Friday, August 9, 2013

Why You Should Not Support The Salvation Army

The Salvation Army is a corrupt, money making business.  It's all about the money...your money.  Consider the following issues before you donate to the organization.  You can read details of all of these issues on my other blogs.  Read them before you donate. 

Officer misconduct:  Salvation Army officers are protected by the organization when they commit acts of misconduct and criminal actions, including rape and sexual assault.  Lt. Luis Valdez, a Salvation Army officer, was arrested and charged with raping a 16 year old girl in El Paso.  The Salvation Army transferred him to a new playground, housing him at a children's day camp for a year.  Another officer raped a young girl in Hawaii and was never punished.  The Salvation Army told victims he was terminated, but those victims found out he was merely transferred to a new location.  The victims found out when they read his obituary 50 years later.  He was a Salvation Army officer when he died.

Another officer, Major Robert Green took pictures of women's rear ends and showed them in a Power Point presentation.  He was simply transferred to another location.  He is still on the job in Fort Worth, Texas, and still disrespecting women. 

Officer misconduct runs rampant throughout The Salvation Army.  Offenses for which employees are terminated is never addressed if committed by officers, or the officer is merely transferred to another Salvation Army location.  There is a "thin black line" that covers up and that protects officers.

Disaster Relief Scams: Read The Salvation Army's pleas for disaster relief donations very carefully.  None of those pleas state that your donations will go to the victims of disaster victims.  The money goes into the general fund of The Salvation Army.  Victims of disasters never see the money, even though you believe you are donating money for their benefit.  Disaster relief is a money making business for The Salvation Army.

Employee Pension Plan: The Salvation Army has a liability for employee pensions that is approaching $2 billion.  The pension plan is severely underfunded, yet the organization owns more than $4 billion in real estate, including luxury offices and homes for its officers.  Employees who are counting on retirement benefits from The Salvation Army should be aware of the issues with underfunding the plan.

Vehicle Donation Plan: The issue with this program relates to officer embezzlement of funds from sales of donated vehicles and fraudulent letters sent to donors who use those letters to justify income tax deductions for vehicles donated to The Salvation Army for resale.  If you donated a vehicle to The Salvation Army and the vehicle was not sold for the amount the organization represented to you in its donor letter, you may have an issue with the Internal Revenue Service.

There are many issues that should cause you to pause if you are considering a donation to The Salvation Army.  Read my blogs before you support corruption.

Saturday, August 3, 2013

Donald Meyer - Mishandling of Money

In March, 2012, Mr. Donald Meyer, the Facilities Manager for The Carr P Collins Social Services Center, owned and operated by The Salvation Army, mishandled money on two separate occasions.  The incidents related to the sale of scrap metal.  At the time I was the Finance Manager for the facility.

The Carr P Collins policy and procedure for selling scrap metal is simple.  It must be sold to an approved dealer who issues a weight ticket showing a calculation of the amount paid for the scrap metal.  The representative selling scrap metal must immediately turn any cash received over to the Finance Department along with a weight ticket.    This procedure ensures timely accounting for the cash receipt and creates the proper audit trail which adheres to  Generally Accepted Accounting Principles.

One of the employees who observed what we now know was Meyer's second incident with respect to the sale of scrap metal.was a finance department employee who knew the procedure for selling scrap metal and handling the cash received for it.  She was the employee to who should have received the money and supporting documents from Meyer and she had not received the money or support for it.  She reported to me that she had observed and the fact that she had not received money for the sale of scrap.

I reported the incident to Meyer's supervisor, Jeffrey Upperman, Associate Director for the Carr P Collins Facility.  Upperman stated that he was not aware of the sale, but he would remind Mr. Meyer to turn in the money and weight ticket.

Later that day Upperman informed my staff that Meyer sold the scrap metal for $150.00 and would be turning over the money and weight ticket.  Approximately thirty minutes later, Meyer turned over $127.00 in cash, stating it was for the sale of scrap metal.  No weight ticket was offered.  I instructed one of my staff to call the approved scrap metal dealer and request copies of the weight ticket. 

She was told by the approved dealer that no one from The Salvation Army sold scrap metal to them on the date in question.    The procedure for selling scrap metal was not followed.  We had to ask Meyer for the money he received and he turned in an amount that was $23 less than he told his supervisor he received.

Meyer was reminded by a finance staff member that the finance department needed support for the cash receipt.  Meyer said he did not have support documentation,  but he did offer the name of the scrap metal dealer who allegedly purchased the scrap metal.  The finance department attempted to contact the scrap dealer by phone, but did not get an answer.  The purpose of the attempted contact was to ask the dealer to fax a copy of the receipt and weight ticket to The Salvation Army.

On the morning of March 30th Mr. Meyer turned in a support document dated March 30th for the $127.00 he turned in on March 28th.  The document did have a company name, but no information with respect to weight and price per pound for the $127.00 payment.  The document did not meet accounting standards. 

Later that day finance was informed me of another issue.  Meyer and one of his staff was observed loading scrap metal in the warehouse about one week prior to the March 28h incident.  Meyer had not turned in money and support for scrap metal he was observed loading a week earlier than the March 28th incident.

I reported the earlier incident to his supervisor, Jeffrey Upperman.  Again, Upperman stated that he knew nothing about it, but would talk to Meyer. 

I also informed The Human Resources Manager, Kacye Harvey who told me she would look at surveillance camera tapes from the warehouse to see if scrap metal was loaded by Meyer a week earlier.  I told her I would follow up with the scrap dealer and try to verify the authenticity of the receipt.  She agreed it was appropriate for me to do it

The next day I went to the scrap metal dealer and request back up documentation for the receipt provided by Meyer.  The dealer informed me that he had not purchased any scrap metal from Meyer, or anyone else from The Salvation Army.

I returned to the office and informed the Human Resources Manager what I had learned.  By then she had visited with The Director of Operations, Blake Fetterman about the issue.  Harvey asked me why I followed up with the scrap dealer.  I reminded her that she agreed it was an accounting issue.  She said there was no hurry and that Fetterman wanted it handled discreetly.

I disagreed with respect to the urgency of the matter, from an accounting standpoint and assured Harvey that I was handling the matter discreetly.  Any disciplinary action that may resulted from Meyer not following Salvation Army procedures was a Human Resources matter, but the documentation issue was a finance department matter.

Later that day Upperman and Fetterman came to my office to confront me.  Both were upset that I was investigating the issue.  Upperman said there was no issue with anything related to accounting principles.  He also said I was not an auditor and should not have investigated the issue related to Meyer.

Upperman's assertions were laughable.  Both demonstrated his lack of knowledge with respect to accounting principles and internal controls.  One of my duties as Finance Manager was to insure internal controls were maintained and Generally Accepted Accounting Principles were followed.  I had performed audits in the past and was commended by Salvation Army leadership for my work.  This time, instead of supporting me, Upperman called me an “out of control cowboy”.  I took exception to that characterization and told him so.

Fetterman then tried a different spin.  She said my actions placed The Salvation Army at risk for legal action; an opinion she alleged came from the Human Resources Manager, Kacye Harvey.  To this day Harvey has never conveyed that opinion to me.  Why?  Harvey knows my actions were within legal boundaries.  She knew then and knows today that I did my job.

I told Fetterman and Upperman that it was my opinion I was doing my job; something I have since verified with the internal audit staff at The Texas Divisional Headquarters of The Salvation Army and The Financial Secretary, Durai Pandithurai.  I was doing my job, no question about it.

Fetterman then said, “I don’t believe Donald Meyer would steal money.  He is a minister and has his own church.”  I confess that I was surprised to hear the Meyer was a minister, given the language I heard him use in the past.  However, that was irrelevant with respect to the issue at hand.

Fetterman's us of the word "steal" was the first time anyone used that word with respect to the incident.  I was trying to secure the proper documentation for an accounting transaction and had accused no one of theft.  I was concerned about the fact that Meyer had not been forthcoming about a possible earlier incident when he was asked about the March 28th sale, but made no accusation with respect to theft. 

At that time I did mention my concerns that Meyer had not been forthcoming with respect to a possible earlier sale of scrap metal.  Being asked about a sale on March 28th should have jogged his memory about a sale he made a week earlier.  I asked Fetterman and Upperman if they wondered  why Meyer had not volunteered information about an earlier sale at the time he was asked about a sale he made on March 28th.  There was no answer to that question.

Finally, Fetterman offered her real concern.  She did not want any information relating to Meyer leaving The Carr P Collins facility.  She did not want her bosses at The Dallas/Fort Worth Area Command for The Salvation Army to know about the issue.  It was her position that we were working to recover The Salvation Army's money and the issue was a "closed matter".

It is important to note here that at least seven other employees had first-hand knowledge of the incident and the issue was being talked about throughout the facility at the time Upperman and Fetterman paid their "closed mater" visit to my office.  Ignoring it, from a finance department perspective, was not an option.

I documented my findings and turned them over to Human Resources.  Fetterman, Upperman and Harvey swept the issue under the carpet, never once considering it was not the ethical thing to do and never once considering that loyal employees throughout the facility knew about the incident.  Director Blake Fetterman only wanted to make sure her superiors did not find out about the incident.  She covered up the incident to avoid embarrassment.

A day or two after Fetterman and Upperman confronted me, Upperman gave the finance department $160.00 cash, stating it was for the first sale of scrap by Meyer.  Upperman turned the money over to the finance department with a note stating documentation related to the sale of the scrap metal could be found in Human Resources.  Donald Meyer still works at the facility.  Case closed?  No, incident covered up.

The handling of the incident by Fetterman, Upperman and Harvey was an embarrassment and a testament to the fact that they are not ethical.  Numerous employees know the three of them swept the incident under the carpet.  Those same employees know that a counselor was terminated for taking $5.00 from a client.  Meyer was a manager at Carr P Collins; he got a pass for mishandling much more money.

Until now, I have not discussed the details of the incident with anyone other than those mentioned in this piece.  However, I was asked about it by numerous employees who knew a cover up had taken place.  I performed the duties of my job ethically.

Fetterman, Upperman and Harvey are very intelligent people.  There is no question that they know they did not handle the issue with Donald Meyer by any standards approaching ethical behavior. Fettermand an Upperman wanted to avoid the embarrassment of having Salvation Army leadership find out that one of its managers got away with breaking rules for which others are terminated.

I believe Harvey was apparently talked into turning her head for future considerations.  Within months of the incident she was promoted to Human Resources Manager at The Dallas/Fort Worth Metroplex Command (Area Command).  She was recommended for the job by Blake Fetterman.  With Kacye Harvey's promotion, knowledge of the Donald Meyer incident made it to The Area Command of The Salvation Army where the cover up was still a secret until I wrote this piece.

What about the five core values of The Salvation Army?

Trustworthy. How trustworthy is someone who hides the truth and shirks responsibilities?  Fetterman, Upperman and Harvey all swept the incidents under the carpet and chastised me for doing my job.

Uplifting. Is covering up the truth uplifting to the loyal employees who know the truth? 

Bravery. Only cowards hides the truth.  Facing the truth would be an example of bravery.

Compassionate.  Were the actions of Fetterman, Upperman and Harvey compassionate toward Donald Meyer, or did they just empower him with respect to breaking the rules. 

Passionate. Fetterman and Upperman were certainly passionate in their attempts to coerce me into ignoring my duties as The Finance Manager of The Carr P Collins facility.  However, neither of them passionately approached their jobs with any semblance of ethical behavior.

Wednesday, July 24, 2013

How The Salvation Army Values Gifts-In-Kind

I have been asked by my readers to explain gifts-in-kind.  Thank you for the question.

In short, gifts-in-kind includes donated food, clothing, supplies and volunteer hours, booked by The Salvation Army at market value.  When the entry is made for gifts-in-kind, The Salvation Army records income equal to the amount it records as expense, or puts it into inventory.

There is actually nothing wrong with that entry.  It is the way most non-profit organizations record gifts-in-kind.  It follows Generally Accepted Accounting Principles.  What The Salvation Army does those numbers in its written reports is the problem.

