Secretary of state's office opens investigation into veterans group

by: Kerry Kavanaugh Updated:

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ATLANTA —

Channel 2 Action News has learned the Georgia secretary of state's office has opened an investigation into the Veteran's Support Organization.

The investigation comes after a Channel 2 Action News investigation.

The VSO is a local charity that pays veterans and some non-veterans to solicit donations.

A former employee told Channel 2's Kerry Kavanaugh the group used him as bait.

"We were the bait, we were glorified panhandlers," former employee Ralph Hiers told Kavanaugh.

Hiers said for three months he wore the Veterans Support Organization uniform and asked for donations.

"They told us to up-sell. You know, instead of getting a dollar, get $5, get $10, get $20. You had to be willing to say whatever," he said.

Hiers said he served in the first Gulf War and now suffers from post-traumatic stress disorder and bi-polar disorder.

He said he was struggling with mental health issues when he discovered the VSO at a veterans' event last fall.

Hiers said the VSO offered to give him a job and a home and help him find full-time employment.

"This was long, hard hours," Hiers said.

Hiers' tax records show he only made a few hundred dollars.

The president of the Georgia chapter of the VSO, Jon Gravely, said its work program gives veterans a second chance.

"Approximately 70 percent (of collected donations) goes to program services, the housing, the gift card," Gravely told Kavanaugh.

They pay veterans to solicit donations outside shopping plazas and inside malls. The VSO's practices and claims have triggered investigations in Tennessee and Florida as well.

The Department of Veterans Affairs said it no longer works with the group because of a Federal Trade Commission investigation.

Now, Channel 2 Action News confirmed the Georgia secretary of state's office opened its own investigation March 1.

The VSO provided Kavanaugh with its amended 2011 tax return. It said nationally, VSO solicitors collected more than $8.5 million in donations. Of that, roughly $318,000 was donated to veterans in grants and gift cards.

The VSO said it gives veterans jobs, not donations.

The tax returns show that the veterans they hired earned $4.6 million in the work program, and that $1.2 million went toward housing programs offered in five states.

Daniel Borochof of watchdog group Charity Watch, disputes how the VSO categorizes that money.

He said it's not charity if veterans earn their money. He said that's a fundraising expense.

"They couch it in terms of a job-training program when in actuality they are putting veterans out on the street to beg for money," Borochof said.

Despite the criticism, the VSO stands behind its work.

The organization's CEO, Richard VanHouten, emailed a statement saying, "We stand behind our organization's philosophy and programs. Most of all, we stand behind the hundreds of veterans we assist each year to get off the streets and into the workforce through VSO's work and housing programs."

Hiers said in his experience the VSO received more of his pay than he did.

"He never mentioned that I was going to have to pay $525 a month for that home," Hiers said.

Hiers said the VSO automatically deducted the rent for a Snellville home from every paycheck. Between the rent and uniform fees, Hiers said there was little left in his check for him.

"Quite frankly, it's just wrong. It needs to be shut down," Hiers said.

He said he quit the work program after three months.

Since Kavanaugh began looking into the group, she has heard from other veterans groups who say sending veterans out to solicit is an insult to the men and women who served their country.