A "nonprofit entrepreneur" walks off with a $1.9 million retirement package in the wake of government probes and Congressional hearings that exposed his charity's unethical and wasteful use of funds. A top GOP fundraiser who stole a man's identity to set up a veterans charity ended up scamming millions from donors and is currently a fugitive from justice. A charity for disabled veterans that raised thousands of dollars but didn't give a penny to veterans.
Veterans charities raise much-needed funds to help America's warriors -- building hospitals, paying for medical expenses and providing job training assistance. And their help has become indispensable as tens of thousands of wounded veterans return from the battlefields in Iraq and Afghanistan.
But the field is especially prone to fraud and deception, according to charity watchdogs who say that veterans charities, along with police and firefighter charities, attract entrepreneurs who take advantage of public good will and sometimes prioritize making money over helping veterans in need.
"You'd think that they are the ones with the highest causes -- even if you're against the war, you're still sympathetic to the plight of injured soldiers," says Daniel Borochoff, the president of the American Institute of Philanthropy, which rates charities. "The reason why they are woefully inefficient is because they're the easiest type of charity to make money in -- if you're in the business to make money."
In its latest report, more than half of the 43 veterans charities graded by AIP received an F -- meaning that those charities spent a paltry share of their revenue on actual services for veterans and that they spent too much to raise money.
Among the few charities that received high grades were the Armed Services YMCA of the USA, Fisher House Foundation, Injured Marine Semper Fi Fund, Intrepid Fallen Heroes Fund, National Military Family Association and the Navy-Marine Corps Relief Society. "Some of these groups do amazing work -- the Intrepid fund actually builds hospital for veterans," says Borochoff.
The most glaring recent example of malfeasance is the U.S. Navy Veterans Association, which is being probed by the Ohio Attorney General's office. The charity's wild-haired founder Bobby Thompson -- who called himself "Commander" though there is no evidence that he actually served in the U.S. Navy -- allegedly stole a man's identity and scammed up to $100 million over the last eight years. Currently a fugitive, Thompson used phone solicitations to reap millions but only gave out a small amount to legitimate veterans groups. The scheme was first uncovered by the St. Petersburg Times's Jeff Testerman.
He also used much of the money to impress powerful lawmakers, donating more than $200,000 in campaign contributions to top Republican politicians from former President George Bush to incoming Speaker of the House John Boehner, both of whom he posed with in photos, reports ABC News.
The last known person to see Thompson tells The Huffington Post that he was paranoid, convinced that the multiples probes of the charity were instigated by Democrats who were punishing him for his conservative beliefs and donations to Republicans.
"He felt it was like a witch-hunt and that he was being targeted because he was a Republican," says Darryl Jones, a law professor at Florida A&M University College of Law in Orlando, who did some consulting work for Thompson. "He was afraid that the authorities were coming after the national org due to his political activities." Jones says that Thompson contacted him in June, around the time that a grand jury in Ohio was looking into the charity, and flew him to New York where they met at a hotel in the city's financial district. Thompson wanted Jones to give him a tax opinion as to whether or not the charity was operating properly -- in return, Jones says, "I wanted him to give me some assurance that this thing really existed."
Thompson "seemed nervous" but he hadn't changed his distinctive physical appearance, says Jones, who says that he has been deposed by the Ohio attorney general's office. "I asked him, 'Do you have a board of directors, and do you have members?' He said yes to both of those and he showed me a ream of paper of applications showing people he asserted were member and he gave me some names of people who served on his board."
Jones says that "no red flags" went up during his year-and-a-half acquaintance with Thompson. "I had no reason to think he didn't run a legit charity, he lived in a dump... the way he lived, I can only describe it as a rat hole. He didn't live like Bernie Madoff."
Thompson, who didn't tell Jones about his future plans, has not been seen since.
Another example cited by Borochoff and probed by the New York State Attorney General's office is the Salute America's Heroes Fund, a high-profile charity which paid Retired Gen. Tommy Franks $100,000 to appear at a 2004 fundraiser for the group. The next year, Franks asked the charity's founder, Roger Chapin, why the group received low ratings from the Better Business Bureau's Wise Giving Alliance. Chapin responded with a memo blaming the cost of direct-mail fundraising and slamming BBB's "arbitrary standards." The group only spent $5.7 million of the $26.2 million it raised in 2008 on direct financial assistance to the families of injured soldiers and job-placement conferences, according to Forbes.
Chapin, who calls himself a "nonprofit entrepreneuer" and also runs Help Hospitalized Veterans, Help Wounded Heroes and the Make America Safe Foundation, was forced to testify in Congress over his charities' excessive spending on fundraising and junk mail. Chapin stepped down from HHV with a $1.9 million payout last year, the third-largest pay package for any nonprofit executive, according to AIP. "He's very good at setting up charities that don't do so much charitable but bring in lots, lots of money."
Chapin did not return calls for comment left at his home.
Last year, a group calling itself Minnesota Disabled Veterans -- a name similar to the legitimate Minnesota Disabled American Veterans group -- raised eyebrows in the Twin Cities area by raising thousands of dollars through telephone solicitations but not giving anything to the state's 40,000 disabled veterans, reports the Minneapolis Star-Tribune.
To make sure that your money is used well, Borochoff recommends reviewing charities' financials and making sure that most of their money goes to charitable programs that actually help veterans "and don't just buy American flags" or go toward symbolic gestures.