Hospital ends car donation program

The fundraising arm of Children’s National Medical Center has scrapped its vehicle-donation program amid a dispute with a company that it says diverted hundreds of thousands of dollars, used money for personal expenses and caused the nonprofit to file incorrect information on financial reports.

Last week, the Children’s Hospital Foundation asked a federal judge to issue a default judgment against Charity Vehicle Services Inc. and several of its executives in a civil lawsuit that the nonprofit foundation filed earlier this year.

The suit seeks nearly $700,000 in recompense for losses.

The foundation, which raises money for pediatric health care, says that Charity Vehicle Services misled hospital officials about the proceeds that it collected in 2002 and 2003, tried to cover up a massive accounting shortfall and used some funds to expand unrelated business.

The foundation also stated that funds were “diverted from, or not deposited into, escrow accounts established for Children’s.”

In response, Charity Vehicle Services’ chief executive, Gregory C. Babcock of Vienna, Va., stated in legal documents he filed last week that he served as president and chief executive but “did not have any proactive role in the day-to-day operations of this entity.”

However, Mr. Babcock stated that two other company officials who are named as defendants — chief operating officer Richard Murray of Texas and chief marketing officer Daniel T. Corrigan of California — charged more than $750,000 on company charge cards and might have used corporate funds “for their own personal benefit.”

Mr. Babcock also stated in legal filings that any fraud or embezzlement in connection with the vehicle-donation program occurred without his “knowledge or consent.”

Telephone messages left at Babcock Advertising Inc., which also is a defendant, were not returned last week. Yesterday, a person who answered the telephone at Mr. Babcock’s residence hung up on a Washington Times reporter.

Mr. Corrigan declined to comment when reached by telephone at his home in California last week.

“I’m not affiliated with them anymore,” he said.

Reached at his home in Texas yesterday, Mr. Murray said that Charity Vehicle Services did not have its own credit cards, but that the company reimbursed him and Mr. Corrigan for business expenses that they incurred on their own credit cards.

“People are finger-pointing in order not to be left with their own issues,” he said. “Mr. Corrigan and I were out of the company when a lot of this came down.”

Mr. Murray said he cannot afford to hire a lawyer. He said he has filed a response to the foundation’s lawsuit, but sent the document to a judge by mistake. He declined to provide a copy of his response to The Times yesterday.

The foundation filed a lawsuit against Charity Vehicle Services in U.S. District Court in January, accusing the company of fraud, unjust enrichment and breach of contract.

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