A hodgepodge of homeless folk and retirees looking for food and cigarette money man the phones, telling Californians that their purchase of flags, first aid kits or garbage bags will help war veterans.

What the telemarketers often leave out is that vets will see only pennies on the dollar from the purchases.

The charity is called Veterans Ensured Through Service, a small entity based just outside Redding. On official documents, the telemarketing operation, Zagar and Associates, is run by Carl Lee Zagar of West Sacramento.

Zagar has one client: V.E.T.S., according to records it filed with the state attorney general's office. V.E.T.S.' treasurer is Candace Filek, a records supervisor at the Shasta County Sheriff's Office.

Although Zagar is not listed in V.E.T.S.' nonprofit filings, Filek said the two of them launched the nonprofit years ago after growing tired of watching large national veterans' charities raising money and failing to deliver results.

"It doesn't go where it's supposed to go: directly to the veterans," Filek said.

Last year V.E.T.S. reported to the state that it raised $332,435 but paid $301,000 of that to Zagar's commercial fundraising operation. Only $19,482 – 5.9 percent – went to veterans' causes, including five $500 college scholarships for veterans' children, the documents show.

The address for Zagar and Associates is Zagar's West Sacramento home. Zagar also co-owns The Goose Club on Jefferson Boulevard in West Sacramento.

Found at the sports bar on a recent afternoon, Zagar said that he actually has no fundraising operation.

Instead he called himself "a go-between" – between the charity and the real commercial fundraiser. That group, he said, is Veterans Accredited Programs or VAP, run by Kurt Nielson.

Zagar said he gets involved only "when there's trouble." Zagar described VAP as "an independent subcontractor" for him, adding, "there's never been any trouble."

But after Zagar was asked about disputes with charity regulators in Oregon, he acknowledged that his previous statement wasn't entirely true.

In 2000, Oregon's attorney general issued a notice of false trade practices to VAP and Nielson, alleging they had made false representations while soliciting donations in Oregon for V.E.T.S.

Investigators found that "Care Packs" the group was selling to distribute at a veterans' hospital for $29.95 contained items worth less than $5, court documents show.

In a 2001 settlement with Oregon's attorney general, VAP agreed to end solicitations in Oregon and reimburse the state $2,750 for the investigation but admitted no wrongdoing.

Nielson did not return telephone messages left for him at a VAP office in Sacramento. Zagar, who said Nielson lives in San Diego, declined to provide his contact information.

The 2001 settlement followed another in 1993 after an earlier probe by Oregon's attorney general.

Both Nielson and Zagar are named in the attorney general's news release about the earlier case, which records indicate ended with a $1,000 payment to cover investigative costs and a promise that canvassers would stop implying to donors that they were "volunteers for the veterans' department" calling for a nonprofit.

In 2006, Zagar reported to California that he sold $244,870 in goods for V.E.T.S. – goods that he reported cost him $16,190.

Expenses included $94,606 in "fees or commissions," which Zagar said paid for Nielson's telemarketing operation. That operation, he said, employs homeless and retired people – some in Sacramento, some in San Diego – who work phones part time to earn commissions "for food and cigarettes."

Another $38,072 was reported as salary, including for Zagar and Associates' "self-employed owner." In addition, $17,988 went for accounting and car expenses, $16,676 for bank charges, interest and office expenses, and $9,096 for a "facilities charge."

Questioned about those expenses, Zagar initially said he would have to ask the bookkeeper for details. Then he grew angry. "We're small potatoes. You're on a witch hunt!" he said, and hung up.

In eight years on the V.E.T.S. board, Chairman John Cleckner said that, although he knew the charity used a telemarketer, he'd never heard about Zagar, Nielson or any Oregon problems.

However, Filek, a board member herself, said Zagar and Nielson have been mentioned at several meetings.

"John and many of our board members are combat vets," she added. "They're advancing in age like the rest of us, and their memories aren't so good."

Call The Bee's Andrew McIntosh, (916) 321-1215.