From lesser known characters like Brian Mullaney, to more famous persons such as Sean Hannity, charitable organizations have fallen victim to financial manipulation for personal gain. Disaster relief, political grass roots organizations, medical relief groups assisting children and the poor, scholarship funds, and many others have been exploited for the purpose of leeching funds from people unawares.
Some are subtle - take the actions of Brian Mullaney, for example. He co-founded an organization that sends doctors around the globe to perform cleft and palate correction on children in the developing world – a worthy endeavor to be sure. In recent years, however, during his tenure as a trustee Brian Mullaney accepted enormous fees from the charity. During 2010 and 2011 his compensation totaled nearly £440,000, which translated to over USD$687,000, reportedly for marketing and fundraising strategies – only for work for the United Kingdom branch of the charity. Mr. Brian Mullaney’s fees were later considered “inappropriate” by the subsequent trustees, and the charity was taking steps to recuperate the funds. In addition, it’s not surprising that Mr. Mullaney’s marketing background has proven successful in sculpting a shining personal reputation. But when the charity was analyzed by independent charity rating and critique organizations, such as GiveWell, American Institute of Philanthropy, and Intelligent Giving, it was given poor ratings for the high salary of Mr. Mullaney. According to their 2010 tax form (see page 8), Brian Mullaney’s compensation was a whopping $1,444,571.
But children’s charities are not the only pasture these people graze in, disaster funds are also a favorite. Emotion fueled disaster funds are a breeding ground for corruption, taking in money at a rapid rate as people with soft hearts and governments pressed to take action form charity funds to deal with the financial toll disasters reap. Take, for example, the retired Navy commander who was awarded the Purple Heart for his heroic actions at the Pentagon during the 9/11 terrorist attacks. Charles E. Coughlin, age 49 from Severna Park was later charged with mail fraud, theft of public money, and filing fraudulent claims to the Victims’ Compensation Fund set up specifically to pay those who lost relatives or were injured in the attacks on the World Trade Center and the Pentagon. He and his wife allegedly made repeated false claims and lied about the severity of injuries sustained in order to receive money that they later used to pay off auto loans and purchase a $1 million home. They collected in excess of $330,000.
Hurricane Katrina was no different in this respect. Among the “assistance efforts” was a website, set up by Gary Kraserof Florida, that solicited money for a bogus project so that he and other Florida pilots could “fly in medical supplies and transport children in need of immediate medical attention,” according to his federal indictment in Miami. In the course of the trial, it was revealed that no such actions ever took place, yet he was able to collect approximately $40,000. He was sentenced to 21 months in prison.
High ranking members of large charitable organizations are often tempted to dip into the sizeable funds at their disposal. Wade Rathke, founder of the well-known and now infamous ACORN, was put into the compromising position of covering up for his brother Dale Rathke, who embezzled nearly $1million through unauthorized credit card transactions. The organization itself struggles to continue its work in spite of corruption accusations and an additional investigation by the state attorney general of Louisiana for the embezzlement of nearly $5 million.
The rich and famous are not exempt. Fox network TV show host Sean Hannity founded Freedom Concerts and Freedom Alliance, charities that raise scholarship money for the children of fallen soldiers. CREW, Citizens for Responsibility and Ethics in Washington, alleges that Hannity’s charities have consistently misled the public by stating that 100% of funds go toward scholarships, when it has been reported that only about 4% to 7% has actually gone to the causes. It was reported that most of the intended beneficiaries only received an average of between $1,000 and $2,000, while Hannity and his entourage of friends and family used funds from Freedom Alliance to travel in style, including spending tens of thousands of dollars on private planes alone.
From the well-known to those never heard of before, charities and those that fund them are being taken advantage of. Before giving, a little due diligence to avoid the Brian Mullaneys and Wade Rathkes of the world can be researched through the American Institute of Philanthropy.