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Charity canister money hard to trace
Sunday, August 6, 2006
By KEVIN DeMARRAIS
RECORD COLUMNIST
NorthJersey.com
How can you resist?
Help, the big sad eyes and skin-and-bones profiles say as they stare
out from the side of the canisters that are conveniently located on
counters at your neighborhood deli, pizza parlor or convenience store.
Whether the canisters feature dogs and cats or young children, the
message is the same: Drop in your spare change and we'll provide
food, shelter and medial care for these poor creatures.
Unfortunately, as two recent lawsuits filed by New Jersey's charities
regulators show, what you see may not be what you get. Some of these
so-called charities are bogus, and the only ones benefiting will be
fund organizers.
The issue was in the news last week when the Division of Consumer
Affairs and the Attorney General's Office sued Ridgefield Park-based
Lovers of Animals Organization, or LOAO, alleging that little or none
of the money it collected went to animal welfare.
"This is one of the most egregious types of fraud," said Kim
Ricketts, director of Consumer Affairs. "Not only are they misusing
the funds, but they're doing it by using the pictures of starving,
helpless animals."
LOAO's president disputed the charges, telling me that the money went
for its intended purposes and that she had receipts to prove it.
"We're not guilty of anything," Josephine Thorton said from the steps
of her Ridgefield Park home, which doubles as LOAO's
headquarters. "Our lawyers and accountants take care of everything."
As president and treasurer, Thorton is responsible for LOAO's
activities.
But state regulators are also interested in the role played by her
brother, Russell Frontera, who was released from prison late in 2004
after serving three years for criminal usury, or loansharking.
Frontera, a former Bogota gas station operator who is listed as a
LOAO board member, had a previous run-in with regulators involving
fund raising for two charities, the Aids Research Foundation and the
National Foundation for Abused Children.
Court records show that despite repeated assurances that most of the
money was going to financially needy patients and AIDS research, only
2.7 percent of $272,000 raised in 1992 went to the causes it
espoused, and none was used for research.
As part of a 1993 consent order, Frontera was banned from involvement
with charities in the state for five years, and required to register
with the state if he hooked up with one after that. According to the
suit, he never did so.
Frontera and his son, Dominic, "have been the primary individuals
responsible for the collection of the LOAO's canisters," according to
the civil suit filed last week in Superior Court in Hackensack.
The known dollar amount is relatively small -- LOAO reported income
of $7,535 and expenses of $7,432 last year -- but Ricketts hinted
that there may be more.
The division is aware of at least 200 canister locations, "so you can
be assured that we are going to look into how much money is involved
in this operation," she said.
The LOAO suit comes two months after a Union County judge ordered a
Metuchen man to pay $330,000 and shut down the National Animal
Welfare Foundation, which was accused of misusing public donations.
The two recent cases pale in comparison to the abuses reported three
years ago by the State Commission of Investigation, although the MO
was the same.
For years, an independent contractor with mob ties used hundreds of
canisters bearing photographs of maimed pets to raise money for the
Associated Humane Societies.
According to the SCI report, the contractor -- who admitted to being
an organized crime associate -- kept most of the money, and the
society never demanded an accounting.
Accountability is obviously a big concern with charities that relay
on cash contributions.
When you think about it -- and few of us do when we make a donation --
there is no way to know what happens after those coins are dropped
through the slot.
We're acting on trust, belief that the fund-raising effort is what it
appears to be and that the cash coming in will go out for its
intended purpose.
Years ago, my mother coordinated fund raising for our town's March of
Dimes campaign, and the job included placing canisters in local
stores.
At the end of the month, she brought the canisters back to our house,
tallied the money and sent it on to fund research to find a cure for
polio.
But, as with most cash businesses, she alone knew how much had come
in.
Fortunately for the March of Dimes, Genevieve DeMarrais was an honest
woman, but that's clearly not always the case. And that is why
Assemblyman Neil Cohen, D-Union, introduced a bill last month to
tighten controls on charities that rely heavily on canisters.
"It's an easy way for quick bucks," he said.
"Nobody knows how much is collected, and nobody knows where the money
goes."
Among the provisions of the Cohen bill are requirements that
charities maintain a bona-fide office where a representative may be
reached by telephone during normal business hours.
In addition, canisters must include the name of the charity for which
the money is being raised (not just a paid professional fund-raiser)
and the charity's state registration number.
Also, the money must be collected only by employees or volunteers who
are registered with the state, and must be taken immediately to a
bank that has an automatic coin counter that produces a receipt. The
bill also includes strict reporting procedures.
Violators would be subject to penalties of up to $20,000.
E-mail: demarrais@northjersey.com
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