Attorney General John Kroger filed what promises to be an extremely interesting and controversial lawsuit today against the Oregon War Veterans' Association.

The OWVA, a 501c(19) non-profit has been under investigation since last year as questions about its fund-raising and political activities mounted.

The group has powerful supporters and allies, including Loren Parks, the reclusive medical-supplies tycoon who's long-bankrolled conservative causes, and Kevin Mannix, the Salem lawyer and former lawmaker who's been very active in public safety ballot measures. Last fall, OWVA sued the Oregon Department of Justice to block the release of public records regarding OWVA.

Although many of the questions raised by WW and The Oregonian about OWVA's concerned its unusual political contributions, Kroger's lawsuit raises entirely new allegations of self-dealing against OWVA executive director Greg Warnock.

Here is the statement Kroger's spokesman Tony Green released this morning:

Attorney General John Kroger today announced a lawsuit alleging that the founder of two charities personally kept at least $690,000 of funds raised to help Oregon veterans and improperly used charitable donations to make unreported political contributions. â€œThe Department of Justice is committed to cracking down on charities that misuse donations raised to benefit veterans, law enforcement and other worthy causes,” said Keith Dubanevich, Chief of Staff and Special Counsel to Attorney General Kroger. “Oregonians deserve absolute assurances that their generous charitable contributions are spent properly.” The lawsuit was filed today in Marion County Circuit Court against Gregory Warnock and corporations he founded: the Oregon War Veterans Association (OWVA) and Military Family Support Foundation. The suit alleges that Warnock falsely claimed that Military Family Support had been granted charitable status by the IRS and that donations to it were tax-deductible. In fact, the suit alleges, Military Family Support was little more than a corporate shell that Warnock used to solicit donations that he transferred to himself or entities under his control.  Warnock also allegedly allowed OWVA to make unreported political contributions and represented that donors could claim a charitable tax deduction for contributions intended to be used for political purposes, which is contrary to Oregon’s campaign finance laws, Internal Revenue Service regulations and OWVA’s status as a charitable, public-benefit corporation.  The lawsuit seeks, among other things, an order shutting down OWVA and preventing Warnock from operating charities in the future.  Attorney General Kroger also is demanding that Warnock repay amounts he impropertly diverted so the funds can be distributed to charitable organizations that provide assistance to veterans. The lawsuit is part of Attorney General Kroger’s ongoing initiative to crack down on non-profits and fundraisers that fraudulently claim to help U.S. veterans. As part of those efforts, the Department of Justice reached an agreement earlier this year permanently barring Community Support, Inc., a fundraising company, from soliciting in Oregon.  Community Support solicited on behalf of veterans groups and other charities, but kept at least 80% of donors’ contributions.  Last year, DOJ shut down No Veterans Left Behind Association, a group that sold merchandise and solicited cash donations for veterans in front of stores in Oregon, but kept most of the money for themselves.  DOJ also permanently enjoined the Florida-based charity The Veterans Fund and its fundraiser, Center Stage Attractions, from soliciting from Oregonians based upon evidence that the organizations made misleading claims about how donations would be used.   In addition, Attorney General Kroger has introduced legislation to crack down on sham charities. Every year, millions of dollars in charitable donations are given to non-profits that spend most of their donations on administrative salaries, telemarketers and overhead costs. To crack down, Attorney General Kroger introduced SB 40, the first bill in the nation to require charities to spend at least 30% of money raised toward their purported charitable cause. If they fail to meet this requirement, donations to them will no longer be tax deductible. SB 40 received its first hearing last week in the Senate Revenue Committee.