Shortchanging Veterans

Congress should turn off the funding for a nonprofit business group that wasted taxpayer funds.

THE IDEA to give veterans a helping hand. Congress set up a nonprofit organization, gave it millions of dollars in taxpayer funds and expected it to help veterans start small businesses. It appears, though, that much of the money was used for expensive dinners, high-end travel and compensation for executives. Let's hope Congress means business when it says it wants to stop funding an organization that's done little more than pay lip service to the interests of America's service members.

Senate investigation of the National Veterans Business Development Corp., better known as the Veterans Corp., revealed "an entity that has been not only ineffective in meeting its responsibilities to our nation's veterans, but also troublingly irresponsible in its use of taxpayer dollars." The Dec. 11 report by the Senate Committee on Small Business and Entrepreneurship found that the group has received $17 million in federal funds since 2001 but, on average, spent just 15 percent each year to operate business centers for vets. Last year, that plummeted to 9 percent.

Equally troubling -- or, as Sen. John Kerry (D-Mass.) put it, "appalling" -- were revelations about how money was squandered on lavish perks -- like more than $2,400 each for two occasions at a ritzy D.C. steakhouse (no info on how many people that fed), for which no justification was provided. Or stays in luxury hotels ($380 per night for Rosewood Mansion on Turtle Creek in Dallas). Officials with the group dispute some of the report's findings, argue that they are on the right track with new leadership and say that they want to work with Congress to take any needed corrective actions.

But this is not the first time the group has come under criticism. Reports by the Government Accountability Office in 2003 and 2004 found a lack of internal controls, an inability to measure the effectiveness of programs and failure to become self-sufficient. Federal funding for the group will expire in March, and Congress should heed the recommendation of Mr. Kerry and Sen. Olympia J. Snowe (R-Maine) to redirect the money to the Small Business Administration's Office of Veterans Business Development. It already has in place 1,500 centers that could be used to more effectively foster entrepreneurship among veterans.