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California

This tea party charity sends care packages to troops. California says it misspent funds

Sal Russo is named in lawsuit
Sal Russo, pictured in 2010, is named in a lawsuit brought by California Atty. Gen. Xavier Becerra alleging that Move America Forward, co-founded by Russo, misspent charity funds.
(Rich Pedroncelli / Associated Press)

California Atty. Gen. Xavier Becerra said Wednesday he has sued a group of prominent GOP activists, including a former state legislator, accusing them of misusing a charity that sends care packages to soldiers.

The lawsuit by Becerra, a Democrat, accuses the charity Move America Forward and its co-founders, including former Republican Assemblyman Howard Kaloogian and Sal Russo, of misspending resources from the charity, with some going to for-profit firms and other funds going to promote the Tea Party Express and political candidates.

Russo is also co-founder of the Tea Party Express, a political entity that occupied office space provided at no charge by the charity.

He and Kaloogian were also the leaders of the campaign that recalled Democratic Gov. Gray Davis from office in 2003.

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Becerra said that Move America Forward’s marketing practices misled donors about the nonprofit’s plans to use donated money that went to political expenses and a firm headed by Russo.

“Our troops and their commitment to our country should never be used for deceitful gimmicks,” Becerra said. “Preying on donors’ support for military service members and veterans with deceptive marketing not only hurts generous donors, but also hurts military families.”

Russo, who started out working for then-California Gov. Ronald Reagan, angrily disputed the allegations and accused Becerra of a political stunt aimed at hurting the Tea Party.

“It’s been political since the beginning,” Russo of the investigation. “They took the wild accusations that had been made and ran with them even though we have explained to them in detail why it’s bogus. And they know it’s bogus and yet they still used it, which tells you this was all done for PR purposes and has no merit to it at all.”

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Kaloogian, who chaired the Davis recall campaign and is chairman of Tea Party Express, did not respond to a request for comment. He served in the state Assembly from 1994 through 2000, representing a district in northern San Diego County.

A representative of the charity said the attack on the group began in 2005 when Move America Forward activists criticized U.S. Sen. Richard Durbin (D-Ill.) for comments comparing U.S. treatment of prisoners at Guantanamo Bay to inhumane tactics used in Nazi concentration camps.

Becerra “ has filed suit against one of America’s major and most successful pro-troop charities in keeping with the disgraceful effort of far-left politicians to attack every conservative they can,” said Melanie Morgan, the chairwoman of Move America Forward, who is also named in the lawsuit.

The charity has spent 91% of its contributions to directly support the troops and has sent more than 450 tons of care packages to the troops in harm’s way in places including Iraq and Afghanistan, Morgan said.

Kaloogian, Morgan and Russo co-founded Move America Forward as a charity in 2004 that started out as a group supporting the troops against what they saw a criticism from Democrats.

The group, for which Russo served as “chief strategist,” according to the lawsuit, organized a caravan of 4,000 people in 2005 to protest antiwar activist Cindy Sheehan during her vigil at then-President George W. Bush’s ranch in Texas, the lawsuit said.

In 2006, the charity began raising funds to send care packages that included items such as coffee and beef jerky to troops stationed overseas and to injured veterans in military hospitals.

Russo also had a for-profit consulting firm called Russo Marsh that ordered the materials for the care packages and then took a commission of 17% on each vendor order, the lawsuit alleges. Russo’s private firm also charged Move America Forward a 15% management fee for special events, the suit contends.

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The lawsuit estimates Russo’s for-profit companies were paid more than $1.8 million for transactions involving the charity.

Russo said much of the money paid was reimbursement for expenses he incurred in organizing nationwide tours with rallies for the troops that featured entertainers. He said the attorney general’s investigators mistook the reimbursement of expenses such as renting buses and hotel rooms for rally participants, and “fair” commissions for fundraising.

“I should get fairly compensated for some of the work,” he said.

Kaloogian did not receive any funding from the charity, Russo added.

The lawsuit said Move America Forward put out news releases endorsing Republican congressional candidate Michael Grimm in New York and U.S Senate candidate Josh Mandel in Ohio, using the charity’s logo.

“Move America Forward does not tell donors that a portion of charitable donations are used to promote political causes and campaigns,” the lawsuit says.

Russo said the use of the charity’s logo was a clerical mistake.

He said the attorney general was mistaking action by the charity with spending by a political action committee that was separate. The lawsuit also alleges the charity invaded the privacy of injured veterans by using their names and stories to solicit donations without their permission.

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The lawsuit filed in Sacramento County Superior Court seeks civil fines and restitution as well as the removal of Russo and Shawn Callahan as directors of Move America Forward for abusing their authority. Callahan has worked for Russo’s for-profit company in the past.

“These actions taint the good work done by the many honest charities in California that support our troops and veterans,” Becerra said. “Our troops deserve respect and Californians deserve transparency.”


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