Senate Investigates Veterans Charity; Interview With Senator Max Baucus
ANDERSON COOPER, CNN ANCHOR: Good evening, everyone. It's 10:00 here on the East Coast. And we begin tonight with "Keeping Them Honest," and that's not just a catchphrase. It's our calling in part because of nights like this one. Tonight, "Keeping Them Honest" reporting on a vital issue to America's wounded warriors and their families is actually getting action. The Senate Finance Committee has just launched a probe, an investigation, a probe into potential abuses by a veterans charity that we have been profiling. Staffers for committee Chairman Max Baucus of Montana, who is going to us shortly, says he learned about the story from reporting by correspondent Drew Griffin and our producer, David Fitzpatrick. Drew is going to join us again tonight because this story is still unfolding. The charity in question is the Disabled Veterans National Foundation. That's their seal. They have raised nearly $56 million in the past three years. What's outrageous is that not one dime has actually gone directly to help disabled veterans. We have been showing you this now for a long time. You may what happened when Drew tried to talk to the charity's president, a woman named Precilla Wilkewitz.</s>PRECILLA WILKEWITZ, CEO, DVNF: You're the one from CNN that's...</s>DREW GRIFFIN, CNN CORRESPONDENT: That's right. (voice-over): Meet Precilla Wilkewitz, president of the Disabled Veterans National Foundation, whom we found at a small VFW office in Baton Rouge, Louisiana.</s>WILKEWITZ: Well, this is the Veterans of Foreign Wars, and I really didn't think you'd do something like this. We've agreed to talk to you and answer questions.</s>GRIFFIN: Nobody has agreed. So here is the question raised over three years.</s>WILKEWITZ: Only in writing. Thank you so much.</s>GRIFFIN: And none of the money has gone to any veterans. (on camera): So the bottom line is you're not going to give any interview? (voice-over): CNN has been trying for two years to get an interview with the Disabled Veterans National Foundation, since we began tracking its fund-raising. We've gotten angry phone calls, angry e-mails, promises of written responses and now a slammed door, but no answers.</s>COOPER: And just think about this. If you had raised $56 million over three years and done it legitimately and actually had something to show for it and given that money to veterans, you would think you would want to explain yourself. You would think you would want to show your books and show all the veterans you have helped. They're not doing that. The charity DVNF does send stuff to veterans group, stuff that they get for free, and stuff that veterans groups we have talked to say they don't need, they don't want, they can't use. Here's one now infamous example, Coconut M&Ms;, thousands of packages. DVNF sent one veterans group more than 11,000 of these bags of M&Ms;, 2,600 bags of cough drops, 2,200 little bottles of sanitizer lotion, because that's just apparently what they think disabled veterans need. Probably not. That's just stuff that they were given for free. Veterans groups have also received bulk shipments of chef's aprons, military dress shoes, random donations so useless that vets groups have had to sell the items at yard sales, like that one, just so they can try to raise some money for things they actually need. So where did the $56 million that people donated to DVNF actually go?</s>GRIFFIN: As far as we can tell, up to the 10th floor of this Manhattan office building to a company called Quadriga Art, a company that specializes in fund-raising. And as far as we can tell, Quadriga Art knows a lot about fund-raising -- for itself.</s>COOPER: So this group Quadriga Art is basically paid to build mailing lists for groups like DVNF. That's where the money trail took Drew. He learned that Quadriga Art and its subsidiaries have more than 500 charities on their client list, including DVNF and other veterans groups. So let's just be clear here. The money trail leads from unsuspecting wallets of concerned Americans, good people like you, who donate money to the DVNF, straight to the bottom line of a fund- raising company, the companies of Quadriga Art and its subsidiaries. But it's the charity DVNF that is now being investigated because of its tax-exempt status, because all of us are giving it a tax break for the good work that it's supposed to be doing. In the words of Senate Baucus -- quote -- "Our veterans should never be use as pawns in a scheme to exploit the taxpayers. DVNF has a responsibility to show it's genuinely helping veterans and playing by the rules." Senator Max Baucus joins us now. We should point out that this is a bipartisan effort initiated as well by a Republican committee member, Richard Burr of North Carolina. Also with us tonight is Drew Griffin, because there's a lot more to the story. Senator, what is your goal with this investigation?</s>SEN. MAX BAUCUS (D), MONTANA: I don't want retired schoolteachers or any other good Americans to be duped by fraudulent organizations into giving money, thinking it is going to go to disabled vets, when in fact it's not at all. It's going in to pad the pockets of some scam artists. I want to stop this stuff.</s>COOPER: What concerns you most about this Disabled National Veterans Foundation?</s>BAUCUS: I -- it sounds like it's a front. I don't think it's legit. They take about $56 million from ordinary good Americans who want to help veterans, but then don't give any of the money to veterans and in this case don't give any money to disabled veterans. It's just -- it's an outrage, frankly.</s>COOPER: Had you heard about the DVNF before?</s>BAUCUS: I have not, frankly. You highlighted it in one of your reports. And we got to looking at it and asked a lot of questions of the organization that they're not answering. An outfit that rates charitable organizations gave them an F. And so we have spent more time looking at them.</s>COOPER: A big part of it seems to be all the money is being funneled to this organization Quadriga Art, which basically organizations use to boost their mailing list.</s>BAUCUS: Right. Right.</s>COOPER: And does that make sense to you and will that be part of the investigation as well?