NEW YORK (AP) — 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. Later, he would collect at least another $2.3 million more for relief 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 two 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, and 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.
— 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.
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 had concerns about the church's ability to properly oversee its financial affairs and was investigating how it had used its assets. The church, Glad Tidings Tabernacle, has agreed to cooperate with the state investigation.
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.
"It must be underscored that Carl Keyes is an internationally recognized humanitarian who has spent the past 30 years helping others in crisis," she wrote in an earlier letter. "He has worked with many presidents and prime ministers around the world to help ease the suffering of their people."
RAISING DOLLARS AND DOUBTS
There is no question that Keyes threw himself into relief work.
Yet he also embellished his accomplishments, according to several people who worked on relief efforts in lower Manhattan. A priest said he didn't believe Keyes' colorful stories about breaking into locked ground zero churches on 9/11. And in response to the AP's questions about a claim that his ground zero soup kitchen had attracted celebrity volunteers like Jerry Seinfeld and actress Susan Sarandon, Keyes acknowledged that they never worked with him.
When Hurricane Katrina struck, Keyes drove to Mississippi to set up a massive volunteer operation and help distribute supplies. But he has yet to account for how his organization raised and spent money on the Gulf Coast.
His Urban Life Ministries charity went a decade without filing the required state and federal reports showing how much money it received and spent. The IRS last year stripped the charity of its tax-exempt status because Keyes failed to submit annual financial disclosures. He operated Aid for the World, which boasted of operating anti-poverty programs on several continents, for more than three years without disclosing its finances.
Keyes still has plenty of supporters.
"He was and remains a tremendous source of strength for those in need," Mike Martelli, a retired New York City police officer, wrote in a letter vouching for Keyes.
But it is the way Keyes has handled millions of dollars entrusted to him that has led his own accountants and others to repeatedly accuse him of self-dealing.
After spending his youth in New Jersey's middle-class neighborhoods, Keyes went to work in 1989 for a church in Brooklyn's impoverished Bushwick neighborhood. But when he split from that ministry in 1997, he was accused in a lawsuit of trying to loot assets on his way out, including a house in Pennsylvania's Poconos that the church had purchased two years earlier for $89,500.
Records show that Keyes transferred ownership of the house to himself, then used the property as collateral for a $70,343 personal loan. In court, he claimed he was entitled to the house because the church bought it for his family and he had been making monthly reimbursement payments. The church said in a lawsuit that Keyes stole the house, and a Brooklyn judge ordered the property returned.
Keyes was hired that same year as pastor of Glad Tidings Tabernacle, a nearly century-old Assemblies of God congregation in Manhattan.
The church struggled financially, but after 9/11 a nonprofit group Keyes controlled, Urban Life Ministries, found itself acting as the conduit for $2.5 million donated by people looking to help the city recover from the attacks.
The charity spent much of its windfall on things like water, food and a counseling center for ground zero workers, according to financial records obtained by the AP. It also staged two concerts honoring first responders and U.S. troops.
But financial records show it also spent money on things that had nothing to do with the tragedy, including monthly payments of $734.99 on the personal loan Keyes owed on the house in Pennsylvania and nearly $33,000 for an architect working on church renovations that would include a new living space for his family.
Urban Life Ministries said in recently filed audited financial statements that it also paid as much as $235,600 in "rent" to the church in late 2001 and 2002. It also donated $70,000 to the church and lent it at least another $26,953, according to Urban Life Ministries accounting ledgers, obtained by the AP.
Charities generally must use donations for the purpose stated when the money is raised. And charity operators must avoid using money to help themselves or causes that are not related to their mission.
Keyes, through his lawyer, said the payments were proper and the rent reasonable.
When he talks about his 9/11 work, Keyes can be dramatic. During a 2010 speech to the New Canaan Society, he told of breaking into a closed Navy port to set up a site for relief supplies, of obtaining phony security badges so volunteers could slip into Lower Manhattan and of commandeering two Roman Catholic churches to turn them into "respite centers" for rescue and recovery workers.
"I couldn't find a Catholic anywhere. The churches were closed. So the doors miraculously opened after we prayed and hit it with a hammer," Keyes said.
Yet St. Peter's Church, one of the two Keyes claimed to have taken over, was open that day, made famous as the place where firefighters carried the body of the Rev. Mychal Judge, a Fire Department Catholic chaplain killed in the lobby of the north tower.
"I don't think it's true, this whole story," said the church's senior priest, the Rev. Kevin Madigan.
There was no break-in at the port, either, said retired New York police Capt. Edward Reuss, who helped oversee staging of relief services there.
Keyes also said he set up a respite center in "The Green Tarp," a canteen that fed thousands of ground zero workers. But the Green Tarp was set up and run by celebrity chef David Bouley.
Questioned about those claims, Keyes told the AP he had only used the soup kitchen as a staging area for deliveries months after Bouley left. He acknowledged that he hadn't been involved in any break-in at the port, but said he once suggested the idea in a telephone conversation.
