Calif. attorney general sues Help Hospitalized Veterans charity for alleged state code violations

Roger Chapin, former president of Help Hospitalized Veterans / CBS

(AP) SAN DIEGO - Help Hospitalized Veterans is no stranger to controversy.

The California-based charity came under scrutiny four years ago, when its founder and then-president was hauled before Congress to answer tough questions about his management of millions of dollars in private donations. Roger Chapin vehemently defended his actions, and his group went on to raise millions more to support its mission of providing arts and craft kits to homebound and hospitalized veterans.

Now the organization is in trouble again in a case that watchdog groups say highlights the lack of oversight for the growing number of charities that have cropped up in recent years to help troops returning from war.

California's Attorney General Kamala Harris told The Associated Press on Thursday that her office is suing the charity based in Winchester, over alleged violations of state codes.

Chapin and his successor, Michael Lynch, grossly overpaid themselves with the consent of several board members, prosecutors say. The organization's directors spent lavishly on perks, such as $80,000 in golf memberships for board members, according to the complaint filed in Riverside County Superior Court.

Help Hospitalized Veterans reported annual revenue in 2011 was $41 million, including $30 million in cash donations.

"What makes this case so egregious is our military servicemen and women are willing to sacrifice their lives for our country and for us as Americans, and when they are in need of help and support we should give it to them and not manipulate charitable people and then personally profit from them," Harris said.

Chapin and others named in the complaint could not be reached for comment Thursday. The law firm representing Help Hospitalized Veterans did not immediately respond to a request by the AP for comment.

Help Hospitalized Veterans ranks among the top 1 percent of charities in the nation for the amount of funds it reports raising annually. Prosecutors say the group has reported more than $436 million in revenue since 2001. The group once was endorsed by retired Gen. Tommy Franks, who later distanced himself from the charity.

At the same time, it has ranked for more than a decade at the bottom of lists by watchdog groups that rate nonprofit organizations based on their financial management and abilities to use most of their donations toward their causes. CharityWatch says about 35 percent of Help Hospitalized Veterans' funds go toward programs to aid veterans. The recommended standard is about 65 percent.

During the 2008 congressional hearing, Chapin called himself the "the most honest person in this room." A year later, he retired with a nearly $2 million pension plan after the group's board members retroactively spiked his earnings to justify the inflated amount for his retirement, according to the complaint filed by California's Attorney General's office.

"It's surprising it's taken this long for something to happen with all the serious problems that were brought up in the (2008) hearing," said Daniel Borochoff of CharityWatch, which monitors the financial records of nonprofit groups. "What's more, this information did not filter down to donors."

But he added: "Mr. Chapin spun a complex web to confuse well-intentioned donors and make it difficult for regulators to untangle."

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[Rejco100]

Not ONE of these charities LAVISH BENEFITS on the disabled veterans!

[Rejco100]

The fact that 300,000 veterans are on the streets homeless & living in absolute poverty is proof the veteran charities are all a SCAM!

FYI: The VA's homeless veteran count IS A LIE!

[Rejco100]

I bet Roger Chapin doesn't sit around all day long stringing wallets & belt kits together!

[Rejco100]

99% of all the "FOR THE VETERANS" charities are the same way....USING & ABUSING the veterans for HUGE SALARIES, BENEFITS, PENSIONS, and LIVING LIKE KINGS & QUEENS while leaving ABSOLUTELY NOTHING for the veterans.

[MojitoMamma]

This is just awful . . . . . .

Maybe it would be better to help veterans directly. Contact the Disabled American Veterans or the Veterans of Foreign Wars in your area and ask them about helping individual veterans. Maybe the injured vets could use help around their house, maybe they need a ramp or railings built onto their homes for easier access. A lot of the legitimate organizations need volunteers as well as money.

[Ceres6]

Roger Chapin called himself "the most honest person in this room." Today he has the honor of being called "the top jerk in the nation."

[formerlyluvnut]

Never NEVER give cash to ANY organization you don't know for a fact as being legit. That includes United Way; even they are a rip off.

[bbarnes5557]

All these so called charities are ripoffs, they are just skimming $ from people just like churches, wall street, banks, government etc...less than 50% ever gets to those in need.....

[csuresh]

This is second Veterans charity after DAVF that is cheating the donors and veterans for the individual gains of the people who are running it. Donors must be vigilant as there are unscrupulous people involved in lots of charities.

[marine1957]

"The organization's directors spent lavishly on perks"
This matter is not good. It is even bad, really bad.
However, hasn't govt after govt agency done the same?

[notparicular]

Not the same. Govt agencies do not profess a sense of service (they should, but no one expect them to). These organizrions drum their solemn commitment to hapless soldiers to high heaven. When they don't do it, they cheat. They are indeed low life.