Arizona, New York launch probe of 9/11 charities

? Officials in Arizona and New York have launched investigations into charities that claim to serve 9/11 causes, probing whether they failed to follow state laws — and may have misspent millions intended to help and honor those affected by the terrorist attacks.

The announcements follow an investigation by The Associated Press last week that uncovered dozens of 9/11 charities across the country that didn’t disclose publicly how they raised and spent money, didn’t keep promises to create memorials or contribute to 9/11 causes, or did more to help their creators than those affected by the terrorist attacks.

New York Attorney General Eric Schneiderman’s office said state lawyers are conducting their own “broad review” of 9/11 charities to make certain that all documentation for charities related to the 2001 terrorist attacks is in order and that all rules on fundraising and public disclosure are being followed.

In Arizona, state Attorney General Tom Horne said his office is investigating a 9/11 charity that raised more than $700,000 from students, police and others to create a massive memorial quilt that was never completed.

New York officials declined to discuss specific groups they are reviewing, but noted in a statement that state law requires most charities to register with the state if they are based in New York or raising money from citizens. There are some exceptions, such as religious and parent-teacher groups. The law also requires charities to file annual reports and more detailed financial reports if they collect more than $100,000 a year.

Schneiderman spokeswoman Lauren Passalacqua said the AG “takes issues involving charities and nonprofit abuse very seriously, and encourages anyone with information about such matters to immediately contact our office.”

Among troubled charities identified by the AP was Urban Life Ministries, a Manhattan nonprofit that its founder said raised more than $4 million to help 9/11 victims, relatives and first responders. The group also spent at least another $800,000 through 2009 to help Mississippi Gulf Coast residents rebuild after Hurricane Katrina.

Urban Life Ministries, created by the Rev. Carl Keyes, pastor at Manhattan’s Glad Tidings Tabernacle church, didn’t file the required financial statements with New York state to show how all the millions were spent, according to the attorney general’s office. Records show the group filed a 2001 report, but nothing after that. Filings from that year showed that Keyes, his wife and his church received payments from the charity.

Arizona state officials are investigating Stage 1 Productions, a nonprofit that raised $713,000 to promote creation of a memorial quilt stretching across 25 football fields that would honor those killed in the attacks of Sept. 11, 2001.

Horne, the Arizona attorney general, said investigators launched the inquiry after reading the AP’s report that the charity’s founder paid himself and his relatives more than a third of the money raised for the project, including $141,000 in compensation, more than $45,000 to repay an undocumented loan and $200 a week in car allowance.

“Once we start an investigation, I can’t talk about that particular investigation until it’s concluded,” Horne said. “But as a general matter with respect to charities, if somebody represents that he’s raising money for the charity, he needs to represent it for the charity. If he’s raising it for himself, rather than the charity, that’s really theft.”