I mentioned in other blogs that disaster relief is big business for The Salvation Army.  Gifts-in-kind are a very large part of that disaster relief business.  The Salvation Army distributes gifts-in-kind to disaster victims, which is a good thing.  However, gifts-in-kind are valued as costs of the disaster relief effort by The Salvation Army when reporting costs associated with the disaster relief effort.  Remember, gifts-in-kind cost The Salvation Army absolutely nothing.

When disasters strike, such as the tornado that recently hit Moore, Oklahoma, The Salvation Army quickly places ads, asking you to donate to the organization.  Read the ads carefully.  Those ads do not state that the money you donate will go to disaster victims and it does not go to the victims.  Your donations go into the general fund of The Salvation Army.  The organization uses those donations as it sees fit.

Reporting for disaster relief operations is sketchy at best, but it does release some reporting to major donors who press for an accounting.  That reporting is less than honest reporting.

This reporting is not offered to the general public, but the organization uses it to entice major donors to keep giving money.  These major donors give very large sums of money to The Salvation Army and some do press for reporting as to how their donations are spent.  What they should press for is an audit, conducted by an outside auditing firm.  The truth with respect to how disaster donations are used would infuriate donors.

Example:  Assume The Salvation Army collects $100,000 in cash donations from pleas for disaster assistance.   It reports the out of pocket dollars to send its disaster vehicles and officers to the disaster site as $50,000.  For the sake of argument, assume that $50,000 is an actual cost to the organization.  The Salvation Army reports a profit of $50,000 from the disaster relief donations.... right?  Wrong!

The Salvation Army also reports the market value of gifts-in-kind it distributes to victims against those donated dollars.  For purposes of this example, assume the market value of the gifts-in-kind is $75,000.  The Salvation Army reports a shortfall of $25,000 to major donors for the disaster relief effort, in hopes those donors will dig deeper and donate more money to the organization. 

The Salvation Army actually spent $50,000, but includes the value of $75,000 in gifts-in-kind as costs incurred; a total cost of $125,000 for the disaster relief effort is reported to major donors.  So, The Salvation Army reports a $25,000 shortfall with respect to dollars received and dollars spent for the specific disaster relief effort.  Of course The Salvation Army gladly accepts donations to make up that shortfall, that does not really exist.

What's wrong with this picture?  The gifts-in-kind cost The Salvation Army absolutely nothing. The organization gets these items at no cost from donors.  Then the organization, in effect, sells the gifts-in-kind that donors previously gave to the organization to donors, at market value when it distributes them in disaster relief efforts.  In some cases it even charges volunteer hours at market value to the disaster relief.  Volunteers donate their time to the disaster relief and the Salvation Army charges donors for those volunteer hours at market value.

It's all smoke and mirrors with the numbers The Salvation Army reports to major donors.  Gifts-in-kind are a large part of this smoke and mirrors reporting.  No ethical accountant would endorse this type of reporting.

Is it illegal?  Sadly, no, but it is highly misleading and many view it as an unethical practice.  Donors give food, clothing and supplies to The Salvation Army and the organization sells those items back to those donors at market value when it distributes the items to disaster victims.  The Salvation Army keeps a large portion of your disaster donated dollars, thanks to the gifts-in-kind you donate.

Let's Examine That 18% Overhead Claim

The Salvation Army states the organization has an 18% overhead cost, claiming 82% of the dollars you donate go directly to the benefit of those in need.  Let's examine that claim.  It is very misleading.   

The organization claims that it submits to annual audits, performed by Arthur Andersen, yet those audits are not public record.  The claims that The Salvation Army submits to annual audits is very public, but the annual reports you can access on the organization's website contain only unaudited financial statements.  Check online, you will not find an audit financial statement.  Why not put the audited financial statements online?

Why does The Salvation Army submit to an annual audit?  The organization claims it is under no obligation to do so.  That is a false claim.  The Salvation Army has state and federal government contracts that require the organization to have annual audits, conducted by an outside audit firm.  So, why not release those financial statements to the public?  What is The Salvation Army hiding from the public that it cannot hide from state and federal government agencies?

The Salvation Army is hiding a lot!  With respect to this blog, the organization buries overhead expenses in a category called program expenses.  Program expenses are not reported as overhead.

For example, anything paid for an officer, as part of his/her compensation package, is considered program expenses.  The Salvation Army sees its officers as gods over the corps they manage.  As such, they are the administrative managers and fund raisers for the corp, as well as the chaplains.  There is no question that administrative and fund raising expenses are overhead expenses.

Most officers claim to spend at least 50% of their time on administrative and fund raising matters.  It follows that the same percent of officers compensation should be considered as overhead expense, but The Salvation Army does not report any part of officers' compensation as overhead expense.

Let's take a look at that compensation package.  Officers in The Salvation Army say that there compensation is slightly above minimum wage.  I truly believe they are taught that in officer train school.  The fact that it is a bold face lie seems irrelevant.  It sounds good when the officer is asking for donations.

It is true that most officers receive money allowances that are close to minimum wage.  There are no taxes taken from that allowance.  The Salvation Army calculates the tax liability for the officer and gives the officer a grant to pay that tax liability.

In addition to a cash allowance, The Salvation Army pays all living expenses, transportation, medical insurance costs and retirement plan costs for its officer.  It also treats them to luxury vacations, such as cruises disguised as conferences.  The Salvation owns the homes the officers live in, pays all utilities, insurance and upkeep on the home.  The Salvation Army owns the vehicle (s) driven by its officers, pays all gasoline, insurance and maintenance costs.

Salvation Army officers enjoy a higher standard of living than most who donate money to the organization.

The Salvation Army officer's compensation package is bullet proof with respect to downturns in the economy.  When utility costs rise, The Salvation Army pays the increase.  When gasoline prices rise, The Salvation Army pays the increase.  Actually, your donations pay the increased costs.

All officer compensation is reported as program costs by The Salvation Army.  At least 50% of these costs should be reported as overhead, which would change the 18% overhead claim dramatically.  There is no way 82% of the money you donate makes it to those in need.

