Charities in debt to fundraising company

THOREAU, New Mexico—A struggling charity in this tiny town amidst the spectacular red rock country of northwestern New Mexico has found itself owing one of the biggest direct mail companies in the world more than $5 million as a result of a failed fund-raising campaign.

The company is Quadriga Art, which just today received an official letter from the Senate Finance Committee in Washington, D.C., seeking detailed financial information about its finances, especially as they relate to another charity that we’ve investigated, the Disabled Veterans National Foundation.

Quadriga Art ultimately forgave a debt of $5.3 million but only after CNN began its investigation. Quadriga says it tried its best but the campaign was a failure.

And we’ve also examined another Quadriga client called Help the Children, based in Los Angeles. Its mission, it says, is to feed 130,000 families a month. But its CEO, Roger Presgrove, told CNN it too was upside-down to Quadriga Art for about $285,000 at one point.

Presgrove admits he emailed Quadriga and said that unless he was let out of that contract, he would go to CNN with his story. Within an hour of making that threat, a Quadriga executive agreed. “I think it is in everyone’s best interests to end this and move on,” the executive wrote back.

But Presgrove talked in any event, shortly after he was discharged from a hospital. He’d been admitted the day before for a scheduled medical procedure.

After our interview, we received a phone call from a Quadriga Art public relations person. She claimed that Presgrove, in her words, was “dragged” out of his hospital room by CNN and was on “drugs.” Over the phone, she said because of that his statements weren’t to be taken seriously and should not be broadcast because he was “unaware” of what he was saying.

CNN denies that he was forced in any way to take part in an interview. For his part, Presgrove emailed and wrote CNN that he wanted to retract what he said in his interview. In a text message, he added: “I have to get out of this contract and that was the deal. No interview and I’m out. Sorry.”

We’d like you to take a look at an extended portion of that interview, between Roger Presgrove and CNN Investigative Correspondent Drew Griffin.