Andrew Locke  /  MSNBC.com
Fans blow cool air into the kennels at the Noah's Wish shelter in Slidell, Miss., in September 2003, only days after Hurricane Katrina slammed the Gulf Coast.
updated 8/3/2007 3:31:50 PM ET 2007-08-03T19:31:50

A Sacramento-area animal rescue group investigated for how it spent millions of dollars raised after Hurricane Katrina has agreed to give up control of the $4 million that remains.

Noah’s Wish raised $8 million in the hurricane’s aftermath, and the state attorney general’s office said all of that should have gone to help animals affected by the storm. Instead, the group spent some of it on its overhead costs, and on animals elsewhere.

Under a settlement agreement, the state will take control of the $4 million that has not yet been spent. That money will go to help the animal victims of the storm, which happened nearly two years ago, as well as to build a new animal shelter in Slidell, La.

The agreement allows Noah’s Wish, which is based in El Dorado Hills, to continue operating as a nonprofit that helps animals after disasters. The group and its now-departed founder, Terri Crisp, denied mishandling money.

Ralph Nevis, an attorney representing Noah’s Wish but not Crisp, said it was better to give the money away than to waste it on a trial.

“For Noah’s Wish, it made more sense to reach a resolution of this and have the money be directed to helping animals affected by Hurricane Katrina,” he said.

Nevis said the problems arose because Noah’s Wish was a small organization that got overwhelmed by the $8 million that poured in after its hurricane work was publicized.

The attorney general’s office argued that because donations were solicited and given to help Katrina victims in New Orleans, all of it should have been used for that purpose.

But Crisp said her group got different advice from its accountant. She said Noah’s Wish raised more money than it could have spent on animals in the Gulf Coast, and many of its donors understood that. She said she wished the board of Noah’s Wish had taken the case to trial.

“I became the scapegoat of this whole ordeal,” she said. “It’s time to put it behind us. No one did anything intentional. There was no wrongdoing found.”

Under the settlement, none of the $4 million can be spent on organizations affiliated with Crisp, who has since started a new group called Animal Resources.

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