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People Top 5
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- April 17, 1995
- Vol. 43
- No. 15
A Little Help for His Friends
William Aramony Faces Prison for Diverting the United Way His Way
"It was the first time I ever had lobster," LuAnn, now 23, recalled recently. "It was the first time I ever rode in a limousine. It was the first time I ever stayed in a nice hotel. Mr. Aramony taught me how to eat because I didn't know what to do with more than one fork." During one game of craps on their Vegas jaunt, he gave LuAnn $100 each time she smiled at him.
But what Lori Villasor saw as tokens of love, a U.S. attorney treated as evidence of fraud. Last week, after seven days of deliberation, an Alexandria, Va., jury agreed, convicting Aramony—and associates Thomas Merlo, 64, and Stephen Paulachak, 49—of tunneling some $600,000 for their own use from the United Way of America and the Partnership Umbrella Inc., a spinoff company, from 1981 to 1992.
Aramony was found guilty of 25 counts of fraud, conspiracy, money laundering and filing false income tax returns, each of which carries a maximum sentence of up to 10 years in prison. Merlo, UWA's former chief financial officer, was convicted of 17 counts and Paulachak, president of PUI, of eight. "This is a case about three men who looted and plundered one of the country's most important institutions of charity," Assistant U.S. Attorney Randy I. Bellows told the jury.
In fact, the United Way is one of the nation's largest charities, taking in more than $3.5 billion each year, much of it through corporate fund-raising drives. (United Way of America, over which Aramony presided for 22 years, first as CEO and later president, is the charity's national service and training center, responsible for providing local units with fund-raising help.) When the Aramony scandal broke in 1992, contributions nationwide declined by 4 percent and have only recently begun to rebound.
In court, prosecutors cast Aramony as an extravagant lothario who treated the United Way as his "private play toy," regularly hitting on female employees and using the charity's money to finance the chase. Sharon Clatterbaugh, Aramony's former assistant and a divorced mother of two, told of a 1985 business trip to Florida during which Aramony sent her mash notes and told her not to turn down her bed at night because she wouldn't be using it. When she rebuffed him, testified Clatterbaugh, "he told me I was stupid, I didn't know what I was passing up." Rina Duncan, a former employee who did have an affair with Aramony, said he instructed her to bill his personal expenses to the charity.
Throughout the four-week trial, Aramony maintained an unruffled calm, smiling and greeting friends like the CEO he once was. He never addressed the charges, and none of the defendants called any witnesses. But after the verdicts were read, Aramony sat with his head bowed, looking neither at the somber jurors nor his fellow defendants. Outside the courthouse, Aramony's attorney, William Moffitt, said he would appeal the conviction. "My client is not happy," said Moffitt, who had argued that the scandal was the fault of incompetent aides who failed to distinguish between Aramony's business and personal expenses and that the UWA's 37-member board knew of Aramony's spending practices but did not rein him in because of his fund-raising abilities.
Indeed, in his 22 years with the organization, Aramony is widely credited with raising the United Way's profile and binding the 2,100 independent local groups into a tight confederation. The youngest of four children born to Russell and Nazley Aramony, Lebanese immigrants, he grew up in Worcester, Mass., and was the first in his family to attend college, graduating there from Clark University in 1949 and from Boston College with a master's degree in social work in 1951. Joining the United Way as executive director of the Columbia, S.C., chapter in the late 1950s, he headed local chapters in South Bend, Ind., and Miami before taking the top national job in 1970. In interviews, he maintained that his $390,000 annual salary was merely comparable to that of other CEOs, and said he had to spend money to attract big contributors. "You won't find those people at McDonald's or in the New York City subway," he once said.
Within the UWA, he was equally blunt about his romantic affairs. "He'd meet somebody on an airplane, and she'd be on the payroll the next day," said George Wilkinson, a former vice president with the charity. "You would question him, and you were told basically that it was none of your damn business."
Aramony's lawyer acknowledged that Aramony was a "womanizer" who had dated under an "arrangement" with his wife, Bebe. (The couple, who divorced in 1992 after 41 years of marriage, have three grown children.) But Moffitt told jurors that Aramony's sexual habits were not the issue in the case. "You've heard some testimony about sexual harassment," he said. "It's ugly and people were harmed...but this case is really not about that."
Still, most in the courtroom found it hard to ignore. Lori's older sister, Lisa Villasor Tomas, told the court how she had met Aramony on an airplane in 1986 when she was 23 and working as a computer programmer. He suggested that she apply for a job at UWA's Alexandria headquarters and then flew her to Las Vegas for an "interview" that included dinner and a show by magician David Copperfield.
The two began a sexual relationship that lasted four months. Not long after it ended, she discovered he had begun a romance with her sister Lori, then 17, who was staying with her in Alexandria. "I told him I didn't want him contacting her anymore or me for that matter," said Tomas, now 31. Although Tomas moved herself and her sister back to Florida, Aramony continued to date Lori. More than $400,000 in Partnership Umbrella funds were used to purchase and decorate an apartment on Manhattan's Upper East Side where he and Villasor met for romantic trysts, and he frequently flew to visit her in Gainesville, where she was working as a secretary and briefly attended classes at the University of Florida.
Among other tokens of affection, Aramony arranged to add a $4,800 sun-room to her Gainesville home. "Lori told me her boyfriend was buying her a new Honda Accord," recalls a high school friend. "Suddenly she had credit cards and money and was proud she was dating a rich guy."
In court, Lori and her sisters testified they believed that Aramony had paid for the gifts and trips himself. And Lori tearfully told the jurors that her relationship with Aramony was based on love, not money. "Was it cheap?" Moffitt asked her in court. "No," she replied, her lower lip trembling. "Was it sordid?" "No." Collapsing in tears, Villasor testified that she and Aramony continued their affair even after he underwent radical prostate cancer surgery that left him unable to have sexual intercourse.
By then, though, Aramony's actions were beginning to catch up with him. In early 1992, The Washington Post began questioning his expenditures and salary, and he was forced to resign.
In the wake of the scandal, UWA has adopted a new code of ethics and a committee to monitor its effects. The charity's supporters hope the end of the trial will allow them to put the Aramony mess behind them. "What Aramony did for the United Way was tremendous; he literally forced the UW into success," says former vice president Wilkinson. "But his ego got in the way. He got to a point where he felt he could do anything."
STEPHANIE SLEWKA and MARY ESSELMAN in Washington and GREG AUNAPU in Gainesville
- Stephanie Slewka,
- Mary Esselman,
- Greg Aunapu.
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