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Your Rags to Their Riches: Donated Clothes May Fund International Fugitive 

Wednesday, Jun 8 2011

Cover design by Andrew J. Nilsen.

Jan Sako gives a tour of the warehouse headquarters of Campus California, a Richmond charity responsible for the more than 1,000 used clothing collection boxes that have sprouted in the Bay Area.

A worker operates a two-story clothing compacting machine. Another uses a forklift to hoist settee-sized bales of shirts, pants, jackets, and blankets onto growing edifices of clothes. A trucker pokes his head in the door to pick up bales bound for McAllen, Texas. Later comes another truck intended for Los Angeles. The bales will travel overseas from both destinations.

Sako tells me we're witnessing the new face of clothes recycling. San Franciscans clearing closet space no longer need to schlep to a Goodwill or St. Vincent de Paul. Instead, they can visit 6-foot-high steel dropoff boxes, the increasingly common 24-hour ATMs of clothing donation. "In the future, we'd like to make it so everybody lives within five minutes of a box," he says.

That may sound ambitious. But Campus California is already expanding at an extraordinary pace.

When Sako came to the Bay Area five years ago after a postcollege stint volunteering in Africa, the Slovakia native's employer was a clothes recycling operation run merely as an offshoot of a private school in remote Siskiyou County. Now Campus California has closed the school, relocated to Richmond, and shifted its focus to collecting, sorting, and shipping overseas some seven million pounds of used clothing per year. The organization also recently launched a branch with 200 boxes in Phoenix. "That was just the beginning of the action," Campus California's expansion and information manager says. Next, "we'll see if we can expand to some more cities."

In San Francisco, where Campus California began placing boxes in 2008, there are currently 35, and Sako is constantly hunting for new spots. Every American annually discards 68 pounds of clothes, he says. Multiply that by the city's 800,000 residents, "and that would bring you around 56 million pounds," he says.

His goal is to make Campus California a top player in this region's league of "green" corporations to further a charitable mission of working "toward the humanization of mankind and for the care of the planet and all its species and plants."

There's nothing, it would seem, to stand in Campus California's way.

Well, actually, there is one thing: credible evidence that this organization is part of a global web of front groups led by a fugitive wanted for money laundering and fraud.

He's Mogens Amdi Petersen, a charismatic outlaw who in Europe enjoys the notoriety of a modern Jesse James.

Does Sako's feel-good business-pages tale hide a far more complicated one about a secretive European organization that thrives by selling San Franciscans' castoff garments into a supply chain with customers in Africa and Latin America? Campus California may be linked to firms such as AC Properties Ltd., Faelleseje, and Humana. Revenue from used clothes flows through nonprofits, wholesale brokers, real-estate holding firms, lenders, and developing-world charitable projects.

But nobody seems to know where the money truly ends up. A 2001 dossier prepared by Danish financial crimes prosecutors quotes him as saying the idea was to "lay down a twisted access path with only ourselves as compass holders."

And that path seems to intersect with Campus California.

Sako is aware of this potential image problem. And he works hard to fix it. Sako and other people defending Campus California have told neighborhood groups, community newspapers, PTA members, and state and local officials that there is no connection between Campus California's clothing-collection operation and an international network of companies known popularly in Denmark as Tvind. "Campus California is an independent nonprofit organization," he emphasizes during our interview.

"Any allegations about a supposed 'umbrella' organization having control over [Campus California] are completely unfounded," Sako wrote in a letter responding to criticisms from Oakland neighborhood activists.

Some tell a different version. Corky Gussman is an Etna, Calif., real estate agent who handled the purchase of Campus California's Etna headquarters, brokered its sale last year, and helped the organization handle the property during intervening years. "They're connected to a larger entity, sure," he says.

There's evidence backing this observation. And it's worth reviewing, because Campus California threatens nonprofits whose activities are transparent and charitable.

In fact, Goodwill Industries, which spends 93 percent of revenue on jobs programs, has lobbied the legislatures of California, New York, New Jersey, and Connecticut as well as city councils in California and across the country to pass legislation and ordinances regulating the placement of these unmanned clothing bins.

"It's interesting to note that many of these bins, with a label on them saying Campus California, are being operated by some of the people who have been connected with Humana or Gaia, and there are a couple of other names that they go by," Goodwill Industries of the Greater East Bay CEO John Latchford says in reference to reputed Tvind fronts. "For us, the question became, who are these people and organizations? And what are they doing?"

Though Petersen and the activities of his inner circle are shrouded in mystery, much of his reputed business empire operates in plain sight. He is so well-known in Denmark that some journalists specialize in writing about him and his organization. His name never seems to appear on an official document (as long as it's not an arrest warrant), but he reportedly controls assets worth hundreds of millions of dollars. He holds extraordinary sway over his core followers, who call themselves the Teachers Group. They've been investigated in Europe as a cult.

Whether or not that label fits, there's something untoward about the way Petersen's organization shifts money and key personnel around the globe.

The group owns ships, U.S. real estate, schools in Europe and the United States, agriculture and used clothing interests, and other operations in Latin America and Africa, as well as clothing recycling companies in a growing number of U.S. cities and counties. Through all these entities twists a consistent line of control, exerted by core Petersen followers, who seem to pop up time and again leading supposedly unconnected Tvind groups worldwide.

European prosecutors have shown that some Tvind front groups obtain revenue through ventures such as collecting used clothing and then redirect that money to places (and offshore accounts) unknown. This appears to be done via exorbitant rents and outsized service fees, goods sold at inflated or deflated prices, and the deployment of idealistic volunteers in what turn out to be private moneymaking operations. Money is moved from one account to another in the form of donations, loans, fees, and the sale and resale of used clothes.

It's unclear whether clothing left in a box on Divisadero Street ultimately feeds the opulent lifestyle of fugitive cult members — though Danish investigative journalists have documented links between Teachers Group members' lavish lifestyle and cash flows from the international Tvind business network.

But Campus California's business practices and choice of management fit a general pattern laid out by Danish prosecutors, as well as by journalists in Europe and the United States. Campus California has paid rent, brokerage, and financing fees to reputed Tvind-linked groups. It has shared key management personnel with such groups.

In April, Danish financial filings showed an annual transfer of around $50,000 to Campus California from Faelleseje, which is "the most central foundation in the whole Tvind empire," Danish journalist Frede Jakobsen says in an interview. He explains that Faelleseje has been used as a sort of banker for Tvind-linked entities.

I asked Sako about the transfers and sent him copies of the Danish documents. He said the money consisted of loans that helped fund expansion drives into San Francisco and Phoenix. But after asking to "take a break" from a follow-up interview, he later sent me an e-mail disavowing his prior statement, saying loans from Faelleseje had instead been fully paid back in 2009. That assertion seems to be belied by detailed Danish financial filings.

Also in April, Campus California filed documents with the Arizona Corporation Commission as part of the group's expansion into that state. The documents revealed that Campus California had reincorporated in Richmond on Oct. 25, 2010, with a new board of directors chaired by a woman named Marianne Thomsen.

Thomsen, it so happens, is reputed to be Mogens Amdi Petersen's personal physician. This was a significant relationship, because Petersen is a reputed hypochondriac.

"He wouldn't rely on other doctors," says Steen Thomsen, a former Teachers Group member who ran a Tvind school in Britain. He quit in 1998 because, he says, he was being required to help Tvind skim money.

"Petersen was in charge, trying to pump out money from the school," says Steen Thomsen, who is now headmaster at a non-Tvind-linked primary school in Denmark, and who is not related to Marianne Thomsen. "We had to pay rents that were exorbitant."

During this time, Steen Thomsen periodically received visits from Marianne Thomsen with the stated purpose of giving Teachers Group members medical checkups. He came to believe this was a form of monitoring. "We knew from the way she was speaking that she would confer with Mr. Petersen," he says.

I asked Sako several times if I could interview Keld Duus, Campus California's executive director. I left a phone message for him and e-mailed a list of questions. I hoped he might have answers about Campus California's Tvind links: According to the 2003 annual report of Planet Aid, which has been described as a Tvind front in an investigation by the Chicago Tribune, Duus was previously manager for Planet Aid Mid-West, and clothes collection manager for the reputed Tvind front Humana in France and Belgium.

I didn't hear back from Duus. But Sako later e-mailed me. "Marianne Thomsen has stepped down as the chairwoman of Campus California's Board of Directors earlier this year and she is no longer associated with Campus California in any capacity," he wrote. Calls to phone numbers linked to her in the East Bay and at a Michigan Tvind school, produced no answers.

As for my question about whether Marianne Thomsen was Petersen's physician, Sako suggested it was inappropriate that I asked about his board chair's alleged ties to an international fugitive: "Did you really asked me if two people are in a patient-doctor relationship???" he wrote in an e-mail.

As for an opportunity to speak to her replacement, Sako said he would "forward my request." In a follow up e-mail, he wrote: "It is our belief that Campus California have already provided you with full information about our work."

