Charities at One Another's Throats
ALEXANDRIA, Va. (CN) - A charity for hospitalized veterans claims marketing outfits founded by political heavyweight Richard Viguerie wrongfully claim ownership of its intellectual property and pressured its vendors to cut off business with it.
Help Hospitalized Veterans (HHV) sued American Target Advertising Inc. (ATA) and American Mailing List Corporation (AMLC) in Federal Court.
Central to the complaint is the ownership of a list of people who have donated to HHV. The group claims the list brings it thousands of dollars by renting it to other organizations for direct mail solicitations.
Help Hospitalized Veterans was founded by the late Roger Chapin. ATA is a direct marketer founded by Viguerie in 1965, and AMLC, an ATA affiliate, also was founded by Viguerie, the complaint states. It adds that Chapin and Viguerie were friends and business collaborators "for decades" until Chapin died in August this year.
Viguerie is not a party to this case, but his involvement in a lawsuit implicating HHV and ATA brought by the state of California led to a reshuffling of HHV's priorities, the group says in its lawsuit.
According to HHV, the California litigation accused the two companies, specifically Roger Chapin and Viguerie, of inappropriately loaning more than $800,000 in charitable funds to Viguerie's company. California also accused Chapin of wrongfully diverting funds intended for a group called Conquer Cancer and Alzheimers Now to himself.
HHV claims that lawsuit forced "a wholesale revitalization of its key personnel and contractual relationships," leading to the group accepting bids for the marketing and fundraising contract held by Viguerie's company since 2005.
"Even though HHV had requested that ATA, and others participating in the bidding process, submit a competitive bid, ATA responded ... with a proposal that was approximately 67 percent higher than at least two other proposals from various vendors," according to the complaint.
HHV adds: "Not surprisingly given the lack of competitiveness in its proposal, the ATA proposal did not prevail in HHV's competitive bidding process and was therefore not accepted. Rather, the Board of Directors decided that it was interest of HHV to move forward with the services of another vendor."
HHV says it notified the marketing company of its decision, but the company claimed ownership of its valuable "house file" - its list of donors - and made defamatory statements to other vendors to encourage them to break their ties with HHV.
"During the past four fiscal years, HHV has paid ATA a total fee for services rendered in excess of $9.3 million or approximately $2.34 million per year," HHV says. "If ATA is correct in its assertions regarding the ownership of the intellectual property and HHV subsequently utilizes this property, then HHV will be liable to ATA for an amount in excess of $75,000.
"During the past four fiscal years, ATA has been responsible for raising over $90 million in HHV's behalf or approximately $23 million per year," the complaint states.
It adds: "Furthermore, ATA's improper communications with the various vendors of HHV that provided direct marketing services have resulted in these venders expressing a reluctance to continue servicing HHV's needs. As a result of ATA's actions, HHV has been harmed and will continue to be harmed in an amount in excess of $23 million per year going forward."
By failing to market its house list, HHV says, AMLC is costing it approximately $36,000 per month in rent.
HHV wants Viguerie's companies to pay it $5.1 million in compensatory damages for breach of contract, and punitive damages for malicious interference. It also wants a court declaration that it is the rightful owner of its donor list.
HHV is represented by Hugh Quinn of Fluet, Huber + Hoang.