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FBI investigates spending at Food for the Poor

Special to the National Catholic Reporter
West Palm Beach, Fla.

A bishop serving on the board of directors of South Florida-based Food for the Poor said the charity will cooperate with an FBI investigation following last month’s resignation of the charity’s founder and CEO, Ferdinand Mahfood.

Separately, a national oversight and accrediting association of evangelical churches has begun its own investigation of the international relief agency.

Frank Butler, president of Foundations and Donors Interested in Catholic Activities, said the situation at the South Florida charity underscores the need for an oversight agency similar to the Evangelical Council for Financial Accountability.

Food for the Poor, a major charitable organization with an annual budget of $182 million, is dealing with a shakeup after Mahfood admitted to diverting $275,000 in donations to two members of his staff and their families. Mahfood had also admitted to having sexual relations with the two female employees.

The charity received more than $36.8 million in federal and state grants last year, which prompted the FBI investigation, according to Judy Orihuela, spokesperson for the Miami Division of the FBI. She said the agency’s “white-collar crime section” is handling the case.

Bishop Paul M. Boyle of Mandeville, Jamaica, a senior board member of Food for the Poor, said, “We are confident that any review will find that Food for the Poor has acted responsibly and lawfully. We only pray that the FBI acts promptly so that our mission to serve the poor is not harmed.”

On Oct. 16, a team of investigators from the Evangelical Council for Financial Accountability in Winchester, Va., sent their own experts to Food for the Poor headquarters in Deerfield Beach.

The evangelical council is a 964-member umbrella agency that monitors charitable organizations soliciting funds in evangelical churches. In addition to making presentations in an estimated 1,000 Catholic churches last year, Food for the Poor has increasingly worked with Protestant and evangelical churches.

Two years ago, Food for the Poor was accredited as a member in good standing with the evangelical council, according to Paul Nelson, president of the council.

The council’s standards committee is conducting the investigation. The committee is an investigative arm of the council’s board of directors and is comprised of technical experts in law, tax, accounting, fundraising and theological standards.

The organization’s investigative team will focus on two areas: Responsible governance and donor protection. The results will be reported back to the evangelical council’s own board of directors.

“We have not condemned our member, and we withhold judgment until we have verified to our satisfaction that the donor has been protected,” Nelson said of the ongoing investigation.

In terms of donor protection, Nelson said the council would probe whether or not monies were diverted away from their intended purpose and whether full restitution was made.

Butler, the president of Foundations and Donors Interested in Catholic Activities, said, “We are always Monday-morning quarterbacking what went wrong, and we don’t have a mechanism right now that addresses charities that raise monies in the name of the church.” There is generally a good structure of accountability now in place in most dioceses, he said, “but that doesn’t necessarily touch on agencies like Food for the Poor.”

The upside of the scandal is that it will prompt donors and church officials to take a closer look at who is claiming to work in the name of the church, Butler added.

It is now known that some U.S. bishops had asked Food for the Poor not to fundraise in their dioceses. The Miami archdiocese, however, listed Food for the Poor as an “apostalate” of that archdiocese in the Official Catholic Directory.

Officials of Food for the Poor said that Mahfood misappropriated donations generated through Food for the Poor/Jamaica, a separate entity with its own board of directors. Law enforcement officials in Jamaica told The Florida Catholic they did not plan to investigate the matter because the alleged diversion of funds may be a federal crime in the United States. “Ferdinand Mahfood has not committed a breach in Jamaica,” said Cpl. Julett Williams of the Constabulary Communication Network in Kingston.

Boyle, along with Robin Mahfood -- the newly appointed CEO and chairman of the board at Food for the Poor -- said the Mahfood family has restored the diverted funds. Ferdinand Mahfood is in residential treatment for bipolar disorder, they said.

Robin Mahfood runs a for-profit company, Essex Imports, out of the same building Food for the Poor operates in.

Meanwhile, the charity’s board is conducting its own investigation, overseen by Miami attorney William Xanttopoulos, formerly a federal prosecutor with the Miami office of the U.S. attorney. Boyle said the charity’s work is continuing overseas.

Tom Tracy is state bureau chief at The Florida Catholic.

National Catholic Reporter, October 27, 2000