William Aramony

William Aramony was CEO of United Way of America for more than twenty years and helped build the orgainization into one of the top four non-profits in the United States. He resigned in 1992 amid allegations of financial mismanagement and criminal activity, for which he was convicted and sentenced to prison.

Early years

William J. Aramony was born July 27, 1927 in Jewett City, Connecticut. His parents immigrated to the United States from Lebanon, and he was the youngest of their four children. He grew up in Worcester, Massachusetts, attended Clark College from 1946-1949 and matriculated at the Boston College Graduate School of Social Work, earning a Master's degree in 1951. [http://query.nytimes.com/gst/fullpage.html?res=9E0CEFD91730F93BA15751C0A964958260 New York Times: February 28, 1992-Charity Leader's Success Was Also His Undoing by John H. Cushman, Jr.] ] Aramony was married and his son, Robert, president of Sales Service/America Inc., a for-profit subsidiary of UWA, was born in 1958.

United Way career

Aramony worked at local UW affiliates beginning in 1958 before coming to the United Way National Capitol Area in Washington, D.C. in the late 1960's. He advanced to CEO of the national governing body, the "United Community Funds and Council of America" (UCFCA) in 1970 and began an organizational makeover. The organization was renamed, United Way of America (UWA), and moved from New York City to Alexandria, Virginia in 1971. A common stated purpose and standard name (United Way of ...) was established for local affiliates.

Next, he formed a partnership with the National Football League in 1973, whereby players and coaches made public service announcements about their involvement with United Way chapters which were broadcast during NFL games at no charge. These associations brought widespread attention to the United Way and in 1975, helped push donations above $1 billion for the first time.

Aramony helped develop a core strategy, which emphasizes an annual community-wide campaign in the Fall. United Way provides assistance to Employers, who encourage their workers to contribute to United Way via payroll deduction. Agencies that receive United Way funding agree not to solicit donations during the UW campaign.

He also created the "minority roundtable" and helped develop numerous United Way leaders, That may not be a positive attribute; Ralph Dickerson Jr., at United Way of New York City; Oral Suer and Norman O. Taylor from United Way of the National Capital Area all had problems distinguishing between personal and United Way assets. [ [http://www.nytimes.com/2006/04/14/nyregion/14united.html New York Times: April 14, 2006-United Way Says Ex-Leader Took Assets by Stephanie Strom] ]

During his tenure, United Way receipts rose from $787 million in 1970 to more than $3.1 billion in 1990. [http://www.time.com/time/magazine/article/0,9171,1101920309-159170,00.html Time Magazine: June 24, 2001-Resignation Charity Begins At Home by Michael Duffy] ]

candal begins

In 1990, there were UWA office rumors about Aramony's liaisons with a teenage girlfriend on vacations in Paris, London and Cairo. An anonymous note on UWA letterhead was sent in late 1990 to UWA's chairman, Edward A. Brennan, who is the chairman of Sears, Roebuck & Company. The letter warned that the charity was being looted by its president, who was romancing a young woman.

When Aramony was questioned about the allegations, he denied any wrongdoing. In late 1991, a source at the national office revealed that Aramony flew first class, sometimes on the Concorde, used chauffeur-driven limosines and lavished expensive gifts on friends. After receiving multiple requests for information from the media, the United Way of America's board of governors hired outside investigators in December, 1991. The auditors were instructed to review the books and examine accounting procedures within the agency. Their investigation found sloppy record-keeping, inattention to detail, and accounting problems, but no evidence that Aramony had enriched himself. [http://www-tech.mit.edu/V112/N9/united-way.09w.html Washington Post: February 28, 1992-United Way Head Resigns Over Spending Habits by Charles E. Shepard] ]

The outrage from local United Way organizations across the country was overwhelming. Many disaffiliated themselves and discontinued their 1% "contribution" of dues to the national office; some filed name changes.

