Boston Globe

From the Boston Sunday Globe, April 7, 2002, front page

By Farah Stockman, Globe Staff

Beneath the yellow awning of Planet Aid's nonprofit store in Harvard
Square, the idea on display is as attractive as the mannequins: The $7 you
pay for someone's castaway corduroys might help fund an aid project in
Zambia or Angola. That outgrown overcoat you donate could end up sheltering
a refugee from the rain.

Planet Aid's model of economic idealism found such a welcome in
Massachusetts that suburban Holliston became the group's headquarters in
the United States. And rural Williamstown became the site for a campus that
launches volunteers all over the world.

In 2000, three years after the organization began scattering its clothes
collection containers across New England, Planet Aid brought in more than
$3.6 million in clothes and cash, much of it from people who had been told
in a brochure that half of their used clothes would be donated to the needy
in Africa.

But almost none of the clothes donated to Planet Aid are given away, and
only about 6 percent of the money the group raises is spent on charity, a
Planet Aid official acknowledged a week ago.

Fred Olsson, the group's New England general manager, called the figure of
a 50 percent donation ''an error.'' ''We sell it to the highest payer,'' he
said. ''That's how we raise money for our development programs.''

It was not the first time that activists behind Planet Aid have been
questioned about how much they donate to the poor. Unbeknownst to
authorities in Boston, the British government took a recycled clothes
operation run by Humana People to People, Planet Aid's parent organization,
into receivership in 1998, after investigators could not determine what had
happened to money from the clothing sales.

And elsewhere, Humana's recycled clothing operations in France and the
Netherlands were reclassified as commercial businesses, according to a
prosecutor in Europe.

And in February, the FBI arrested Mogens Amdi Pedersen, Humana's founder.
He now awaits extradition to Denmark in a Los Angeles jail, on charges of
tax fraud and embezzlement of millions of dollars from a vast international
network of charities and for-profit companies.

Pedersen's arrest is part of an international tale of charity and profit,
and involves an investigative trail that stretches to Massachusetts, and a
group of activists so secretive and dedicated that some goverments have
classified them as a cult. ''They are in operation all over Europe and they
are very active in the US, especially on the East Coast,'' said Poul Gode,
a deputy prosecutor in Denmark's Division of Serious Economic Crimes, part
of the Justice Ministry. ''There is no doubt in my mind that Amdi is linked
to Planet Aid in Massachusetts. ... The charges against Amdi are not
focused on what is happening with Planet Aid, but the people involved are
the same.''

But Olsson said the jailed charity founder has nothing to do with Planet
Aid. ''You can't find this person on any payroll or board of directors,''
Olsson said, of Pedersen. ''They are talking about something which is not
possible to prove.''

The local presence of a world `cause'

The public face of Planet Aid can be found in Harvard Square, where music
from the Rolling Stones blasts from a radio as teens in bell bottoms drift
in past a world map surrounded by literature about Humana's work in Africa
and Central America.

At Planet Aid's tonier location on Newbury Street, second-hand orange
trench coats fetch $35 apiece from shoppers who are told how their
purchases help aid projects abroad. Store employees listen to talks given
by volunteers who return from overseas development projects with the
Williamstown-based International Institute for Cooperation and Development,
another Humana group.

''We're all doing it because we care about the cause,'' said Amy Lewis,
store manager for three years, who reiterated figures from a brochure that
50 percent of all donated clothing is given to the needy in developing
countries.

But at Planet Aid's more private headquarters in wooded Holliston, where
colorful bales of sorted clothing are stacked up to the warehouse ceiling,
workers freely say that ''almost all'' of the clothing is sold to pay for
Humana-run development projects.

Planet Aid spent just about all of the $3.6 million it raised in 2000, the
last year for which complete records are available. It gave out just 6
percent of that income, or about $217,000 that year, to projects including
AIDS seminars, small-scale farming groups, and AIDS research. The rest went
to salaries, rent, administrative fees, and costs associated with
collecting the clothing and fund-raising.

Olsson, a Swedish activist who oversees the Holliston headquarters, called
it the cost of doing business.

''When you run a nonprofit in the US, you have to pay your bills,'' Olsson
said, adding that the stores themselves serve a worthy purpose as job
providers. ''I bet somewhere between 200 to 400 people get their living off
of this.''

