Fund-Raising Drives for Veterans Causes Draw Special Attention in Oregon

Since he took office in 2009, John Kroger, Oregon’s attorney general, has taken legal action against a variety of nonprofit groups and telemarketers that solicit money for services to veterans. Among the organizations that his office has pursued:

Associated Community Services. The office reached a settlement this month with this telemarketing firm in Southfield, Mich., which was raising money for a charity, Veterans of Oregon and Members of the Community. The firm—which Mr. Kroger said kept 80 percent of the money it raised, misled people about how their donations would be used, and violated Oregon’s do-not-call law—agreed to pay $40,000 and not solicit money in Oregon through 2013.

While donors thought they were helping homeless and hospitalized veterans, the small amount of money that went to the charity paid for people to travel around the state awarding medals, Mr. Kroger charged. He also sued Veterans of Oregon but has not yet resolved that part of the case.

Errol Copilevitz, a lawyer in Kansas City, Mo., whose firm represented Associated Community Services, declined to comment on Mr. Kroger’s accusations but said the settlement did not include any findings of wrongdoing.

“Sometimes it’s easier to compromise than to go through a whole proceeding,” he said. He also complained that attorneys general take action against clients like his because “they get great publicity.”

William “John” Neuman, who heads Veterans of Oregon, said he has declined an offer to settle the case and will fight the charges in court. He “adamantly” denied misleading donors and said Mr. Kroger is “on a crusade to end telemarketing in the state of Oregon” as a way to further his political ambitions.

Oregon War Veterans Association and Military Family Support Foundation. The attorney general sued these two nonprofits and their founder, Gregory Warnock, in February, charging that Mr. Warnock kept at least $690,000 of the money he raised and improperly used charitable donations to make unreported political contributions.

The veterans association, an advocacy group in Salem, said in a statement that the lawsuit was “baseless,” a “political stunt,” and an effort to get access to its donor records. It said the group is organized under a provision of the tax code that allows veterans groups, unlike regular charities, to use tax-deductible donations to make political contributions.

The association also requested a federal investigation of the attorney general’s office, citing complaints that it had failed for years to properly report the court-ordered child-support payments made by disabled veterans. Elizabeth Grant, head of the charitable-activities section, declined to comment on the lawsuit but said Mr. Kroger had corrected the problems with child-support payments after Mr. Warnock brought them to his attention in 2009.

Community Support. This telemarketing firm in Milwaukee, which solicited money for a variety of nonprofits, including veterans groups, reached a settlement with regulators in January. The firm, which keeps at least 80 percent of the money it raises, agreed to stop operating in Oregon and to pay $20,000. Mr. Kroger said Community Support violated previous settlements—one with Oregon in 2008 and another with more than 30 states in 2009—by failing to disclose its professional fund-raising status to donors and misleading them about how their money would be spent. Company representatives did not return telephone messages asking for comment.

No Veterans Left Behind Association. The state closed this group in May 2010. The organization sold veteran-related gear and sought donations in front of major retail stores in several Oregon counties. It allegedly told shoppers it was an all-volunteer organization that gave between 75 percent and at least 80 percent of its proceeds directly to needy veterans, but the charity’s leaders and professional fund raisers actually kept 80 percent for themselves. The four people who were named as defendants could not be reached for comment.

Veterans Fund. This organization, which provides arts and musical entertainment to hospitalized veterans, and Center Stage Attractions, a Florida-based fund-raising firm that solicited money for the group and allegedly kept 80 percent of the proceeds, reached a settlement with regulators in May 2010. Center Stage agreed to pay $150,000 to settle charges that it contacted people on Oregon’s do-not-call list, misled donors about how their money would be spent, and sent false pledge invoices. The Veterans Fund paid $30,000 to settle charges that it failed to monitor the firm’s fund-raising activities. Both agreed never to solicit again in Oregon.

Hugh Brooks, president of the Veterans Fund, who lives in McIntosh, Fla., said that his group got in trouble because Center Stage did some things that “we stipulated in the contract with them that they wouldn’t do.”

The charity now works with a different fund-raising firm, which promises to send it 35 percent of the proceeds, he said. Mr. Brooks said he started using professional fund raisers after he wrote “probably 60 grant requests” and failed to get any money. A woman who answered the phone at Center Stage said Joseph Gehl, the owner, was out of town and could not comment.