of dollars in some cases, end up paying for candies and other useless knickknacks instead of making a difference in the lives of people who have made incredible sacrifices for us all. tonight they have found another one of these organizations. >> i've got to ask you about the money, though. that doesn't answer questions about the money that they are -- that's it? that's all you're going to say? >> that's drew trying to get answer from help hospitalized veterans. remember that name. you're going to hear more on that shortly. hhv's mission claims it's helping sick and injured war veterans. sounds good and reputable, right? the men behind the so-called charity have been helping themselves to excessive salaries and lavish lifestyles while using accounting gimmicks to trick the public into giving more money. drew griffin in is california. >> reporter: they are handing out craft kits by hospitals, trying to challenge the mind and help pass the time while vets recover. but now they are seeking to make their own recovery. the civil penalties of $4 million for misrepresentations in solace sitting. california says this charity paid excessive salaries, perks, and conducted illegal deals with donated money, all for the benefit of some board members and officers. >> it's a shell game. what we've seen is that instead of focusing their intellectual efforts and energies and energies of the corporation on getting money to help the folks who are in need of help, our injured veterans, instead, they spend all their energy, effort, and time in these shell games to move money around in order to benefit themselves. >> reporter: according to the charity's latest filings, the president of hhv, michael lynch, was paid a salary of $389,000. and that's just the start. in its complaint, california authorities say money donated for hospitalized veterans also paid for memberships in these two country clubs near lynch's home. a cost of $80,000. donated funds paid for this condominium near washington, d.c. for the use of charity executives. according to the complaint, while help hospitalized veterans have been raking in millions of dollars, $65 million in just the past two years according to tax returns, the charity has misled the irs and its donors about where the funds actually go. we know 44 million has gone to fund-raising. the charity says it spent $16 million on these kits for veterans but the california attorney general's office questions the charity's accounting. >> there have been a number of misstatements to the irs and other regulators in order to suggest that the corporation is much more efficient than it, in fact, is. >> reporter: and it's not the first time the allegations have been made. california congressman henry waxman has been trying to sound the alarm on help hospitalized veterans since 2008. >> as far as i'm concerned, they ought to be put in jail. it's so terrible what they're doing. using the plight of our veterans to make themselves rich. and playing upon the good, well-meaning americans who want to help veterans and are willing to contribute to that kind of cause. >> reporter: the state of california now wants all of the charity's board members fired. including the president, mike lynch. hello, mr. lynch! yesterday, we approached lynch at his rural home near his operation's headquarters. he told us we were the first to bring him the news of the california complaint and said he'd have something to say tomorrow. all right, we'll see you tomorrow. >> okay. >> reporter: at 8:00 this morning, mike lynch was at his office, telling us as soon as he talked with his lawyers, he'd be happy to answer questions. mr. lynch, drew griffin. >> hi, how are you? >> reporter: i'm sure you're aware of the serious charges being -- >> not yet. i'm waiting to talk to the attorneys. so as soon as i speak with joe and them when they call me this morning, i'd be happy to speak with you. >> reporter: four hours later, michael lynch said this -- >> i have a statement that i have prepared. it says, we hope that these unproven allegations will not diminish the more than 40 years of service hhp has provided to our nation's most valuable treasure, our veterans. hhv looks forward to the chance to tell its story and hopes that this action will not impede its ability to provide vital support to hospitalized veterans nationwide. thank you very much. >> reporter: well what about -- i got to ask you about the money though. i mean that doesn't answer any of the questions about the money that they're -- that's it? that's all you're -- you guys are going to say? anderson, help hospitalized veterans gets its money through direct marketing pleas. american target advertising is known by richard vigeray. in a really strange twist, according to the california attorney general, the charity, which paid american target advertising millions in fund-raising costs, turned around and loaned the company $800,000. why? we don't have any clue. the spokesman told us there would be no comment at this time. >> it's just -- again, amazes me how each time when we're asking questions of these charities. which you would think transparency is the key for any charity. if their reputations were being questioned, they would want to answer questions. yet this guy reads a statement his lawyer helped him write and then disappears. how does this charity stack up in the ratings of those watchdog groups? >> not well. one group gives it a one star out of five. charity watchdog in chicago gives it a flatout "f" rating. the ratio of expenses versus the benefits going to any veterans is very low. >> unbelievable. i want to bring in california's attorney general. attorney general harris, this charity claims all it wants to do is help veterans. do you buy that? >> i think the charity itself purports to enhance, help some veterans. as to these directors we have charged, they've basically been lining the pockets off the compassion that americans have for our veterans and serviceen and women and that has to be stopped. a large part of this focus and action in filing this complaint is also to be able to preserve the charitable assets that exist in that ornization so they can be directed to the veterans and not office holders and directors. >> we've done a series of these reports. this is just the latest one. they're raising tens of millions of dollars in many cases, these groups. a lot of that money, the bulk of it, seems to be going just to increase their mailing lists to do more advertising, to get more money, rather than -- and these high salaries. according to your complaint, help hospitalized veterans has basically