YOU ARE HERE: LAT HomeCollections

The Region

2 United Way Donors Allege Agency Fraud

Couple's suit contends the Ventura County arm gave less money to charities than promised and reneged on a pact to give to the Boy Scouts.

September 20, 2003|Amanda Covarrubias | Times Staff Writer

Two major contributors to the United Way of Ventura County allege in a lawsuit filed Friday that the fund-raising organization committed fraud and breach of oral contract by giving charities less than 85% of the millions of dollars it collected in 2001, and taking longer than the promised three months to distribute the money.

Dennis Mark Weinberg, an executive director at WellPoint Health Networks, and his wife, Allyson Weinberg, also contend in the civil suit that the former president of United Way reneged on an agreement to give to the Boy Scouts, which was later barred as a recipient because of the Scouts' policy against gays.

"These agreements formed the backbone and foundation of everything he [Weinberg] did, including his own personal giving, as well as the thousands of employees and non-employees who gave to United Way," said Richard Kahdeman, an attorney for the Weinbergs.

David Smith, president and chief executive of United Way, said Friday in a statement that the organization "regrets that Mr. and Mrs. Weinberg have taken this approach instead of dealing directly with United Way of Ventura County regarding their concerns. United Way of Ventura County is committed to its goals and principles of providing important support to nonprofit organizations in Ventura County. That has always been our objective and will continue to be our objective."

The Weinbergs gave more than $99,000 to the United Way in 2001, and Dennis Weinberg led the WellPoint campaign to raise money for the charitable organization, Kahdeman said. The Thousand Oaks-based health insurance company has about 3,000 employees, but Kahdeman did not know how many of them voluntarily took payroll deductions to give to United Way. WellPoint provided a 50% match on donations, he said.

The Weinbergs charge that former President and Chief Executive Sheryl Wiley Solomon promised to give 85% of every dollar raised to charities and use the remaining 15% for administrative expenses, but that United Way actually gave less than that amount. At one point, Kahdeman said, the percentage that went to charity was as low as 77%.

United Way raised $4.9 million in its 2001 campaign, and $5.2 million in 2002 and 2003.

Kahdeman said the Weinbergs specifically asked Solomon if the Boy Scouts would remain a recipient of United Way giving, and that she assured them it would. But the United Way Board of Directors adopted an inclusiveness policy in June 2001 that banned funding to agencies that discriminate. The Boy Scouts of America bars homosexuals as members and leaders.

Solomon left her position in July 2001 after serving as president for three years, Smith said.

Contributions collected by United Way are distributed in grants to about 50 charitable programs every quarter, Smith said, adding that the organization reduced its administrative fee this year to 10% on the dollar instead of 15%.

The Weinbergs are asking the court to make their lawsuit a class action on behalf of other contributors, as well as beneficiaries that were to have received United Way money. They also are seeking a court order that would force United Way of Ventura County to pay charities any money it kept for administrative costs beyond 15%.

"They want the money they intended to go to charities to actually get to the charities," Kahdeman said. "They want United Way to make good on the promise they made to every contributor."

Los Angeles Times Articles