Report blames board, whistleblowers, media for Wounded Warrior Project scandal

JACKSONVILLE, Fla. – A report on spending scandal exposed by News4Jax and national media outlets in January blames the Wounded Warrior Project's board, former employees who spoke about the charity's spending practices, the media, charity evaluators and even the Department of Defense for WWP's problems.

The former leaders of the organization, CEO Steven Nardizzi and COO Al Giordano, escape most of the blame in a 79-page report by author Doug White, a former director of Columbia University's fundraising management program.

The report, The First Casualty, called damage to the Wounded Warrior Project "self-inflicted" by its board of directors.

"This was not a senior staff problem. This was, and quite possibly still is, a board problem,” White wrote.

White blames the board for not allowing Nardizzi to respond to images of him rappelling down the side of a resort at an employee conference.

While White found Nardizzi acted "brashly" he found the board's firings of senior management made the crisis worse, saying, "The finances were sound and WWP's impact was strong."

Instead White believes the charity was the victim of a  "well-thought-out and deliberately planned attack" by former employees.

White hammered CBS News and New York Times for their reporting calling it "incorrect" and "unnecessarily damaging journalism."

"The board acted inadequately" and "should replace itself," White concluded.

The charity's board released a statement Monday responding to the report:

"The facts are that the Board acted swiftly to conduct an thorough review with an independent law firm and outside accountants and promptly publicized the key findings of that review in a press release on March 10. The Board also quickly implemented multiple critical changes at WWP over the last several months to ensure the organization continues to fulfill its mission of providing critical, life-saving programs and services to our nation’s latest generation of wounded warriors, while exercising greater control over costs. These changes include the appointment of Lieutenant General Mike Linnington as the organization’s new CEO, who has revamped the structure of the organization to ensure it is operating as effectively and efficiently as possible, and the addition of Mr. Ken Fisher and Lieutenant General Richard Tryon to the WWP Board, each of whom bring a lifetime of dedication to veterans’ causes and deep experience managing non-profits."

The organization's new CEO, Mike Linnington, didn't want to talk about fallout from the scandal when interviewed earlier this month.

"I'm not focused on that. I'm focused on the future," Linnington said. "I wasn't here at that time. I do know that what the negative media events have caused us to do was assess ourselves, see where change is required and then make those changes."

Linnington also said he sees the value in charity oversight groups like Charity Navigator, which White also blamed, saying, "Watchdogs ... do more harm than good."

"We're working hard to get the highest rating we can with all the charity organizations that access us, because I know that's how a lot of folks judge which organization to give to," Linnington said. "That's also a part of why we're restructuring to reduce cost every way we can."

Charity Navigator also commented on White's report.

"I think charities are held to a higher standard and it's important for them to maintain the public's trust," Sandra Miniutti said. "I think many donors were surprised to see how much the charity was spending on advertising and marketing. It really is out of line with how other nonprofits operate and that prompted reasonable questions from the public and the media. I think that's appropriate for the public and reporters to ask these questions and I think great charities are happy to have those conversations."

Charity Navigator recently changed its rating system from a watch list to a low, middle, and high advisory system.  The Wounded Warrior Project's communications staff provided to the I-TEAM email correspondence from Charity Navigator, stating that the low-level advisory will be removed from the organization's profile on October 1.  The Wounded Warrior Project had provided Charity Navigator its most recent financial documents and an outline of its recent reorganization.

WJXT stands by its reporting on this story and was not cited in White's report.

Since the I-TEAM investigation began eight months ago, nearly 100 employees and executives have been replaced, nine regional offices were closed, up to $200 million in donations were lost and new leadership is in place.

The Senate Judiciary Committee, which was also investigating Wounded Warrior Project, told News4Jax it had seen the new report, but there was still lots to consider in what went wrong and reforms necessary going forward. 

About the Author:

Lynnsey Gardner

Lynnsey Gardner is an Edward R. Murrow award-winning investigative reporter and fill-in anchor for The Local Station.