Two other expenses The Salvation Army does not report as overhead are "Support Services" and "Statewide Services".  These two expenses total 11.8% of all money received by Salvation Army Corps from donations, grants and agency contracts.  If you donate $1.00 to The Salvation Army, the organization's Divisional Headquarters offices and Territorial Headquarters offices skim nearly 12% of that dollar off the top, as administrative overhead.

This percentage is left out of the equation when calculating a minimal 18% overhead.  This does not follow Generally Accepted Accounting Principles.  Why is the Salvation Army allowed to make the 18% overhead claim?  You allow them to without questioning the claims!  Start asking questions.  Your questions will not be answered.  The Salvation is not a transparent organization.  It's attractive public image is manufactured by very well oiled public relations firms.  The view is much less attractive within the organization.

 Another issue with respect to costs reported as program expenses, is the "expense" category, "Gifts In Kind".  This represents donated food, clothing and supplies, charged to program expenses at market value.  Public volunteer hours are also valued at $15 to $20 per hour and charged to program expenses.  (This hourly rate is higher than the hourly pay rate of most The Salvation Army employees).

Also it is questionable as to whether gifts-in-kind should be classified as a program "expense". The Salvation Army pays nothing for these items, but values them as expenses to the organization.  The Salvation Army also books income for these gifts-in-kind, equal to the amount of the expenses charged to program expenses, but does not include that income when it calculates the percentage of income to expenses that go directly to those in need.  This definitely inflates that claim that 82% of all donations go directly to those in need.  Remember, The Salvation Army pays nothing for gifts in kind, but accounts for these items as program expenses, at market value. 

You should be aware of these facts before you choose to believe The Salvation Army's claim that it holds its overhead costs to 18% of your donated dollars.  Whether, or not, you donate to The Salvation Army is a choice you should make based on all the facts. The Salvation Army spends much more of your donated dollars on overhead than the organization reports.  How do you think The Salvation Army built a net worth of $8.8 billion?  That net worth came from your donations!

Monday, July 22, 2013

Angel Tree vs Red Kettle Campaign

There is a misconception about two programs run by The Salvation Army during the Christmas season.  Yesterday, a friend told me she thought the purpose of both programs was to help the needy with Christmas.  This is not the case.  The only thing these two programs have in common; both are run by The Salvation Army.

The Angel Tree program is provides a  way for you to give gifts to a person in need at Christmas time.  It is a program worthy of your donation because you do not give money to The Salvation Army.  The gifts you buy do go directly to the person whose name you take from the Angel Tree.

Angel Tree locations are normally sponsored and manned by volunteers from local companies and churches.  You can find an Angel Tree set up in many malls around your local area.  Most people who donate in this way take a name from the tree and buy the items on that person's wish list that day,  while shopping for other gifts in the mall.  Then you take the gifts to the location where the recipient name was selected.

If you wish, you can buy the gifts somewhere other than the location where you picked up the name, then take them to any Angel Tree location, or any Salvation Army facility.  I recommend you take them to an Angel Tree location.  If you take them to a Salvation Army facility, such as a Corp location, there is a chance the items will not make it to your intended recipient.

Local Corps sometimes divert gifts to other programs and there are news reports every year, somewhere in America, about Salvation Army officers and workers stealing Angel Tree gifts.  Every Salvation Army program is open to corruption and there will always be those who take advantage of it.  So, take the added few minutes and make sure you drop off your Angel Tree gifts at an Angel Tree location.

After you drop off your gifts The Salvation Army arranges for recipient pick-up from one of the organizations warehouses.  My girlfriend and I have each bought Angel Tree gifts for years, and we plan to continue.  We drop off our gifts at and Angel Tree location.  The likelihood of the gift getting to our intended recipients is as close to 100% as it can be.
The Red Kettle Campaign program run by The Salvation Army is an entirely different matter.  The money you drop into a red kettle goes into the general fund of The Salvation Army.   That money is spent however The Salvation Army sees fit.  There is a common misconception that money is spent on the needy at Christmas time, since it is a campaign that takes place during the Christmas season.  Not so.  The Salvation Army merely uses the time of year to beg for money while you are in a giving frame of mind.

The Red Kettle Campaign is big business for The Salvation Army.  In early 2013, the organization announced collecting around $300 million in its 2012 "Red Kettle Christmas Campaign".  The organization worded its announcement, incorporating the word "Christmas" because it wants you to think of the program as being one that helps the needy at Christmas time.  The more you hear the word Christmas connected to the words Red Kettle Campaign, the more money you will drop into the red kettles, believing you are helping the needy at Christmas time.

Actually, The Salvation Army rakes 11.8% of your kettle donations right off the top.  For example; in Texas, The Texas Divisional Headquarters in Dallas and The Southern Territorial Headquarters in Atlanta take 11.8% of the red kettle donations for support services.  This overhead is not included in the numbers when The Salvation Army states that 82% of the money you donate goes to the clients the organization serves.  There are many issues with that 82% claim, but that is covered in another blog.

The only program run by The Salvation Army, and local volunteers, that is designed to give 100% of its donations to those in need is The Angel Tree program.  Why?  Because you do not give money to The Salvation Army.  You actually buy gifts for the recipients.  No money donation runs through a Salvation Army bank account, which is known to cause shrinkage in the donation.  There is no money for The Salvation Army to skim off the top. 

If you plan to participate in the Angel Tree program this year, you should do it.  The chances of your gifts getting to the right person are greater than them not getting to that person.  It is a risk worth taking. 

However, do not drop your money into a red kettle believing you are helping those in need at Christmas time.  You may be helping The Salvation Army pay for a luxury cruise for the organization's officers, or you may be helping subsidize the almost $2 billion shortfall in the organizations pension plan.

All Salvation Army pleas for money are very carefully worded.  Wording in plea advertisements for your donations to specific disasters, for example, never state that your donations will go to the victims of the disasters they reference in the advertisements.  The money you give goes to The Salvation Army, not disaster victims, but the advertisement is worded so you will assume the money is going to disaster victims.  It's not illegal, but it is deceptive.

