FBI investigates spending at Food for the
Poor
By TOM TRACY
Special to the National Catholic Reporter West Palm
Beach, Fla.
A bishop serving on the board of directors of South Florida-based
Food for the Poor said the charity will cooperate with an FBI investigation
following last months resignation of the charitys founder and CEO,
Ferdinand Mahfood.
Separately, a national oversight and accrediting association of
evangelical churches has begun its own investigation of the international
relief agency.
Frank Butler, president of Foundations and Donors Interested in
Catholic Activities, said the situation at the South Florida charity
underscores the need for an oversight agency similar to the Evangelical Council
for Financial Accountability.
Food for the Poor, a major charitable organization with an annual
budget of $182 million, is dealing with a shakeup after Mahfood admitted to
diverting $275,000 in donations to two members of his staff and their families.
Mahfood had also admitted to having sexual relations with the two female
employees.
The charity received more than $36.8 million in federal and state
grants last year, which prompted the FBI investigation, according to Judy
Orihuela, spokesperson for the Miami Division of the FBI. She said the
agencys white-collar crime section is handling the case.
Bishop Paul M. Boyle of Mandeville, Jamaica, a senior board member
of Food for the Poor, said, We are confident that any review will find
that Food for the Poor has acted responsibly and lawfully. We only pray that
the FBI acts promptly so that our mission to serve the poor is not
harmed.
On Oct. 16, a team of investigators from the Evangelical Council
for Financial Accountability in Winchester, Va., sent their own experts to Food
for the Poor headquarters in Deerfield Beach.
The evangelical council is a 964-member umbrella agency that
monitors charitable organizations soliciting funds in evangelical churches. In
addition to making presentations in an estimated 1,000 Catholic churches last
year, Food for the Poor has increasingly worked with Protestant and evangelical
churches.
Two years ago, Food for the Poor was accredited as a member in
good standing with the evangelical council, according to Paul Nelson, president
of the council.
The councils standards committee is conducting the
investigation. The committee is an investigative arm of the councils
board of directors and is comprised of technical experts in law, tax,
accounting, fundraising and theological standards.
The organizations investigative team will focus on two
areas: Responsible governance and donor protection. The results will be
reported back to the evangelical councils own board of directors.
We have not condemned our member, and we withhold judgment
until we have verified to our satisfaction that the donor has been
protected, Nelson said of the ongoing investigation.
In terms of donor protection, Nelson said the council would probe
whether or not monies were diverted away from their intended purpose and
whether full restitution was made.
Butler, the president of Foundations and Donors Interested in
Catholic Activities, said, We are always Monday-morning quarterbacking
what went wrong, and we dont have a mechanism right now that addresses
charities that raise monies in the name of the church. There is generally
a good structure of accountability now in place in most dioceses, he said,
but that doesnt necessarily touch on agencies like Food for the
Poor.
The upside of the scandal is that it will prompt donors and church
officials to take a closer look at who is claiming to work in the name of the
church, Butler added.
It is now known that some U.S. bishops had asked Food for the Poor
not to fundraise in their dioceses. The Miami archdiocese, however, listed Food
for the Poor as an apostalate of that archdiocese in the Official
Catholic Directory.
Officials of Food for the Poor said that Mahfood misappropriated
donations generated through Food for the Poor/Jamaica, a separate entity with
its own board of directors. Law enforcement officials in Jamaica told The
Florida Catholic they did not plan to investigate the matter because the
alleged diversion of funds may be a federal crime in the United States.
Ferdinand Mahfood has not committed a breach in Jamaica, said Cpl.
Julett Williams of the Constabulary Communication Network in Kingston.
Boyle, along with Robin Mahfood -- the newly appointed CEO and
chairman of the board at Food for the Poor -- said the Mahfood family has
restored the diverted funds. Ferdinand Mahfood is in residential treatment for
bipolar disorder, they said.
Robin Mahfood runs a for-profit company, Essex Imports, out of the
same building Food for the Poor operates in.
Meanwhile, the charitys board is conducting its own
investigation, overseen by Miami attorney William Xanttopoulos, formerly a
federal prosecutor with the Miami office of the U.S. attorney. Boyle said the
charitys work is continuing overseas.
Tom Tracy is state bureau chief at The Florida
Catholic.
National Catholic Reporter, October 27,
2000
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