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HANDS ACROSS AMERICA, May 25, 1986 : HANDS' BILLS PAID IN FULL, BUT HOMELESS STILL WAITING

November 02, 1986|DENNIS McDOUGAL

Five months, one week and a day after 5 million-plus people held Hands Across (most of) America in a demonstration of compassion for America's homeless and hungry, the poor have yet to see any of the $32.2 million that the event raised.

The USA for Africa Foundation, which staged the mega event, apparently decided to pay off between $16 million and $17 million in expenses first.

"The remaining bills related to the Hands Across America event are minimal," foundation executive director Martin H. Rogol told Calendar last week. "The present assets of Hands Across America are approximately $15 million."

Rogol declined to say how the $15 million is invested or how much interest the money is earning.

The reason the foundation is taking so much time to disburse the remaining donations is the same as the one that foundation officials have given frequently to explain the delays in its African grant process: It wants to make the payments with the utmost care in the interest of fair distribution and wise spending.

But Rogol has said that the first allocations of $12 million of the remaining Hands Across America funds will be announced about Thanksgiving time. There was no indication specified on when the money actually would be dispensed.

Rogol, who said that Hands' expenses currently are being audited, has declined to comment on any specific expenses until the audit is complete. He said he didn't know when that would be.

And, though charity-watchdog agencies such as the widely respected National Charities Information Bureau in New York City would like to know how and why those expenses were incurred, they'll also have to wait.

"For us, we have to look at what those expenses are and whether or not they were (fund-raising) program expenses," said bureau Executive Director Ken Albrecht. "We need more information from Hands Across America in order to tell."

Over the last four months, Hands officials have turned down or put off numerous Calendar requests for financial statements. The charities information bureau has run into the same problems, according to Albrecht.

"We are about to ask them again, if we haven't all ready," said Albrecht, who noted that his agency receives frequent queries about Hands monies.

Although all expenses have not been reported, a foundation financial statement on Hands Across America filed last April with the City of Los Angeles (for the period through March, not covering the May 25 event), several budgeted figures were shown, including $270,659 budgeted for entertainment, $245,320 for travel and $2,018,734 for salaries.

Among other items in the statement:

Fred Droz, who oversaw the Hands project as its national director, was budgeted to receive a $70,000 management fee, though foundation executive director Rogol declined to say exactly what Droz was finally paid. Droz, a political advance man for former President Jimmy Carter and 1984 Democratic vice-presidential nominee Geraldine Ferraro, was back with his Orange County political consulting firm within a week of the Hands event.

Bob Giraldi, whose New York production company produced Michael Jackson's "Beat It" video, also was paid. Giraldi signed on with Hands as a video promotional consultant last January and was in charge of putting together the Hands Across America music video. According to the financial statement, Giraldi received $234,986 of his contracted $250,000 fee as of March 31.

The foundation also has other on-going expenses for Hands. It has offices donated in a Century City high rise for its regular operation but pays $4,996 monthly rent for ninth-floor office space for the Hands staff.

The creator of Hands Across America, Ken Kragen, called a press conference recently at West Hollywood's posh Le Bel Age Hotel to announce how the $12 million would be parcelled out. A complicated formula based on population, poverty levels and the number of people in each state who participated in Hands Across America will determine what share of the money poverty agencies in each of the 50 states and the District of Columbia will get. California, for example, will get the largest sum ($1,254,025) and Vermont, the smallest ($19,314).

But, Kragen told Calendar last week, the press conference also was his attempt to counter some of the critical stories about his foundation's growing bureaucracy and slow distribution of money.

"We tried to go on the offensive with the positive side," he told Calendar. "We're going to continue to do that. It's very hard when you're doing the damn best that you can and it doesn't get told."

Kragen, who manages superstars Lionel Richie and Kenny Rogers, said that there has been a "bunkering up" tendency around Hands headquarters because of critical articles about the project. As a result, officials such as Rogol have been reluctant to answer questions about finances, he said.

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