| Thursday, May 31, 2012. Chaos and violence continue, Moqtada says he can bring 40 votes to a no-confidence vote on Nouri, Baghdad is slammed with bombings, Iraq's energy auction is a bust, the US House Veterans Affairs Committee reviews the progress on the VOW to Hire Heroes Act, and more. "We just spent last weekend, and in particular Monday, honoring our nation's defenders that are no longer with us. Now it's time for us to renew our focus on those who still need our help in securing a good job," declared US House Rep Jeff Miller drawing this morning's House Veterans Affairs Committee hearing to order. The hearing explored the VOW To Hire Heroes Act which Chair Miller hailed as "an excellent example of what we can do when we all work together." The Committee heard from VA's Under Secretary for Benefits Allison Hickey who was accomanied by VA's Curtis Coy and they heard from the Labor Dept's Acting Assistant Secretary of Veterans Employment and Training Ishmael Ortiz who was accompanied by Kathy Tran. Why the hearing? Chair Jeff Miller: While I am impressed by the level of effort being made by program level staff at both departments, I am concerned that not enough is being done by either cabinet secretaries [VA Secretary Eric Shinseki, Labor Secretary Hilda Solis] or the President [Barack Obama] himself to promote this benefit. Getting the message out about this opportunity is critically important to putting unemployed veterans on a path to a job in a high-demand field. Clearly, aggressive promotion by the nearly three thousand One Stop Employment Centers are the key to filling the 99,000 training slots that have been authorized by the VOW Act. I want to give you just one example -- one example of why I am concerned that despite VA's significant outreach efforts -- for which I commend them -- problems are still arising. Staff was contacted by a community-based organization in Georgia about what appears to be a lack of effort to get the program started. Shortly after the passage of the VOW Act, the organization contacted the Augusta One Stop Employment Center about how to enroll unemployed vets in the program. They asked again in mid-March and the DVOPS and LVERs were still not aware of the program. Two weeks later, Augusta told them the Georgia Department of Labor was not aware of VRAP. In early April, both the Georgia and South Carolina Departments of Labor stated they were waiting for policy from DC. In late April, there still appeared to be little understanding of how the program would work. It appears that finally, on May 11th, 2012, a mass e-mail from VA was released detailing how the program would be implemented, only 4 days later on May 15th. Obviously, if that is typical of the level of awareness at the One Stop Centers, I think we all agree we've got big problems with the potential launch coming up shortly. On the subject of veterans hiring, the Dept of Labor is holding a Veterans Hiring Fair next week on Wednesday, June 6th. It will be at the Great Hall of the Frances Perkins US Dept of Labor Building on 200 Constitution Ave. starting at ten in the morning and ending at one in the afternoon. So that's just three hours and they're hoping for a large turnout. After this morning's hearing, I went to talk to a friend at the Labor Dept to make sure I understood some of the issues from the hearing. When I brought up Miller's solid issue of getting the word out, I was told that even in DC it can be a struggle to get the word out and that job fair was used as an example. So I'm including it here at the top. You will need veteran i.d. to enter the job fair. And it is open to all adult veterans. Repeating, that's next week on Wednesday. Also for FYI purposes, we'll note Allison Hickey's opening remarks regarding Veterans Retraining Assistance Program applications: VA and the Department of Labor collaboratively developed the VRAP application process and the requirements for the information technology system changes to support this process. To efficiently leverage existing systems, VA modifided its application for VA education benefits for use by the VRAP applicatns. The VRAP application is available online at www.benefits.va.gov/VOW, a web site developed specifically for portions of the VOW to Hire Heroes Act. This site can be accessed through eBenefits, the GI Bill web site, DoL web sites and numerous other web sites. Additionally, Veterans can visit their local DoL One-Stop Career Center locations for application assistance. Applications can be submitted through VA's Veterans Online Application web site. To be eliglbe for participation, DoL must determine that the applicant is unemployed, not enrolled in any federal or state job-training program and is between the ages of 35 aand 60. VA verifies the applicant's veteran status and type of discharge, and confirms that the applicant has no other VA education benefits available for use, and is not in receipt of compensation for a service-connected disability rated totally disabling by reason of unemployability. After eligibility has been established, the applicant identifies his or her intended high-demand occupation category and applicable training institution. Information