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Local branches question United Way's spending

Officials at United Way agencies say reports about the spending habits of the group's longtime president have prompted them to write letters of concern to the national organization's board.

Executives of the United Ways in Washington, Chicago and San Francisco said Wednesday that they asked for additional explanation of reports in the Washington Post that describe how United Way of America president William Aramony has run the $29-million-a-year organization.

The United Way is financed primarily by voluntary dues from about 1,400 local United Ways. The three locals pay more than $1-million in dues a year.

Aramony has helped build the network of 2,100 local United Ways into a powerful movement that raises $3.1-billion a year for charity.

He is paid $463,000 a year in salary and other compensation, the Post reported. He uses chauffeured cars on frequent trips to New York and stays in a $430,000 New York condominium purchased primarily for his use by a spin-off corporation.

United Way of America in Alexandria, Va., has created several independent organizations, called spin-offs, to save money for charities by buying goods in bulk and other activities. Aramony's son is president of one spin-off; Aramony said he had nothing to do with his son's hiring.

Aramony has rewarded friends and associates, hiring a longtime friend as chief financial officer for the national organization, he said, without checking the man's background. Aramony said he only found out later that the man had legal and financial problems stemming from failed business ventures.

As a result of recent questions from the Post and Regardie's magazine, Aramony's board of directors has commissioned an independent investigation.

Officials at several large locals, including Cleveland, Atlanta and St. Louis, expressed confidence that the national board would take any action necessary after the investigation.

"Obviously, we feel the national board is a strong volunteer board," said Jack Costello, president of the Cleveland United Way. "They are obviously looking into all of this. We continue to be supportive of the national organization."

Tony DeCristofaro, a spokesman for the United Way of America, said, "We appreciate the support local United Ways are expressing to us and are doing everything we can to keep them fully informed. It is important for them to know that the board is acting quickly and responsibly, and will continue to be open and forthright with local United Ways and the general public."

Officials at the Seattle and Portland, Ore., United Way groups said they won't decide on their next payment of voluntary dues to the national organization until the inquiry is complete. Dues typically amount to 1 percent of collected donations.