United Way chief resigns in furor over funds use Probe finds no abuse but sloppy records

February 28, 1992|By New York Times News Service

WASHINGTON -- A wave of anger over revelations of high expense-account living and questionable management practices by William Aramony, president of the United Way of America, forced him out of his job yesterday as leader of the nation's largest network of charities.

Although the executive committee of the organization's board said it would accept Mr. Aramony's "thoughtful and sensitive offer to retire immediately" and had asked him to stay on until a replacement is found, at least one board member told associates that Mr. Aramony would take a vacation or leave of absence within days and was unlikely to return.

Many leaders of United Way affiliates had called for his resignation or announced that they would not pay any future dues until the problems were investigated and rectified.

A number of those leaders said after listening to the resignation that they were still not satisfied and would continue to withhold any dues until investigations were complete.

The carefully coordinated statements of Mr. Aramony, a lawyer leading an investigation for the board and a leading board member mixed praise for the organization, thanks for Mr. Aramony's contributions, and regret that the revelations of his $463,000 salary-and-benefits package and his penchant for luxury travel might have led to a loss of trust among local affiliates or their donors, who contribute $3.1 billion a year to United Way drives.

But all these statements avoided any specific admission of wrongdoing or mismanagement, although Berl Bernhard, the lawyer conducting an investigation into the panoply of allegations, conceded to the group's affiliates that there had been "sloppy record-keeping" and "inattention to detail" in the management of the national headquarters.

The United Way, a network of 2,100 local chapters, obtains most of its contributions through workplace donations from employee checkoffs.

Chapters in cities and counties pass much of the money on to local charities.

About 1 cent of each dollar donated to 1,400 of the local chapters -- a total of $29 million -- goes to the United Way of America, a national association based in Alexandria, Va., that helps the affiliates with everything from advertising to training of charity workers.

Norman Taylor, president of United Way of Central Maryland, saidMr. Aramony's resignation would restore confidence in the organization's integrity.

"We look at it as a new beginning," said Mr. Taylor, who had watched Mr. Aramony's hourlong, closed-circuit television conference with two staff members and United Way directors from Harrisburg, Pa., and York, Pa., at the local Red Cross headquarters in Northwest Baltimore.

"The mission of the United Way is certainly more important than any one individual," he added.

Mr. Taylor, former executive vice president of the Los Angeles United Way, said his own annual salary of $140,000 was determined by the search committee that hired him for the Baltimore-based United Way office a year ago. He said his annual pay "measures right in the midpoint of health and welfare organizations," and he gives back $10,000 of his pay as a donation.

Four local vice presidents earn between $60,000 to $80,000 &&TC year, and 10 departmental managers make salaries of $35,000 to $55,000, Mr. Taylor said.

The local United Way office employs a total of 98 people. Administrative costs run close to 14 percent of each dollar it raises, he said.

For two weeks, news reports have focused on details of Mr. Aramony's salary and benefits and of spending, including two trips on the supersonic Concorde aircraft, the purchase of an Upper East Side apartment in New York and a Florida apartment by United Way spinoffs, and his use of chauffeured cars.

The reports, widely broadcast by TV news programs, infuriated many local volunteers and charity workers, many of whom are in financial straits as a result of the recession.

The bitterness and anger among the 2,100 local affiliates of the United Way were evident in some of the questions asked during yesterday's television conference.

Jay Smith, head of the United Way of Georgia in Atlanta, said: "What I've not heard, honestly, is an apology. Do you think, Aramony, that we're owed one?"

Wincing slightly, Mr. Aramony raised his head slightly, looked fixedly at the TV camera and said: "Well, Jay, you absolutely are. I do apologize for any problems my lack of sensitivity to perceptions has caused this movement."

In a letter to his board dated Wednesday, Mr. Aramony said: "To put things back in focus, I now intend to retire immediately from the United Way of America. I do this because media attention is overshadowing the importance of the work of the United Way."

It was not clear if the resignation, which apparently will allow Mr. Aramony to continue on salary and then retire with a generous benefits package, will appease the outrage.

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