misled the irs for years. >> i would suggest they knew they were misrepresenting the facts to the irs on their 990 form and were misrepresenting it to such an extent that they inverted the numbers. what we have found is that, in fact, over 65% of their revenue went to overhead and not to the programs that were intended to help these vets. and it's outrageous. it really is. they have really tugged i think at the heart strings of americans who want to help our veterans. and, instead, they've had gulf club memberships and condominiums and they've been lining their pockets, their personal pockets. >> i mean, you wish these organizations in their advertising, rather than implying that all this money's going to help veterans that they would admit, here's how much our director makes and here's how much we're giving to some company for a mailing list. i'll bet a lot of people wouldn't want to donate money. a lot of this information first came up i understand in congressional hearings in 2008. why has only now california acted? >> well, i came into office in 2011 and focusing on our veterans in california has been a priority for my administration. we have 2 million veterans in california, of the 22 million veterans in the united states. so we prioritized this case. and we're now filing this complaint. and the focus will not stop here. the reality is there are a lot of predators who take advantage of our service men and women and our veterans. and we have to pay attention to that. our veterans and service men and women can be, in the case of hospitalized vets, a very vulnerable and in need of support and care. with our service men and women, they also tend to be very trusting. we've found a lot of predatory practices that focus on them as consumers with money to spend. and its outrageous, anderson, it really is, when we think of what they do on a daily basis to protect us. and there are people who are out there taking advantage of our compassion for them in a way that allows them to profit. it's outrageous. that's why we're putting the full force of law into going after these guys and, believe me, they will face a full accounting and consequence for their misconduct. >> drew griffin is still with us. this other group you've been doing a lot of reporting on for years. they also have sent tens of millions of dollars to one of these mailing list companies, drew. i mean, it sounds like quadriga art. sounds like they're doing a similar job for dvnf that this other group is doing for hhv. >> yeah, the private fund-raising companies are making a fortune off all of us donating their funds. that is very true. what i think is a little different here, though, anderson, is in dvnf's case, we couldn't tell anybody directly at the charity was lining their pockets. what the attorney general here is outlining is much more egregious. and i would almost say, and i'll let her say it, if she would, attorney general harris, it's almost criminal. it's almost like these guys are stealing the money that was destined to go to the veterans. in dvnfs case, i think it was just a big screw up and the private fund-raiser has that charity over the barrel. this seems much more insidious. >> attorney general harris, at this point, while you're pursuing this legally, they can still send out solicitations, right? >> this is why, as part of our action, we're requiring the directors and officers step down, so that we can purge the organization of the bad apples and preserve the assets that exist, so that the money that folks have given to that organization, with the intention of going to veterans, that it actually will go to veterans heretofore. >> attorney general, appreciate you being with us. drew griffin, again, great reporting. there are good charities out there. especially ones trying to help vets. if you want to find out which ones, go to a group like charity navigator which gives you a rating basically of the transparency of all these groups. that's at least a good first stop to try to figure out what charity is legitimate. let us know what you think. we're on facebook. i'll be tweeting tonight. raw politics also ahead. new evidence one of these two men would be benefiting from negative campaign ads. we'll tell you which candidate it is and what polling numbers show, next. it's something you're born with. and inspires the things you choose to do. you do what you do... because it matters. at hp we don't just believe in the power of technology. we believe in the power of people when technology works for you. to dream. to create. to work. if you're going to do something. make it matter. humans -- even when we cross our t's and dot our i's, we still run into problems. namely, other humans. which is why, at liberty mutual insurance, auto policies come with new car replacement and accident forgiveness if you qualify. see what else comes standard at libertymutual.com. liberty mutual insurance. responsibility. what's your policy? new polling says a lot more about where the presidential horse race stands at the moment. the numbers do show obama opening up a seven-point lead over romney. other numbers in that same survey could be opening a window into more. including effect negative ads are having on romney's likability. team romney complains about one iffy campaign spot. they do not mention the factually dubious ad of their own. the polling speaks to the power of such ads. the new polling also covered how some of the possible romney running mates might play with the public. john king has been crunching the numbers for us. i want to ask you another interesting number in today's poll. there's been a 17-point swing in just one month. the majority of americans and even more independents now saying they don't have a favorable impression of mitt romney. does this mean the attack ads are working? >> yes. i would say anderson, i'm always wary when you see a 17-point swing. you wonder if maybe your poll's a little bit out there. we'll watch to see what the next one says. there is no doubt in our poll and in other polls mitt romney's favorables are on the rise and there's no doubt it's because of not only the attack ads from the obama campaign but the obama campaign's friends in the super pac community. don't discount the fact the president's on the road. outwardly bashing mitt romney. >> i think you said "mitt romney's favorables are on the rise." you meant his unfavorables? >> i'm sorry, right. >> there is a poll about possible vp picks. doesn't seem like there's been one favorite one, one main contender. now that we're in the homestretch, any sign that is changing? >> if you look at our new