April 11, 2008 -- Whistle-blowers who criticized a veterans charity group's lavish spending have been kicked off the charity's board of directors in a move they say was made in retaliation for speaking out to ABC News.
"They were incensed that I would tell the world how their donated money was being wasted," said Henry Cook, national commander of the Military Order of the Purple Heart (MOPH).
Cook had, until this week, served on the board of the MOPH Service Foundation, an organization separate from the MOPH that raises funds and gives grants to the MOPH for veterans services.
Cook told ABC News earlier this year that the Service Foundation mismanaged millions of dollars of donated funds that generous Americans thought they were giving to veterans and their widows.
Last year the Service Foundation paid the Washington Redskins $685,000, according to the foundation's tax forms. Cook said that money allowed the Service Foundation executives to sit in the owner's luxury box at the stadium. "They partied lavishly," he said, adding that the foundation takes advantage of the emotional impact of the Purple Heart medal to raise money.
"[The Service Foundation] gave a $255,000 retirement package to their executive director -- who they rehired at his old salary. They gave two museums $500,000 a piece this year. How does all of this serve the welfare of combat wounded?" he asked.
Cook and four other board members who are currently MOPH members were voted off the Service Foundation Board of Directors on Monday. "Now the Service Foundation has total control over how their almost $30 million of donated funds will be spent," he said.
Richard Esau, executive director of the Service Foundation, could not immediately be reached for comment. His office said that he alone is authorized to speak on behalf of the foundation.
In the past, Esau has defended the foundation and its spending practices.
Joe Palagyi, who was also voted off of the Service Foundation board on Monday and who currently serves as the business manager of the MOPH, said the salaries of Service Foundation executives total many times more than those of MOPH staff. "The executive salaries of the Service Foundation outweigh the total of MOPH headquarters' salaries," said Palagyi.
Cook and Palagyi said they worry that now that the Service Foundation has removed all current MOPH members from their board of directors, there will be no one to represent the needs of the MOPH.
Charity watchdogs said they are outraged that Cook would be voted off the board of directors for raising legitimate concerns about wasteful spending. "It's outrageous that they are acting more like a boys club than a charity. Cook should be applauded for pointing out the wasteful and wrongful spending at the charity," said Daniel Borochoff, president of American Institute of Philanthropy, a charity watchdog group.
Borochoff's organization rated the MOPH Service Foundation an "F" for only giving 32 percent of the budget to veterans programs.