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August 10, 2012

Calif. Sues Veterans Charity Over Spending on Pay and Perks

California officials are seeking the ouster of a major veterans charity's president and board in a lawsuit that accuses the organization of misusing funds and excessive spending on executive compensation, according to CNN and the Associated Press.

Attorney General Kamala Harris filed suit late Wednesday against Help Hospitalized Veterans, a Winchester, Calif.-based group whose main mission is distributing arts and crafts kits to aid in rehabilitation of homebound and hospitalized military personnel.

The charity ranks among the top 1 percent of U.S. nonprofit groups in fundraising, with more than $436-million in revenue since 2001. The organization reports spending about 65 percent of its money on overhead, and in 2009 gave its departing president, Roger Chapin, a $2.3-million pay and pension package. Mr. Chapin and the charity had drawn media and congressional scrutiny in 2008 over financial issues.

According to the suit, Help Hospitalized Veterans used donations to support golf-club memberships and condominiums for it leaders and to loan hundreds of thousand of dollars to other Chapin-led nonprofits and to its direct-mail provider.

In a statement, the charity's current president, Michael Lynch, called the accusations "unproven" and said they "will not diminish the more than 40 years of service HHV has provided to our nations most valuable treasure, our veterans."