Lamar Odom cancer charity faces financial scrutiny

(CBS News) National Basketball Association star Lamar Odom is on the defensive about questions raised by ESPN's "Outside the Lines" about the finances of his cancer charity, Cathy's Kids.

The stated goal of Odom's charity was to generate funds for cancer research and care, promote awareness, and have a positive impact on the lives of kids. But some watchdog groups are accusing Cathy's Kids of failing to meets its mission.

It's a personal one for Odom and his wife, reality TV personality Khloe Kardashian. When Odom was only 12, his mother Cathy died from stomach cancer.

On an episode of "Keeping Up with the Kardashians," Odom said, "When my mother passed away, I just went to the park and I just played and played and played."

He started a cancer charity, Cathy's Kids, in her memory in 2004. But now, the group's finances are under scrutiny.

"From what we've seen of Cathy's Kids and the paperwork that we've reviewed, we see virtually nothing going on at Cathy's Kids that relates to supporting cancer research," said Ken Berger, president of Charity Navigator, a group that tracks and evaluates charities.

Berger said he would give Cathy's Kids a zero rating.

"There's a lot of money spent on salaries during the years that they raised money. There's a lot of money spent on consulting fees," he said.

In its 2010 IRS filings, for example, Cathy's Kids said it raised almost $157,000, but nearly half of that went to paying the $72,000 salary of board secretary Jerry Degregorio, now a Golden State Warriors assistant coach and the best man at Odom's wedding.

There's also a $263,000 loan to an unnamed corporate director. Berger said that expense "raises the question -- who got that loan, what benefit did they get out of that loan, why is this charity burdened with this massive deficit from the day it began, practically?"

Both Odom and Kardashian, whose dad also died of cancer, have solicited donations for Cathy's Kids through their eBay store and personal websites. Many of these links have now been taken down, but Kardashian's site still urges visitors to send checks directly to Odom's agent.

Odom disputed the financial irregularities to ESPN, saying they were "totally wrong" during an abrupt encounter with reporter who claimed Odom's IRS forms contained discrepancies.

In a statement to "CBS This Morning," Odom and Kardashian's representatives said: "Cathy's Kids was formed with several purposes in mind, including benefiting underprivileged youth and cancer research. A decision was ultimately made that the charity should focus on one of those purposes -- to help enrich the lives of underprivileged inner-city youth. Not one penny went to help Lamar personally or any member of his family. No charitable funds were misused, and the IRS has repeatedly given Cathy's Kids a clean bill of health, confirming that there were no improprieties."

Berger said when it comes to charities headed by celebrities, everyone should be vigilant. He said, "Let's not forget that every charity is ultimately subsidized by every taxpayer. And that we have charities to provide a public benefit, and therefore every taxpayer shares, if you will, some of the burden, so that this charity can do the good work."

Odom claims 90 percent of the money raised by Cathy's Kids came from his own pocket. Neither he nor his charity has been accused of breaking the law. According to Charity Navigator, there are no rules mandating how much of a charity's funds should be spent on good works -- and the state and federal agencies that oversee nonprofits are often understaffed. So, they say, before you open up your wallet, it doesn't hurt to do your own homework.

Watch Jeff Glor's full "CBS This Morning" report in the video above.