THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Monday, February 5, 1996 TAG: 9602050037
SECTION: LOCAL PAGE: B3 EDITION: NORTH CAROLINA
SOURCE: BY PERRY PARKS, STAFF WRITER
DATELINE: ELIZABETH CITY LENGTH: Long : 105 lines
On Feb. 6, 1995, Albemarle Area United Way's executive director, James Graham Foreman, resigned after officials discovered a doctored audit report.
By May, $102,000 had been confirmed missing from the United Way's coffers, its member agencies had lost one quarter's funding and feared losing another, and Foreman had been indicted on 46 counts of embezzlement and corporate malfeasance charges.
Now, a year after Foreman's resignation, the United Way has a new director leading a promising capital campaign, the 18 member agencies in seven northeastern counties are still on their feet, and Foreman's criminal charges are still pending.
In the July settlement of a civil lawsuit filed by the United Way, Foreman admitted to ``willfully, wrongfully and fraudulently'' diverting United Way funds ``for his personal use and benefit'' during his tenure from March 1993 to February 1995.
United Way officials are still waiting to collect from that $150,000 settlement, and they're still waiting to see how the criminal charges against Foreman will be resolved.
On the criminal side, they may not have to wait long.
Nine months after Foreman's indictment, Assistant District Attorney Mike Johnson said last week that some movement is expected on the criminal case in the coming days.
``We may get it wrapped up this week,'' Johnson said. ``I hope to know something pretty soon, get this one squared away.''
Johnson has repeatedly declined to comment on the details of negotiations between his office and Foreman's attorney, H.P. Williams Jr. Williams last week also declined to comment on the case. Foreman could not be reached.
Some United Way and member agency officials are hoping for both financial and moral restitution from Foreman.
``Personally, I don't think anything they do is going to be too hard on him,'' said Jane Taylor, interim director of the Boys and Girls Club of Elizabeth City, one of the United Way's largest agencies. ``I'm bitter, and I think a lot of agencies are bitter toward him.''
United Way board member Doug Gardner said it's unlikely that charity officials would settle for less than a jail term if Foreman is convicted.
``First we want to fix the financial wrong,'' said Gardner, one of the first officials to discover suspicious bookkeeping that led to Foreman's suspension and resignation. ``But I think we need to try to stem the cynicism in institutions that abounds in this country.
``I don't want to see people think that white-collar criminals don't face the same punishment as a guy who knocks over a gas station for 40 bucks.''
The past year has challenged both United Way and member agency workers in ways far beyond the financial loss. Officials have been fighting a quiet public relations battle to overcome both local concerns and the April conviction of national United Way President William Aramony on fraud charges.
But the process of changing how the local agency does business, Gardner said, has resulted in a stronger board with better links to its agencies.
``I think the board has really gotten a lot closer than it has in previous years,'' said Gardner, who spent 40 hours last February alone working on United Way issues. ``We had to spend so much time together.
``We've gotten to know our agencies a little better . . . We certainly revamped our internal financial controls.''
Under new procedures, Karl Quinn, a retired Coast Guard officer and Chesapeake resident who replaced Foreman in August, is not authorized to sign checks. Two board members must do that, making it much more difficult for a single individual to divert funds, Gardner said.
``Financially we're in a bind right now, yeah,'' Quinn said. ``But administratively, we're a lot better off.''
The United Way last year collected on a $35,000 fidelity bond and remains a fiscal quarter behind in funding its agencies, officials said. The lawsuit settlement grants some proceeds to the organization from the sale of a Rivershore Road house that Foreman partially owns, but several other creditors will get first crack at that money, Gardner said.
Meanwhile, the Albemarle Area United Way has raised more than $163,000 toward its $250,000 goal in an annual campaign that started later than usual last fall and will probably last through March, Quinn said.
``I'm optimistic that we'll get pretty close to our goal,'' Quinn said. ``I hope we can get there.''
During the campaign, in which pamphlets hail ``A New Beginning,'' the agency has received its largest-ever individual gift (an anonymous donation of $10,000), has doubled the number of $1,000 contributions, and has seen record contributions from some of its larger employers, Gardner said.
``I think the fact that we've had such a good response . . . sends a good signal for the future,'' Gardner said.
Quinn encountered not just missing funds when he started in August, but poorly kept records, relationships with member agencies that were ``just a real shambles'' and three years of absent tax records that irked the IRS.
He has received high praise from United Way and agency officials for turning things around.
``He's done a tremendous job,'' Taylor said. ``He's had to pick up a lot of pieces.''
Agencies like the Boys and Girls Club have had to bite the bullet in the past year and may have to again, Taylor said. But they continue to operate.
``We're surviving,'' said Taylor, who joined the United Way board in November. ``We're a lot more conscientious about where we spend our money.
``I think the United Way is doing a good job right now trying to make amends.''
At any rate, officials said, the agency is going in the right direction.
``We've got some enthusiastic people,'' Gardner said. ``I would say the mood is a whole lot better this February than it was a year ago.''
KEYWORDS: EMBEZZLEMENT UNITED WAY by CNB