Login or signup
36
STRATEGY

Report: Veterans Corp Wasted Millions

Officials used cash meant to support veteran-owned businesses for lavish dinners and bloated salaries, investigators say.
Advertisement

A federal program meant to help military veterans launch their own businesses wasted millions of dollars on mismanaged projects and lavish perks for its executives, investigators say.

In a scathing report released Wednesday, Senate lawmakers charged officials at the National Veterans Business Development Corporation with squandering $17 million in federal funding while providing little of value for veteran entrepreneurs.

Based on an investigation by the Senate Committee on Small Business and Entrepreneurship, the report called on Congress to suspend funding for the program and place its three flagship veteran business centers under the Small Business Administration.

According to the report, Veterans Corporation officials left the business centers chronically under funded, while spending millions on gourmet meals, luxury hotels, first-class airfare, and executive wages and bonuses.

Last year, the program's top two executives earned a combined $338,172, about a quarter of its total budget allotted by Congress for 2007 and accounting for 14 percent of all expenses -- more than triple the non-profit industry's average CEO compensation as a percentage of total expenses, the report said.

According to investigators, the two officials also ran up hundreds of thousands of dollars on company-issued credit cards over the past three years, including over $40,000 for meals at top D.C. area restaurants and $100,000 for hotel accommodations.     

Other questionable expenses included $240,000 for fundraising efforts that raised just $64,00, and $3,000 for a film screening at the Palm Beach International Film Festival, among other venues, the report said.

"This investigation made me angry as someone who has worn the uniform of my country," Sen. John Kerry (D-Mass.), the chairman of the Senate Committee on Small Business and Entrepreneurship, said in a statement. "It's appalling that an organization created to aid our nation's heroes would instead squander taxpayer dollars, wining and dining their executives instead of helping veterans," he said.

The Senate committee launched its investigation in March following complaints by veterans groups that the business centers in St. Louis, Boston and Flint lacked sufficient funding.

The Veterans Corporation was created by Congress in 1999 to provide entrepreneurial training and support for veterans returning from active duty.

Last updated: Dec 11, 2008




Register on Inc.com today to get full access to:
All articles  |  Magazine archives | Comment and share features
EMAIL
PASSWORD
EMAIL
FIRST NAME
LAST NAME
EMAIL
PASSWORD

Or sign up using: