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Lamar Odom’s cancer charity took donations from outside sources, disbursed funds primarily to young basketball players

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Lamar Odom and Khloe Kardashian's eBay auction site, which gives a portion of proceeds to Cathy's Kids. (eBay)

ESPN’s “Outside the Lines” sports news program examined eight years of tax records for the charity started by basketball star Lamar Odom called Cathy’s Kids – a tax-exempt 501 (c) 3 named in honor of his late mother, who died of stomach cancer.

ESPN reported on March 31 that while the charity had raised an estimated $2.2 million since its inception in 2004, it had not given one single dime to cancer-related causes. The report stated that over $1.3 million had, however, been funneled into "elite" youth traveling basketball teams.

This did not go over well with Odom. In a sit-down interview with ESPN, when asked about the charity and its finances, the L.A. Clippers would only reply “It’s my money” before shaking hands with the interviewer and walking off the set.

But FOX411’s examination of the charity seems to show donations have come from many donors other than Odom.

The L.A. Clippers star and his wife, reality star Khloe Kardashian, have been running auctions under the charitable Giving Works arm of eBay for several years. According to the eBay Giving Works guidelines, a designated percentage – 15 percent in Odom and Kardashian's case -- is directly paid to the chosen charity. The site’s rep told us eBay Giving Works has “raised over $28,000 for Cathy’s Kids since June 2010.”

In 2011, Yahoo! teamed up with the Kardashian family, offering to make a donation to Cathy’s Kids every time somebody made Yahoo! their homepage.

In 2009, FOX411’s Pop Tarts column covered a star-studded Hollywood fundraiser attended by Odom and a number of other L.A. Lakers, which was held to benefit the foundation, with tickets costing $150. The focus of the event was cancer fundraising.  

Odom’s wife and her sister Kim have also both tweeted to their millions of followers messages like “Get 40% off all our health & beauty products on jpselects.com/Kardashian and help us support @CathysKidsFound & @StJude.”

A rep for JP Selects told us: “The products only sold about 700 units and they were giving .25 cents from each unit. Roughly under $200 was donated from the sale through JP Selects to go to Cathy's kids.” The rep added the payment was made by the manufacturer.

But Odom and Khloe Kardashian's rep defended Cathy’s Kids, saying nothing wrong has been done.

"No charitable funds were misused, and the IRS has repeatedly given Cathy’s Kids a clean bill of health," their publicist Jill Fritzo told FOX411.

When first contacted, Fritzo said the charity remained active, but on second thought said the charity is “dormant,” and that funds from the many eBay auctions are just sitting there waiting to be used.

“The charity is now dormant so that money (from eBay) is still there. They need a new person to run the charity and it will be revamped,” Fritzo told FOX411’s Pop Tarts column. “Their accountants are working on this, it’s all above board and legit and through the IRS, there is just no one running it.”

The 2011 tax returns for Cathy’s Kids paint a much different picture however, showing the charity $256,000 in debt. The registered treasurer of the foundation, Lester Knispel -- who is Odom and Khloe Kardashian’s business manager, and was a groomsmen at Odom’s wedding to Khloe -- told ESPN that Cathy’s Kids had been operating at a loss mostly due to a loan Odom made to the charity.

Regardless of where the money came from, or how much is left, there is still the question of why a 501 (c) 3 that billed itself as cancer charity was instead primarily funding youth basketball to the tune of $1.3 million over eight years.

“The guy running the charity never changed the mission statement. This is more clerical than anything,” Fritzo said. “And as far as cancer stuff, Lamar has donated so much time. He’s done blood drives for cancer, he’s done PSAs, he goes to children’s hospitals. His time went to cancer, money to basketball.”

“The guy” Fritzo refers to is Odom’s high school coach and best man at his wedding, Jerry DeGregorio, the only executive on the foundation’s payroll, who earned a median salary of about $72,000 from 2004 to 2011 and is now assistant coach on the NBA’s Golden State Warriors.

The Warriors would not make DeGregorio available for comment, citing NBA rules.

"A decision was ultimately made that the charity should focus on one of those purposes — to help enrich the lives of underprivileged inner-city youth,” Fritzo said. “Cathy’s Kids helped fund multiple AAU basketball teams providing underprivileged youth with opportunities enriching their lives, providing financial support for coaching and travel to tournaments, helping inner-city youth on a path toward success, and leading many participants go on to college.”

When pressed for more information regarding the basketball teams, Fritzo said “the teams were all over the U.S., New York, North Carolina, Florida, etc.”

The money apparently did not go directly to the AAU (Amateur Athletic Union), though, as the AAU told FOX411 they had not received any money from Odom. Fritzo said the money went straight to teams and players, not the parent organization.

“Lamar had teams he funded for their expenses (registration fees/travel expenses/per diems, etc.) for AAU sanctioned events,” Fritzo told us, including “Team Odom East” which the rep said went to the National Championship in Orlando in 2010, and “Team Odom West.”

However, an AAU representative could not locate any information in their database regarding those team names or their attendance at any 2010 championships. FOX411 could not find any contact information or specific details on any Odom-financed teams.

A search through Eteamz.com found mention of  a “Team Odom” in the competitive youth divisions of basketball located “South Side,” but no further information was listed.

The teams described by Fritzo also don’t sound like your typical AAU roster of local kids. ESPN described the teams as “elite” in their report. Fritzo said that was inaccurate because only a few players went on to play professionally. 

Fritzo insisted that Odom helped young players with money “from his own pocket,” but irrespective of whether he provided the charity all of its funds or not, charity money – coming from a tax-exempt organization – cannot be treated as one’s own according to Larry Bodine, Esq., and Editor-in-Chief of Lawyers.com.

“Once the money goes into a charity, it’s no longer private money,” Bodine said. “It doesn't matter where the donation comes from. Once the funds are received by the charity; only the charity can decide how they are used.”

John Conway, Entertainment Lawyer and President of Astonish Media Group, said that a foundation can change the charitable cause it supports, and may have multiple goals, but faces ethical questions if it says it’s giving money to one cause, then gives it to another.

"If cancer research was included in the pitch, it would have been wise to cut a check to a cancer research institute," he explained. "Otherwise people donating to the charity with cancer research in mind are being misled, even if the oversight is unintentional."

At press time the eBay auction site for Odom and Kardashian still promoted proceeds going to Cathy's Kids, which it calls a charity "targeting a disease that has played a significant role in his life, cancer" that he is "committed to help causes that are focused on finding a cure and helping people who suffer from the disease” as well as helping those less fortunate.”

The California Attorney General’s office and the registered Cathy’s Kids treasurer, Lester Knispel, did not respond to a request for further comment.

Following the ESPN report, Khloe Kardashian had some harsh words for “finicky” people who think her husband’s charity’s money should go to the charity’s stated recipients – cancer victims or cancer research – instead of basketball players.

“There are some finicky people in this world! People thrive off hate,” she tweeted this week. “I am fueled by LOVE and POSITIVITY. Peace to those who only know hate.”

Danielle Jones-Wesley contributed to this report.

 

 

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