Clothing drop box charity questioned

Portsmouth Herald/January 23, 2005
By Chris Bernard

Exeter -- The yellow boxes stand out for their color but could easily be mistaken for similar boxes set out by Goodwill Industries or another charitable group.

On the surface, that's what these clothing donation boxes are - giving sites put out by a nonprofit to aid those in need.

According to its Web site, the boxes' owner, Planet Aid Inc., is a nonprofit organization dedicated "to improving the lives of people in developing countries."

But the group has been accused of being linked with a larger organization called a secular cult, and that has been definitively linked to criminal activities involving its charitable work.

The boxes first appeared at Exeter's transfer station last October after a request by Planet Aid was approved by the Board of Selectmen.

Similar boxes already were in other spots around town, and more have appeared in recent months, including one in downtown Newmarket.

They can be found all over the Seacoast, according to Planet Aid spokesman Ron Dellmuth.

"I don't think there's any town up there where you can't find us," Dellmuth said.

In fact, the group has more than 1,100 boxes throughout New England, including in more than 15 New Hampshire towns, and stretches as far west as Detroit, and as far south as North Carolina.

Dellmuth said the clothing donation boxes have been a success in the New England region.

"We've gone from averaging 125,000 pounds a week to about 525,000 pounds," he said. "That's each week. We've got 13 drivers."

Planet Aid is expanding across the eastern United States, and there's a Planet Aid UK and Planet Aid Canada.

Family ties

Similar clothing donation boxes began appearing a couple of years ago in the Chicago area, put there by a company called Gaia.

The Chicago Tribune investigated Gaia, and found it was linked to TvGaiaind, a Danish organization founded by a group of countercultural teachers, sometime called the Teachers Group.

Other clothing donation nonprofits, such as USAgain, also are linked with Tvind.

Over the years, Tvind has become a multimillion dollar empire of commercial ventures and charities spread across some 35 countries.

Its members contribute their money to a collective pool, and are given living stipends by the leaders. Their time also is collective, and they surrender certain personal rights - including whether or not to have a family, according to a 33-page case summary filed by Danish prosecutors.

They've charged Tvind founder Mogens Amdi Pedersen and seven top aides with a multimillion-dollar embezzlement and criminal tax evasion scheme for redirecting humanitarian funds into profitmaking businesses and Miami real estate holdings.

Pedersen also has been indicted in Belgium for money laundering, and was arrested as a fugitive by FBI agents in 2002 in Los Angeles. He had eluded authorities since 1979.

He's hired Robert Shapiro, who defended O.J. Simpson, as his attorney.

Last September, The United Nations World Food Program ended its relationship with African aid organization Development Aid from People to People, another Tvind group, citing allegations money from Europe may have been diverted or siphoned off and does not always reach the projects.

Planet Aid has been connected with Tvind, though the connection is ephemeral at times.

"We're not even affiliated with that organization," he said. "Planet Aid New England is owned by Planet Aid New England."

Tvind's Pedersen has not been tied to Planet Aid in any official capacity. The leaders of Gaia and Planet Aid Canada have said they are members of the Teachers Group, but that their companies were not.

Ester Neltrup, president of Planet Aid, also has said she and Planet Aid's board of directors are members of the Teachers Group, though she distanced herself from Pedersen.

The Boston Globe reported three of Planet Aid's five board members - including Neltrup - supported Pedersen during his extradition.

In Massachusetts, where the company is based, the Attorney General's office reviewed the group's situation, but would not confirm nor deny an investigation.

Following the money

Dellmuth said it's difficult to assess how much money the group puts into its causes.

"It depends on how you look at the numbers," he said. "In 2003, we did over $200,000. In 2004, we're giving over $2 million."

In 2000, Planet Aid raised $3.6 million. About 6 percent of that - just over $200,000 - went to development projects.

Planet Aid is not a charity, Dellmuth said. The money goes into its own development programs.

According to the Web site, the group's collection program works like this:

Donated clothes are removed from collection boxes and taken to the group's warehouse, and eventually resold. Some are sold in Planet Aid's second-hand clothes stores, others are sold in bulk to commercial dealers.

Proceeds are used for community development projects in Central America, Africa and Asia.

Those development groups seem largely to be operated by Tvind holdings.

"That's not at all the case," Dellmuth said. "That's not us. We're in a world of our own.

Dellmuth said Planet Aid has a hand in the overseas development groups, but they're also associated with another charitable group, Humana, based in Zimbabwe.

Humana also is linked to Tvind.

In England, Humana UK was closed down by the Charity Commission in 1997 after an investigation of its financial affairs. That same year, Humana France was closed down by French authorities who determined it was not a charity but a business.

Other Tvind groups in Sweden and Holland currently are under threat from authorities over their financial dealings, as well, according to published reports.

According to prosecutors quoted in a Copenhagen newspaper, Humana sells the donated clothing to its own secret subsidiaries at a tiny fraction of its actual value. Those small proceeds are sent to Third World countries.

The Tvind subsidiaries then sell the clothes to private dealers in Eastern Europe for profit.

Tvind is estimated to be worth more than $350 million, despite its legal troubles.

"Everybody's had problems," Dellmuth said. "But those things have nothing to do with us. We're even talking to Oprah Winfrey about being our spokesperson."

Better than nothing

Exeter Town Manager George Olson said the town was approached by Planet Aid about six months ago.

"I was the one who recommended putting the boxes in when we got the solicitation in," he said.

At a Board of Selectmen's meeting last week, a resident submitted a letter complaining about Planet Aid to the board. Selectmen decided to leave the boxes up at the transfer station for the time being.

Board chairman Bill Campbell said he's a little suspicious of the organization.

"I did a little investigative work, and it seems a little suspect," he said. "Why should the town get involved with that?"

Campbell searched the Web for information on Planet Aid, and a similar search turns up scores of hits ranging from the group's official site to sites posted by former Teacher's Group and Humana members and volunteers lamenting their experience.

Dellmuth addressed those concerns at the meeting, and Campbell said his presentation was convincing enough for them to leave the boxes there pending further information.

He said Dellmuth told the board that last year, Planet Aid gave about 11 percent of its income to development causes.

"I just can't see that almost 90 percent is required to run the organization," Campbell said. "That just seems high."

Campbell said he believes the board would reconsider allowing the boxes on town land if it heard compelling reasons not to.

"Until we have some reason to remove them, we're going to leave them up," Olson said. "I don't want the town to have a part in anything nefarious or illegal."

That said, even if just a small percent of proceeds is going to charity, that's still better than none at all, he said.

"We have a real problem in terms of disposing of fabrics," he said. "If 10 percent ends up in the hands of people who need it, that's better than it ending up in the landfill in Rochester."