Wounded Vet Charity Accuses Own Executive of Fraud

ABC News reported in November 2007 that the Foundation received an "F" rating from the charity watchdog group American Institute of Philanthropy (AIP) for their extremely high fundraising costs and relatively small percentage of donations that actually went to help wounded veterans and their families.

The Foundation hid millions of fundraising expenses, according to Daniel Borochoff, President of AIP by netting them from their contributions in 2007: The Foundation's reported fundraising expenses of $14.8 million for the fiscal year of 2006-2007 is actually $22.9 million when the fundraising costs of a "donate your vehicle" campaign in fiscal 2007 are added, according to Borochoff.

The Foundation could not immediately be reached for comment in response to Borochoff's allegation.

Borochoff says the scandal surrounding Esau and the Foundation points to a broader accountability problem for the non-profit field that allows for this type of alleged manipulation: "Charities can massage their numbers to appear better which makes it difficult for the donating public to know whether or not their money is actually reaching the cause they intended to help."

Congressman Henry Waxman, D-Calif, held a hearing on veterans charities shortly after the initial ABC News report last fall.

Esau told MOPH members at a meeting two weeks ago for the National Purple Heart Hall of Honor museum in New York that he had been wrongfully terminated and asked the board to consider him to serve as their president for another year, according to Cook who was at the meeting.

Esau told ABC News that he would not comment on this story at this time because he is "negotiating [his] severance package."

Calls from ABC News to the Foundation requesting comment were not returned.

Cook said the financial scandal has driven a wedge between the Foundation and the MOPH and has affected MOPH at the local level, seriously hindering their fundraising.

"The MOPH local chapters have unfairly become the objects of ridicule and scorn, because the organization has been branded as one that doesn't help veterans," said Cook, who said that local chapters of the MOPH provide important services to wounded veterans and their families.

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