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California 'actively reviewing' charity executive

By David Fitzpatrick and Drew Griffin, CNN Special Investigations
updated 11:52 AM EDT, Fri July 13, 2012
STORY HIGHLIGHTS
  • Under a 2007 settlement, Terri Crisp agreed not to serve as a charity official
  • Yet, last year, she was named as one of SPCA International's directors and officers
  • California's attorney general is now reviewing Crisp's involvement with SPCAI

Editor's note: This is the latest in CNN's ongoing investigation into national charities as part of the Keeping Them Honest series on "AC360°."

Placerville, California (CNN) -- California's attorney general is "actively reviewing" an animal charity executive who had agreed not to take a higher office with another charity after a state investigation into how her previous employer had spent its donations, a spokesman for the AG's office told CNN.

The woman at the center of the review, Terri Crisp, has been identified by SPCA International in its tax filings as one of its directors or officers. She also serves as the spokeswoman for the charity's "Baghdad Pups" program which, according to SPCA International, "helps U.S. troops safely transport home the companion animals they befriend in the war zone."

Before her work with SPCA International, Crisp headed the California-based animal rescue charity Noah's Wish, which received millions of dollars in donations after Hurricane Katrina struck the U.S. Gulf Coast in 2005. It promised to use the money to help animals affected by the disaster

The California attorney general investigated whether contributions to Noah's Wish for "rescuing and caring for the animal victims of Hurricane Katrina" were used for that purpose.

In the summer of 2007, Noah's Wish reached a settlement agreement with the state of California in which the charity agreed to forfeit $4 million in donations out of the $8 million raised by the charity.

Under that settlement, Crisp agreed not to "serve as an officer, director or trustee or in any position having the duties or responsibilities of an officer, director or trustee, with any nonprofit organization for a period of five (5) years from the date of the execution of this Settlement Agreement."

Yet in a filing with the North Carolina secretary of state's office last year, SPCA International named Crisp in its list of officers and directors.

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California's attorney general launched the investigation into Noah's Wish after a bookkeeper with the charity and others alerted his office to questionable business practices.

The former bookkeeper, who wants to conceal her identity for reasons unrelated to her work at Noah's Wish, told CNN that donations came pouring into Noah's Wish soon after Hurricane Katrina. Crisp had appealed for donations on numerous television networks, including CNN.

"There was cash, there were checks, there were cashiers checks, there were letters -- heartbreaking letters from kids who, instead of having birthday parties, they wanted all the money to go to Noah's Wish to help those poor little animals," the woman said. "On a given day, we would have, oh my gosh, easily $20,000 ... just in checks."

And she said suddenly Terri Crisp changed, hiring her daughter and acting as if the money was hers to keep. Both made six-figure salaries, the former bookkeeper said.

"Terri at one time said, 'I've worked hard for so many years, doing animal rescue, I am entitled to this money.'"

When approached by CNN at her Placerville, California, home, Crisp told CNN she has "nothing to hide" but refused to answer any detailed questions without permission from the organization's communications director.

CNN requested an on-camera interview several weeks ago from Stephanie Scott, the SPCA International public relations director, but Scott never responded either by phone or e-mail.

Standing on the lawn of her home, Crisp told CNN that "you've taken a lot of the information" provided by SPCA International and "reported it incorrectly."

CNN said now was her chance to correct the record she saw as inaccurate.

"I would love to but as I said, I'm an employee of SPCA International."

She added, "I can't answer any of your questions. Believe me, I would love to."

She did tell CNN that the Noah's Wish board of directors set her salary and that she is now an employee, not a director, at SPCA International.

Terri Crisp agreed not to take another high-level position at another charity following a state probe into \
Terri Crisp agreed not to take another high-level position at another charity following a state probe into "Noah's Wish."

A CNN investigation into SPCA International found that the charity raised close to $27 million to help animals worldwide but spent nearly all of that money on fund-raising expenses paid to a direct-mail company.

In 2010, SPCA International owed $8.4 million to Quadriga Art and its affiliated company, Brickmill Marketing Services, according to publicly available Internal Revenue Service 990 tax records.

Quadriga Art is one of the world's largest direct-mail providers to charities and nonprofits. It is the same fund-raiser hired by two veterans charities that spent tens of millions of dollars for its services -- triggering a Senate investigation last month into whether one of the charities should retain its tax-exempt status.

That charity, Washington-based Disabled Veterans National Foundation, collected nearly $56 million in donations over the past three years yet paid Quadriga Art more than $60 million in fees, according to a CNN investigation into the charity's tax records.

The other veterans charity, National Veterans Foundation, raised more than $22 million in donations over the past three years to help veterans yet spent about $18.2 million to pay Quadriga Art, according to IRS 990 forms.

SPCA International is still in debt to Quadriga Art, according to a spokeswoman for the direct-mail firm, adding that's part of the charity's "aggressive strategy" to build a broad donor base.

This handout photo from SPCA International shows one of the military dogs that the charity said it is bringing to the United States for adoption.
This handout photo from SPCA International shows one of the military dogs that the charity said it is bringing to the United States for adoption.

"That resulted in an expected high cost in the beginning of their acquisition program," said the spokeswoman, who declined to be named. She called SPCA International's efforts a "successful strategy."

There's no question that a charity needs to spend money to raise money, according to Bob Ottenhoff, president of the charity watchdog group Guidestar. But he said that SPCA International's tax records raise "a number of red flags."

"No. 1, there is an enormous amount of money going into fund-raising," Ottenhoff said. "It's not unusual for a nonprofit to fund-raise. In fact they need to fund-raise. But this organization has an enormous amount of fund-raising costs, certainly relative to the amount of money being spent."

Of the $14 million raised in 2010, SPCA International reports it spent less than 0.5% -- about $60,000 -- in small cash grants to animal shelters across the United States. It also said it spent about $450,000 -- about 3% of the total raised in 2010 -- to bring back animals from Iraq and Afghanistan as part of its "Baghdad Pups" program.

In addition to its questionable finances, CNN found that SPCA International misrepresented the "Baghdad Pups" program on its tax filings.

On its website and its tax filings, SPCA International describes as a program that "helps U.S. troops safely transport home the companion animals they befriend in the war zone."

Yet the charity admitted that only 26 of the nearly 500 animals transported to the United States from Iraq and Afghanistan were actually service animals. The rest were stray animals, said Stephanie Scott, the charity's communications director.

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