Almost nine years ago Congress created a federally funded, nonprofit corporation to help veterans start their own small businesses. But like so many well-intentioned programs, this one became a cesspool of waste and mismanagement during the Bush years.
A new government investigation has found that the National Veterans Business Development Corporation engaged in widespread misuse of taxpayer funds while failing to carry out even its most basic mission. Millions of dollars were spent on lavish corporate perks for top executives, including outsized salaries and bonuses, with virtually no oversight by the Bush administration.
Whether it’s the Securities and Exchange Commission’s failure to curb massive investor fraud, or the massive bungling of federal aid for hurricane victims, the government’s incompetence has been astounding over the past eight years. But nothing drives the point home quite like the petty abuses that took place in this obscure program.
The organization’s mission became even more important following the U.S. invasion of Iraq in 2003. Hundreds of thousands of servicemen made huge sacrifices, often serving multiple tours of duty, before returning home to pick up their lives. But instead of helping veterans, the corporation frustrated efforts by groups like the American Legion, which threw up its hands in disgust and withdrew from its programs last August.
“It’s appalling that an organization created to aid our nation’s heroes would instead squander taxpayer dollars,” said Sen. John Kerry, D-Mass, chairman of the Senate small business committee, which conducted the investigation and produced the 58-page report.
The corporation, known as TVC for short, was plagued by mismanagement and questionable spending almost from its outset in 1999. General Accountability Office (GAO) investigations in 2003 and 2004 criticized its lack of internal controls, its inability to measure the effectiveness of its programs, and its inability to become self-sufficient within the timeframe mandated by Congress.
Of course, a succession of TVC executives assured lawmakers that steps were being taken to address problems. But the abuses have continued largely unabated up to the present day. “The committee’s staff investigation revealed an entity that has been not only ineffective in meeting its responsibilities to our national veterans, but troublingly irresponsible in its use of taxpayer dollars,” the report states.
In terms of its mission — to “establish and maintain a network of information and assistance centers” — the organization has spent only 15 percent of its funding on that goal since its inception. Today, its regional centers in Boston, St. Louis, and Flint, Mich., are strapped for funds and struggling to survive in the face of budget cuts that have reduce the centers to 9 percent of funding.
But that’s not the worst of it. “The most shocking revelation from the investigation was the thousands, perhaps millions, of wasted taxpayer dollars spent on extravagant dinners, luxury hotels, first-class travel, high executive salaries, ineffective programs, and other dubious expenditures,” says Kerry.
The investigation focuses largely on board of directors Chairman Jeffrey W. Gault, former president and CEO Walter Blackwell, and his acting successor John Madigan, all of whom seemed to have had an appetite for high-priced steakhouses, among other luxuries.