Top executives out at Wounded Warrior Project after reports of wasteful spending

Posted at 8:01 PM, Mar 11, 2016
and last updated 2016-03-11 22:01:12-05
By Michael Pearson and Tiffany Ap


(CNN) — Two top executives of veterans’ charity Wounded Warrior Project are out after reports of extravagant and wasteful spending.

In a statement announcing the departures of Chief Executive Officer Steven Nardizzi and Chief Operating Officer Al Giordano, the charity said Thursday that it disputes some allegations leveled against it, but will impose new restrictions to rein in spending and help regain the trust of donors.

The organization did not say whether Nardizzi and Giordano had been fired or resigned. It said only that its board had “determined the organization would benefit from new leadership.”

The executives’ departure will “help restore trust in the organization among all of the constituencies WWP serves,” the organization said.

Neither Nardizzi nor Giordano could be reached for comment, despite repeated attempts by CNN by telephone and email.

Board Chairman Anthony Odierno — the son of retired U.S. Army Chief of Staff Gen. Ray Odierno — will temporarily oversee the organization until a permanent replacement can be found.

The moves follow a January investigation by CBS News that said the Jacksonville, Florida, organization spent $26 million on conferences and meetings in 2014 while directing less than 60% of donations to support veterans.

Charity Navigator, which evaluates the finances of nonprofits, reports that 70% of charities it tracks spend at least 75% of their budgets on programs and services. Nine out of 10 spend at least 65% on programs and services. The group gave Wounded Warrior Project a rating of three out of four stars in its most recent rankings.

CBS said the organization’s spending on lavish meetings and travel skyrocketed after Nardizzi took over the reins in 2009. The network cited as one example a four-day conference at a luxury resort in Colorado that it said cost $3 million.

“Donors don’t want you to have a $2,500 bar tab,” CBS quoted retired Army Staff Sgt. Eric Millette, a former motivational speaker for Wounded Warrior Project, as saying. “Donors don’t want you to fly every staff member once a year to some five-star resort and whoop it up and call it team-building.”

In its statement Thursday, Wounded Warrior Project — which took in $312.4 million in donations in 2014 — said it had ordered an independent review of its operations that found the charity “continues to advance its mission of providing substantial services for the nation’s wounded warriors.”

The group also disputed parts of the CBS report — saying 94% of the $26 million in spending it cited “was associated with program services delivered to Wounded Warriors and their families.” It did not provide details.

It also said the Colorado trip cost $970,000 — not $3 million — and disputed the accounting method used to conclude it spends less than 60% of its funds on programs and services.

Instead, the charity says it spends 80.6% of its budget on programs and services. Charity Navigator puts the number at 59.9%.

CBS declined to comment Friday on the charity’s disputes with its reporting.

Despite its argument with some of the network’s reporting, the charity said its review had found some changes are warranted.

For instance, the review “found that some policies, procedures and controls at WWP have not kept pace with the organization’s rapid growth in recent years and are in need of strengthening,” the organization said in its statement.

The charity has begun to “more explicitly limit domestic air travel to economy class absent an exception for health or disability reasons” and said it would strengthen expense policies and employee training.

Ordierno, himself wounded in Iraq in 2004, thanked employees for keeping the faith during a turbulent time.

“It is now time to put the organization’s focus directly back on the men and women who have so bravely fought for our country and who need our support,” he said.

Whether it will be able to regain the trust of donors remains to be seen.

“It’s really unfortunate that wounded veterans will really be hurt by the drop-off in donations to come,” a Facebook user posted on the organization’s page. “My checkbook is now closed to this organization.”

™ & © 2016 Cable News Network, Inc., a Time Warner Company. All rights reserved.