Humana's Rags to Riches Cash Trail

The Observer, London/January 28, 1996
By Michael Durham

Cast-off clothes donated to Third World aid have funded a luxury lifestyle for a handful of businessmen and accountants.

It seemed like a clever idea to raise money 'for the Third World'. Over 10 years it became established in Britain as a 'foreign aid charity', recycling old clothes to help the poor in Africa, Asia and South America.

Yesterday, Humana Ltd, which has half-a-dozen 'charity shops' and hundreds of roadside clothes collection boxes in Britain, was exposed as part of what could amount to a £50 million-a-year international swindle. The Charity Commission has appointed receivers to take over its affairs.

Humana - which is linked to a Danish cult - could now be forced to shut up shop in Britain. Other European countries are expected to investigate claims that tens of millions of pounds a year are diverted to offshore bank accounts to finance a luxury Caribbean lifestyle for an inner circle of 'cult' members.

One of the most astonishing aspects of the claims is the time it has taken for the authorities to act. A deluge of official reports, newspaper articles, witness statements and even an MA thesis have for 20 years cast doubt on Humana's activities. In Britain, the Charity Commission spent two years investigating newspaper allegations. It was on the point of giving Humana a clean bill of health when, acting on new information from the Observer, investigators flew to Zambia to study 'development projects' at first hand.

Humana-linked charities in 11 European countries, together with the parent cult, Tvind, have been repeatedly investigated and criticised. In Norway and Sweden, government funding has been withdrawn. In Denmark, where Tvind receives £10m of public money to run independent schools, the education ministry has given the cult a year to put its affairs in order.

The European Union withdrew support in 1985 following concerns about the quality of 'foreign aid' projects, and Unicef has refused recognition. Allegations of money-laundering and gun-running have been investigated - inconclusively - by Danish police and Interpol.

Despite this, in Britain Humana annually receives £1.5m from public gifts and £3m from local authorities, which pay for children to attend two boarding schools in Norwich and Hull. Worldwide, the Tvind 'empire' is estimated to generate more than £50m from the lucrative second-hand clothes market, government grants, farms, plantations, clothes and furniture factories, and donations from cult members - little of which is believed to go to the Third World poor.

Humana's first British shop opened in Kilburn, London, in 1986 and its distinctive pine clothes collection boxes began to appear on roadsides. The boxes carry appeals for unwanted clothes, shoes, soft toys, blankets, towels and curtains 'in aid of Third World development'. There are hundreds of boxes in London and Manchester, and eight shops in the London area. In 1994, Humana UK said it gave away £462,228 for Third World education work, poverty relief and 'emergency aid' - about a third of its British turnover of £1.5m. Glossy brochures and photographs give the impression of an immense network of aid projects in Africa, Asia, South America and the Far East, run mainly by its overseas arm DAPP (Development Aid from People to People).

Humana UK claimed in that year to have sent abroad, through a 'federation' in Brussels, £168,228 for 'emergency aid in southern Africa', £112,000 to Zambia, £107,000 to Angola, £41,000 to Borneo and £34,000 to Mozambique. This is only a fragment of the picture. 'Charity' shops and collection bins in Denmark, Sweden, Norway, Finland, Germany, Austria, Holland, Belgium, France and Spain keep the cash rolling in.

In Scandinavia, the 'charity', is known as UFF. Each national 'charity' tells a similar story, of huge donations to DAPP foreign aid projects with emotive title such as 'child aid' and 'the children's town', as well as refugee projects, schools, shops and tree-planting. But well- documented research and the testimony of former cult insiders, - now supported by the Charity Commission's findings - suggest that while the money is certainly rolling in, large sums are rolling out again in a direction not disclosed to the authorities.

According to skeptics, Humana's "charity" shops and the old clothes given by members of the public are helping to support the millionaire lifestyle of a handful of Scandinavian businessmen and accountants at the heart of an astonishing international financial organisation, which has succeeded in pulling the wool over the authorities' eyes for 25 years.

The key is the Scandinavian names and accents of almost everybody in a position of of authority in Humana, UFF and DAPP. They are invariably members of Tvind, a secretive cult started in Denmark in 1970 by a disenchanted teacher, Mogens Amdi Petersen.

From a tiny start as an "alternative" school in a Danish village, from which it takes its name, Tvind has grown into an immense empire. It owns 41 state-supported schools in Denmark, a property company, a shipping line, plantations, houses and factories. Assets in Denmark alone are put at £38m; worldwide, at hundreds of millions.

Tvind, which recruits in Britain and throughout Europe, bas been accused of brain- washing and even putting lives at risk. Former pupils at Tvind schools have complained of ill-treatment; in 1981, eight students died when the Tvind schooner Activ sank off Dover. The Danish Sailors' Association described the vessel as 'a floating coffin'.

Teachers and cult 'members' are obliged to donate much of their income into a common 'Savings Association'; this was estimated 10 years ago to contain £5.5 billion. A second Danish tax-free trust, Faelleseje, uses the money to buy assets all over the world. Among these are luxury houses in Florida, a beachside villa, a fruit farm, cars and yachts in the tax-haven Cayman Islands, and plantations in Belize, St Lucia, Ecuador and the Virgin Islands.

Petersen, the movement's reclusive 'guru', lived until recently in luxury in the Cayman Islands and has not been seen in public in Denmark for 15 years. Heis said to have moved to a new hideaway in Ecuador or a Pacific island.

Attempts to unravel Tvind's multi-million-pound financial web have foundered on the organisation's ability to confuse investigations by crossing borders and using offshore companies. Investigations lead to a complex network of inter-related companies - whose directors are usually Danish and members of Tvind - and to company addresses in Gibraltar, the Channel Islands, the Caymans, Belize and the Dutch Antilles.

However, inquiries by the Observer and Danish and Dutch investigators suggest many of Humana's second-hand clothes are sold through middlemen for a healthy profit in Eastern Europe and Africa, with proceeds transferred to offshore accounts through a series of companies in Europe and the Caribbean.

For years, such claims fell on deaf ears. Richard Lugg, a council officer in Hounslow, West London, alerted the Charity Commission to 'irregularities' in Humana's accounts five years ago. Humana was asked to change its accounting procedures. In 1993, it was revealed that only 8 per cent of Humana profits were going to charity. The Commission spent two years in "discussions." Last year, a former Humana clothes sorter blew the whistle, but again the Commission decided it was powerless to act.

Perhaps it was reluctant to commit itself to a costly and time- consuming investigation because of the difficulty of working abroad and the vast distances involved. The case has exposed a glaring loophole in charity regulation: once money goes abroad, it can be almost impossible to check that it is properly used. The Charity Commission is at last eager to show that it has teeth.

Two months ago, after an approach from the Observer, it reopened its file on Humana and last week investigators in Zambia finally got the evidence they needed. One key discovery was that many 'aid projects' in Zambia supposedly run by Humana are financed by other charities or even by the Zambian government. Very little of Humana's or DAPP's money appears to support the projects. 'We have serious doubts about the misuse of funds,' an investigator said.

Richard Lugg said: 'I will be delighted to see Humana shut down in Britain and I am looking forward to a proper investigation of the money trails worldwide. I believe a few people are getting very rich out of this and it has to be stopped.'