As for breaking into Catholic churches, Keyes said he stands by his story. But he added that the chaos of 9/11 makes it "impossible for any individual to accurately remember what happened at what time on what day and by whom."
Some of the most serious complaints about Keyes' financial practices come from his former accountants.
One, Bruce Kowal, filed complaints in 2008 with New York state officials accusing Keyes of misusing Urban Life Ministries money meant to help Hurricane Katrina victims.
"Not only was this (nonprofit) plundered to fund the operating deficits of the church, the amounts were spent on personal items of the pastor's family, and thus were items of taxable income," Kowal wrote.
He attached bank records to the complaint that he said showed Urban Life Ministries paid some of Keyes' personal expenses, including his American Express bills, a monthly lease on a car his sons used while attending a private college in Florida, and payments toward the personal loan Keyes owed on the Pennsylvania property.
Kowal's complaint, obtained by the AP, said Glad Tidings church money was used to pay more than $73,000 in Keyes' credit card bills, without the minister ever providing proof that they were legitimate church expenses.
"I had repeatedly admonished the pastors that these actions were possibly illegal," Kowal wrote.
The New York attorney general's office declined to comment on what happened to Kowal's complaint.
Keyes referred questions to his lawyer, Polovetsky, who said all of the charity's expenditures were legitimate. She said a newly hired accountant had reviewed the transactions and that "any required taxes were paid."
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 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. He said he has given Keyes financial records showing that the group spent at least $800,000.
Polovetsky said Urban Life Ministry's tax filings don't show financial activity from the Gulf Coast relief work because the money went through a separate corporate entity called ULM Relief. Jones disputed that the corporation had handled the donations.
Urban Life Ministries' newly filed IRS forms also contain no trace of a $135,000 donation made by real estate agent Karen Dome, who told the AP she gave the money to the charity after getting a $1.39 million commission for helping Glad Tidings sell its midtown Manhattan church on Dec. 31, 2007. Dome said she regularly gave 10 percent of her commissions to charity.
On Feb. 19, 2008, David Cushworth, then Urban Life Ministries' accountant, emailed Keyes a resignation letter in which he accused the minister of using that donation to pay off a second mortgage on a house he owned in Manasquan, N.J., a Jersey Shore community.
"If the New York attorney general were to ever find out, then goodness knows the kind of trouble you and the church could be in, never mind the IRS or the feds," he wrote.
The AP confirmed through public property records that the mortgage, which had a balance of $131,973, was discharged in early January 2008, but could not independently obtain records verifying Cushworth's claim that Urban Life Ministries money was used to make that payment.
Polovetsky refused to answer questions about whether the charity had paid off Keyes' mortgage, other than to say that all transactions were approved by its executive board. She added that Cushworth "was subsequently fired for incompetence and should not be deemed credible."
When Glad Tidings Tabernacle sold its crumbling Manhattan home in 2007 for $31 million, the church gave Keyes $200,000 in back pay and distributed $670,000 in "tithes," according to a financial statement recently provided to the attorney general's office by the church. It didn't disclose the recipients, but other records obtained by the AP show that Abraham Fenton, a pastor who served on the Urban Life Ministries board, received $100,000.Don Barnett, another longtime Keyes friend who has served on boards of Keyes' two charities, had $35,965 paid to seven personal credit card accounts. "Thank you for lifting me up out of this pit," Barnett wrote in a note of gratitude.
Fenton said he later returned the money. Barnett did not return phone and email messages.
Property records show that the church also lent Donna Keyes, the minister's wife and co-pastor, $950,000 to buy an 18th century stone-and-clapboard house on seven wooded acres in Stockton, N.J.
Seven months later, that loan was declared "paid or otherwise satisfied." It isn't clear from public documents whether the Keyes family paid off the loan, or if the church forgave the debt. Polovetsky declined to say, but said the transaction had been approved by the church board.
One longtime Glad Tidings board member, Louis Delgado, confirmed that the board had wanted the Keyes family to enjoy a nice house but said he understood the church would own the property, and that it also would be available to future pastors.
The church gave another $1 million in proceeds from the sale to Keys' charity, Aid for the World, which used a large portion of the gift to cover expenses related to a failed fundraiser featuring former U.S. Secretary of State Colin Powell.
Today, the church holds services in a former nightclub in Harlem, after wasting $8.7 million on a failed attempt to create a new chapel inside a town house in Manhattan's chic Tribeca neighborhood.
The church began 2008 with $13.8 million in savings, according to a financial document obtained by the AP. Three years later it told a court it had only $180,484 left in cash.
The church agreed last month to cooperate in an ongoing state investigation triggered by the AP's reporting. In exchange, the attorney general's office agreed not to block release of $4.5 million in proceeds remaining from the sale of the Tribeca space.
On his website, Keyes said he is working on a new charitable project. He wants to lift people out of poverty by writing a screenplay and having big Hollywood stars shoot the movie on location in a struggling small city or town. A site has yet to be selected.
Associated Press researcher Judith Ausuebel in New York contributed to this report.
The AP National Investigative Team can be reached at investigate(at)ap.org.