poll, there are some changes. i'll go to the state of florida to show you our poll. we asked people in our new poll, who would you like to see mitt romney choose as his running mate? look who comes out on top. he's got a lot attention. he's a tea party darling. the conservative base loves him. he's also been selling a book and he's on tv a lot. marco rubio, then the new jersey governor, chris christie. they say they want governor christie. then paul ryan, the house budget committee chairman. then you see governor jindal. two other guys on the short list. portman and pawlenty down at the very end. we also asked republicans who ey think romney will choose. they still think rubio. senator rubio tops the list. then governor christie. you see these other guys in single digits. this is largely a question for even republican voters right now. these are republicans, as romney and who. we asked people, do you have a favorable, unfavorable opinion? or are you unsure? do you not know enough about these guys to have an opinion? nearly half of americans, republicans, say they don't know enough about marco rubio. 32% say they don't know enough about chris christie. the numbers are higher when you get to ryan. jindal. pawlenty. even republicans are looking act these choices and saying who. >> is there any reason to believe any pick will give a boost to romney against president obama? >> we've seen polls in recent days from the key battleground states. a poll in virginia showed the president up a little bit. is that a reason to pick governor mcdonald? there's been a poll in wisconsin just yesterday showing the president up five or six points. people in that state say he would help in the state of wisconsin. if you look at the short lists we know of, you have pawlenty from minnesota, it tells you governor romney is looking at this part of the country out here. michigan perhaps. he's looking at that part of the country as he narrow his choices. some say maybe portman helps a little. maybe ryan helps a little. that's the calculations governor romney is going to make. certainly he's looking at this region of the country. >> john, thank you very much. chief political correspondent candy crowley and republican strategist ari fleisher who is working for the romney campaign as an occasional unpaid communication, adviser. what's the strategy, the timing? >> well, you look for maximum exposure. how many days play can you get off your vp pick. so if you're in search of some excitement, obviously, john mccain sort of fit that bill. he really -- it really came at a time -- his announcement came at a time he was rolling to his convention, as next week will be for mitt romney, rolling into the week after, which is the convention. so they want to figure out how they can build excitement going into the convention, because honestly there are three things right now that help mitt romney break through if he is to break through. one of them is his vice presidential pick. onof them is his speech at the convention. and one of them is his performance at the three presidential debates. so those three things are huge and key and you want to just maximize that as much as possible. at the same time, i'm assuming at this point mitt romney has pretty much made up his mind. you have to begin to tell the person themselves and to offer it, et cetera, et cetera. so the circle's getting bigger. what you don't want is to have it leak out before you're ready to have it happen. >> ari, you've been tweeting you're prepared to say who you think the candidate is. do you think romney has already made this decision? i asked you because in 2000 you got a very upclose look at this process with then candidate george w. bush. >> i agree with everything candy said in her analysis, it was right on, except for that last point. if i were in charge of the romney selection process, i would not tell the person it was going to be till within 24 hours of the selection. otherwise, it's sure to leak. you've got to really close that window and close it tight. i don't think mitt romney has made the final decision in his mind who it will be yet. once he does, it sets loose a whole lot of important events. and with the person who's going to get named. all of it predicated on absolute secrecy so when the governor tweets it or announces it on his app that will be the first time people hear it. >> do you want to say who you think it should be? >> i've said this in some events i've been to. i've always been a paul ryan guy. i would have supported either mitch daniels or paul ryan for presidency if they had been in it earlier. because i believe this nation just needs so badly a jolt of economic adrenaline. we're heading towards greece with the debt we have. we need somebody who can take that seriously and will really bring this country's budget first and foremost with a growth oriented plan to the center of the national attention. the problem i with have ryan is the democrats want him so badly. salivates at the opportunity to get paul ryan. it turns the race into a fight over medicare and off the economy. that will be the stakes if its paul ryan. >> candy, do you agree that a lot of democrats want ryan for that very reason? >> absolutely. they think that it would make mitt romney even more vulnerable. it ties him very tightly to the ryan plan. and, look, this is -- also could be a positive for mitt romney because this is a man who is still having a little trouble with his base. you're seeing all these conservative publics come out saying paul ryan, paul ryan, paul ryan. one of the things it does do is activate the conservative base. i still believe that in the end this is a race that's going to be decided on turnout. i don't think this is a message race so much as it is a turnout race. who do you need in your turnout base? you need your base. that's the conservatives. paul ryan certainly satisfies that for mitt romney. as do others. but the democrats look at this and think, wow, we just have to go out there and talk social security because that obviously was kind of what was seen as a politically toxic part of ryan but i think that ari's right in that, look, it will be a real argument. i mean, you would be able to tell the difference between these two tickets. but it is a lot for mitt romney to take on, even as he's trying to convince folks that he's the right guy to have to also take on the ryan plan at the same time. >> ari, in terms of timing, do you think next week would be the time? how far in advance of the convention? >> yeah, i think it is going to be next week. i think they want to have as much of a runway h