Cancer Charities Ripping off Donors

>>> KEEPING IT HONEST TONIGHT, A YEAR-LONG INVESTIGATION WITH THE TAMPA BAY TIMES SHOWS A SMALL BUT AGGRESSIVE SEGMENT OF THE CHARITY WORLD SEEMS TO CARE LITTLE ABOUT HELPING OTHERS. INSTEAD, IT GENERATES SIX-FIGURE SALARIES FOR PEOPLE THAT RUN THEM AND FEED AS MULTI-BILLION-DOLLAR FACILITY THAT ONLY CARES ABOUT PROFIT AND WHAT WE ALSO FOUND OUT IS NO MATTER HOW BLATANT THE SCAM, NOBODY SEEMS TO BE GOING AFTER THEM. DREW GIRIFFIN TONIGHT KEEPING THEM HONEST. >> Reporter: DRIVE DOWN THESE COUNTRY ROADS IN KNOXVILLE, TENNESSEE YOU'LL FIND A FAMILY OF CANCER CHARITIES THAT RETURN LAVISH SALARIES TO THE OWNERS BUT ACCORDING TO THEIR TAX RECORDS DONATE VERY LITTLE TO DYING CANCER PATIENTS AND THE LAST THING THE PEOPLE RUNNING THIS CHARITY DO IS ANSWER QUESTIONS. >> DON'T -- DON'T TURN YOUR CAMERA ON ME. OKAY? >> Reporter: ACROSS THE COUNTRY IN MESA, ARIZONA, ANOTHER OUT POST OF IT. IT'S CALLED THE BREAST CANCER SOCIETY. IT'S CEO AND EXECUTIVE DIRECTOR, THE MAN ESCAPING IN THE TRUCK, JAMES REYNOLDS JR. >> EXCUSE ME, SIR, MR. REYNOLDS, HEY, EXCUSE ME, MR. REYNOLDS, RIGHT HERE, BUDDY, MR. REYNOLDS, HI, HI, CAN YOU STOP FOR A SECOND? WHERE YOU GOING MR. REYNOLDS? MR. REYNOLDS. BACK IN KNOXVILLE THERE IS ANOTHER CANCER CHARITY, THE CHILDREN'S CANCER FUND OF AMERICA, AND THIS ONE RUN BY YET ANOTHER MEMBER OF THE FAMILY, ROSE PERKINS. HI, IS ROSE PERKINS IN? >> SHE'S NOT AVAILABLE AND NOT DOING INTERVIEWS. >> Reporter: WHY ISN'T SHE DOING INTERVIEWS? SHE'S RUNNING A CHARITY FOR KIDS WITH CANCER. THAT SEEMS LIKE A GOOD IDEA. >> SHE'S NOT DOING INTERVIEWS. >> Reporter: CAN YOU TELL ME WHAT YOU GUYS DO, ANY POSITIVE THINGS YOU CAN DO WITH THE MONEY YOU COLLECT? >> YOU CAN SEND YOUR QUESTIONS TO HER E-MAIL. >> Reporter: OKAY. MA WHAT IS THAT E-MAIL. >> AND WE'LL ANSWER IT. >> Reporter: IF YOU ASKED US FOR MONEY WHAT WOULD YOU SAY YOU DO WITH OUR MONEY? >> WE HELP CHILDREN WITH CANCER. >> Reporter: HOW DO YOU DO THAT? >> WHAT DO YOU MEAN? WE PROVIDE THEM FINANCIAL ASSISTANCE. >> Reporter: AND -- >> IF YOU HAVE ANY QUESTIONS SEND THEM TO HER E-MAIL. >> Reporter: MY QUESTION -- ROSE PERKINS DID E-MAIL US AND TELLS US HER CHARITY HAS A CLEAR CONSCIENCE BECAUSE THEY FEEL THEY ARE MAKING A DIFFERENCE IN PEOPLE'S LIVES BUT SAID AN INTERVIEW IS NOT SOMETHING WE CAN CONSIDER. THAT MAY BE BECAUSE OF THE QUESTIONS WE'D LIKE TO ASK HER AND THE OTHER MEMBERS OF HER EXTENDED FAMILY WHO ARE ESSENTIALLY MAKING A LIVING ON YOUR DONATIONS. ROSE PERKINS, THE CEO OF THE CHILDREN'S CANCER FUND IS PAID $227,442 A YEAR. HER EX-HUSBAND JAMES REYNOLDS SENIOR IS PRESIDENT AND CEO OF CANCER FUND OF AMERICA. HE GETS PAID $236,815 AND JAMES REYNOLDS JR., PRESIDENT AND CEO OF THE BREAST CANCER SOCIETY HAS A SALARY OF $261,609. IT'S