Minnesota veterans charity under scrutiny over use of funds, ties to ex-official
By DAVE ORRICK | (St. Paul, Minn.) Pioneer Press | Published: August 3, 2019
ST. PAUL, Minn. (Tribune News Service) — A Minneapolis nonprofit that aims to help military veterans accused of crimes has come under scrutiny for how it uses taxpayer funds and for ties to an embattled former state official.
The Veterans Defense Project, which has received nearly $450,000 in state taxpayer funds since 2017, will be the subject of a “special review” by the state legislative auditor — the nonpartisan watchdog of the Minnesota Legislature, Legislative Auditor James Nobles said Thursday.
The probe seeks to tackle questions officially that were simmering quietly among some quarters of the Capitol for months but were thrust into the spotlight in July when Sarah Walker resigned from her position as deputy commissioner of the Department of Corrections amid an internal investigation into whether Walker was improperly lobbying for the charity.
Walker, a longtime lobbyist before she was appointed to the state position in January, is married to Minneapolis attorney Brock Hunter, who co-founded the nonprofit.
Walker has called the allegation that she lobbied for her husband’s charity while she was serving as a state official “baffling.”
However, Walker hasn’t directly addressed records from her own computer and phone that suggest she was advocating for the nonprofit last spring as it was seeking funding that included her husband’s salary. She never received any payments from the charity, before or after she became a state official, according to Walker and charity officials.
The Veteran Defense Project’s board chairman, John Kingrey, emphasized that he believes the charity has accomplished important work in its mission, although he acknowledged the critical attention and the political climate have placed it in a sticky spot.
“We have significant financial issues, certainly,” Kingrey told the Pioneer Press. “We are actively attempting to secure grant and foundation money at the federal level. But I personally have seen the benefit of what we’ve done.”
In the spring, the charity sought an additional $800,000 over two years. It ultimately received none.
Kingery, a former lobbyist wise in the ways of the Capitol, said, “We’re not going back for another (state) appropriation.”
What will the inquiry probe?
Nobles said his probe will “look deeper into the operations of this Veterans Defense Project and the money the state gave them previously, how it was used, what was achieved. And there are questions, still, about Sarah Walker lobbying for the project.”
Nobles’ office took a brief look at the charity in the spring. Joel Alter, the office’s director of special reviews, described it as a “preliminary assessment” that followed questions by some lawmakers when the charity was seeking funding.
“We raised questions but didn’t reach conclusions,” according to Alter.
The brief examination did not give Veterans Defense Project a clean bill of health, Alter said. His description contradicts a statement by Walker saying the inquiry “found no concerns.”
The examination was abandoned when it became clear that the nonprofit wasn’t on track to receive any funding, Alter said.
What does the charity do?
The Veterans Defense Project’s mission is “Restoring veterans involved in the criminal justice system to the communities they served.”
The nonprofit seeks to do that by boosting “veterans courts,” according to public statements, documents and its own website.
Analogous to drug courts or domestic-abuse courts, veterans courts are essentially courtrooms especially equipped to deal with issues facing veterans charged with crimes ranging from misdemeanors to low-level felonies.
The courts involve attorneys, judges, clerks and probation officers who are veterans themselves or are familiar with issues uniquely faced by veterans, such as post-traumatic stress disorder, mental illness or head injuries that resulted from combat.
During the legislative session, it appears the charity’s advocacy for veterans courts — via a policy bill that contained no money for VDP — became muddled with its own advocacy for the $800,000 it wanted for itself, according to both Kingery and Tommy Johnson, legislative officer for the Department of Minnesota Veterans of Foreign Wars.
Neither bill passed, although both men emphasized that no public criticism was made of the policy bill, which was supported by Gov. Tim Walz and sought reforms that would encourage the use of veterans courts.
Who runs the charity?
The charity was co-founded by Hunter and Ryan Else in 2014, tax records show. The two — who both served in the military — are the only attorneys working at the criminal defense firm that bears Hunter’s name and specializes in defending veterans.
The pair produced a book, “The Attorney’s Guide to Defending Veterans in Criminal Court,” which the charity sells on its website for $200. It includes 24 articles by them and other authors. Proceeds of the sales go to the charity. Kingrey said he wasn’t sure whether the charity paid for its inventory of the books, or whether they were donated.
The nonprofit operated on less than $10,000 per year until 2017, according to tax filings, when it began to receive state funding. About that time, it hired Donn Lindstrom as its executive director. He is a Navy veteran with a background in nonprofits and veterans’ issues. Lindstrom, Hunter and Else constitute the entire staff, according to its website and other statements.
Where did the money go?
Veterans Defense Project received $441,000 in state grant funds. Lawmakers in 2017 appropriated closer to $500,000 over two years, but $44,000 was unspent and eventually was returned to the state, according to figures supplied by the Minnesota Humanities Center, which administered the grants.
In response to questions from lawmakers, the charity supplied a summary of how about $243,000 was spent, but not the rest. Kingrey said the most recent fiscal reports will be complete within a matter of weeks.
Here’s some of what the nonprofit reported:
• The largest expense — about $140,000 — was payroll. That included direct payments to Lindstrom, Else and Hunter. It appears Hunter and Else each received $53,000, and Lindstrom received $34,440.
• The grant paid for rent in the same building at Hunter’s law firm, 3201 Hennepin Ave. S. Kingery said the money was used to convert storage space in the firm’s area, as well as possibly to rent other areas, to accommodate the charity’s work separately from the law firm’s work. He noted that such arrangements are not uncommon when using grants to fund what often amount to part-time operations. He emphasized that VDP made the rent payments directly to the building’s landlord.
• The bulk of $25,000 that initially was listed as “printing costs” eventually went to pay for videos touting the benefits of veterans courts. Hunter told lawmakers the videos garnered more than 9,000 views.