It's Better To Receive Than To Give

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By Newsweek Editors

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It was worse than they thought. In February, after The Washington Post questioned the management practices and high living of William Aramony, the president of United Way of America, the organization accepted his resignation but declared the problem a matter of "sloppy record-keeping. " Last week brought a second look. The charity disclosed in disturbing detail an external report alleging a pattern of financial chicanery over several years. Among the charges: Aramony OK'd the diversion of donors' money to questionable spinoff organizations run by longtime aides and provided benefits to family members as well. In one instance he allegedly approved a $2 million loan to a firm run by his chief financial officer, in violation of New York State law, the report said. Those who provided United Way's $29 million annual budget, concluded interim president Kenneth Dam, "will and should feel betrayed. "

Almost as eye-opening was the largesse Aramony apparently bestowed on himself. He landed a $4.4 million pension, according to the report. (United Way's board froze the benefits.) He incurred more than $100,000 in travel and other costs with "no documented business purpose. " He made at least 29 trips to Las Vegas between 1988 and 1991. An additional 49 journeys were to or through Gainesville, Fla., home of Aramony's daughter and also of a woman with whom he had a relationship, according to the Post. The report skirted any discussion of criminal prosecution, though United Way lawyers said they expected an IRS investigation. Aramony denied "any suggestion of misappropriation, " and told ABC's "Nightline " he plans to sue the charity he ran for 22 years for defamation of character.

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