about the high-demand occupations, identified by DoL, is availabe on VA's VOW to Hire Heroes web site as well as DoL's web site. In his opening remarks, Ortiz noted that the Labor Dept had "repurposed approximately $5.4 million of our 2012 Project Year Budget in order to implement the provisions of the VOW Act." This statement in passing led to the first question. Chair Jeff Miller: I was just asking staff a question. You talk about repurposing five-plus million dollars to assist. Was it not funded properly in the legislation? Where's the money that the legislation appropriated? Just trying to figure out why would you need additional -- to repurpose additional money? Kathy Tran: There were several provisions that did not have -- that appropriated funds were not included in. So for example, the section 222 study on equivalency is one example. Ortiz had indicated Kathy Tran should speak to the question. She did. But it wasn't really clear. The Chair would say he was still trying to figure out this money issue and that this was paid for in the legislation but then he would note that people behind Tran were shaking their heads "no" on that last part. So let's delve into that. Tran's referring to the fact that the legislation required the Dept of Labor to identify skill equivlance between military and civilian employment. Was this fully funded? That's one of the questions I asked when I went to the Dept of Labor today. No, it wasn't funded at all, I was told, and the Labor Dept had to take from their budget for it. In addition to the five million budgeted, more money will likely be spent on this because the study is not yet completed -- and, again, the legislation requires this study take place. The Labor Dept is hoping to piggybag on a DoD study. If they're able to, that would reduce the cost. In addition to wanting to know if the study was funded, Chair Miller also wanted to know what happened in this program -- limited to 99,000 -- if someone signed up, was accepted and ended up having to drop out due to some reason. Chair Jeff Miller: What happens if a veteran enters the program and he drops out? Is that counted a "used slot"? Or, if there's still funding left, can that be reallocated to another veteran? Allison Hickey: Chairman Miller, we have been -- We have been instructed that, uh, that it works similar to the other Mongtogmery GI Bill and other GI bills and when that veteran drops then that authority drops in the 99,000 that are available. Chair Jeff Miller: Drops in or? Allison Hickey: So if the veteran -- I apologize, Mr. Chairman, let me be a little more clear about that. If the veteran applies and then doesn't fulfill the whole year's worth of training and let's say they stop mid-pointm then that is one of the 99,000 and we cannot recycle the rest of that benefit on to a different veteran. Chair Jeff Miller: Is that right? Allison Hickey: Sir, I think that's the provision of the law that has been laid out for us so that's the way we're working it. Chair Jeff Miller: Sounds like the provision needs to be corrected, doesn't it? Would you recommend that that slot be re-allocated? Allison Hickey: Chairman Miller, from my perspective, from the advocacy that we have in VA for all veterans, we would certainly like to see every dollar that you all have put towards this be used to train veterans so if you are inclined to do something different in the legislation, we would be happy to consider that. Chair Jeff Miller: That's a great political answer. [Laughter.] I appreciate that. The Post-9/11 GI Bill is one of the pieces of legislation that was passed during the current wars. The first fall semester checks for that legislation, in fact, didn't go out until the fall of 2009 (and many waited much longer than that to receive their checks, but that's another story). The retraining opportunities offered by the VOW to Hire Heroes Act was an issue Representative Mike Michaud wanted to explore and he wanted to delve into job training, not just academic training. US House Rep Mike Michaud: I have a couple of questions. The first is I've heard from a couple of small towns and cities and county government, the fact that they're looking for fire fighters as well as police officers and when you look at the unemployed in the military -- particularly for the military police -- they'd like to hire veterans. Under the VOW Act, what are you doing to help encourage municipal towns for police officers and what's available to them? And that's my first question. My second question is, having done several manufacturing tours throughout my district over the past year, one of the things I hear a lot from businesses is that they would like to hire more employees but they found that they're not trained. When you look at the extension patnership program, the MOST Program, I don't know if you're familiar with it? It stands for Mobile Outreach Skill Training, it made it's MEP, they go into these businesses and actually are willing to train and they guarantee a job after training or else they do not get paid for the training. Are you working with extension partnership programs throughout the country in that regard since they do guarantee jobs? And do you