Donor bins are a big business

But the nonprofit collecting clothes in the area has ties to a network that's facing worldwide scrutiny.

Sacramento Bee/November 5, 2006
By Todd Milbourn

Bernie Banderas, who manages the Gaia operation in Sacramento, collects clothes Wednesday from an area bin. About 20,000 pounds of clothing pile up in 100-plus local bins each week, he said.

The big green bins make big green promises: Donate old sneakers and help save a barrier reef. Give threadbare T-shirts and protect the mangroves. Offer out-of-style sweaters and support renewable energy.

More than 100 such bins have been set up alongside Sacramento sidewalks, storefronts and strip malls in the past year by a charity called Gaia-Movement Living Earth Green World Action. The Chicago-based nonprofit sells the donated goods to finance environmental projects around the world.

What Gaia doesn't advertise is that the used clothes also raise money for a vast, international used clothing empire whose finances are so inscrutable, several European governments have lost confidence in charitable claims of this network -- known as Tvind.

European authorities have cracked down on Tvind over the past decade. France and the Netherlands rescinded the licenses of one of its used clothing charities because investigators couldn't follow the money. The United Kingdom took control of a Tvind charity's assets for similar reasons. And Denmark accused eight Tvind leaders of running an embezzlement and criminal tax evasion scheme that channelled millions of humanitarian dollars into profit-making ventures. All but one of the defendants were acquitted at trial this summer.

Meanwhile, the Tvind network has extended its reach in the United States, particularly Northern California.

The group relied upon Gaia, one of its largest U.S.-based charities, to place used clothing bins in Sacramento and the Bay Area. Tvind also opened a school on the outskirts of Etna, a Siskiyou County logging town, to recruit and train volunteers for environmental and educational projects in poor countries.

Gaia officials in Chicago didn't return phone calls, and Tvind doesn't have a central office to respond to questions.

The group's local leaders acknowledged that Tvind is big business, but said they've seen the group's good works with their eyes: Trees planted in Mozambique. Health education in Nicaragua. AIDS outreach in Namibia. The bins also keep old clothes out of landfills.

"The top guys can get into trouble in any corporation," said Bernie Banderas, who volunteered in Mozambique last year and now manages Gaia's growing Sacramento operation. "They do have a humanitarian heart. It's just that the group operates a little differently than a church or the Peace Corps."

The big green bins

Standing more than 6 feet tall and resembling giant metal mailboxes, the Gaia bins are hard to miss in Sacramento. Placing them is easy. All the charity needs is a property owner's permission.

Kim Hanks, a self-described environmentalist, spied a bin outside the Uptown Market on Capitol Avenue a month ago. She liked Gaia's idealistic message.

"It's very convenient," said Hanks, a 42-year-old state worker who donated a garbage bag full of old sweaters and socks that had been taking up space in her closet. "At the very least, it keeps it from going into the landfill."

About 20,000 pounds of clothes are dumped into Sacramento's bins every week, Banderas said. Some of it is sold to local thrift stores. Most of it is shipped and sold abroad, tapping a booming market for Western styles and raising money for Tvind.

"There's a huge demand for American fashion, especially in places like Japan and Brazil," said Banderas, who was tossing garbage bags of clothes into a moving truck last week outside Rico's Pizza on Northgate Blvd. "That stuff sitting in your closet is worth more than you think."

Gaia says it then uses the revenue -- more than $1 million through the Chicago office alone in 2004, according to the most recent tax records -- to support environmental programs. But tax records don't show how much money was spent on specific programs.

Army of volunteers

Much of Tvind's labor is supplied by a small army of volunteers. Many are idealistic 20-somethings looking for a chance to travel and help the world's poor.

Volunteers get six months of language and cultural training at one of Tvind's three schools in the United States. They are then sent abroad to help with aid efforts.

Tvind's newest school -- Campus California TG -- opened five years ago in an old, dormlike U.S. Forest Service building in Etna. African art hangs from the walls. Bob Marley tunes waft from the stereos.