During a teleconference on February 27, 1992, Aramony announced his retirement with full pension benefits as soon as a successor was chosen. Until then, he would continue to receive his $390,000 salary and $73,000 in other compensation. Jay R. Smith, publisher of the Atlanta Journal and Constitution and an active volunteer at United Way of Atlanta asked, "What I have not heard, quite honestly, is an apology. Do you think, Mr. Aramony, that we are owed one?" Aramony's reply was:

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

The following day, after an avalanche of calls from local chapters demanding his ouster, Senior vice president Alan S. Cooper was named acting president.

Indictment

Later that year, Aramony was charged, along with CFO Thomas J. Merlo and Partnership Umbrella President Stephen J. Paulachak, [ [http://query.nytimes.com/gst/fullpage.html?res=9E0CEFDD1738F937A35757C0A964958260&scp=22&sq=William%20Aramony&st=cse New York Times: April 4, 1992-United Way's Ex-Leaders] ] in a 71-count Federal indictment of defrauding their organization of $1.2 million through misuse of leave salary, misreporting expenses such as billing private travel as a company expense, and drawing retirement benefits from the "United Way National Capitol Area" retirement fund while he was still working there.

Other issues

A secondary issue that was not litigated was Sexual harassment by William Aramony. He was accused of pressuring employees to have sex with him. According to the indictment, he propositioned female employees and offered the women financial benefits if they had sex with him and transferred or suppressed the careers of those who rebuffed him. [http://www.nydailynews.com/archives/news/1995/03/10/1995-03-10_ex-charity_chief_wooed_her_k.html New York Daily News: March 10th 1995- EX-CHARITY CHIEF WOOED HER KID SIS By Laurie C. Merrill] ]

Rina Duncan, Aramony's former secretary testified that she had had an affair with Mr. Aramony, beginning shortly after she was hired in 1982 and lasting until 1985. During trial, the court admitted testimony from several UWA female employees who testified that they had sexual relationships with Aramony and two UWA employees who rejected Aramony’s sexual advances in 1985.

Villasor sisters

When Lisa Villasor Thomas was 22, she met William Aramony on an airplane. He got her a job at UWA and their affair began in July, 1986. They traveled together to San Francisco, New York City and other locations for business. Everything was fine until he met someone he liked even more: her kid sister.

Lori Villasor graduated from high school in Gainesville, Florida in 1986. She was unsure what to do with her life, so she accepted her older sister’s invitation to move to Alexandria, Virginia and share an apartment. Soon after meeting the 17-year old Lori, the 59-year old Aramony began pursuing her. Lisa Thomas said she was outraged when she learned that Aramony was romancing her underage sister. According to Thomas, "I told him I didn't want him contacting me or Lori at all".

But that didn’t stop Aramony. He moved Lori out of her sister’s apartment and into a ritzy New York City condo on East 65th Street. Aramony used $450,000 in partnership dollars to buy and furnish the lovenest with amenities such as top-of-the-line televisions, original watercolors, crystal, oriental furniture and a king-size bed. Aramony siphoned hundreds of thousands of charity dollars through ‘’Partnership Umbrella’’ to spend on fancy meals, trips and gifts, to keep her as his mistress. Over the course of their five year relationship, He sent her flowers, provided her with limousine rides, flew her to vacations, made out checks to her for "consulting", presented her with a fax machine, even funded the construction of a sunroom for her house in Gainesville -- all with money from the United Way.

Lori Villasor testified that she was a former employee of United Way and began dating Mr. Aramony in December, 1986 when she was 17. She was paid $27,500 per year for work on a real estate project that lasted for two years and required a total of two hours of her time. [http://query.nytimes.com/gst/fullpage.html?res=990CE5D81F3FF936A25750C0A963958260 New York Times: March 15, 1995- Charity Leader Had Warning On Misconduct] ]

Rina Duncan, Aramony's assistant, stated that after Aramony began dating Ms. Villasor, he would run up big bills for airplane flights and entertainment. Ms. Duncan admitted that she altered Aramony's expense accounts for seven years by substituting the names of clients for Ms. Villasor's name and charging things like champagne, flowers and plane tickets for Ms. Villasor to UWA. Ironically, Villasor said she would leave Aramony if Ms. Duncan continued to work for him. Aramony found a position for Duncan at Partnership Umbrella, the UWA. spin-off company that he used to fund his affair with Villasor.