So who is that secretive man? During the 1970s, Mogens Amdi Petersen gathered a group of idealistic, leftist-minded educators to establish folk high schools, a uniquely Danish tradition of learning centers where adults can extend their education. The group expanded with more schools, overseas development projects, and used-clothing collection operations.

"It's very difficult to describe a truly charismatic person," Steen Thomsen says. "He's very bright. He's able to talk to anybody, wherever he might be. And the only person I can say I've ever heard give a speech at the level of Mr. Petersen is Barack Obama."

Accusations that the various enterprises weren't honest with their accounts surfaced during the late 1970s. Things got so bad that in 1979 Petersen went underground, seemingly for good.

But in 2002, FBI agents acting on a tip arrested him for extradition to Denmark to stand trial on charges of embezzlement and tax fraud in connection with an $8 million scheme to launder money. Danish prosecutors compiled a dossier that describes how, while a fugitive, Petersen personally oversaw the creation and management of a global network of for-profit and nonprofit front groups, offshore companies, and byzantine money transfers with the aim of moving and hiding assets generated by the collection and reselling of — of all things — used clothes. A court convicted one of his associates of embezzlement but acquitted Petersen and six others. Danish prosecutors announced they would appeal the decision in 2006, and Petersen went into hiding.

Eleven years ago, a northern European named Ebbe Larsen visited Etna, Calif., population 781. That's according to Corky Gussman, who recalls that Larsen was in a hurry to consummate an unusual real estate transaction. Events that followed seemed extraordinary to residents of this sleepy mountain town.

Larsen may have been a Petersen underling. Steen Thomsen reported in his 1998 complaint to Danish authorities that Amdi Petersen removed a man named Ebbe Larsen from a post as a schoolmaster in Denmark after Larsen had failed to persuade enough students to join the Teachers Group.

Gussman says of Larsen's involvement, "He's still with them. He travels around and does different things for them."

Larsen had come to Etna to buy an old Forest Service building where a mysterious European group planned to establish a boarding school training volunteers for work in Africa. The school was to be called Campus California TG, the initials standing for Teachers Group.

According to a school brochure, the school was staffed by "members of the Teachers Group (TG). The TG started in Denmark in the 1970s and has grown to almost 2,000 members worldwide."

However, the school itself wasn't going to buy the building. Instead, "there was a Delaware corporation, and I think they had an office in Florida," Gussman recalls. It was called AS Properties Ltd., and seems to focus on buying real estate and renting it to various Tvind entities. In 2004, the Chicago Tribune published an investigation of the Tvind-linked companies with names such as Gaia, Planet Aid, USAgain, Garson & Shaw, and AS Properties.

Tvind's U.S. schools train volunteers to work in Tvind-linked programs in Africa operating under the name Humana-People to People. And, according to the Chicago Tribune investigation, the institutes funneled money to Tvind by paying "hundreds of thousands of dollars in rent to a for-profit Tvind company called AS Properties Ltd."

Something similar seemed to have been going on with Campus California. On its most recently available public financial filings in 2009, Campus California TG reported "occupancy" expenses of $158,000, plus another $40,000 for "boarding" when the Etna school was operating on AS Properties-owned land.

The Chicago Tribune reported that A.S. Properties vice president Kirsten Fuglsbjerg had been indicted in Denmark. According to the Danish dossier, Fuglsbjerg also used the alias Christie Pipps.

That wasn't the only unusual thing about the Etna school. It was set up along the same lines as other Tvind-linked schools in Massachusetts and Michigan, which operate under the name Institute for International Cooperation and Development. Those schools charge $13,000 annual tuition with the promise of delivering training for development work in Africa and Latin America.

In the case of the Etna School, "training" included traveling to the Bay Area and spending days visiting merchants to ask if they'd be willing to allow Campus California TG to put clothing donation boxes on their properties. Students were even encouraged to solicit donations in public, the rationale being that they needed to pay down their tuition. The idea of the clothing bins seemed to be raising money for a tiny rural school that was already collecting a fortune in tuition.

It wasn't long before the local Pioneer Press had produced the March 2001 headline "Has a Cult Come to Etna?"

That didn't rattle residents. "I don't know. They seemed like nice people to me," Etna Motel proprietor Bart Jenkins tells me, articulating a common viewpoint. Georgia Wright, president of the Friends of the Etna Library, adds, "They brought some new thoughts to the valley."

Campus California raised eyebrows again in the winter of 2009 when the school manager went away for a few days without shutting off the water main, which froze and burst. "It ended up emptying the whole Etna water system," Gussman recalls. "There were 300,000 to 500,000 gallons of water that emptied inside the building."

