January 13, 2000 | Read Time: 2 minutes
For the second time in a little more than a year, a federal judge has ruled that the United Way of America owes several million dollars in pension benefits to its former president, William Aramony, who is serving time for defrauding the charity.
U.S. District Judge Shira A. Scheindlin in New York said last week that Mr. Aramony was entitled to $2-million in pension benefits that the United Way had argued were unfairly awarded to him in a 1998 court decision (The Chronicle, November 5, 1998). The decision brings the total amount of benefits owed to Mr. Aramony to $4.4-million.
Since Mr. Aramony remains liable for more than $2-million in salary, damages, and interest to the charity, however, his net award amounts to $2.38-million.
At issue in last week’s ruling was whether the United Way should have to pay Mr. Aramony money from a pension plan that the charity contends was void. United Way officials say that the plan, which was signed by a representative of the charity’s governing board, did not reflect the board’s intent because it did not include a so-called bad-boy clause, which would deny Mr. Aramony the benefit money if he committed a felony. The officials say that the bad-boy clause somehow never made it into the final contract, which was prepared by Mutual of America, a New York insurance and pension-plan company.
A United Way spokesman said that the charity’s lawyers would review the court’s decision and consider an appeal. He added that the United Way may also consider suing Mutual of America. In any case, the spokesman said, the United Way has set aside enough money to pay Mr. Aramony what the court says he is owed.
Mr. Aramony, who presided over the charity for 22 years, was fired in 1992 for fraudulently spending, with two of his colleagues, more than $1.2-million on luxury travel, vacations, and other perks for himself and his friends. In 1995, a federal court convicted him of fraud and tax evasion, sentencing him to seven years in prison.
