The National Vietnam Veterans Foundation, which raised more than $29 million in four years but spent less than 2% of that money on actual veterans causes, is agreeing to shut down, forfeit its assets and its president, VA lawyer Thomas Burch, will pay back a $100,000 severance package.
The agreement was announced Thursday by the New York attorney general's office
following an expose on the charity by CNN.
Burch remains a VA government lawyer earning an annual salary of $125,000. He was earning that salary while also, at one point, receiving a $65,000 annual salary from his foundation along with other benefits.
"VA takes this matter very seriously as unethical conduct undermines the trust and confidence veterans and the American people have in the good and important work of VA," VA spokesman Henry L. Huntley said in a statement to CNN. "After reviewing the evidence provided by the (Office of the Inspector General), today VA initiated the process for the employee's removal from federal service."
In announcing the settlement, the New York attorney general's office said its investigators determined almost all the money collected by the National Vietnam Veterans Foundation went to professional fundraising fees. And that "The fraction that actually made it to NVVF was further reduced by a pattern of abuse, mismanagement and misspending by NVVF's former President."
Burch remains a career government lawyer with the Department of Veterans Affairs in Washington, and has been running the charity from his home in suburban Virginia. CNN tried to reach Burch last May to ask about the lack of donations his organization made to charity. Instead of answering questions, Burch sped away in a Rolls Royce bearing the license plate "My Rolls".
The New York attorney general has accused Burch of using donated funds to spend lavishly on travel, a yearly salary and other personal benefits, including a severance package the charity awarded him when he stepped down after being exposed by CNN. Burch has agreed to pay back $100,000 which will be re-directed to actual charitable works according to the New York attorney general's office.
"There is nothing more shameless than exploiting military veterans in order to enrich oneself. The actions of this charity and its founder are appalling," said Attorney General Eric Schneiderman. "This organization took advantage of the good will of millions, yet failed to fulfill nearly all of its promises to help those who have sacrificed for our nation. This settlement sends a clear message that charities will not get away with fleecing donors in New York."
The National Vietnam Veterans Foundation has a long record of poor management. It earned a zero rating form the watchdog group Charity Navigator. An official calling it one of the worst charities in the United States.
According to the settlement terms: Burch has agreed to a permanent nationwide bar on access to charitable assets or decision-making, issued an apology to donors of NVVF and to Vietnam Veterans whom he exploited in order for fundraisers to collect money, and admitted that NVVF had paid 90% of its donations to its fundraisers and admitted to deceptively marketing how solicited money would be spent.
The settlement also states Burch has admitted to using foundation funds to pay for foreign and domestic travel, frequenting night clubs in the Baltimore area on a nearly weekly basis, ordering excessive and expensive food and drink at the country's top restaurants and lavishing gifts on women. The settlement states Burch expensed an $800 dollar nightclub and hotel bill in 2012 as "work on homelessness" and "veteran issue."
VA still investigating
Officials at the Department of Veterans Affairs were first made aware of Burch's foundation activities when contacted by CNN in May. The VA opened an investigation into the matter, and told CNN that the results are expected this week.
At the time, the VA said there was nothing wrong with an employee operating a charity outside his or her employment duties.