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United Way Head Resigns Over Spending Habits

By Charles E. Shepard
The Washington Post

Washington

United Way of America President William Aramony announced his retirement Thursday and apologized during a video teleconference beamed to local United Way officials nationwide for a "lack of sensitivity to perceptions" about his spending and management practices.

Aramony, who remains in charge of the $29 million-a-year operation in Alexandria, Va. until his successor is chosen, told his colleagues he was stepping aside to protect the United Way movement that he worked so hard to build during 22 years at the national association.

"I did not pay enough attention to detail or to the way some of my actions could have been perceived and my personal style could have been perceived by certain people," Aramony said.

Aramony appeared on the one-hour teleconference with LaSalle D. Leffall Jr., who chairs the executive committee of the United Way of America's board of governors. Leffall praised Aramony for "his decades of service" and said his committee "has reaffirmed its vote of confidence in him and his work."

Leffall, a professor of medicine at Howard University, said the United Way of America provides valuable services to the 2,100 autonomous United Way locals. "But," he said, "there may be certain areas that can be improved."

Specifically, United Way of America officials said, outside investigators had found sloppy record-keeping, inattention to detail, and accounting problems. The investigators found no evidence that Aramony had enriched himself, Berl Bernhard, an attorney who is representing the United Way of America, said during the video hookup.

The investigators began their work in December, after United Way learned of inquiries from the press.

Bernhard announced three immediate changes in response to concerns about Aramony's style of travel: a ban on first-class travel and supersonic Concorde jet flights for United Way employees and a requirement that employees use taxis or other "economical" ground travel. Aramony said he flew the Concorde two or three times because of illness or schedule demands and used chauffeured cars to make back-to-back meetings.

Aramony, 64, told the audience that he will receive full pension benefits upon his retirement, but no "golden parachutes." He receives a salary of $390,000 a year and $73,000 in other compensation, including contributions to his pension funds.

The hookup was watched by United Way executives and volunteers at 93 sites around the nation, arranged on satellite networks provided by AT&T and the Red Cross. More than 20 local United Ways have announced that they have halted dues payments, which provide the bulk of the United Way of America's budget, until they get satisfactory explanations about Aramony's spending and management practices. About 1,400 locals pay voluntary dues of about 1 cent of each dollar they raise.

Some United Way executives in the field had expressed anger at the board's limited response to critical press coverage of Aramony, and several had called on Aramony to step aside. Some of that concern was evident Thursday in questions phoned to the studio where Aramony and Leffall were sitting.

"What I have not heard, quite honestly, is an apology," said Jay Smith, publisher of the Atlanta Journal and Constitution and a top volunteer at the Atlanta United Way. "Do you think, Mr. Aramony, that we are owed one?"

Aramony replied, "Well, Jay, you absolutely are. I do apologize for any problems that my lack of sensitivity to perceptions has caused this movement. I do it happily and gladly to you and everyone else."

Aramony also told the audience that "I would never do anything at all that hurt local United Ways, the mission or the people we serve."

Leffall said it was time to stand together. "Events are happening very fast. We need your support. Give us a little time to address these issues," he said.

It remained unclear how much longer Aramony would be in charge inside the five-story riverfront offices of United Way of America, where most of the staff of 275 listened quietly to the announcement of Aramony's retirement. Leffall said he hopes the search for Aramony's successor will be speedy. The search committee will be selected by United Way of America board Chairman John F. Akers, who also chairs IBM, and William R. Howell, chairman of J.C. Penney and Co., who will succeed Akers as United Way board chairman this spring.

There were indications Thursday night that Aramony might be replaced as early as next week in an effort to assure that local United Ways make as swift a recovery as possible from a public relations debacle that many feared would hurt their annual fund-raising drives. United Ways raise $3 billion a year and support 42,000 agencies.

Akers's spokesman at IBM, Brian Doyle, said that Akers "believes that the transition period is critical to the future of United Way. As a result, the details of the transition are still being hammered out."

Akers, in a videotaped statement during the teleconference, praised Aramony as the man most responsible for today's United Way system. "Let us go forward together by renewing our commitment to the goals and objectives of this great American institution," Akers said on the tape.

Aramony's announcement came 21 hours after the board's executive committee met by telephone conference call to decide how to answer the pressure from local United Ways to remove Aramony. On Monday, delegates from the "Big 10" -- a group of the largest 14 United Ways -- asked Aramony by telephone to step down. Aramony rejected the suggestion, saying that he had done nothing wrong and would not have anyone else dictating his decision, according to one United Way official familiar with the exchange.

But sometime Wednesday, Aramony sent a letter to Leffall stating his intention to retire immediately. "I do this because media attention is overshadowing the importance of the work of United Way. ... " the letter said.