Fundraising company faces new questions

WASHINGTON—The veterans charity that CNN has been examining for months now is also under investigation by the State of Florida.

The Florida Department of Agriculture and Consumer Affairs turned over all of its records to us after we filed a public records request earlier in September. Those documents show that the Disabled Veterans National Foundation, already the subject of an investigation by the U.S. Senate Finance Committee, essentially paid off another charity years ago after claims that it pirated logo design, wording for fund-raising direct mail letters and a host of other items before launching its own direct mail campaign.

The Chief Operating Officer of a charity called the Disabled Veterans Living Memorial Foundation wrote that “it appeared our proprietary information and intellectual property rights had been violated.” So the DVNF, while it was just getting started, agreed to pay an extraordinary fee of $325,000 over three years to settle the dispute.

Moreover, DVNF sent a new mailing to 750,000 donors, each letter containing a one dollar bill. This, in the midst of both a U.S. Senate and State of Florida investigations.

Meantime, CNN has learned that Quadriga Art, LLC, the giant direct mail fund-raiser in back of DVNF and hundreds of other charities, is now under formal investigation by the attorneys general of both New York and California. Sources inside the company in a position to know, say both state agencies have received documents after formally requesting them from Quadriga.

Until recently, Quadriga Art officials have only communicated with CNN by email. But over the weekend, Quadriga CEO Mark Schulhof spoke to his clients in a video posted on the Internet.

Here’s what he said about his company and about CNN’s reporting: http://bit.ly/quadriga-art