have the resources needed? So i guess both of you or who wants to answer both of those questions? Ismael Ortiz: Congressman, first of all -- Let's -- I want to hit your first question first, sir. Fire fighters and police officers are on a high demand list so as far as VRAP is concerned, this is an opportunity for them to be able to go in there if they meet the elegiblity requirements, sir. On the second part of that, sir, if they don't, we also have local veterans employment representatives in each one of the One-Stop Centers our LVERs [Local Veterans Employment Representatives] who go outreach and make sure and talk to different employers and places to help them find the skilled person that they're looking for. So our One-Stops are a very important piece of getting that outreach part and also local communities, that is the biggest piece of what we are talking about, working with the communities as much as possible to get that information to us so that way we can find the proper individuals to help them fill their needs. US House Rep Mike Michaud: And what type of a benefit will a local community receive since they are tax exempt? Is there any specific training piece or is there any other benefit under the VOW Act that will be beneficial for the communities? Ismael Ortiz: Actually sir -- You know what, I'm not really sure on the specifics on that, sir. But I'll be more than happy to find out. US House Rep Mike Michaud: Okay. Allison Hickey: Congress Michaud, let me just tell you how we have generally worked with the education programs in relation to this -- especially the non-degree programs which we started thanks to this Committee and the Senate Veterans Committee's support from the first of October of last year when we were allowed to use GI Bill benefits towards non-degree efforts. We still require your state approving agency to certify the training. And if you have on in everyone of the states, I would highly recommend that the counties contact the state approving agencies and submit their training program to them and let them go through their normal process, certify it and then I can -- I can cover them under GI Bill or VRAP for either one. Ismael Ortiz: As far as the MOST, sir, the MOST Program, I'm going to turn it over to Ms. Kathy Tran. She works specifically on those issues. Kathy Tran: Sir, regarding our partnership. We have a federal partnership with the US Dept of Commerce and the MEP Program and we have been encouraging local partnerships in communities and regions across the country to partner between the workforce system and MEPs in order to support employment in the manufacturing arena. And we actually issued a training guidance letter or notice -- I can't remember which one, we can get back to you on that -- recently to encourage those partnerships and that letter included examples of existing successful partnerships at various different levels whether it be working with MEPs on layoff aversion strategies or working with MEPs to help fulfill, you know, job openings and training. But also just to add to the question earlier, One Stop Career Centers are available to help local muncipalities in their hiring so they can work to help do recruitment, to do job screening, to do post job openings and so that is a good relationship between the One Stop Career Centers and those muncipalities. Many local webs have good representation from their city and county councils and such. These are highlights from the hearing that I'm choosing because they go to issues that may require further attention. US House Rep Jerry McNerney raised a very important issue in his questioning. It needed to be explored further but was instead dismissed. US House Rep Jerry McNerney: I don't think the VA is doing enough to outreach, I don't think just for this program, there seems to be a reluctance to go to the media, to advertise on TV, to put up billboards. I'd like to see the VA do more of that, in general. Especially in this case. Allison Hickey: Congressman, I appreciate your comments and your questions. I will say that we have been to the media quite extensively, in the print media and have gotten it out that way, quite extensively. The -- I don't know about billboards except to say that we have a lot of veterans in many, many communities and it would be difficult to figure out the expense associated with a billboard in a single community. We would start to, I think, create some discussion around funding that would be a little bit untenable. We have been online. I have literally done, as has the Secretary done on camera interviews about veteran employment issues and about the opportunity for education to help those employment opportunities. And I know that Secretary Ortiz' Secretary [Hilda Solis] has done that as well so I will let him comment further on that but we have reached out quite extensively through lots of media different environments including 75 newspapers nationwide for those communities where veterans -- the unemployment rate for veterans is the most -- is the highest. We're not stopping. US House Rep Jerry McNerney: So what kind of budget does the VA have for media outreach. Allison Hickey: Well Congressman McNerney, we