Veterans' Charity Boss Rebuffs Critics

Roger Chapin, president of Help Hospitalized Veterans CBS

The head of a California-based veterans charity rebuffed accusations of mismanagement and self-dealing at a raucous congressional hearing Thursday, shouting over lawmakers to declare himself "the most honest person in this room."

"I may be the only guy in the whole cotton-picking nonprofit establishment who's willing to tell it as it is!" asserted Roger Chapin, president of Help Hospitalized Veterans of Winchester, Calif. He argued that fundraising costs for charities like his are much higher than some watchdog groups claim, leaving less for veterans than he would like.

Rep. Henry Waxman, chairman of the House Government Reform and Oversight Committee, was unmoved.

"It's unethical, it's wrong, it's really a fraud against Americans who agree to give you their hard-earned dollars," said Waxman, D-Calif.

Waxman had subpoenaed Chapin to testify after the businessman evaded a subpoena for an earlier hearing that found problems with management of veterans' charities nationally. The charities are benefiting as Americans eager to help troops in wartime open their wallets, but some use questionable accounting methods and spend more on raising money than on helping veterans, some watchdog groups claim.

Chapin's charity rates an "F" from one watchdog group for spending just 25 cents of every donated dollar on vets, mostly for craft kits, reports CBS News correspondent Sharyl Attkisson.

The American Veterans Coalition, American Veterans Relief Foundation and Disabled Veterans Association - groups not associated with Chapin - all spent more than 75 percent of their revenues on fundraising rather than on veterans, according to the committee's earlier findings. The recommended standard for charities is to spend around one-third of revenue on fundraising.

Waxman said Chapin had given veterans only 25 percent of nearly $170 million raised from 2004-2006 through charities he runs. The rest was spent on fundraising and more than $1.5 million in compensation for Chapin and his wife along with $340,000 more to reimburse the couple for hotels, restaurants and other expenses.

There were other questionable costs including $17,000 on a country club membership so board members could golf, a condo, loans to business associates, and $100,000 paid to Gen. Tommy Franks who allowed his name to be used on fundraising appeals.

Franks has since distanced himself from Chapin and his enterprises, Chapin acknowledged.

Donations of $135,000 have also been used to help an executive settle his divorce, reports Attkisson.

Chapin, 75, said his expenses were reasonable and his compensation comparable to others in his field. He said that with different but accepted accounting methods and including the market value of leather-working "craft kits" and other items, Help Hospitalized Veterans actually gives 67 percent of its revenues to veterans.

"Throughout my life I have endeavored to do well for my family while I try and do some good in this world," he insisted. Balding and thin, Chapin put on glasses to read from his notes but kept up an energetic stream of retorts.

He resisted calls from lawmakers to disclose to donors that just a small fraction of money was actually going to veterans.

"If we'd disclose, we'd all be out of business - no one would donate!" Chapin said.

Belinda Johns, senior assistant attorney general for California, testified that Chapin's spending raised questions and said her office would take a look at it.

A principal beneficiary of Chapin's spending has been Richard Viguerie, a Virginia conservative activist and direct-mail expert. Viguerie was paid $14 million from 2000-2005 by Chapin's charities to send fundraising appeals, according to committee research.

In his own testimony, Viguerie denounced the committee's proceedings as "political, anticompetitive, unconstitutional and, if I may be frank, mean."

Some Republicans rose to Chapin's defense.

"I'm deeply concerned that we're whacking on groups that are supporting the military," said Rep. Chris Cannon, R-Utah.

Chapin has started more than a dozen charities over the years, some focused on veterans and military issues but others on disparate causes including Alzheimer's research and drug addiction. The mission of Help Hospitalized Veterans is donating "craft kits" and in some cases computers to homebound and hospitalized veterans, and employing "Craft Care Specialists" who help veterans select and complete their craft kits.

Help Hospitalized Veterans provided 752,878 craft kits in 2006 - leather working is the most popular - along with 296 computers and 101 WebTV Internet systems, according to Chapin.

The group says it's been honored with the Department of Veterans Affairs Secretary's Award. In a statement Wednesday the V.A. called Help Hospitalized Veterans "one of many valued co-sponsors" of the V.A.'s national rehabilitation event and also said Help Hospitalized Veterans has sponsored its creative arts festival.

Chapin also runs Coalition to Salute America's Heroes Foundation and Help Wounded Heroes, Inc.

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