NEW YORK — Before the Sept. 11, 2001 attacks, Carl Keyes was a little-known pastor of a small New York City Assemblies of God 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 survivors. More opportunities to raise relief money would come later, with at least another $2.3 million collected for efforts along the hurricane-ravaged Gulf Coast, in the poorest corners of Appalachia, 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.
The scandal has tarnished the reputation of one of the oldest Pentecostal churches in New York. Glad Tidings Tabernacle officials were pioneers in the Assemblies of God, a denomination - founded in 1914 in Hot Springs - with 3 million members across the United States.
According to financial records, internal correspondence and interviews with former employees conducted by The Associated Press, Keyes blurred the lines among his 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 relief into his cash-starved church, 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.
He used large church donations from a wealthy supporter to pay his sons’ private college tuition.
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 benefited.
For example, $950,000 of the proceeds was used to buy his family a country home near the Delaware River in New Jersey.
After paying large debts and buying a building to convert into a new church, the congregation had $13.8 million in cash, according to a February 2008 financial document obtained by the AP. Three years later, it told a court it had to sell that building because only $180,486 remained in its bank account.
After the AP first wrote about Keyes’ finances last year, the New York attorney general’s office opened its own investigation. Glad Tidings Tabernacle has agreed to cooperate with the investigation.
Keyes also faces questions from his own denomination. “The New York District [of the Assemblies of God] is investigating all of those allegations against Carl Keyes,” said Juleen Turnage, a spokesman for the Springfield, Mo.-based body.
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.
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,” said his attorney, Jennifer Polovetsky, on Aug. 22.
RAISING DOLLARS, DOUBTS
There is no question that Keyes has thrown himself into relief work.
After 9/11, his charity provided food, water and counseling for recovery workers. But a priest disputed Keyes’ colorful stories about breaking into locked Catholic churches for shelter near ground zero.
For a decade, Keyes operated his Urban Life Ministries charity without filing the required state and federal reports showing how much money it received and spent, an AP examination of official records found. The IRS last year stripped the charity of its tax-exempt status because Keyes failed to submit annual financial disclosures to verify that the money had been used for charitable purposes.
For Keyes, it has always been about the good works he can do through a selfless ministry, his supporters say.
“He was and remains a tremendous source of strength for those in need,” Mike Martelli, a retired New York police officer, wrote in a letter vouching for Keyes.
Good works aside, it is the way Keyes has handled millions of dollars entrusted to him and the benefits that he, his church and others received that has led his own accountants to accuse him of self-enrichment and dishonesty - accusations that have followed him since his early days as an Assemblies of God minister.
A HOUSE DIVIDED
Born in 1956, Keyes spent much of his life in New Jersey’s middle-class neighborhoods.
Keyes has said he used drugs and had brushes with the law as a young man. But he said he abruptly quit drugs in 1982 after a religious conversion during a trip to Maine.
In 1989, Keyes took a job with a church in Brooklyn’s impoverished Bushwick neighborhood.
But when he split from that ministry in 1997, its leaders accused him in a lawsuit of trying to loot assets on the way out, including a house in Pennsylvania’s Poconos that the church had bought two years earlier for $89,500. Keyes 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 gave it back to the church in October 1998.
That same year, Keyes was hired as pastor of Glad Tidings Tabernacle, a congregation founded in 1907 and housed in an even older brick church wedged between Manhattan high-rises.
Keyes brought part of his old flock from Brooklyn with him, but the newly merged congregation struggled financially. In mid-2001, church leaders had to borrow $543,500 for repairs and renovations.
Then came 9/11. In just over a year, more than $2.5 million gushed into Keyes’ church and a nonprofit organization he controlled, Urban Life Ministries.
After the terrorist attacks, Keyes applied for tax-exempt status for the charity, listing “relief programs in times of crises” as one of its purposes.
Urban Life Ministries spent much of its windfall on things like bottled water, food and a counseling center for ground zero workers, according to financial records. The nonprofit also provided apartments near ground zero for its workers, including Keyes and his family.
Financial records show that Keyes also spent money donated for 9/11 relief on expenses that had nothing to do with the tragedy - including a series of monthly payments of $734.99 on the personal loan he owed on the Poconos house.
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 attorney, said the rent and other payments were proper.
CONFLICTING ACCOUNTS
Keyes tells compelling stories about his charity’s work, even if others say some of them are not true.
During a 2010 speech to the New Canaan Society, Keyes told how he had jumped into action after the 9/11 attacks: breaking into a closed Navy port on Staten Island to set up a site for relief supplies; obtaining phony security badges for volunteers so they could slip into the disaster zone with ease; and going door to door to rescue 600 pets stranded in Battery Park City apartments.
