Wounded Warrior Project under fire for reported overspending

The Wounded Warrior Project, a national nonprofit organization that supports servicemembers wounded in the line of duty, has been accused of blowing millions of dollars in donation money on spoils for its staff, according to a new two-part CBS News investigation. The New York Times also published a similar report about the charity's spending.

The CBS investigation was inspired by Charity Navigator, a nonprofit organization that promotes fiscal transparency among charities. Its scrutiny of public records found Wounded Warrior Project spent 60% of its donations on veterans, the remainder of which the CBS News team set out to account for.

"According to the charity's tax forms, spending on conferences and meetings went from $1.7 million in 2010, to $26 million in 2014," the report states. "That's about the same amount the group spends on combat stress recovery — its top program."

Officials with Wounded Warrior Project denied CBS' requests to speak with CEO Steven Nardizzi.

On Wednesday, the the organization issued a statement on its website calling the CBS story a "false news report." The group called itself an "open book" and "a leader in nonprofit transparency." It also faulted CBS for allegedly not contacting the project's top auditor to check the numbers prior to broadcasting the story. The auditor, Richard M. Jones, "stands by our financial statements, our reporting methods, our public filings, and our independent audits," the statement reads.

The statement also notes Wounded Warrior Project's recent multimillion-dollar investments in its new Warrior Care Network among other programs.

Ryan Kules, a spokesman, defended the organization's spending, telling CBS that the conferences and meetings enhanced team-building, organizational alignment and service quality. He refuted accusations, made by former employees, of excessive spending outside of Wounded Warrior Project conferences and that the organization used donation money to purchase alcohol, the report says.

CBS News says it interviewed more than 40 disillusioned ex-employees for the report. Their allegations of excessive spending include claims that:

• Wounded Warrior Project employees were directed to stay in an expensive hotel during a conference, despite living locally.

• The CEO, Nardizzi, spent money on extreme entrances to events — once even rappelling off of a building.

• The organization paid $3 million for its employees to attend a three-day Wounded Warrior Project conference.

On Wednesday, the New York Times released a similar special report about the charity's spending. The second part of CBS' report aired Wednesday on CBS This Morning.

Charity Navigator has added Wounded Warrior Project to its watch list as a result of the CBS investigation and the New York Times report.

This isn't the first time the organization has received critical media coverage.

In April, Hampton Roads, Va.-based News Channel 3 attempted to delve into some of the same Charity Navigator data that CBS examined, though its piece mostly focused on Nardizzi's apparent opposition to so-called "charity watchdogs."

That report made a point of underscoring the value of donors performing independent checks, claiming that the news team's "investigation shows how a charity and a charity-checking organization can review the same data and come up with different results."

A June report by The Daily Beast also criticized Nardizzi, saying he paid his executives too much.

"Nardizzi is an advisory board member of the Charity Defense Council, an outfit with lofty ambitions," The Daily Beast's Tim Mak wrote. "The organization wants to remake the entire charitable sector to be more permissive of high overhead and high executive compensation, explicitly citing as its model the oil industry’s efforts to rehabilitate its public image."