Sako says the massive damage wasn't worth repairing. And besides, Campus California was refocusing its mission to just clothes recycling.

The group shut down the school, and reincorporated in October 2010 with its headquarters in Richmond. Sako says the group removed "TG" from the name, though as of last month it was still on his business card.

After the flooding, Gussman received another out-of-town visit, this time to sell the Etna building. "It was A.S. Properties, which is an affiliate of the huge corporation," he recalls. He explains that his clients were a sort of franchise. Campus California "borrowed money from A.S. Properties, which is part of the whole entity; part of the Humana People to People organization. It's out of Denmark."

Now that the school has closed, Campus California doesn't have to pay rent to AS Properties. And Sako says that to maintain its charitable purpose, Campus California now sends $220,000 per year to the Michigan and Massachusetts schools that also have Tvind links. But Campus California's connection with A.S. Properties has not broken completely. County deed records say those school facilities are owned by AS Properties Ltd.

That's not the only Tvind company connected to Campus California.

In the Bay Area, Sako says, Campus California pays a commission of 3 percent of gross receipts to Garson and Shaw, a used-textiles broker based in Atlanta that also arranges clothing sales for Gaia, Tvind's collection operation. Garson and Shaw is owned by Tvind company Fairbank, Cooper and Lyle.

In 2009, Campus California grossed $1.8 million. If the nonprofit generated a similar amount of money this year, and if it all came from clothing sales, the annual brokerage fee would presumably be in the $50,000 range.

Annette Floystrup is a retired Oakland computer technician who lives in a smallish house marked by Danish design themes. She's a Danish immigrant who happens to be uniquely poised to battle Campus California. She's vice chair of the Rockridge Community Planning Council, a NIMBY group known for opposing expansion plans of companies such as Safeway.

During annual vacations to Denmark, Floystrup read periodic newspaper updates about the underworld empire of Mogens Amdi Petersen. And when she saw mysterious clothes collection boxes sprouting up not far from her home, it seemed as if her once separate worlds had collided. She translated a Danish article about Petersen and his group for fellow neighborhood activists Valerie Winemiller and Ken Katz, who complained to local officials. Some of the boxes disappeared. But others popped up at more than half a dozen Oakland schools, one of which is just a block from Floystrup's house.

"The idea that Campus California disassociated itself from the Teachers Group is ludicrous," she says. "We got all the boxes out" of Piedmont and College avenues. "We got them removed from Rockridge, and a friend of mine is chair of the Piedmont Avenue area neighborhood group, and we got them removed there."

Oddly, though San Francisco is home to some of America's most muscular NIMBYs, there seems to have been no reaction to the recent incursion of boxes. Instead, the anti-Campus California vanguard is in Oakland.

Floystrup would like to put an end to the battle once and for all with city legislation imposing a fee for each box placed in the city.

Sako says that Campus California's business model does not allow for a significant fee, and that the group will pull out of any city that imposes one.

Thanks to lobbying help from Goodwill Industries, such a fee might not be far off.

Last year, the state Legislature passed a Goodwill Industries-backed measure allowing local jurisdictions to regulate used-clothing boxes. In Oakland, a representative with Councilwoman Patricia Kernighan's office said she is studying the possibility of legislation.

Latchford, the East Bay Goodwill executive, says his office has been informing officials in cities and towns where Goodwill operates of the new state law. (Again, oddly in NIMBY-mad San Francisco, Goodwill Industries of San Francisco, San Mateo and Marin Counties has not been involved in any such efforts, a spokeswoman says.) "Once they have the cover of state legislation, local officials often feel more comfortable enacting ordinances and procedures," Latchford says.

Goodwill's Sacramento lobbyist, Otto DeLeon, says the group might seek tougher legislation next year. "Our next steps are trying to regroup and find out what our strategies would be," he says.

Back at Campus California's Richmond headquarters, Sako doesn't seem to feel there's much to fear. Last fall's legislation "became a very useful bill," he says, because it required boxes to have stickers declaring they belong to a nonprofit, which has served as a sort of advertisement attracting donors. As far as he can tell, the future portends nothing but growth.

"When I came here from Africa in 2006, our challenge was that this was a new thing, and the general public had to ask, 'What are these boxes?'" Sako says. "Now the boxes are accepted. And the people understand it. And they know there is no better way to deal with used textiles."

Perhaps it's time for the public to begin asking questions again.

About The Author

Matt Smith


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