The same is true for pleas to give to the Red Kettle Campaigns during the Christmas season.  There is no claim that the money will go to help those in need at Christmas time, but the wording makes it easy for you to assume the money you give will go to help those in need at Christmas time.  It's not illegal, but it is deceptive.

Read Salvation Army advertisements very carefully before you donate and you will realize that there is no representation by The Salvation Army that your donations will be used for program to which you thought you were donating.  The Salvation Army offers no reporting on monies received vs monies spent for specific programs.  There is no public accountability as to how your donations are spent.  The Salvation Army relies on public relations, instead of public accountability.  Don't fall for a smoke and mirrors advertising campaign!

Friday, July 19, 2013

Salvation Army Officers And Sexual Assault

Finally, a year after Salvation Army officer Luis Valdez was arrested and charged with raping a 16 year old girl, the organization terminated him as an officer.  The rape took place in a house and bed owned by The Salvation Army, yet it took the organization a year to do the right thing.  The Salvation Army claims that Valdez is no longer an officer.  As you will see later in this piece, there is reason to question the claim.

For the sake of argument, let's assume Valdez has truly been terminated.  Why did it take so long?  I was an employee of The Salvation Army for 7 1/2 years.  I would have been fired immediately if I had been arrested and charged with rape.  The answer to the "why" question is not complicated.  Those who are  current, or former employees of The Salvation Army know that officers are held to a very low moral standard.

The Salvation Army pretty much overlooks officer misconduct.  In fact, the Salvation Army covers up officer misconduct if a cover up is needed.  A thin black line of secrecy that exists within the brotherhood/sisterhood of Salvation Army officers.  Many of them have enjoyed the thin black line of cover up with respect to their own personal misconduct.  Those who have not, know the thin black line will be there for them if they do need a cover up in the future.  So they turn their heads to the misconduct of fellow officers.

The evidence against Luis Valdez was immediately overwhelming with respect to the 16 year old.  Semen in the young girls rape kit matched Valdez's DNA.  Other alleged victims also came forward.  Yet The Salvation Army waited one year after the DNA match and other victims came forward to terminate Valdez, stating that he had been suspended, leaving the impression that he was gone. 

He was, in fact, moved from El Paso to Camp Hoblitzelle, in Midlothian, Texas, where he was housed until he was finally terminated.  Camp Hoblitzelle runs day camps for children, and is owned by The Salvation Army.  Where else would The Salvation Army send an alleged rapist?

Sadly, Valdez is not the only officer to be accused of sexual assault of a minor.  He is not the only officer The Salvation Army sent away; "out of sight, out of mind".  One officer was hidden from his victims for 50 years, after The Salvation Army told them he was fired.  The story is almost unbelievable, but very true.

In 1959, on the island of Ohau, a Salvation Army officer, Richard Tenkan Taba, sexually assaulted a minor on at least three occasions.  That minor is now 65 years old.  After Taba sexually assaulted the minor, The Salvation Army assured her, her family and authorities that he was fired.  He left Oahu. 

I've talked with those who are familiar with the case, including reporters who are investigating the incident now.  In 1959 sexual assault was not as aggressively pursued as it is today.  Even though several sources say Taba admitted to his crime, he was not prosecuted, but he did leave the island of Oahu.

The state of Hawaii is made up of six inhabited islands.  Each island is a world of its own.  I lived on one of the islands for five years and rarely new what was going on on any of the other islands.  In 1959, moving from Oahu to Maui was like moving around the world, even though the two islands are neighbors.

Taba died February 17, 2012.  His sexual assault victim learned of his death when she read his obituary in the local newspaper.  She was shocked to read that he was an officer in The Salvation Army when he died, and had been living on the island of Maui, where The Salvation Army sent him when the organization falsely announced that he was terminated.

Over the years Taba rose to the level of Major.  After he committed sexual assault he lived the remainder of his life as a Salvation Army officer on the island of Maui, where no one knew he had sexually assaulted a minor.  The Salvation Army lied to everyone about terminating him.  The thin black line that covers up officer misconduct today existed in 1959.

Of course, there is now an investigation to determine if there are other victims on the island of Maui.  That investigation is necessary because The Salvation Army lied about getting rid of him. If The Salvation Army, and authorities in Hawaii had handled the case properly in 1959, Taba might have lived out his life in a Hawaii prison, instead of enjoying the beauty of the islands.

Taba's Oahu victim has filed suit against The Salvation Army for the organization's deception.  The man who assaulted her is dead, but the fact that The Salvation Army lied about terminating him is a major public relations issue for the organization in the State of Hawaii.  If other sexual assault victims come forward from the island of Maui, The Salvation Army facilitated those assaults. 

It's time for The Salvation Army to hold its officers to the same moral standards it preaches to the rest of the world.  One of the five core values of The Salvation Army is Trustworthy.  The organization was anything but trustworthy with respect to two of its officers, Taba and Valdez. 

We are no now realizing that The Salvation Army, with respect to its officers, has operated for many years like The Catholic Church operated when a priest committed sexual assault.  Both organizations covered up for the offender and transferred that offender to a new location.  This cannot continue!

There are other reports of Salvation Army officer sexual misconduct being brought to my attention from other parts of the country.  I am gathering documentation and will report on those incidents.  We cannot let this blatant disregard for donors and Salvation Army clients continue.

Wednesday, July 17, 2013

Salvation Army Officer Arrested - Accused Of Raping A 16 Year Old Girl

The Salvation Army officer's name is Luis Leonel Valdez.  In June, 2012 he was a youth minister for The Salvation Army in El Paso, Texas. 

Valdez took the 16 year old girl to breakfast at McDonalds.  She reported to police that the coffee she drank tasted funny.  The next thing she remembered was waking up in Valdez's bedroom.  Her pants and panties had been removed and her blouse was pulled up.  Valdez was getting dressed.  When he left the room, the young girl managed to escape and called 911.

DNA from her rape kit matched the DNA of Valdez.  When arrested, he told police that the girl was just hallucinating, or having a nightmare. He made no statement about the DNA match.

The Salvation Army has strict policies with respect to officers being alone with children.  Under no circumstances are officers aloud to take them to their homes.