Planet Aid's form to the IRS states that ''the operating of four thrift
shops ... is an environmental purpose. ... Collection and recycling of 14+
million pounds of used clothes, thus relieving local waste facilities.''

But the Web site of Garson & Shaw, the for-profit company that buys Planet
Aid's clothes and resells them in Eastern Europe, talks about recycled
clothing as big business. Stranger still, Garson & Shaw's other major US
supplier, the for-profit company U'SAgain, is listed as a company
controlled by Pedersen in an evidence summary filed by Danish prosecutors.

Olsson acknowledged that some of Humana's recycled clothing operations in
Europe have raised suspicions, have been shut down, or have been declared
commercial businesses, but he said the allegations had nothing to do with
Planet Aid here.

''I know there is a lot going on overseas, and I can't answer for that,''
Olsson said. ''I know what I am doing here.''

The story that Humana people tell about the group's genesis starts 30 years
ago, when a charismatic aspiring teacher in Denmark named Mogens Amdi
Pedersen was dismissed from an academy for having long hair.

Disillusioned, he founded the Traveling Folk Schools, persuading young
idealists to travel to Africa and Asia to aid in anticolonial struggles and
live among the poor.

The Danish farm origins of a world organization

When they returned to Denmark, these activists pooled their resources and
bought a farm in a place called Tvind. Under Pedersen's leadership, they
launched a string of schools, farms, and charities that now spans 55
countries. In 1977, these activists - known as ''Tvind'' - launched the
International Humana People to People Movement, an umbrella organization,
which eventually moved its headquarters to Zimbabwe.

In 1979, Pedersen gave up all formal positions with the organizations and
withdrew from public life.

The members of the group's inner circle, known as the Teachers Group,
commit to staying with the movement for life, donating their salaries to a
communal fund, and relocating anywhere they are needed, according to Danish
prosecutors and former members.

At first, the group's efforts gained renown in Denmark, attracting
thousands of volunteers. But as the schools and charities spread across
Europe, critics accused group leaders of negligence, cloudy finances, and a
near-fanatical demand for loyalty from members. Denmark passed a law
forbidding state funding for the organization. French authorities
classified the group as a nonreligious cult.

''It's huge, and nobody can really work out what's at the bottom of it,''
said Michael Durham, a British freelance journalist who created a Web site
aimed at exposing Pedersen and the dozens of charities and for-profit
companies he allegedly controls. ''Is it about money? Is it about power? Is
about this one man? Or is it about left wing politics?''

In 1997, Stuart Crookshank, an investigator with the Charity Commission in
the United Kingdom, traveled to Zambia to find out what had happened to the
used clothes that well-wishers had donated to Humana UK, Planet Aid's
sister organization.

He found six stores selling used shoes and shirts at European prices.

''It's very good business,'' Crookshank said. ''The question is: What
happened to the money?''

Humana UK could not prove that their profits had been donated to charity,
so the group was taken into receivership. But nothing stopped its leaders
from changing the organization's name and resurfacing elsewhere, Crookshank
said.

''Because they straddle the world and they exploit people's emotions and
national views about charities, legally ... it's very hard to crack,'' he
said. ''There are so many firewalls, smoke screens. To unravel it is going
to take some very special investigators.''

Last year, Danish authorities tried to be just that. They swooped down on
the Teachers Group headquarters, cracked the codes on computers, and
uncovered letters Pedersen had allegedly written describing how to hide
funds of one humanitarian organization from ''theft, taxation and prying
from unauthorized persons,'' according to Danish prosecutors.

They found evidence that Teachers Group members ''forgo their personal
rights, such as their right to start a family according to their own
wish.'' Prosecutors also reported signs that the group had diverted
humanitarian funds to for-profit ventures, including a television station,
commercial farms, and a Brazilian plantation engaged in ''intense forest
cutting,'' according to papers filed by Gode.

Pedersen, who had been living in a multimillion-dollar condominium in
Florida, has hired Robert Shapiro, the lawyer who led the O.J. Simpson
defense, to defend him from extradition charges in a Los Angeles court.

