Feed The Children Under Scrutiny

*This story was covered by the CBS evening news last week.

"Feed the Children" Charity Under Fire

(CBS) "Feed the Children" is perhaps best known by its infomercials featuring founder, the Reverend Larry Jones.

"For only $8 a month, you can help feed a child. Would you go to your phone," Jones said in a commercial.

After the Haiti earthquake, the charity sprang into action. The Oklahoma City headquarters buzzed with activity, as donors sent in a million dollars in cash.

"Right now, we need your help like never before to get urgently needed relief to Haiti," the commercial said.

CBS News investigative correspondent Sharyl Attkisson reports most donors have no idea about the nasty family feud that's tearing apart the billion-dollar a year charity.

On one side: founder Larry Jones. On the other: his daughter Larri Sue, and the charity's Board of Directors. It came to a head more than a year ago when each side accused the other of the worst sort of financial improprieties.

In a lawsuit, Larry Jones accuses the Board of serious financial neglect, claims his daughter misused charity funds including living in a $1.2 million dollar Los Angeles home on the charity's dime, and that she engaged in illegal schemes to cover up unpaid taxes.

Larri Sue denies any wrongdoing. The board claims it's her father who got caught taking bribes and kickbacks, awarded himself and his wife unauthorized pay raises and went so far as to bug the executive offices.

Larry Jones fired his daughter and Board members who opposed him. But when a judge resintated them, they turned around and fired him.

"Larry Jones has not engaged in any financial improprieties whatsoever," said his lawyer Mark Hammons.

"Has Larry Jones done anything wrong," Attkisson asked.

"Yeah," Hammons replied. "He made a mistake. He relied on people, and they let him down."

But the Christian charity's donors might feel let down by the most scandalous allegations, about pornography and sexual and racist emails.

"Feed the Children" says it found incest-related porn in Reverend Larry Jones' office.

Larry Jones counters by producing racist and inappropriate emails that he claims were traded by top executives. "Plot to kidnap Obama" a watermelon under a box trap. "if she looks too young, just assume she's 18."

Watchdog Daniel Borochoff says donors should see lots of red flags. He's been questioning the charity's practices for more than a decade.

"It's ridiculous this charity can continue to raise money and have its hand out to the donating public," Borochoff said.

We asked "Feed the Children" spokesman Tony Sellars about Borochoff's allegations.

"Only 21-23 percent of your cash donations that people give actually go to program services," Attkisson said.

"I can't address that," Sellars said. "I just address to the people that when they support us, what they want us to do is feed families and children, and that's what we're doing."

"Fifty-four percent of cash is spent on TV, radio ads and direct mail," Attkisson said.

"No, again, I cannot verify or comment to that," Sellars replied.

Sellars says the good they do can be seen all over the world - like in Nashville, where they distributed food and personal items to the needy.

Borochoff warns that looks can be deceiving.

"Certainly they're going to be doing some good, enough - not to be too cynical here - but enough good to look good in the fundraising and promotion of charity," Borochoff said.

Which brings us to Haiti. In online e-mail messages and on its Web site, "Feed the Children", the chairty claimed it set up a base and was running a huge camp "providing medical relief for 12,000 people."

CBS News decided to send a camera to the camp in Carrefour, west of Port-au-Prince, to see for ourselves.

We found the camp was set up by local monks and nuns, not "Feed the Children."

What about the claim that "Feed the Children" was running the camp? Apparently, that's not true either.

We did find a small, well-meaning "Feed the Children" staff - apparently unaware of the inflated fundraising claims being made by headquarters.

"Feed the Children's" Dr. Stephan Villatt said, "We have three doctors working here."

You might ask how three doctors are handling the supposed 12,000 patients. They're not. It's more like a hundred a day.

"Feed the Children" also claimed that the United Nations chose them "to distribute food and milk for the entire camp."

But that's false according to the United Nations, and the account from "Feed the Children's" own manager in the field, Rachel Zelon. Zelon told us the UN actually chose another charity called "ADRA."

Back in Oklahoma City, we confronted Sellars -- who was unaware that we'd been to the camp.

"Is it your impression that you are, that "Feed the Children" is in charge of the camp," Attkisson asked.

"That is my impression at this point," Sellars said.

"Because we visited the camp, and 'Feed the Children' is not running it," Attkisson said. "Does that surprise you to know?"

"I would certainly have to look into that," Sellars said.

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