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National veterans group drawing more scrutiny in Texas

Austin employees quit after discovering funds collected weren’t staying in the state

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AUSTIN — A veterans’ organization banned in South Carolina and fined in Tennessee is drawing more scrutiny in Texas where it has been operating in several cities for years.

The Austin American-Statesman reported the employees of the Florida-based Veterans Support Organization in Austin resigned as a group in December, because the funds they collected for veterans were not staying in Texas.

The Veterans Support Organization employs veterans and nonveterans to ask for money in front of businesses and at intersections. Critics said little of the collected money actually makes it to veterans.

“The funds weren’t going where they were supposed to be going,” said former Austin chapter manager Robin Woods. “We were telling the public the money was staying here to help local veterans, but the money was going to Florida. ... What they were doing wasn’t right for Texas or for veterans.”

No one at the organization’s Florida headquarters responded to emails and calls seeking comment.

VSO President Richard VanHouten — an Army veteran who lives in a $548,500 South Florida home, according to county records — received $259,965 in salary.

The group said it helps veterans transition to life after the military by providing jobs.

“We are the one employer willing to overlook long (gaps in employment),” said Arthur Metcalf, general manager of the group’s Houston branch, adding that his employees earn $7.25 an hour and are eligible for incentives if they raise more than $250 in a day.

Connecticut’s congressional delegation requested a federal investigation of the group and the Department of Veterans Affairs suspended them from its advisory board.

South Carolina fined the group $5,000 last year and banned it for 15 years for violating its solicitation laws.

Tennessee fined it $50,000 — later settled for $20,000 — in 2010, for failing to properly register and claiming to provide services that it wasn’t providing in the state.

The Texas attorney general’s office declined to say whether it was investigating the group, but said it received five complaints.

The Veterans Support Organization office in Austin is closed and recently had a lock-out notice from the landlord taped to the door. According to its website, it also has a chapter in Dallas in addition to those in Austin and Houston.

In 2007, Veterans Support Organization took in just more than $1 million. In 2010, that figure was $8.4 million.

For 2011, the most recent tax information available, it collected $7.1 million in contributions and paid out $46,597 in grants to veterans agencies. Most of the $3.3 million it spent in 2011 went to a work program paying employees to raise donations.

The American Institute of Philanthropy’s CharityWatch gave the group an F rating.

“VSO’s ‘program’ does not help unemployed veterans obtain useful skills, such as computer programming, carpentry or nursing, to help them obtain gainful employment,” the group said in a recent newsletter. “But the ‘program’ does help VSO raise money for itself by turning veterans into street solicitors.”

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