Two federal investigations launched into charity group; U.S. funds keep flowing

Reveal--The Center for Investigative Reporting/April 11, 2017

By Matt Smith

Two federal investigations have been launched into a charity group accused of fraudulently misusing U.S. government funds, according to documents newly released under the Freedom of Information Act.

U.S. officials also traveled to London to meet with their counterparts there who have cut funding to the group, operating under various names including Planet Aid and Development Aid People to People. But the USDA Foreign Agricultural Service ultimately determined they had “distinctly different procurement regulations” than Britain that preclude stopping the flow of $31.6 million in U.S. grants set to be paid out in installments through 2020, according to an internal memo.

“Our general counsel has reviewed the termination clauses in our agreements and found no basis under which to terminate a (Planet Aid Inc.) agreement,” the memo said. “Our procurement regulations do not allow us to cease agreements based on other entities’ choices.”

Reveal from The Center for Investigative Reporting previously reported  that the USDA’s Foreign Agricultural Service has allocated $133 to Planet Aid since 2004 for relief projects in southern Africa. When Reveal visited USDA projects in Malawi in 2015, however, farmers were still impoverished, and project staff said the money had been misused.

After Reveal broadcast its story in May 2016, Rep. Betty McCollum demanded an Inspector General’s inquiry into the allegations of fraud. In a briefing memo prepared for a Dec. 14 meeting with McCollum – among the documents released under FOIA – the USDA noted that that investigation was underway alongside one by the U.S. Department of Justice.

According to earlier FBI memos, court records and other documents, Planet Aid is run as part of Tvind – now also known as the Teachers Group – a secretive organization launched by Mogens Amdi Petersen in the 1970s. Petersen currently is an Interpol fugitive wanted by Denmark on charges that he set up fake charities in a scheme to skim and launder Danish government grants.

Denmark continues to pursue those charges. Prime Minister Lars Løkke Rasmussen urged Mexican President Enrique Peña Nieto to extradite Petersen during a state visit in early April. Petersen had been spotted last year by a Danish television crew at a lavish hideaway he and his followers built on the Baja California coast.

Britain was funding Planet Aid’s subcontractor in Malawi with 5.6 million pounds until the BBC, in collaboration with Reveal, made the connection to Tvind – which had previously been cut off from UK funds. After that broadcast, Britain’s Department for International Development halted the funding and sent an investigator to Malawi.

And in January Brazil’s federal attorney general opened a criminal investigation targeting the a related Geneva organization identified in Reveal and USDA reports, alleging a money-laundering scheme involving interlinked charities.

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