9/11 donations still unverified

No government agency has yet been able to tally all of the collections.
Thursday, September 11, 2003 | 12:00 a.m. CDT; updated 4:52 p.m. CDT, Monday, July 21, 2008

Three weeks after terrorists attacked America on Sept. 11, 2001, Ray Sneed walked into the International Association of Fire Fighters in Washington, D.C., carrying a canvas bag concealing what looked like a large brick.

“It was a brick — a brick of checks,” said George Burke, spokesman for the group, which operated the New York Firefighters 9/11 Disaster Relief Fund. “It was over a foot long and tied with rubber bands, and it was about half a million dollars.”

In a spontaneous fill-the-boot drive, Sneed, president of Local 36, and his firefighters gathered the money in two days by appealing to drivers stopped at red lights. “It was so much money, it was frightening,” Sneed said. “People were dropping hundred-dollar bills into the bucket. People were writing thousand-dollar checks. An attorney took a flier and said he would get back to us later that day. At 2 p.m., he came back with a check from his office in the amount of $10,000.”

About 300 existing organizations like Sneed’s started Sept. 11 funds on the fly. Additionally, the Internal Revenue Service hastened the creation of more than 300 new charities devoted to Sept. 11 relief.

Shocked citizens funneled at least $2.7 billion to these charities, and by some estimates, $500 million has yet to be spent.

It is an unparalleled amount of money generated by an unprecedented number of organizations focused on a single disaster. But two years later, no government agency has tallied all of the collections or verified that the money has been spent as promised.

The best existing estimates are based on voluntary surveys conducted by watchdogs such as the Better Business Bureau and the federal government’s General Accounting Office.

All charities must register with the IRS, and those operating in New York must register with the state attorney general, but neither of these agencies has attempted to audit the Sept. 11 charities.

“We don’t have the resources to audit 187 funds,” said Brad Maione, a spokesman for Attorney General Eliot Spitzer, referring to the Sept. 11 charities registered in New York. “A lot of what we do is complaint-driven. If someone had filed a complaint, we would have taken a look at that issue.”

Marv Friedlander, a senior technical adviser with the IRS, said tracking Sept. 11 charities is not the IRS’ responsibility. “We didn’t and don’t intend to figure out how much was contributed,” he said.

For watchdogs attempting to follow the money, arriving at an accurate tally is difficult because of the myriad charities involved, the vast sum of money and the accounting thicket created when multiple charities passed money from one to another before distributing it to victims. On top of that, watchdog groups cannot compel charities to provide financial information.

The Better Business Bureau, which collected survey responses from the most groups, found that 88 percent of the money it documented went to 11 organizations, with the American Red Cross collecting more than a third of the total, the most of any single group.

About 74 percent of the money documented by the bureau had been spent at the time of the report.

Beneficiaries of Sept. 11 funds have ranged from displaced workers to families of World Trade Center employees who died when the towers collapsed to the widows and widowers of emergency workers who died while trying to save others.

Ronna Brown, president of the Better Business Bureau serving metropolitan New York, is satisfied that her organization’s survey accounts for the majority of the money collected for relief.

“I think that an important message for donors to understand is that most of their money went to groups that have very clearly documented how they spent their money,” she said.

According to Kevin Kumanga, the senior analyst in charge of the GAO’s December report, the Manhattan district attorney had eight fraud cases under investigation as of last September.

“We have not charged any organizations with fraud,” a spokeswoman from the district attorney’s office said. She would not comment on whether any investigations are ongoing.

But Friedlander confirmed that, at the federal level, the IRS is examining nine agencies for possible violations.

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