Major Michael Morton, Area Commander for The Salvation Army in the El Paso area was asked about the incident.  His response;  "In this particular case, this is a very abhorrent behavior. We have a case where the individual deliberately violated our own safety checks. If someone deliberately goes out to violate the law, they will succeed. The trick is did we catch it and have we done something about it? And the answer is, yes, we did."

Really?  The Salvation Army caught it?   The police investigation indicates that the young girl escaped from Valdez and reported that she had been raped.  The Salvation Army caught nothing!  Note that Major Morton refers to Valdez as "the individual", in an attempt to distance The Salvation Army from the crime.  The individual charged with the rape of a 16 year old girl is a Salvation Army officer.  The Salvation Army's "safe from harm" policy failed.

Despite Major Michael Morton's attempts to distance The Salvation Army from the incident in question, and shed a good light on the issue as far as The Salvation Army's policy is concerned, it is not as cut and dry as Major Morton's statement indicates.  The El Paso Police Department believes there are more victims and has set up a tip line, urging potential victims to can come forward.   Again, The Salvation Army caught and prevented nothing!

Another Salvation Army spokesperson stated "The Salvation Army will reserve judgment until we see how this plays out. The officer has been suspended."

What happens to a Salvation Army officer who is suspended while The Salvation Army reserves its judgment?  What happens to the officer while The Salvation Army waits to see how it "plays out"?

Salvation Army officers live in homes owned by the organization, drive vehicles owned by the organization, enjoy full medical benefits and receive a salary.  Even though Valdez was suspended, The Salvation Army continues to financially support him, with his officers benefits.  Actually, your donations continue to support Valdez, while he awaits trial for his alleged crime.

It's unclear at this time whether, or not, The Salvation Army is paying for Valdez's defense, but the organization does have a vested interested in how it "plays out".  The Salvation Army may have some civil liability for its failure to keep a 16 year old girl safe from harm.  Again, any money spent by The Salvation Army with respect to this incident comes from your donations to the organization.

From all indications, as of today Valdez is still on The Salvation Army payroll and is still being housed by the organization.  What is outrageous about the current status of the suspended officer is where The Salvation Army has chosen to house him.

The Salvation Army owns a resort, Camp Hoblitzelle, near Midlothian, Texas, the place where Valdez is believed to be housed.  Those who are not familiar with the resort will be shocked to know that The Salvation Army conducts meetings, seminars and day camps for children at the Camp Hoblitzelle.  They even rent out the facility to other religious organizations for day camps.  Housing an alleged rapist where children are sent for day camp is beyond belief!

If this outrages you as much as it outrages me, call Major Ward Matthews, Area Commander for the Dallas Metroplex Command, 214-637-8100 and ask him why The Salvation Army is housing an alleged rapist at Camp Hoblitzelle.

Update 7-18-13.  The investigation continues with respect to other potential victims.  No trial date set at this time.  Many thanks to Channel 7 news for staying on top of the story.  If only The Salvation Army took sexual assault by one of its officers seriously.

Tuesday, July 16, 2013

The Salvation Army and The First Amendment

I have many friends who work for The Salvation Army.  Most of them have seen the corruption I now write about.  None of them provides input for any of the pieces I write.  My blogs are based on my first-hand knowledge of the corruption I have seen within The Salvation Army.

Nevertheless, about a dozen of my friends have informed me that The Salvation Army reminded them that they should no longer talk to me, classifying me as a reporter.  The Salvation Army has informed all of them that any employee who talks to reporters can be terminated.  I wonder how they reconcile that position with the First Amendment rights of Americans. 

What does The Salvation Army have to hide?  The answer to the last question is important.  The Salvation Army is a corrupt organization and it works hard to hide that corruption from the donating public.  Public image is very important to non-profit and religious organizations that ask you for donations.

The Salvation Army is a non-profit, religious organization and it depends on billions of dollars in donations each year to pay for lavish offices and lifestyles for its officers. Last year The Salvation Army reported around $2.8 billion in donations from you and others like you.  If you do not give, The Salvation Army will not survive.  So, hiding the truth about corruption is important to The Salvation Army.

The Salvation Army believes in the organization's First Amendment right to free speech.  Those who work for the organization have the same right to free speech.  Threats of termination for employees who exercise their rights to free speech should be met with legal action.  Can anyone say "class action suit".

The Business of Disaster Relief

Disaster relief is big business for The Salvation Army.  Do not assume the money you donate to The Salvation Army for a specific disaster will make it to the victims of the disaster.  The money you donate goes into the coffers of The Salvation Army and the organization uses that money as it sees fit.

Read their disaster pleas very carefully.  Those pleas reference specific disasters, such as the disaster in West, Texas, or the Moore, Oklahoma tornado.  The ads ask you to pray for the victims of those disasters.  On the page there is a "donate to The Salvation Army" button.  Do not assume the money you donate will go to the victims of the disasters.  The Salvation Army profits from your donations.  Victims of the disasters never see the money.

The Salvation Army is an $8.8 billion net worth organization.  It owns more than $4 billion in luxury offices, homes for its officers and provides those officers with a better style of living than most people who donate.  The Salvation Army provides its officers with a home, car, medical insurance, a retirement plan, pays all of the officers living expenses, gives them a salary and sends them on luxury vacations with the money you donate, including the money you believe you are donating for disaster relief.

The Salvation Army diverts the money you believe you are donating for disaster relief.  This diversion of funds will continue as the organization runs its deceptive ads, asking for donations you believe will go to disaster victims.  Remember, the ads do not state that your donations will go to disaster victims.  The ads ask you to pray for the victims and donate to The Salvation Army.  

Where do your disaster donations go?  That money goes into The Salvation Army's general fund.  No one really knows how the money is spent, but the organization has one financial issue that will further effect the way it uses your disaster donations in the years to come.  Take a look at its fiscal 2012 annual report.  The Salvation Army owes its retirement plan almost $1.8 billion, which is 67% of the revenue reported by the organization in the annual report.

This liability has grown over the past four years and is going to be a major issue for The Salvation Army in the years to come.  By the organization own admission, the number of officer retirements is growing each year.  In some years, the number of retiring officers retiring exceeds the number of newly commissioned officers.  The organization relies on newly commissioned officers to earn the money to pay its retirees.