</s>BAUCUS: Well, clearly, frankly, I smell a rat there. I have a hunch that that outfit, the mail order is using the veterans organization as a front for themselves. So they get the contributions from good, well-meaning, gullible Americans thinking they're helping disabled vets, when in fact the money is going to this other outfit, Quadriga, as a fund-raising operation, and none of the money is going to disabled vets. We're going to be looking at all that. And I have a hunch unfortunately that there are other fraudulent, scam organizations like this as well. And we're going to do what we can to get to the bottom of it.</s>COOPER: And, Drew Griffin, Drew, you actually talked to another organization which it also has a contract with Quadriga that they're trying to get out of. And they at least off camera acknowledged that they were kind of trapped into this contract with this group.</s>GRIFFIN: Yes. They were trapped. Well, I'm saying that. They aren't saying that. They are in a long-term contract for six years, which lasts until 2014, the National Veterans Foundation, which took in $18 million -- or excuse me -- took in $22 million or $20 million and gave $18 million of it back to Quadriga and its subsidiary, Brickmill. They did say they weren't happy with how this all worked out. And they have severed ties with them are now trying to break their contract.</s>COOPER: Senator, a big part of what Drew has uncovered seems to be kind of a shell game. The charity, DVNF, they take credit for enormous amounts of money on their tax returns, but deliver a lot of stuff to veterans groups that veteran groups say they don't need, that it's basically useless, surplus dress shoes, chef's coats, hats, thousands of bags of Coconut M&Ms;, and they claim it as goods in kind, so it will look good to the IRS. Do you think the IRS needs to take a hard look at what this group actually does for veterans?</s>BAUCUS: There's no question there's some kind of a shell game, some kind of a scam going on here. And I don't know who's getting the money. It's certainly not disabled vets that are getting the money. And I have a hunch there are other organizations like this. And it might -- the scam might be partly the disabled veteran foundation, and they're ripping people off. The scam could also be partly this other mailer outfit that is getting a lot of money that's on the receiving end of it. So we just to get to the bottom of it.</s>COOPER: Drew, you have been struggling now for years to even get basic answers from DVNF and also this Quadriga.</s>GRIFFIN: Yes. For two years, we get nothing but phone calls that aren't returned. You know, we got a door slammed. We even went out to Sacramento last week, as you recall, Anderson, trying to find the person who runs this DVNF. She was supposed to be at a concert, and she canceled at the last minute at a conference there. And we want to ask the same questions that the senator is asking and that you're asking. How can Americans who are so generous be pouring so much money and giving from their hearts to our disabled veterans right now coming back from the war, thinking the money is going to do good? It's doing no good. It's going all the way to the fund-raiser. And, number one, where is the money? From the senator, and from you, Anderson, as I recall, how do you sleep at night?</s>COOPER: Yes. That's the question I would like to -- Senator, that's -- I'm sure that's -- I know that's not one of the questions you asked to the DVNF, but that's probably one of the questions you would like to ask. How do these people who are raising money on the backs of the disabled veterans, and not giving it directly to the veterans, I don't understand how they sleep at night.</s>BAUCUS: Well, there are a lot of unfortunate bad apples. Let's not forget most charitable organizations are good. They do very good work, and this country probably wouldn't exist without all the charitable foundations that we have in this country. But there are a few rotten apples that take advantage of gullible, good American citizens. And this one that frankly it really ticks me off personally, because we in Montana have the highest sign-up in the wars in Afghanistan and in Iraq per capita. We're patriotic. And a lot of our men and women, they come home, they're disabled, they're injured and they're wounded. And it just makes me angry, frankly, that some outfit wants to take advantage of gullible people for their own personal benefit, at the expense of veterans.</s>COOPER: And it makes it harder for reputable organizations that want to help vets.</s>BAUCUS: Yes, it does.</s>COOPER: It makes it harder for them to raise money. It takes money away from them. Senator, I appreciate you being on this. And we will continue to follow it, your efforts, and Drew Griffin as well.</s>BAUCUS: You bet.</s>COOPER: Thank you.</s>BAUCUS: Well, Anderson, thank you for your good work, because you spotlighted this. That's good work.</s>COOPER: Well, it's Drew Griffin who really has done it all. So I appreciate it, Senator.</s>BAUCUS: You bet. You bet.</s>COOPER: Drew and David Fitzpatrick, producer. One final note. We talked about Drew's many unsuccessful attempts to get DVNF president Precilla Wilkewitz to answer questions about the charity that she runs. This evening, the group sent the following statement. It reads in parts -- quote -- "The Disabled Veterans National Foundation has helped tens of thousands of veterans with direct financial aid and supplies that have made a difference in their lives. Media reports about our activities have been plain wrong and we welcome the opportunity to set the record straight." Let me just point out for the record, we have given them multiple opportunities to try to set the record straight, in their words. Again, we invite her at any point to talk to Drew, come on this show. We will talk to them. To say that -- you know, that this is misleading, and that they're going to set the record straight, we have been waiting for two years to try to get them to set the record straight. It's -- it's ridiculous. Let us know what you think. We're on Facebook. Follow me on Twitter @AndersonCooper. I will be tweeting tonight. Up next: the part of Mitt Romney's record that no one seems to be talking about with all the shouting over Bain Capital, namely, his record as governor of Massachusetts. We will look at it next.