http://www.nytimes.com/2007/06/13/business/13cutter.html?_r=3&oref=slogin&ref=business&pagewanted=all&oref=slogin&oref=sloginFederal Grant for a Medical Mission Goes Awry
In theory, it was simple: Congress gave two decommissioned Coast Guard cutters to a faith-based group in California, directing that the ships be used only to provide medical services to islands in the South Pacific.
Coast Guard records show that the ships have been providing those services in the South Pacific since the medical mission took possession of them in 1999.
In reality, the ships never got any closer to the South Pacific islands than the San Francisco Bay. The mission group quickly sold one to a maritime equipment company, which sold it for substantially more to a pig farmer who uses it as a commercial ferry off Nicaragua. The group sold the other ship to a Bay Area couple who rent it for eco-tours and marine research.
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“We did everything in our power to put these ships into service,” Mr. Spence said. But when the group could not raise the money to repair and maintain the vessels, it sold them instead, using the proceeds to cope with its financial difficulties, he said.
Mr. Spence said he had consulted with Canvasback’s legal advisers and was confident the sales were ethical and legal.
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“There is no clear audit trail for the boats,” said Julie L. Floch of Eisner L.L.P. in Manhattan, a member of the I.R.S.’s national advisory panel on nonprofits.
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