MONEY THAT COMES FROM DONORS LIKE YOU WHO IN 2011 SENT THESE THREE CHARITIES $26 MILLION IN CASH. HOW MUCH OF THOSE DONATIONS ACTUALLY WENT TO HELPING CANCER PATIENTS? ACCORDING TO THE CHARITY'S OWN TAX RECORDS, ABOUT 2% IN CASH. EXAMPLE, THE CANCER FUND OF AMERICA RAISED $6 MILLION THROUGH IT'S FUNDRAISING CAMPAIGN IN 2011 AND GAVE AWAY JUST $14,940 IN CASH. BUT THAT IS NOT WHAT YOU WOULD HEAR FROM THE TELEMARKETERS RUN BY JAMES REYNOLD SENIOR. >> HOW MUCH OF MY $10 WOULD GO -- WHO IS THIS TO? >> CANCER FUNDS. 100%. WE PURCHASE MEDICAL SUPPLIES FOR THE CANCER PATIENTS. WE ALSO DO THE HOSPICE CARE FOR THE TERMINALLY ILL AND SUPPLY MEDICAL SUPPLIES ALL OVER THE UNITED STATES. >> BUT HOW MUCH OF MY $10 WILL GO -- >> IT GOES ALL DIRECTLY. I'M CALLING FROM THE CHARITY. >> THAT'S GREAT, THEN. >> Reporter: ACCORDING TO THE ATTORNEY GENERAL'S OFFICE THAT GAVE US THESE RECORDINGS, THOSE PHONE CALL STATEMENTS ARE ONE GREAT BIG LIE. THE CALLERS WERE TELEMARKETERS BEING PAID TO MAKE THE CALL. THE STATE OF IOWA FINED THE TELEMARKETING COMPANY $35,000 FOR MAKING FALSE REPRESENTATIONS. AS FOR DONATIONS OF OTHER CHARITIES, THE CANCER FUND OF AMERICA CLAIMED ON THE 2011 TAX FILINGS, IT SENT $761,000 IN SO-CAL SO-CALLED GIFTS IN KIND, NOT ACTUALLY CASH, TO CHURCHES, SOME HOSPITALS AND OTHER PROGRAMS AROUND THE COUNTRY. WHEN WE CALLED OR E-MAILED THOSE OTHER CHARITIES TO CHECK, MANY OF THEM SAID THEY DID GET SOMETHING, THINGS LIKE THESE SUPPLIES. BUT SEVERAL OF THE GROUPS TOLD US THEY NEVER HEARD OF THE CANCER FUND OF AMERICA OR DON'T REMEMBER GETTING A THING. THE CANCER FUND ALSO TAKES CREDIT FOR SERVING AS A MIDDLEMAN, BROKERING TRANSFER OF ANOTHER $16 MILLION WORTH OF GIFTS IN KIND TO INDIVIDUALS AND OTHER CHARITIES, MANY OF THEM OVERSEAS. THOSE CONTRIBUTIONS DOUBLE UP BOTH AS REVENUE AND DONATIONS ON THE SAME TAX FORMS. BACK AT THE CANCER FUND OF AMERICA'S CORPORATE OFFICE, EVEN THE CHIEF FINANCIAL OFFICER, WHO BY THE WAY HAS A SALARY OF $121,000 COUNT EXPLAIN WHAT WAS HAPPENING. >> WE JUST HAVE ALL THESE -- MISSISSIPPI MEDICAL CENTER. BARCO ONCOLOGY INSTITUTE. >> Reporter: THE HIM IS JAMES REYNOLDS SENIOR. THE FOUNDER WHO FINALLY TOLD US IN AN E-MAIL, HIS BOY THOUGHT IT UNWISE TO TALK TO CNN. EVEN THOUGH IN A DIFFERENT E-MAIL HE CALLED THE NEWS OF PHANTOM DONATIONS QUOTE MOST DISTURBING. AS FOR HIS SON, JAMES REYNOLDS JR. AND HIS CHARITY IN ARIZONA. >> HEY, HOW ARE YOU? >> THE CAMERA NEEDS TO STAY OUTSIDE. >> CAN HE STAY THERE? IS MR. REYNOLDS HERE? >> I'M SORRY, HE'S NOT HERE RIGHT NOW. >> Reporter: THE PUBLIC RELATIONS OFFICER FOR THE BREAST CANCER SOCIETY MARRIED TO JAMES REYNOLDS JR. SENT US E-MAILS SAID THE GUIDING MISSION IS TO PROVIDE RELIEF FROM THOSE WHO SUFFER FROM THE EFFECTS OF BREAST CANCER AND WE MADE A DIFFERENCE