.

[ For complete coverage of politics and policy, go to Yahoo! Politics ]

And more Americans still blame former President George W. Bush rather than Obama for the economic distress. Some 31 percent put the bulk of the blame on Obama, while 51 percent point to his Republican predecessor.
"I think Bush had a hand in it, too. Obama's not totally responsible," said Mary Parish, 68, of Troy, Tenn. An independent who voted for Republican John McCain in 2008, she said she doesn't believe Obama has what it takes to heal the economy. "He's a smooth-talking man. But he does not know what he's doing."
Obama also fares better than Congress in the blame department. Some 44 percent put "a lot" or "most" of the blame on Republicans while 36 percent point to congressional Democrats.
The gloomy economic outlook reflected in the poll, which was taken Aug. 18-22, follows a round of bleak government economic reports — on unemployment, the housing market and economic growth that fell below 1 percent for the first six months of the year. It was taken amid heightened worries of a new U.S. recession, fallout from a downgrade of the country's credit rating and a spreading European debt crisis.
As the public's outlook on the economy dips, so has approval for the president's economic stewardship.
More than 6 in 10 — 63 percent — disapprove of Obama's handling of the economy. Nearly half, or 48 percent, "strongly" disapproved. Approval of his economic performance now stands at just 36 percent, his worst approval rating on the issue in AP-GfK polling.
Among Democrats, 58 percent approve of the president's handling of the economy, down from 65 percent in June. Among Republicans, approval dipped to 9 percent from 15 percent.
Just 51 percent consider Obama a strong leader, down from 60 percent in June and 65 percent following the capture and death of Osama bin Laden in May. In June, 85 percent of Democrats in the poll called him a strong leader. Now, the number is down to 76 percent.
Of course, there are limits to what a president can do.
"I think he can nudge it along, but really, it boils down to the private sector," said Dan Elliott, 42, of Hillsboro, Ill., an independent who voted for Obama in 2008 and says he'll probably vote for him again.
Judith Lee, 63, a retired teacher from Great Diamond Island, Maine, said she's a Republican who voted for Obama in 2008 but has been disappointed by his leadership style.
"I don't think he is a very forceful leader," Lee said. "His style of leadership seems to be to look for consensus and ideas from other people, and it seems to have been ineffective. And Congress seems to be deadlocked on problems."
Some 75 percent in the poll said the country is heading in the wrong direction, up from 63 percent in June. Among Democrats, 61 percent chose "wrong direction" — up from 46 percent in June.
And for the first time for Obama in the poll, a majority of all adults said they disapprove of his overall performance — 52 percent, up from 47 percent in June. Among Democrats, approval fell 8 points, to 74 percent from 82 percent in June. Among Republicans, it fell to 11 percent from 22 percent.
Politically, the poll underscores the difficult time ahead for Obama as he seeks re-election in a shaky economy.
Unemployment increased to 9.2 percent in July, up from 9.1 percent in June. And most economists don't expect it to decline much below 8.5 percent by the November 2012 presidential election. No president has won re-election with a jobless rate that high since Franklin D. Roosevelt in 1936.
So why hasn't the rise in pessimism taken more of a toll?
Despite the general rise in gloom, it seems unlikely that liberal Democrats will flock away from Obama even if they have rising doubts about his agenda or economic leadership, analysts suggest. And independents, who helped elect Obama in 2008 and are now being actively wooed by both parties, did not exhibit significant changes in their approval levels.
It was at 44 percent, statistically no different from the 43 percent approval rating among independents in June.
"A lot is out of his hands," said Penny Johansen, 65, a retired legal secretary from Tempe, Ariz. "There is only so much one person can do, and one person cannot be blamed for the acts of others." Politically unaligned, she voted for Obama in 2008 and says she'll probably do so again.
On related economic issues, 59 percent said they disapproved of Obama's handling of tax issues, up from 53 percent in June. And 64 percent said they disapproved of his handling of the annual budget deficit, compared with 63 percent in June.
Sixty percent described the financial situation in their own households as "good," about even with the level in June. Asked if they expected their financial situation to change over the next 12 months, 31 percent said they expected it to get better, 12 percent expected it to get worse and a majority — 56 percent — said they expected it to "stay about the same."
As to creating jobs, some 44 percent said they would trust Democrats to do a better job, while 42 percent said Republicans would.
The AP-GfK poll was conducted Aug. 18-22 by GfK Roper Public Affairs and Corporate Communications. It involved landline and cellphone interviews with 1,000 adults nationwide and has a margin of sampling error of plus or minus 4.1 percentage points.