- The Washington Times - Tuesday, May 7, 2002

Directors of the National Capital Area United Way will receive tomorrow a much anticipated report on officials' credit-card abuses, contracts issued without comprehensive bidding and a $72,000 consulting fee for a former executive.
"We're not hiding anything," United Way spokesman Tony DeCristofaro said. "As our board will find, this organization didn't have some of the fiscal discipline that it should have had."
The report on the local chapter's problems comes less than a decade after the charity's top national official was imprisoned for misusing donations and only months after the New York chapter came under fire for misleading the public on the distribution of September 11 donations.
Mr. DeCristofaro said the report will be revealed at a special meeting of the chapter's 41-member board of directors and will address questions raised in a year-old complaint letter written by a former board member, Ross W. Dembling.
The administrative budget's management has been the source of a heated debate sparked last May, when Mr. Dembling circulated a memo charging inappropriate spending and cronyism among top members of the charity.
In the memo, Mr. Dembling accused the board's chief executive Norman Taylor of "excessive" expenditures $85,000 on renovating and sound-proofing his office. Mr. Dembling also complained that the board was never informed of a $6,000-a-month, one-year contract for the consulting services of former Executive Vice President Oral Suer.
The problems in Washington are the latest to dog the United Way, which was staggered seven years ago when former national President William Aramony was sentenced to seven years in federal prison after being convicted of looting the charity of more than $1 million to support a lavish lifestyle.
Area United Way leaders mailed an appeal to 500 of its largest corporate supporters in February. The letter, signed by Mr. Taylor and board President Gwendolyn E. Boyd, said each of the questions raised by Mr. Dembling had received "detailed" attention.
But Mr. Dembling, a partner at the Washington law firm of Holland and Knight, was ousted from the United Way in June, a month after circulating the memo. In the months after, the board hired an independent auditor, the national accounting firm McGladrey & Pullen, to investigate the charges.
Some board members have complained that the withholding of the audit report, leaked last month to certain "privileged" members, was inappropriate because a D.C. law gives board members of charity organizations the right to examine the charity's books and records.
"It has been slow coming to us," said board member Donna Kloch, who as a member of the organization's finance committee received a full copy of the report yesterday. She declined to comment on the report's specific findings, saying she wanted to wait until the entire board had a copy before making a judgement.
Contacted by a reporter yesterday, Mr. Dembling said he no longer wants to be involved in the contro versy.
He told the New York Times on April 29 that board members had informed him the audit report uncovered substantial mismanagement, including inadequate financial controls, unexamined executive expense accounts and below-market-value sales of cars the charity owned to families of current or former managers.
The National Capital Area United Way is the nation's second-largest chapter, raising $93.5 million last year from Washington area businesses and their employees.
The national scandal caused local fund raising for the charity to temporarily plateau in the mid-1990s. The Washington area chapter raised $75 million in 1994, and $76 million in 1995 and 1996, respectively.
During Aramony's trial in Alexandria in 1995, U.S. District Judge Claude M. Hilton dismissed claims by the then-67-year-old's defense lawyers that his behavior had been influenced by gradual shrinkage in his brain.
The sentence was the climax in a three-year scandal that shook public confidence in U.S. charities and completed the fall from public life of Aramony, who had created the United Way and been its president for 22 years.
Officials contacted yesterday said a major concern about the accusations of financial mismanagement is that they have given rise to a growing "perception within the organization of 'here we go again.'"
But Mrs. Kloch said the controversy "doesn't even compare to past problems, because there isn't anything of criminal activity that we've learned about at all; there are no allegations that anybody made personal profit."
Both Mrs. Kloch and Mr. DeCristofaro said the region's United Way chapter has put in place reforms to prevent financial mismanagement, including mandating a competitive-bid policy for any expenditure greater than $10,000 and prohibiting the sale of organization assets to employees or volunteers, even at full market value.
Asked why stricter rules were not implemented years ago after the Aramony scandal, Mr. DeCristofaro said only that it "is a great question."


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