He described taking control of two Roman Catholic churches in lower Manhattan needed for shelters after the towers collapsed. “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 cited, was open that day, made famous as the place where firefighters carried the body of 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,” Kevin Madigan, the church’s senior priest, said of Keyes’ version.
There was no break-in on Staten Island, either, said retired New York police Capt. Edward Reuss, who helped oversee staging of relief services there.
And 1,000 pets were rescued in Battery Park City, but that was handled by the city’s Parks Department, according to representatives of several animal rescue groups involved. They said they never heard of Keyes.
Keyes said he stands by his statement about breaking into Catholic churches. 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.”
ACCOUNTANTS COMPLAIN
Some of the most serious complaints about Keyes’ financial practices come from his former accountants. Several who used to work for Keyes said that as donors poured money into Keyes’ Urban Life Ministries, he raided its accounts to help himself and his church.
One accountant filed complaints in 2008 with New York state tax officials and the New York attorney general accusing Keyes of misusing Hurricane Katrina donations.
“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,” wrote Bruce Kowal, an accountant who worked for Keyes between 2003 and 2006.
Kowal 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 $349.23 monthly lease on a car his sons used while attending a private college in Florida; a $130 monthly payment on a storage unit near their school; and payments toward the personal loan Keyes owed on the Poconos property.
Kowal said in the complaint that Glad Tidings church money was used to pay more than $73,000 in 2004 and 2005 for other personal credit card bills on Keyes’ behalf without providing the required proof that they were legitimate church expenses for him and his wife.
“I had repeatedly admonished the pastors that these actions were possibly illegal, and that the remedy was the repayment of all amounts diverted from [the charity], as well as amending the personal income tax returns of the pastors to reflect the personal items paid for,” he wrote.
Kowal also accused Keyes of forging a former church employee’s name on Urban Life Ministries’ checks.
Keyes referred questions to his attorney, Polovetsky, who declined to discuss the check signatures. She said the storage unit, the leased car and other expenditures were legitimate expenses of Urban Life Ministries.
Michael Messner, who had served as a business manager for the church, also questioned payments to Keyes’ credit card in 2008. Messner asked David Cushworth, another accountant, if Keyes had provided receipts showing that his credit card charges were for church purposes. A church financial statement at the time showed $205,767 in credit card expenses.
“The ugly fact remains that Carl never did an accounting for his expenditures,” Cushworth said.
Polovetsky said that “all church financial transactions were approved by the executive board.”
Kowal’s complaint also accused Keyes of getting a wealthy supporter to help pay his sons’ college tuition with large church donations that could be claimed as tax deductions, which is not allowed.
Polovetsky declined to discuss the donor’s contributions and the tuition payments.
SELLING THE CHURCH
When the dwindling congregation at Glad Tidings Tabernacle sold its big, crumbling Manhattan home in 2007, church leaders spent some of the $31 million on Keyes and a few of his supporters, according to real estate and other financial records.
The church gave Keyes $200,000 in back pay.
The Keyes family also bought a house. In December 2008, the church lent Keyes’ wife $950,000 to buy an 18thcentury stone-and-clapboard house on 7 wooded acres in Stockton, N.J., a Delaware River community about 70 miles southwest of New York, property records show.
Seven months later, the loan was declared “paid or otherwise satisfied” and Donna Keyes owned the house outright, the records show. Three months after that, the Keyes couple used the house as collateral to borrow $520,000.
It isn’t clear from public documents whether the Keyes family paid off the Glad Tidings loan, or if the church forgave the debt. Polovetsky declined to say.
She said the transaction had been approved by the church board, and that by living outside the city, the Keyes family had saved the church “a significant amount of money.”
After selling off its original church home in midtown, Glad Tidings paid $11.5 million for a town house in the chic Tribeca neighborhood of Manhattan and began converting it into a place of worship, transaction records show. Glad Tidings began 2008 with $13.8 million in savings.
Three years later, the church told a court it owed contractors and others nearly $2 million, had only $180,484 left in cash, and needed to sell the Tribeca building.
In its recent disclosures to the attorney general’s office, the church said it spent $8.7 million on the never-completed renovation.
The church sold the Tribeca building last year for $9 million, $2.5 million less than what it had paid.
Keyes says disaster and devastation have taken their toll. He’s no longer a full-time pastor of Glad Tidings. His wife leads the church.
“I would never go back to relief work again, even if you pay me,” he says. “It was a circus.”
Religion, Pages 12 on 09/29/2012