The students live, eat and study together.

And raise funds.

After paying $3,300 for tuition, students must raise $7,000 before going overseas.

Yeun Joo Hwang, a 26-year-old from South Korea who discovered Campus California on the Internet, credits the school with broadening her cultural awareness. She recently returned to California from Namibia, where she lived in a hut for five months and rode a bike through the countryside distributing information about AIDS.

But she said the focus on fundraising is frustrating.

Within two weeks of her initial arrival in California, campus officials sent her to San Francisco to solicit donations on the street and secure new spaces for bins -- even though she spoke little English.

"I just memorized the words" of the sales pitch, said Hwang, who now speaks English fluently. "If somebody asked me a question, I just smile."

Josephine Johnson, a Denmark native who oversees the Etna campus, said language and cultural classes take precedence. But, "we're trying to improve the lives of people in these countries, and we can't support our programs without money," she said.

Some of Tvind's efforts have fared better than others.

Zahara Heckscher, an editor of Transitions Abroad magazine, worked on a Tvind tree-planting project in Mozambique in the late 1980s. She returned to Mozambique 10 years later while researching a book on overseas volunteering. To her dismay, every tree had died. They had not been suited to the climate.

Heckscher, whose book includes a chapter on Tvind, said many of Tvind's programs are marred by poor planning. For instance, she said some Tvind volunteers are sent abroad on tourist visas, which can cause problems if the host country finds them working.

"I can't say they don't do some good," Heckscher said. "But the staff who join aren't well-trained, there's sloppy planning, and some of the programs aren't culturally appropriate."

Banderas, the Gaia manager in Sacramento, had nothing but praise for the program he volunteered for in Mozambique. He and other volunteers distributed information about AIDS to villagers and handed out soybean flour.

"When you go there and see young people from all over the world pulling together to get something done, it's really awesome," he said.

Tainted history

Understanding Tvind -- its structure, scope and finances -- has become a career-long pursuit for government investigators and journalists in Europe.

Founded in Denmark in 1970 by a collective of idealistic teachers espousing a revolutionary creed to end global poverty, Tvind gradually evolved into a $100 million labyrinth of charities and for-profit companies spanning some 55 countries, according to court records filed in the criminal case in Denmark.

Affiliated outfits operate under a dizzying array of names: Gaia, Humana People to People, U'SAgain and Planet Aid, to name a few. These organizations share executives, and money is often moved among the enterprises, which extend far beyond clothes collection.

Tvind's Institute for Scientific Research and Applied Sciences offers a window into the group's convoluted nature, Danish prosecutors write in court documents available on the Internet. Tvind members founded the institute in 1987 to examine "the real distance between the general level of the sciences and its advantages to the general population, especially in the Third World." But the institute has no employees, and Tvind members couldn't show that it had conducted any research. Prosecutors alleged that the institute was established to launder money.

Overseeing it all, according to prosecutors, is Tvind's founder, a self-described revolutionary named Mogens Amdi Pedersen. He is surrounded by a cadre of loyal deputies who embrace a "collective economy" philosophy and are asked to turn their financial resources over to the group, according to prosecutors. The collective financing and strict hierarchy of Tvind's inner circle -- called the Teachers Group -- led Danish prosecutors to label the group as a secular cult.

European authorities started investigating Pedersen's empire in the late 1970s. But the leader went underground, according to news reports. Pedersen's whereabouts were unknown until 2001, when a pair of Danish investigative reporters found him living in a $6 million apartment on an island off the Florida coast. Pedersen was arrested on tax fraud and embezzlement charges a year later and extradited to Denmark on a warrant issued by Interpol, the international police agency.

In August, in a case that was front-page news in many parts of Europe, Pedersen and seven of his lieutenants were acquitted by a jury of the embezzlement and tax fraud charges. Tvind's financial director was found guilty of embezzling $10 million and received a suspended sentence. The case is under appeal.