Democrat Accuses Veterans' Charities of Fraud

Monisha Bansal | Staff Writer | Friday, January 18, 2008

Democrat Accuses Veterans' Charities of Fraud

( - Accusing charitable organizations aimed at veterans' services of "intolerable fraud," Rep. Henry Waxman (D-Calif.), chairman of the House Committee on Oversight and Government Reform, said the organizations spend more money on fundraising than on services.

Critics, however, took issue with the data upon which the congressman based his charges.

"This morning's hearing is about deceit and a sickening betrayal of our most fundamental values, and I hope it is the first step in fixing an intolerable fraud," Waxman said during a hearing Thursday to investigate the charities' fundraising activities.

"In some cases, these organizations spend as much as 90 percent of the donations they receive on fundraising activities rather than helping veterans - in some cases, the executives pay themselves over half a million, $500,000, a year," Waxman said.

Waxman based his claims on a report by the American Institute of Philanthropy, a watchdog group for charitable organizations.

"Right now, there is incredible waste out there, and it is being done in the name of our brave veterans, said Daniel Borochoff, president of American Institute of Philanthropy, during his testimony before the committee on Dec. 13.

"We owe a lot more to the veterans than too many of these non-profit groups are providing," he said. "It is a national disgrace that hundreds of millions of dollars raised in the name of injured veterans, police, and firefighters are being squandered."

"Many veterans and military charities do a lot of good," said Borochoff. "They help veterans obtain benefits from the government, fund medical research and rehabilitative services, provide vocational and financial counseling and offer many other valuable programs for veterans and their families.

"Unfortunately, too many veterans charities choose to spend most of their donated dollars on direct mail and telemarketing solicitations, executive salaries, and other overhead expenses that do not directly benefit veterans," he added.

But "Charities' solicitations - what they say, and how they say it - do more than just solicit and dole out funds," Richard Viguerie, president of American Target Advertising and pioneer of political direct mail, said during his testimony before the committee on Thursday.

"In the case of veterans' charities, there are veterans and their families who are falling through the cracks right under the watch of this Government Oversight Committee," he added.

"One of the biggest impediments to faster and better help for these veterans and their families, though, is that people in the general public think that the government is helping veterans enough when it's not," Viguerie said.

"Veterans' charities have helped, and continue to help, expose the failure of our federal government to adequately care for our wounded and disabled veterans and their families," said Viguerie.

"The Supreme Court ... has said four times in the last 27 years that the high cost of fundraising is not fraud," he told Cybercast News Service. "Waxman just won't believe that. He just keeps gnawing at that bone."

Viguerie said the hearings are politically motivated. "Henry Waxman and some of the Democrats have been trying to figure out how to silence me for decades," he said. "Singling out one veterans' organization that I'm associated with was one way they could get me up there and try to silence me."

He noted that there are many other veterans' organizations that are larger than Help Hospitalized Veterans, with whom Viguerie works. "Some of them pleaded to testify, and they wouldn't take them."

Paralyzed Veterans of America (PVA) received an "F" rating from the American Institute of Philanthropy and said they were "shocked and dismayed" that they were not allowed to testify.

"It's a sad day for those who have fought for freedom of speech to be shunned in this way. Americans need to know the truth about this American Institute of Philanthropy Report (AIP) which is so unfair, flawed, and insulting to our brave heroes," said Homer Townsend, acting executive director of Paralyzed Veterans of America, in a statement.

"AIP gave Paralyzed Veterans a failing grade - despite the fact that the organization has been doing A+ work for all veterans for more than 61 years and that we meet all 20 standards of the Better Business Bureau's Wise Giving Alliance," he said. "We are deeply saddened and disappointed that Chairman Waxman has declined to give us a proper right of reply to this outrageous report."

Viguerie added that Borochoff is a "lone wolf" who he said doesn't follow the same standards as other groups, such as the Better Business Bureau.

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