However, there was a third Villasor sister, LuAnn, who also had a close, personal relationship with the United Way CEO. In her testimony, she recalled that her affair began with a high school graduation present from Aramony in 1989: a trip they took to Las Vegas and New York City. ["Masters of Deception: The Worldwide White-Collar Crime Crisis and Ways to Protect Yourself" by Louis R. Mizell; ISBN 0471133558 Published by John Wiley and Sons, 1996 pgs 97-98]

According to court documents, Aramony was also seeing another UWA employee, Anita Terranova, between 1987 and 1991. Aramony purchased half ownership of a race horse, "Stylish Affair", in Terranova’s name and spent $125,576.92 to purchase a Florida condominium for Terranova's use until her retirement in May 1991, and $10,000 to Terranova to furnish the condominium. [ [http://www.nycourts.gov/comdiv/Law%20Report%20Files/October%201998/vaccov.htm New York Courts website: State of New York against WILLIAM A. ARAMONY, and THOMAS J. MERLO] ]

Prosecution

On April 3, 1995 and after a three week trial, Mr. Aramony was convicted in the U.S. District Court for the Eastern District of Virginia [http://www.unitedwaycv.org/pages/questions.htm#q8 United Way of Central Virginia: FAQ-Was former United Way of America president, Bill Aramony, convicted of fraud?] ] on 25 counts including conspiracy to defraud, mail fraud, wire fraud, transportation of fraudulently acquired property, engaging in monetary transactions in unlawful activity, filing false tax returns and aiding in the filing of false tax returns. Money laundering charges were dismissed. He was sentenced to 84 months in prison, fined $300,000 and served the time at the Federal Prison Camp at Seymour Johnson Air Force Base, near Goldsboro, North Carolina. [http://www.nptimes.com/Mar02/npt2.html NonProfit Times: March 1, 2002-William Aramony is Back on the Streets by Matthew Sinclair] ] He was released from prison on September 28, 2001 [ [http://www.bop.gov/iloc2/InmateFinderServlet?Transaction=NameSearch&needingMoreList=false&FirstName=William&Middle=&LastName=Aramony&Race=U&Sex=U&Age=&x=56&y=9 Federal Bureau of Prisons: Inmate Locator-William Aramony] ] and was on probation for three years.

Unbowed

Aramony never acknowledged any wrongdoing or expressed remorse. He appealed his convictions and sentences; all of his appeals were denied. Aramony's lawyer says his client's judgment was impaired because of brain atrophy and noted that Aramony had a cancer that led to surgical castration while he was seeing Lori Villasor.

Lori Villasor ended her affair with Aramony when he was convicted in 1992. She was given immunity to testify and was not charged with any crime. [ [http://www.time.com/time/magazine/article/0,9171,981527,00.html Time Magazine: October 3, 1994-Charitable Seductions] ]

While still incarcerated in 1996, Aramony filed a $5 million lawsuit against UWA, claiming he was denied earnings and retirement benefits that were due him. [http://www.fundinguniverse.com/company-histories/United-Way-of-America-Company-History.html Funding Universe: Company Histories-United Way of America] ] UWA counter-sued and a United States district court issued a split decision which both parties appealed. The Second Circuit Court of Appeals reversed a portion of the lower court's decision: United Way of America owed Aramony $2.4 million in pension benefits, less UWF's $2.02 million award against Aramony. After subtracting the amount Aramony owed UWA from the New York state attorney general's judgement against him, applicable income tax withholdings and attorney's fees, Aramony received $7,871. [ [http://www.allbusiness.com/specialty-businesses/non-profit-businesses/816752-1.html Non-Profit Times: July 1, 2001-United Way Finally Beats Convict Aramony by Matthew Sinclair] ]

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