''It's been very difficult to go worldwide,'' said Gode, the Danish
prosecutor, who said he plans to investigate only those crimes related to
Denmark. ''Our impression is that Amdi Pedersen controls this whole network
of funds and companies due to his personal authority. He is the undisputed
leader.''

But Jamie Katz, chief of the public charities division of the Massachusetts
Attorney General's office, said he was not aware of any complaint against
Planet Aid and was not sure if he would investigate it.

''We have somewhere over 30,000 charities registered in Massachusetts and
... the large majority of them are doing good work,'' Katz said. ''I have a
staff of five lawyers and three paralegals. A lot of our time is spent on
complaints.''

Planting their roots in an old 4-H camp

Humana came to Massachusetts in 1986. Ted Lewis, a University of
Massachusetts graduate, and Eric Newman, a student at Hampshire College,
had just returned from England, where they had volunteered with a Humana
organization and joined the Teachers Group. Back home, they used a rundown
4-H camp in Western Massachusetts to launch, under Humana's umbrella, the
International Institute for Cooperation and Development.

They worked nonstop, donated their salaries to the Teachers Group's
communal pool, and soon recruited their first batch of overseas volunteers.
The enthusiastic recruits each paid $5,000 in tuition, and raised much more
for the opportunity to volunteer abroad.

''As we became successful in North America, the Danish folks that we worked
with got more and more eager,'' Ted Lewis said in a telephone interview
from the San Francisco-based nonprofit group, Global Exchange, where he now
works. ''I was summoned to a meeting on a visit to Denmark and there was
Amdi,'' he said of Pedersen.

''There is sort of a mysterious quality to this guy,'' Lewis said. ''He
traveled secretly. He was introduced to me as a comrade. It was obvious
from the way that he was treated and the things that he was saying and the
way that he moved that he was a very special person.''

At that meeting, Lewis said, Pedersen motivated him to stay another year at
the International Institute for Cooperation and Development, even though he
had become increasingly disillusioned.

In the end, Lewis resigned, because Humana kept calculating the institute
to be in debt, and because of the strange way that he said his supervisors
had interfered with his private life. ''I've never been certain if it's any
more evil than an ordinary American corporation,'' he said of the group.
''But what I've always resented the most is that fundamentally, the
resource that they were exploiting was young people's idealism.''

The man who came from Denmark to take over Lewis's job was Mikael Norling,
who later founded Planet Aid. Norling brought on Fred Olsson, who had been
running a Humana recycled-clothing operation in Sweden, to help oversee the
new Massachusetts group.

''The aim is to change people's lives,'' Olsson said, recalling how he
learned of Humana when he joined a Traveling Folk School in 1978, and
traveled from Sweden to Afghanistan to build a school. ''I have chosen to
spend my life on trying to make the world a better place.''

Olsson said that he had met Pedersen ''a few times,'' and acknowledged that
he is himself a member of the Teachers Group. But he declined to say more.
''It's a private matter,'' he said. ''The Teachers Group is not a legal
entity. It has no influence on Planet Aid.''

A 19-year-old makes a disillusioning trip

Those comments came as a surprise to Sarah Bullentini, a 19-year-old who
rode a train from Minnesota to work under Olsson at the Holliston warehouse
so that she could earn her way to Zambia as an International Institute
volunteer.

''The Teachers Group runs Planet Aid, under various names, all over the
world,'' she said, adding that she didn't think it was a secret.

Bullentini spent two months sorting clothes for Planet Aid, and even
attended a Humana conference in Denmark before her trip to Zambia.

''I learned about the bad press and the controversy,'' she said. ''But I
said, `As long as I get to Africa, as long as I do good work.'''

But in Zambia, everything went wrong, she said. She found Humana
development projects having to pay $200 a bale for used clothes. Funding
for her own project stopped completely. And then came Pedersen's arrest.

''When I joined ... they said all these rumors about him being rich and
living in Miami were false,'' she said. ''But when he was arrested they
said he had no ties to the Teachers Group and this will not affect the
projects at all.''

So, three weeks ago, Bullentini flew home.

''I know the organization has a lot of potential,'' she said. ''But nobody
knows where the money goes ... I decided it would be better for me to come
home and go to school, because there's not going to be much future for
Humana.''


This story ran on page A1 of the Boston Globe on 4/7/2002.
Copyright 2002 Globe Newspaper Company.