Local Chapter not focus of United Way program

An investigation into allegations of financial mismanagement at the United Way of the National Capital Area will not directly include the Prince William United Way, but local chapter officials are worried it could affect donations.

The United Way of the National Capital Area, which serves the District of Columbia, Northern Virginia and two Maryland counties, is the target of a federal investigation stemming from allegations raised by a former board member.

FBI agents served a subpoena on the offices of the United Way of the National Capital Area on Tuesday.

Prince William United Way acts like a branch of the United Way of the National Capital Area, but does not manage any monies. Donations are processed and distributed out of the National Capital Area office.

The investigation stems from questions raised last summer by Ross W. Dembling, then a volunteer member of the organization’,s board of directors.

Dembling voiced concerns about a consultant contract with the agency’,s former chief executive, renovations to corporate offices and travel expenses of senior staffers. He also raised questions about the sale of cars previously leased by the agency to executives.

The matters have already been studied by outside auditors, said Irving Kator, an attorney for the charity. He said the organization intends to cooperate with federal authorities.

The United Way is subject to federal scrutiny because, in serving areas in Virginia and Maryland, it is involved in interstate commerce.

Anne Terrell, chairwoman of the Prince William United Way Executive Committee and a member of the Board of Directors for the United Way of the National Capital Area, said she believes the United Way hasn’,t done anything wrong, but the organization could have been more open about its financial practices.

“Over time, a lot of fairly loose practices may have developed. There weren’,t any rules that have been violated, but the rules got too lax. And the board downtown is sitting up and taking notice,” she said.

The United Way, which raises about $90 million a year for 1,100 social programs, has acknowledged taking credit for millions in donations it has not handled and withholding donations collected on behalf of some charities while deducting excessive fees to cover its overhead.

No overhead expenses are deducted from donations at the Prince William United Way office, Terrell said. The office has a staff of three who primarily do fund-raising, and do not collect or distribute any monies.

“No people in our office are directly involved in accounting,” Terrell said.

When Prince William residents donate money to the United Way, their pledges are sent to the United Way of the National Capital Area, which distributes the money to charities.

If a local charity is designated to receive the donation, it goes there –otherwise it goes to organizations selected by the United Way.

Last year, Prince William organizations received more than $3 million from the United Way, according to Lucy S. Beauchamp, director of the Prince William United Way.

The local chapter raised about $1.2 million, handled by the United Way of the National Capital Area, so the agency gave more money to county charities than was collected from county donors.

Beauchamp referred all questions about the federal investigation to a United Way of the National Capital Area spokesman.

Terrell said her biggest fear over the investigation is the possibility that it could lead to a decrease in United Way pledges. The Prince William United Way is kicking off a major fund-raising campaign after Labor Day.

“It will have a devastating impact on the community if pledges go down,” she said.

According to Tony De Cristofaro, United Way spokesman, the agency’,s finance and administration committee conducted an internal probe over Dembling’,s allegations and outside auditors and legal consultants have conducted their own reviews of the issues.

Former Clinton Administration Secretary of Transportation Rodney E. Slater, now practicing law in the Washington area, has been appointed to head the agency’,s Ethics, Policies and Procedures Task Force in an effort to avoid future concerns about suspected irregularities.

Staff writer Kate Bissell contributed to this report. She can be reached at (703) 878-8068.