Much of the money the Salvation Army receives as disaster donations will be used to pay retirees.  The money you donate by clicking that magic "donate" button on the page with a disaster relief plea for prayers, goes into the organizations general fund.  Victims of disasters never see that money.

You will never see an audited accounting for disaster donations to The Salvation Army.  Example; when the Katrina disaster hit, The Salvation Army finally admitted collecting $295 million from donors who gave to the organization, believing the money would go to the victims of the Katrina disaster.  When pressed for an accounting of those funds, The Salvation Army would only say that it planned to spend about 1/3 of the money on "future" needs of those devastated by the disaster.  What about the other 2/3 of the money collected?  No accounting for that money.

When you do hear The Salvation Army talk about money spent on disaster relief, be skeptical of the way the organization calculates the money it spends.  The Salvation Army has disaster warehouses throughout the United States.  Those warehouses stock donated water, donated food, donated clothing and other donated supplies.  These donated goods cost The Salvation Army nothing.  However, when the organization talks about the money it spends on disasters it includes the market value of those donated goods, even though the donated goods cost The Salvation Army nothing.

If you want to do the most good with your disaster donations, you should look for a disaster relief fund that is set up though a bank in the local disaster area.  Your money will go to the victims.  The Salvation Army will use it to line the pockets of, and improve the lifestyles of, its officers.


Monday, July 15, 2013

Corruption In The Salvation Army's Vehicle Donation Program

There are issues with The Salvation Army's vehicle donation program.  One Salvation Army Corp officer sold donated vehicles, pocketed the money and issued fraudulent letters of donated value to donors who may have used those fraudulent documents to take deductions when they filed their income tax returns.

The Salvation Army sells 500,000 donated vehicles annually, raising more than $250 million for the organization's coffers.  Corruption within this program is nationwide.  It is far to easy for corp officers to sell donated vehicles and pocket the money.  Because The Salvation Army wants you to keep donating vehicles and money, the organization conspires to cover up the illegal actions of its officers.

In Harlingen, Texas one Salvation Army officer accepted 18 vehicles from donors over one fiscal year.  One of those vehicles was sold by the Salvation Army, four were not in condition to be sold, one was repaired, using donated dollars, and given to The Salvation Army officer's daughter.  Thirteen of the vehicles were sold by The Salvation Army officer.  He pocketed the money and issued fraudulent letters to vehicle donors.

The Internal Revenue Service allows you to donate your vehicle to a non-profit organization for resale.  If you donate a vehicle the tax code allows you to take a deduction equal to the amount for which the vehicle is sold to its new owner.  The non-profit organization must send a letter to you indicating the amount for which the vehicle sold before you can legally take a deduction for the donated vehicle.

I was one of two people who audited the Harlingen Corp's vehicle donation program, so I have first hand knowledge of the issues related to that Corp and its Corp Officer.  What follows are some of the issues.

Thirteen of the vehicles in question were sold for an undetermined amount.  The amount of sale was never determined because the Corp Officer pocketed the money and refused to say how much he received from the sales.  We do know that the officer issued letters to the donors for sales values of some of the vehicles, ranging from $700 to $3,200.  These letters, even if the officer sold the vehicles for the amounts stated in the letters, were fraudulent since The Salvation Army, a non-profit organization, never received the money.

One vehicle was repaired, using dollars donated to the Corp by the public, and was being driven by the Corp Officer's daughter.  At the time I participated in the audit, title to the vehicle was still in the name of The Salvation Army.  A donor letter was issued, even though the vehicle was not actually sold.

The Corp Officer was not prosecuted.  No real attempt was made to quantify the amount he pocketed from his criminal actions. It's likely he never paid income taxes on the money he pocketed, which constitutes tax evasion on his part.  All of the letters he issued to donors were acts of fraud against the federal government, specifically The Internal Revenue Service.

At least three officers in The Texas Divisional Headquarters of The Salvation Army, Major Everett Wilson, Major Ken Johnson and Major James Taylor conspired to cover up the Harlingen Corp Officer's actions.  They conspired to cover up acts of fraud against the federal government.

The Salvation Army has a standard procedure of cover up when one of its black uniform wearing officers breaks the law.  There is a think black line of protection that covers up his/her actions.  If the officer's actions are known within the community, he/she is transferred to a new location where the officer can continue to prey on the unsuspecting, trusting public.

The think black line is there for all Salvation Army officers.  They all know it exists.  Even those who have not yet participated in cover up know the cover ups exist.  They turn their heads.  Somehow they all sleep well at night.  How is this possible?  Could it be that they all know the thin black line will be there for them if they ever need a cover up on their behalf? 

Sadly, your donations pay the cost of their cover up actions. Think twice before you donate to this corrupt organization.  Find a worthy charity for you dollars.

Sunday, July 7, 2013

Major Robert Green - Prejudice and Misconduct

I have known Major Robert Green, and his wife, Charma, for more than three years. We met shortly after their appointment as Corp Officers for The Carr P Collins Social Services Center in Dallas, Texas, where I was the Billing and Finance Manager. This piece covers some serious issues; his lack of respect, prejudice and gross misconduct on the job.

Major Robert Green is still a Salvation Army officer and is now assigned to The Lancaster Corp in Fort Worth, Texas. The Salvation Army transfers officers who commit misconduct. Officers are never held to the same standards it holds its employees. The bar for ethical and moral behavior is much lower for officers.

The following statements are direct quotes from Major Robert Green.  

“Did you see the way that woman was dressed? If I were her husband I would have hit her too. Oh, I'm not saying I condone domestic violence, but I do understand why her husband hit her." 

Major Green made those two statements about a client in the Domestic Violence program at The Carr P Collins Social Services Center, a facility owned by The Salvation Army.  At the time he was the Corp Officer for the facility.

“I don't know why The Salvation Army does business with Home Depot. They hire gays.”

Major Green made that statement to the finance staff of The Carr P Collins facility.  The facility has an account with Home Depot.