are -- We are actually trying to be good stewards here. So we are leveraging our current network operation, we are leveraging the good will of communities and newspapers and others to get this word out as well including all the military alumni groups, all the -- the Military Times are carrying this for free, many of the local newspapers are carrying this for free -- US House Rep Jerry McNerney: So in other words, you don't have a budget specifically for outreach? Allison Hickey: Congresmman McNerney, I've not found the need at this point in time especially when, in very short order, we have over 12,000 applicants and they're growing every single day. Yesterday, it was 11,000 as the Chairman well noted, today it's twelve. If in fact we do require, I will be happy to come and share that need with you. First, "Military Times" -- that's a publication. Elsewhere, she noted them as well as Air Force Times, Federal Times, Marine Corps Times, Army Times and Navy Times. I want to be sure they get their credit. The Philadelphia Inquirer was mentioned elsewhere in the hearing as was USA Today, the Fayetteville Observer, the San Antonio Express News and the Wall St. Journal. Those newspapers had all run the VA's notice and run it for free. They deserve credit and praise for their public service. But McNerney is correct, there should be a budget. If he had more time, it would have been interesting if Hickey could have answered how many turned them down? Or how many people they had to speak to at the Wall St. Journal? And how much time was used on this? My point here is that just because the VA did not spend money paying for advertisement, money was still spent in that staff had to call around. And I'm sure they got rejections. I'm also sure they got, "This is great but you need to speak to ___." So how much time was used? There should be a budget and I don't think the VA has staff that can afford additional duties. The backlog at the VA is so huge -- backlog on claims processing (but really backlog on anything) -- that I don't understand how they're able to work on this and claim money was saved. I also don't think this is what the authors of the legislation intended. (I could be wrong.) You're already limiting the program to 99 slots. Now you're saying that it's not even an equal playing field. That whether someone hears about it in a publication depends a great deal on if they live in San Antonio or Philadelphia? The Labor Dept estimates that the number of unemployed veterans between the ages of 35 and 60 is 400,000. Repeating, there are only 99,000 slots. And thanks to Chair Miller's questions, we now know that if someone has to drop out due to illness or maybe they get a great job offer, that slot doesn't get refilled. It seems like the VA needs to be targeting all veterans. This is not supposed to be a secret program. All 400,000 should know it's out there and be able to compete equally for the 99,000 spots. This is probably the strongest veterans legislation passed since 2009. Refusing to spend money to get the word out on the program is ridiculous and goes against the whole point of it. Good for the newspapers who did run it for free, good for the VA staff that worked on that. But there should be an advertising budget. The government's more than happy to foot the bill for lots of TV and print advertising to recruit into the military. They should have the same --if not more -- willingness to spend the money to get the word out on programs. Winding down before we move on to Iraq, US House Rep Jerry McNerney raised the issue of billboards. In political campaigns, billboards are largely a vanity issue. Studies have found repeatedly that they have less impact on voting than other forms of advertising. Those studies are on voting for a particular candidate. There are no studies on what impact they have on raising awareness of new programs. My guess is that they would be rather effective since they are stationary and many people pass them. That's just my guess. But the VA should be using a wide range of techniques to reach veterans. And the very last thing on the hearing. No one asked Allison Hickey a question that she should have been asked (two veterans asked me if I heard the same thing in the hearing -- I did). She noted a mass mailing sent out to veterans, 460,000 e-mails. That's fine. But what bothered the two veterans (and bothered me as well) was that Hickey stated that they "were viewed or opened by 23 percent of recipients" -- how does she know that? What is the VA attaching to e-mails that allows them to know if they were opened or not? Veterans get e-mails from the VA all the time and if there's something additional that they aren't seeing but is in those e-mails, they need to be informed of that. She didn't explain how she knew the number (or how she knew it was 12% above a standard opening rate) and no one asked her. We'll note another veterans issue as we wind down the snapshot, right now on to Iraq. Today, Baghdad was yet again slammed with bombings. Mohammed Tawfeeq (CNN) reports the bombings took place over "a three-hour period" today in Shi'ite and Sunni neighborhoods. Laith Hammoudi (AFP) observes the bombings are "underlining persistent security concerns even as international energy companies met in the centre of the capital to bid on oil and gas exploration blocks." Deutsche Welle adds, "The last major bomb blast to hit the Iraqi capital was in mid-May when a suicide bomber targeted a police checkpoint in the city." Sameer N. Yacoub (AP) quotes survivorNaseer Ali stating, "I was in my shope when I heard a powerful explosion and everybody rushed to the explosion site. Part of the restaurant was damaged and the windows of the nearby shopws were shattered. We saw several wounded people screaming for help." The number of dead and wounded climbed throughout the day. Early on, Patrick Markey and Alison Williams (Reuters) count 9 dead and twenty-seven injured. Then the BBC News counted 12 dead and twenty-seven injured. Citing security sources, KUNA stated 18 were dead and sixty-four were injured and did so before 10:00 a.m. EST and while other outlets had a much lower figure for the death toll and the number wounded. As the day faded, AP reported the death toll had reached 18 and the number injured was at fifty-three. For anyone wondering, neither the White House nor the State Dept issued any statement regarding the bombings or the dead. Of today's Baghdad bombings, Al Rafidayn points out that they take place during a shapr increase in the political crisis. The Irish Times observes, "Some argue that the ongoing political impasse has opened the door to violence. The unity government headed by Mr al-Maliki, a Shia muslim, has been largely paralysed since the withdrawal of US troops from Iraq late last year. There is mounting criticism of Mr al-Maliki within the ruling coalition, amid complaints that he is shutting out Iraq's two main minorities -- Kurds and Sunni Muslims -- in decision-making." A group participated in decion making yesterday in Sulaymaniyah Province (KRG). Al Rafidayn reports that KRG President Massoud Barzani met with Iraqi President Jalal Talabani, Speaker of Iraq's Parliament Osama al-Nujaifi, Moqtada al-Sadr, Deputy Prime Minister Saleh al-Mutlaq (who represents the National Dialogue which is a part of the Iraqiya political slate), Iraqiya head Ayad Allawi and others and it was decided that a no-confidence vote would be taken on Nouri if 164 MPs would sign on. Kitabat notes Moqtada is stating he can get the signatures. Middle East Online quotes him stating online, "I promised my partners that if they got 124 votes, I will complete the 164 votes." Deeply alarmed is Ammar al-Hakim who insists to Alsumaria that he was not part of the meet-up. Dar Addustour reports that al-Nujaifi is said to be ready to call an emergency session of Parliament to vote on the issue of Nouri. They also note US Ambassador to Iraq James Jeffries continues to try to shore up support for Nouri among the National Alliance and that he met with Ibrahim al-Jaafari. Karim Abdzaair (Al-Monitor) notes, "The National Iraqi Alliance responded to anti-Maliki political activities by sending their president, Ibrahim al-Jaafari, to meet with US ambassador in Iraq James Jeffrey to discuss the political crisis in Iraq. Khadr Khuzai, a member of the National Iraqi Alliance's presidential council and another pole within the Alliance, met with UN representative in Iraq Martin Cooper to discuss the crisis. These were the first two meetings that the Iraqi National Alliance held with US and UN representatives after the Alliance explicitly rejected internationalizing the crisis, one which it considers to be purely internal." The three-judge panel hearing the case denied the request, however, and [. . .] adjourned the trial until June 19. "They have asked for Jalal Talabani, (former Vice President) Adel Abdel Mahdi, (Talabani's chief-of-staff) Nasser al-Ani," and four MPs belonging to Hashemi's mostly Sunni-backed Iraqiya bloc to testify, one of the judges said. In related news, the targeting of Iraqiya's Laith al-Dulaimi continues and Kitabat reports Iraqi human rights activists joining Talabani's call for al-Dulaimi to be released. al-Dulaimi was arrested days ago on Nouri's order. He is a member of the Baghdad provincial council. Nouri began airing al-Dulaimi's 'confession.' al-Dulaimi -- still in prison -- has declared he was tortured, that the 'confession' was forced and false. Realizing he had another p.r. disaster on his hands, Nouri recently began calling for an investigation into these torture allegations. Abdul-Jabbbar al-Jubouri (Kitabat) reports that the 'confession' has now aired on Iraqi TV. That's in violation of the law. al-Jubouri terms it not only a political scandal but an ethical one as well. Kitabat also doesn't take seriously Nouri's 'investigation,' noting it was his forces acting on his orders that tortured Laith al-Dulaimi and now he's going to investigate himself? While Nouri flounders, Alsumaria reports the Russian government has extended an invitation to KRG President Massoud Barzani to visit Moscow so that Russia and the KRG can strengthen their ties with one another. In other bad news for Nouri, he's signed a multi-million dollar contract -- valued at a quarter of a million dollars. Al Rafidayn reports that this is to build 100,000 housing