Embattled veterans nonprofits face new complaint with IRS

Oct. 24, 2018 / 6:46 PM GMT

By Sarah Kleiner, Center for Public Integrity

The full version of this story was originally published by The Center for Public Integrity, a nonprofit, nonpartisan investigative news organization in Washington, D.C.

WASHINGTON — A former staffer at a Virginia-based charity alleges in a new whistleblower complaint that his former employer is bilking donors out of millions of dollars — money intended to help homeless veterans.

The staffer, James C. Edgar of Virginia, formally asked the IRS to revoke the not-for-profit status of the Circle of Friends for American Veterans and the Center for American Homeless Veterans, two nonprofits run by retired Army Maj. Brian Arthur Hampton in Falls Church, Virginia.

Hampton’s organizations, and the telemarketers he’s paid millions of dollars to raise money, were the focus of a months-long investigation by the Center for Public Integrity. Attorneys general in New York and Virginia subsequently launched investigations into Hampton’s Center for American Homeless Veterans. Both offices declined to comment on the status of their investigations.

“Using paid fundraising companies, Brian A. Hampton — the owner and president — has been paying himself hundreds of thousands of dollars from the millions of dollars the fundraisers generate,” Edgar wrote to the IRS. “He also pays back to the fundraisers over 90 percent of what is raised. Virtually none of that money goes to any public purpose.”

The IRS responded to Edgar’s complaint in a letter dated Oct. 4, according to a document provided to the Center for Public Integrity by Edgar. If an investigation is launched based on his allegations, it could potentially “take several years until final resolution of all tax matters,” Layne Carver of the IRS wrote. Bruce Friedland, a spokesman for the IRS, declined to discuss Edgar’s complaint, citing confidentiality laws.

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Hampton, who has previously denied wrongdoing, did not respond to multiple requests for comment for this story.

Hampton employed Edgar as director of programs for his charitable organizations from February through mid-September. Edgar also worked as political director for Put Vets First! PAC, a veterans-focused political action committee Hampton also operates.

Edgar said Hampton fired him because of a pay dispute involving Ricardo Manoatl, a staff member who reported to Edgar. Hampton had told Edgar and Manoatl to cut back their hours because the veterans organizations weren’t bringing in as much money, but Edgar said he authorized pay for Manoatl anyway.

Edgar is seeking a financial reward from the IRS through the agency’s whistleblower program, should the IRS collect money from Hampton — but he says he’s not motivated by money. Rather, he said he wants to hold Hampton accountable

“While performing my duties, I discovered I was not providing any benefit to homeless American veterans,” Edgar wrote to the IRS, according to documents he provided the Center for Public Integrity.

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The Center for Public Integrity is a nonprofit, nonpartisan investigative news organization in Washington, D.C.