State and federal officials accuse veterans nonprofit of misleading donors

Introduction

Virginia’s attorney general has launched an investigation into a veterans charity that allegedly misled donors by spending millions of dollars on telemarketing and salaries rather than on veterans.

The Falls Church, Virginia-based Center for American Homeless Veterans received a “civil investigative demand” for documents from Attorney General Mark Herring’s office in late December, according to documents reviewed this week by the Center for Public Integrity.

The attorney general’s actions came just two weeks after publication of a Center for Public Integrity investigation into the Center for American Homeless Veterans and its founder, Brian Arthur Hampton.

Separately, Rep. Walter B. Jones, R-N.C., on Wednesday asked the leaders of two U.S. House committees to launch an investigation into “bad actors” who mislead donors and enrich themselves in the name of military veterans. He cited the Center for Public Integrity’s investigation into Hampton’s veterans operation and media reports about other veterans charities.

“Congress should not sit on the sidelines while unscrupulous individuals abuse their tax-exempt status, fleece donors and take advantage of the men and women who have served our great nation and their families,” Jones wrote in a letter to the leaders of the House Committee on Ways and Means and the House Committee on Oversight and Government Reform. Committee representatives could not immediately be reached for comment.

Along with the Center for American Homeless Veterans, Hampton runs the nonprofit Circle of Friends for American Veterans and the Put Vets First! Political Action Committee out of the same office.

All three groups use telemarketers to raise millions of dollars, but hardly any of this money is spent on programs for veterans, according to federal tax filings and Federal Election Commission disclosures.

Hampton denies wrongdoing and has said in the past that contracting with professional fundraisers frees up his time to focus on outreach.

But in its “civil investigative demand,” Herring’s office alleges that Hampton’s Center for American Homeless Veterans “has engaged in misleading donors to believe funds would be used for veterans-assistance programs and organizations, when funds were not used for those purposes.”

Michael Kelly, spokesman for Herring, confirmed his office is investigating the Center for American Homeless Veterans but declined to answer specific questions about the probe.

“Attorney General Herring has made it a priority to crack down on financial exploitation of veterans and fraudulent charities, as evidenced by his work with colleagues to shut down the deceptive “VietNow” charity, and the record-setting $100 million settlement his team secured against USA Discounters for deceptive sales and debt collection practices,” Kelly said in an emailed statement.

Hampton said he is cooperating with the investigation.

“We have the program goods and are always enthusiastic about sharing all the documents,” Hampton wrote in an emailed statement. “We do what we say we are going to do and a great deal more.”

Hampton has personally benefited from his trio of veterans organizations.

During 2017, he made $110,00 from the PAC, boosting his income from the PAC to $20,350 in December alone, according to federal records.

Hampton also earned $340,000 in 2016 from his two veterans charities, according to the most recent tax filings available. It’s not yet known how much Hampton earned from his charities during 2017.

Hampton defended his compensation, noting that he has “24 years of tenure” and is the head of three organizations.

During the 2014 and 2015 tax years, a telemarketer hired by the Center for American Homeless Veterans, Outreach Calling, kept $3.7 million — or 90 percent — of the $4.1 million it raised for the nonprofit, according to annual tax filings.

Records filed by Outreach Calling in Utah indicate the telemarketer kept $7.9 million out of $8.7 million it raised for the charity from 2011 to 2015.

Similarly, Hampton’s other nonprofit and his PAC have spent most of the money they’ve raised on telemarketers.

Since 2015, Outreach Calling has raked in $2 million from the Put Vets First! PAC. That’s 89 percent of the $2.3 million in donations the PAC has received in the same time period, according to Federal Election Commission filings.

Charitable Resource Foundation, the telemarketer working for Hampton’s Circle of Friends for American Veterans, kept $6.4 million, or 85 percent, of the $7.5 million it raised from donors between the 2011 and 2015 tax years, according to IRS filings.

Charity Navigator, a watchdog organization that studies the spending habits of charities, issued “concern advisories” for Hampton’s two nonprofits after the Center for Public Integrity published its initial investigation in December.