By Jim McElhatton - THE WASHINGTON
TIMES - August 3, 2006
The fundraising arm of Children's National Medical Center
in the District yesterday dropped a federal lawsuit against a top
company executive whom the charity accused of mismanaging
nearly $700,000 in vehicle donation proceeds to fund
pediatric health services.
Attorneys for the Fairfax-based Babcock Agency and
Children's Hospital Foundation filed documents in federal court
in the District yesterday, saying they had reached a settlement in
the case. The case was filed in January 2005.
The fundraising scandal prompted the foundation to scrap its heavily
Lewis Weiner, an attorney for the foundation, yesterday said the
terms of the settlement are confidential. Geoffrey S. Gavett and
Scott Ives, attorneys for the Babcock Agency and its chief
executive, Gregory Babcock, declined to comment.
According to the foundation's lawsuit, Mr. Babcock and other
executives began a Fairfax-based company now known as Charity
Vehicle Systems which in 2001 began managing the charity's
The lawsuit said Charity Vehicle Systems and its officials
misled foundation officials about the proceeds it collected in 2002
and 2003, tried to cover up a massive accounting shortfall
and used some funds to expand unrelated business at the Babcock
Agency, which was named as a defendant in the case.
The foundation also stated that funds were "diverted from, or not
deposited into, escrow accounts established for Children's."
Mr. Weiner said yesterday the settlement does not include Richard
Murray, former chief operating officer of Charity Vehicle Systems.
Yesterday's settlement dismisses the foundation's claims against
Mr. Babcock, the Babcock Agency and Mr. Babcock's wife,
Ruth Song Babcock, who also was a company official and
recently filed for bankruptcy in the District.
"Mr. Murray remains the sole remaining defendant," Mr.
The attorney said the foundation plans to pursue its claims
against Richard Murray, who has relocated to Texas, "by all
The lawsuit prompted charges and countercharges among Charity
Vehicle Systems executives. Mr. Babcock stated in legal
documents he filed that he "did not have any proactive role in the
day-to-day operations of this entity," saying Mr. Murray and chief
marketing officer Daniel Corrigan ran the operation.
Mr. Babcock also said he and Charity Vehicle Systems
first alerted the foundation about possible problems concerning the
handling of vehicle donation proceeds.
Mr. Murray said in a previous phone interview with
Times that he and Mr. Corrigan "were out of the company
when a lot of this came down."
An attorney for Mr. Corrigan, who previously settled with the
foundation, called his client "a minor figure" in the business.
The foundation contracted out its charity vehicle donation
program to the Charity Vehicle Systems on a trial
basis in December 2001 before signing two one-year agreements with
the company, court records show.
Vehicle donation programs are common among charities,
which solicit the cars and trucks, usually by touting the tax
benefits. Some nonprofits then outsource the towing and
selling process to private firms in exchange for a percentage of the
final sale price.
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are not associated or affiliated with Babcock Agency or Children's
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