I know gay and lesbian employees who work for The Salvation Army. Does Major Robert Green believe you should not donate to The Salvation Army? After all, they hire gays and lesbians.

Major Green committed gross misconduct on the job:

In the fall of 2012, at a golf outing (Top Golf) for the program managers of the Carr P Collins facility Major Green took pictures numerous inappropriate pictures of the rear ends of some of our female program managers. He was observed taking the pictures and was asked to delete them from his camera, which he agreed to do. However, instead of deleting the pictures, at the next managers meeting he included them in a PowerPoint presentation, complete with inappropriate captions.

One of the shots was the rear end of The Director of Operation for Carr P Collins, Ms Blake Fetterman. The tag line Major Green chose was, "It's all in the wiggle".  Other female employees were treated to the same disrespect in Major Green's presentation.

Major Green thought his presentation was funny. Everyone else was embarrassed, insulted and outraged.

Several managers, including me, complained in writing about the incident. The Texas Divisional Headquarters of The Salvation Army sent two human resource employees to interview those who complained.

Because I saw a pattern of escalating bad behavior in my dealings with Major Green, I included the other issues documented in this piece in my complaint. I wanted Salvation Army leadership to know I had not chosen to write a complaint about Major Green without seeing the pattern of misconduct.

I was asked why I included other incidents in my complaint. One of the two Human Resources employees asked if I thought mentioning the other issues was appropriate. Yes, his pattern of behavior was relevant.

Three other questions I was asked; “Don’t you think Major Green was just joking?” and “Did you see anyone laugh at the presentation?” and “Will you still be able to work at Carr P Collins with Major Green?”

I saw the final question for me the same way everyone else saw it. We were being invited to leave if we could not work with Major Green. It was a veiled threat, but I got the message and so did others. The Human Resources employees had a job to do and that job was to downplay the issue.  Their mission was to sanitize Major Green’s actions and begin the job of sweeping those actions under the carpet. They should have been carrying brooms, instead of pens and paper.

The Carr P Collins Human Resources Manager, Ms Kacye Harvey, gave the two-person clean up squad a pass, telling me “they are doing what they have to do to keep their jobs.”That was a true statement.

For the next two months Major Green continued to work at Carr P Collins, while The Salvation Army considered what to do. He held his daily devotionals, preached his Sunday sermons and continued to interact with those he offended. In devotionals he and his wife talked about the evil at Carr P Collins that was working against them. Neither ever admitted that Major Green's misconduct was the issue.

Around two months after the slide presentation it was announced that Major Green and his wife were transferring to Fort Worth, where they now serve as Corp Officers. The decision to transfer them was belatedly made by The Salvation Army’s Divisional Commander for The State of Texas, Lt. Colonel Ken Luyk and Major Ward Matthews, Dallas/Fort Worth Area Commander. 

The transfer was announced about a month before it took place, leaving Major Green plenty of time to rub in the fact that he was not really being punished for anything.  Most of the time he claimed victory over all of us who complained about his actions. Of course there were times when he played the victim, blaming everyone at Carr P Collins for persecuting him. Some days he claimed victory, other days he was the victim.

Lt. Colonel Ken Luyk and Major Ward Matthews knew Major Green's actions were wrong, but they also knew all along that appropriate actions would not be taken.  Both of them failed the backbone test. Both are morally bankrupt. Their handling of this incident proves it.  If I had been the cameraman, they would have fired me immediately.  Their moral standards bar is much lower for a fellow Salvation Army officer.

Lt. Colonel Ken Luyk and Major Ward Matthews protected a fellow officer while treating loyal employees like that pile of stuff the neighbors dog leaves in your front yard.

Here is the final blow with respect to Major Green. On May 21, 2013 The Salvation Army released a bulletin announcing that Major Robert Green was sent to Moore, Oklahoma as a counselor, in the aftermath of the tornado that recently moved through the area. With everything The Salvation Army knows about this man, he was still sent to be a counselor. Major Robert Green should be receiving counseling, not giving it.

Saturday, July 6, 2013

Salvation Army's Pension Liability

For the fiscal years 2008 - 2011, The Salvation Army reported a $1.6 billion deficit, (expenses over income).  The annual average income for the four fiscal years was $2.7 billion.  These numbers come from the organization's unaudited annual reports.

The Salvation Army states that the organization has annual audits by an outside audit firm.  It would be nice to see the auditor's opinions with respect to the operations for those years, but the audited financials are not available to the public.  Unaudited financial statements reflect an operating deficit (loss) of almost $250 million for the fiscal year ending September 30, 2009.

During that fiscal year many hourly employees were told to reduce their hours from a 40 hour workweek, to 36 hours.  They were also told The Salvation Army could not give raises that year, yet  Salvation Army officers got raises and were treated to a luxury cruise, courtesy of your donations and sacrifices made by hourly employees.  Salvation Army officers made no sacrifices when the economy was at is lowest point, during the recession.
One item on the most current unaudited balance sheet, the fiscal year ended September 30, 2011, is a liability for pensions, approaching $1.8 billion.  The liability for unfunded pensions is 67% of the organization's average annual income for the past four years.  Is The Salvation Army breaking the law by not paying this liability?

The answer is actually no.  Since The Salvation Army offers its retirement plan as a benefit, and does not ask for participation from employees and officers, the organization cannot be held accountable for failure to fund the retirement plan.  However, is it Trustworthy (one of the organizations five core values)?  Is it ethical? Is it moral?  The answer to those questions is also no.

The Salvation Army is booking a liability for pensions, but from where will that money come to pay that debt?  It will come from potential future donors.  The Salvation Army is hoping you, and many like you, will donate enough money in future years to bail them out.  At some point, The Salvation Army will divert money you donate for those in need to fund its officers and employees retirement.

Donors beware of this organization, especially if you are responding to one of The Salvation Army's disaster pleas, such as the tornado in Moore, Oklahoma.  The money you donate does not go to the victims of the disaster.  The money goes to The Salvation Army.  The Salvation Army sells disaster relief at a profit.  You may think you are donating to the victims of disasters; in reality your donations may be diverted to pay Salvation Army officers' retirements.