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Three Years Later, Aramony Scandal Still Hurts United Way

April 10, 1995

ALEXANDRIA, Va. (AP) _ Charities are hoping the conviction of the former United Way president will rid them of the stain caused by his outrageous spending habits, and win back the trust _ and dollars _ of donors.

Charities large and small suffered from the scandal caused by William Aramony, convicted last week of bilking $600,000 from the United Way of America. Donations to the United Way plummeted 42 percent after he resigned in disgrace in 1992, but have since recovered.

Smaller charities, many of which rely on United Way funds, are still scrambling to recover.

``It did hurt all the way down the line,″ said Kim Manning, fund-raising director of the Arlington Red Cross.

In 1991, about 55 percent of the Red Cross chapter’s $750,000 annual budget was composed of United Way funds. In 1994, three years after the scandal, that amount shrunk to 14 percent.

``Aramony was not the only factor; the economic times didn’t help either,″ Manning said. ``But definitely, Aramony made things a lot more difficult.″

The Arlington Red Cross has turned to its own fund drives to make up for the reduction in United Way support.

``It was not easy,″ Manning said. ``But I think that is a good thing. Some good comes out of every `oops’ in life.″

Aramony, who lasted 22 years as president, was convicted last Monday of 25 counts of fraud, conspiracy and money laundering. Two other former United Way executives also were convicted.

Aramony built the United Way into America’s richest and most visible charity, leading a fund-raising machine that brought in about $3.1 billion in 1990.

But his accomplishments were eclipsed by what he became: a symbol of corruption, arrogance and avarice unheard of in the ordinarily staid world of nonprofit organizations.

Few who worked with Aramony remain at United Way headquarters. The office has fewer employees, tighter financial controls, a new code of ethics and a new boss _ former Peace Corps director Elaine Chao.

Donations have rebounded, up to $3.05 billion in 1993 and at least $3.1 billion in 1994.

The United Way of America oversees about 2,000 local United Way offices, which fund local charities. When the Aramony scandal broke, many of the local offices withheld their dues from the national group, but gradually rejoined the fold.

``Everyone was reassured. There is greater accountability, and looking long-term there’s sort of a silver lining to all of this,″ said Charles Kolb, general counsel for the United Way of America.

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