units. The bad news? While Iraq suffers record unemployment, Nouri's farming this job out to South Korea. Iraq's two day energy auction ended today. Yesterday brought one successful bid. W.G. Dunlop and Salam Faraj (AFP) explain, "Iraq on Thursday closed a landmark auction of energy exploration blocks with just three contracts awarded out of a potential 12, dampening hopes the sale would cement its role as a key global supplier." The offerings weren't seen as desirable and the deals offered even less so. But big business began sending signals this auction would not go well over two months ago. (And we've noted that at least three times in previous months.) That's due to the instability in Iraq caused by Nouri -- and it is seen as caused by Nouri in the oil sector because he is the prime minister, he did pick a fight with Deputy Prime Minister Saleh al-Mutlaq, he did order Vice President Tareq al-Hashemi arrested. All the instability in recent months have not helped. His attacks on ExxonMobil and their deal with the KRG has not helped. Nouri al-Maliki is bad for business. If Iraq had the arrangement they did under Saddam Hussein, Nouri could get away with that. But he's going to have to grasp real soon that state oil isn't what it was under Hussein. The economic model (imposed by the US) is mixed. And if Iraqis hadn't fought back, it would be strictly privatized. Nouri's not yet learned that his actions impact Iraq's business. (And, in fairness to Nouri, this is a new thing for Iraq. Saddam Hussein could do anything and it wasn't an issue unless the super powers decided it was. But, again, it's a mixed model now. Nouri might need to bring in some economic advisors from out of the country.) W.G. Dunlop and Salam Faraj (AFP) report Iraq's response to the poor showing at the auction is to declare that they will hold another one. Finally, US Senator Patty Murray chairs the Senate Veterans Affairs Committee and her office noted yesterday an important concern she and two other senators have:
FOR IMMEDIATE RELEASE
Wednesday, May 30, 2012 CONTACT: Murray Press Office (202) 224-2834
VETERANS: Murray, Blumenthal, Nelson Call on Departments of Justice, Treasury to Investigate Charitable Organizations Exploiting Veterans for Own Financial Gain Recent findings raise serious questions as to whether organizations are violating federal law and abusing their tax exempt status by misrepresenting work on behalf of veterans
(Washington, D.C.) – Today, U.S. Senator Patty Murray (D-WA), Chairman of the Senate Veterans' Affairs Committee joined with Senators Richard Blumenthal (D-CT) and Bill Nelson (D-FL) in sending two letters regarding the Veterans Support Organization (VSO), addressing potential violations of federal law and abuse of tax exempt status by the 501(c)(3) organization. The first letter was sent to Attorney General Eric Holder and Secretary of the Treasury Timothy Geithner, requesting an audit and, where appropriate, an investigation of the VSO for potential violations of federal law. In a second letter, sent to Secretary of Veterans Affairs Eric Shinseki, Senator Murray, again joined by Senators Blumenthal and Nelson, expressed concern about the membership criteria used by the Department of Veterans Affairs' Voluntary Service National Advisory Committee (NAC) to evaluate prospective member organizations and the NAC's failure to require any standards of conduct for its members. The Senators point out the lack of internal controls for membership on the advisory committee and call for the removal of any organization that fails to conduct itself in a manner befitting the Department's mission or that exploits its relationship with the Department for its own financial gain. "Without a meaningful review process or standards of conduct, the Department risks legitimizing organizations engaged in questionable business practices by permitting their membership on the NAC," the Senators write in the letter to Secretary Shinseki. "For example, the Veterans Support Organization (VSO) has repeatedly touted its membership on the NAC as a way to represent itself as a reputable organization. But throughout the seventeen states in which it operates, VSO has drawn scrutiny from state authorities, veterans service organizations, local news organizations and veterans themselves. VSO's business practices have been characterized as dishonest, misleading and fraudulent, and in at least one instance, VSO has acknowledged breaking state law." The full text of both letters follow: May 30, 2012
The Honorable Eric H. Holder
Attorney General U.S. Department of Justice 950 Pennsylvania Avenue, NW Washington, DC 20530
The Honorable Timothy F. Geithner Secretary of the Treasury U.S. Department of the Treasury 1500 Pennsylvania Avenue, NW