IN THE LIVES OF TENS OF THOUSANDS OF MEN AND WOMEN. BUT DECLINED OUR REQUEST FOR AN ON-CAMERA INTERVIEW AND WHEN OUR CAMERA FOUND JAMES REYNOLDS JR., HE MADE SURE WE GOT THE MESSAGE WITH A SINGLE FINGER SOLUTE. >> DREW, THIS IS JUST UNBELIEVABLE. I MEAN, YOU'VE DONE SO MUCH GREAT REPORTING ON THIS CHARITIES THAT ARE SCAMS. THESE PEOPLE'S FACES I FEEL LIKE SHOULD BE PUT ON T-SHIRTS AND PEOPLE SHOULD SEE THEY ARE FACES AND KNOW THEIR NAMES BECAUSE WHAT THEY ARE DOING IS HORRIFIC. THE FACT THEY ARE RUNNING AWAY LIKE COCKROACHES FROM YOUR CAMERAS IS ALL YOU NEED TO KNOW. IF YOU'RE ASKING FOR PEOPLE'S MONEY AND RUNNING A CHARITY, YOU SHOULD HAVE NOTHING TO HIDE. IT'S UNBELIEVABLE TO ME. WHAT IS YOUR ESTIMATE ON HOW MUCH CANCER PATIENTS AND SOME COMMUNITY GROUPS ACTUALLY DID RECEIVE FROM THE CANCER FUND OF AMERICA AND THESE OTHER CHAR CHARIT CHARITIES? >> WE TOOK A LOOK AT THESE TAX RECORDS AND CENTER FOR INVESTIGATIVE REPORTING AND TAMPA BAY TIMES, ANDERSON, WE THINK IT'S JUST ABOUT 2%. THINK OF IT, YOU GIVE ONE OF THESE CHARITIES A DOLLAR, THEY WILL GIVE 2 CENTS IN GOOD TO SOMEBODY OUT THERE, AND THAT'S JUST KIND OF OUR BEST GUESS OF THIS. IT'S RIDICULOUS. >> AND THE FACT THAT IT'S LIKE FATHERS AND EX-WIVES AND THE GIRLFRIENDS AND BROTHERS, I MEAN, THIS IS JUST INSANE. THESE PEOPLE ARE PROBABLY LIVING IT UP IN COUNTRY CLUBS IN THE COMMUNITIES AND I BET PEOPLE IN THE COMMUNITY HAVE NO IDEA OF WHAT THEY ARE DOING AND PEOPLE THEY ARE SOCIALIZING WITH. THESE PEOPLE SHOULD BE, YOU KNOW, PUT ON POSTERS I FEEL LIKE. ARE REGULATORS CONCERNED BECAUSE IT SEEMS LIKE THEY SHOULD BE? >> LOOK, YOU AND I HAVE BEEN DOING THESE STORIES, ANDERSON, FOR A YEAR AND A HALF. WE DO KNOW, WE HAVE A SOURCE WITH DIRECT KNOWLEDGE THAT SAYS CANCER FUND OF AMERICA LEADERS HAVE BEEN DEPOSED IN PART OF A MULTI-STATE REVIEW OF THESE CHARITIES BY VARIOUS STATE AGENCIES, BUT LET'S BE HONEST, WE'VE BEEN LAYING THIS OUT FOR A YEAR AND A HALF. WE HAD INTEREST FROM THE SENATE FINANCE COMMITTEE. I'M COMING FROM CINCINNATI WHERE IRS WORKERS HAD TIME TO REVIEW APPLICATIONS FOR TEA PARTY GROUPS BUT NOTHING SEEMS TO GET DONE WHEN WE LAY IT ALL OUT. WE AND OUR PARTNERS HAVE A LIST OF THE 50 WORST CHARITIES IN AMERICA ON OUR WEBSITE AND WE'RE SHOWING YOU HOW BAD IT IS. I JUST DON'T UNDERSTAND WHY NO ONE IN GOVERNMENT, WHETHER IT BE STATE OR FEDERAL, CAN DO ANYTHING TO STOP THIS. >> DO WE HAVE STILL PHOTOS? CONTROL ROOM, DO WE HAVE STILL PHOTOS OF THESE PEOPLE? PUT IT UP. I WANT TO LOOK AT THESE PEOPLE AGAIN AND SAY THEIR NAMES. JAMES REYNOLDS JR. THERE ON THE LEFT, JAMES REYNOLDS, SR. AND ROSE PERKINS. THESE PEOPLE ARE RUNNING AWAY LIKE IN THE OLD 60 MINUTES PIECE AND MIKE WALLACE WALKS INTO A GARAGE AND PEOPLE RUN AWAY. WHY ARE Y'ALL RUNNING AWAY LIKE COCKROACHES.