Dear General Holder and Secretary Geithner: We write to request that the Departments of Justice and Treasury audit and investigate, as appropriate, the Veterans Support Organization (VSO), a registered 501(c)(3) tax exempt corporation, for potential violations of federal law. Throughout the seventeen states in which it operates, including Connecticut and Florida, VSO has attracted scrutiny from state authorities, reputable veterans service organizations, local news organizations and individual veterans. VSO's business practices have been characterized as dishonest, misleading, and fraudulent and in at least one instance, VSO has acknowledged breaking state law. Taken together, these actions and allegations raise serious questions as to whether VSO has repeatedly and intentionally misappropriated public donations and abused its tax exempt status in violation of federal law. At the heart of VSO's suspect practices is its use of paid solicitors, violation of state solicitation laws and financial irregularities. VSO presents its paid solicitors to the public as veterans, providing them with camouflage-style uniforms and instructing them to keep thirty percent of their collected donations as commission. Through its use of these paid solicitors, VSO has been found in violation of state charitable contribution laws and has faced civil penalties as a result. VSO's paid solicitors program is its single largest expenditure, with executive and employee compensation following close behind. In 2009 alone, VSO paid its chief executive officer $255,000, or over four percent of its total revenue. That same year, VSO's spending on its paid solicitor program and executive and employee compensation was over eight times greater than its direct grant awards to other veterans service organizations, government entities, and individual veterans. Clearly, VSO's disproportionate spending on paid solicitors and its own executives, coupled with its admitted violation of state solicitation laws and general lack of transparency and accountability is cause for serious concern. For your reference, we have enclosed a background paper that details VSO's questionable conduct in greater detail. As an increasing number of our servicemembers return home and transition to civilian life, it is especially critical that charity organizations act as good stewards of the American people's goodwill and generosity towards our veterans. On behalf of our nation's veterans and those who serve them, we thank you for your attention to this matter and look forward to your timely response detailing the steps you have taken auditing or investigating, as appropriate, VSO. ---------------------- May 30, 2012 The Honorable Eric K. Shinseki Secretary of Veterans Affairs 810 Vermont Avenue, NW Washington, DC 20420 We write to express our concern about the membership criteria used by the Department's Voluntary Service National Advisory Committee (NAC) to evaluate prospective member organizations and the NAC's failure to require any standards of conduct for its members.
It is critical that organizations permitted to affiliate themselves with, or invoke the name of, the Department of Veterans Affairs conduct themselves in a manner befitting the Department's mission, its reputation and the integrity of its work. Yet today, any organization that meets a minimum level of monetary and material support to VA facilities is eligible for membership on the NAC. No other review is undertaken by the Department to evaluate a potential member organization, nor does the NAC have in place any standards of conduct to which its member organizations must adhere. This is both troubling and unacceptable. Without a meaningful review process or standards of conduct, the Department risks legitimizing organizations engaged in questionable business practices by permitting their membership on the NAC. For example, the Veterans Support Organization (VSO) has repeatedly touted its membership on the NAC as a way to represent itself as a reputable organization. But throughout the seventeen states in which it operates, VSO has drawn scrutiny from state authorities, veterans service organizations, local news organizations and veterans themselves. VSO's business practices have been characterized as dishonest, misleading and fraudulent, and in at least one instance, VSO has acknowledged breaking state law.
In response to VSO's suspect practices, we have written to the Attorney General and to Secretary Geithner, requesting that their departments investigate whether VSO has misappropriated public donations or abused its tax exempt status in violation of federal law. We expressed our concern that charity organizations must act as good stewards of the American people's generosity towards our veterans. Surely an organization, such as VSO, which has admitted breaking state law, should be ineligible to serve on the NAC or use the Department's name in furtherance of its own financial interest. To protect the integrity of the NAC's work, we ask that you review this situation and take such action as you consider appropriate. It is our hope that you will rescind the membership of VSO and any other organization that fails to reflect the caliber and character of the Department's mission and work, and institute safeguards to regulate the NAC's membership accordingly. We look forward to hearing from you regarding your review of this issue. Thank you for all that you do on behalf of our nation's veterans. ###
-- Eli Zupnick Press Secretary U.S. Senator Patty Murray 202-224-2834 eli_zupnick@murray.senate.gov
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