
DATE: Sunday, April 13, 1997                TAG: 9704130046

SECTION: FRONT                   PAGE: A1   EDITION: FINAL 

SOURCE: BY MATTHEW DOLAN, STAFF WRITER 

                                            LENGTH:  243 lines

BIG BROTHERS BIG SISTERS AGENCY, EX-DIRECTOR EMBROILED IN DISPUTE

A bitter, long-running dispute between Big Brothers Big Sisters of South Hampton Roads and its former executive director imperiled the agency's United Way funding and may be affecting its ability to perform its primary mission, according to documents and interviews.

That mission is matching children from one-parent families with volunteers to serve as surrogate siblings. The agency relies on thousands of dollars each year from the United Way and several South Hampton Roads cities.

At the heart of the dispute is the performance of former Executive Director Peter S. Viele, who was fired last fall. Before his firing, agency officials charged that he had misused agency funds and garnisheed his wages to collect money they said he had misspent. After he was fired, a state police investigation was conducted into Viele's role as agency head and was concluded without finding criminal wrongdoing.

In interviews, Viele denied misusing agency funds and said the board of directors is to blame for the agency's woes. The board retroactively cut his spending allowance, he said, forcing him to pay back thousands of dollars that he considered legitimate expenses. He also said he has been defamed by board members and others involved with the agency and said he will file lawsuits to clear his name.

Part of the dispute between Viele and the board centers on an agency audit for 1995, which was not completed when Viele left in November. Failure to complete the audit put Big Brothers Big Sisters in danger of losing its United Way funding, according to a Nov. 7 letter to the agency from the United Way of South Hampton Roads.

Big Brothers Big Sisters officials blamed the failure to complete the audit on Viele. But Viele said the audit was the board's responsibility and board members paid no heed to his warnings that United Way certification could be lost without an independent audit.

Both Viele and current Big Brothers officials say the conflict has not affected the agency's ability to deliver services.

Rita Hughes, the current executive director, said the organization is financially healthy and was unscathed by the criminal inquiry. She said she wanted to ``assure the public that the services that we provide for the children have not been affected.''

In a lengthy interview, Viele said, ``I would never do anything to harm the agency.''

Some former employees, however, said the controversy drained resources that could have been used to pair additional children with Big Brothers and Big Sisters.

Toxey Tribby, Viele's former administrative assistant, lamented children waiting for surrogate brothers and sisters while internal problems raged.

``I saw so much money wasted that they could have hired another social worker,'' she said.

According to officials with Big Brother Big Sisters of America, an agency serving an area the size of South Hampton Roads - about 1 million people - has an average of about 400 primary, or ``core-program,'' matches at any given time. The South Hampton Roads agency had about 150 such matches at the time of Viele's dismissal.

In fact, local board President Gray Randolph told the board in November that the agency was 250 ``core-program'' matches below the national average for similarly sized regions, according to board minutes.

The board of directors of Big Brothers Big Sisters of South Hampton Roads once took great pride in Viele. ``He always knew how to charm the board,'' one former employee said of her old boss, ``and raise the money.''

But in a letter written a month after Viele's dismissal in November, then-acting Executive Director Laurie Michels - Viele's successor - described his performance as ``gross misconduct,'' according to a draft copy of a letter she wrote to the Virginia Employment Commission. In the letter, Michels listed 15 problems with Viele's tenure.

Viele overcharged the agency for reimbursement of computer, pager, cellular phone, car mileage and other expenses by hundreds of dollars, Michels wrote in the letter.

``With his approval, we began deducting $563.88 per month from his paycheck in May 1996,'' she wrote. ``We implemented internal controls to limit his abilities to misappropriate funds.''

Viele responded that the spending limits were exceeded only after the board changed the terms of his employment. Viele said he paid more than $4,000 in expenses through wage garnishments back to the agency before he was terminated.

Michels' letter also said that Viele borrowed $1,500 from the agency in violation of the agency's nonprofit governing rules. Michels said he later repaid the money.

Viele confirmed he had taken an ``advance,'' but explained that employees were traditionally allowed to borrow up to one paycheck's worth of money from the agency and pay it back quickly.

Viele also ``intercepted three of his own (outside) wage garnishment notices, placing the agency at risk of being in contempt of court when money was not withheld,'' Michels wrote in the letter.

Viele acknowledged that the agency's bookkeeper gave him the notices and he told her he would take care of the debts, which were later paid. The board of directors, he said, was not notified.

The board terminated Viele in November after he had shown ``willful disregard for financial propriety and the interests of the agency could no longer be tolerated,'' Michels wrote to the employment commission.

Neither Michels nor the employment commission would confirm that the letter was sent or would comment on its contents.

After Viele filed for unemployment, the agency challenged his benefit award by the employment commission and won, he said. Viele said he is appealing that ruling.

When investigators got wind of agency documents on Viele's activities in February, they obtained a search warrant by alleging Viele ``wrongfully and fraudulently obtained money under false pretenses during his term of employment as Executive Director . . .''

State police searched the Virginia Beach headquarters of Big Brothers Big Sisters on Feb. 11. But the criminal inquiry was closed without charges being brought, state police said.

Virginia Beach Commonwealth Attorney Robert J. Humphreys said authorities stopped their probe when they discovered that the board of directors had drawn up a promissory note to cover Viele's outstanding bills.

``I don't think it was the brightest thing to do if they were interested in criminal prosecution,'' Humphreys said in an interview. ``If they had hoped to keep it quiet, well, that's for you and readers to decide.''

Viele said the agency asked him to sign a $6,000 promissory note to cover the remaining expense that board members felt Viele owed the agency, but Viele refused. He said he does not owe the agency any money.

Viele, 47, a former parole officer, said he made his fund-raising reputation when he started an area wilderness school from scratch, later ran a capital campaign for the United Way in Virginia Beach and served as the assistant executive director of the regional Boys and Girls Club.

In 1992, he was hired by Big Brothers Big Sisters as a fund raiser and later was promoted to executive director at a annual base salary of $30,000 with benefits, according to an agency letter. In 1995, he said, his base salary was capped at $50,000.

He now works for a national fund-raising company for schools, universities and nonprofit organizations.

His leadership of the agency, Viele said, helped it to grow and thrive.

``I was able to double the amount of funding almost every year I was there,'' Viele, of Chesapeake, said of his time at Big Brothers Big Sisters. ``I developed and created the school-based mentoring programs. We went from 50 matches to almost 500 for both the school-based and core programs.''

But referring to members of the board, he added: ``They were not satisfied with my leadership style, and certain board members had personality conflicts with me.''

He added that the board made him work in multiple positions at the agency involving long nights, weekends and special events.

Not all who worked at the agency saw Viele's stewardship in a positive light.

Tribby described her eight-month stint as Viele's administrative assistant last year as chaotic. She said Viele used agency money for personal expenses and that, under his leadership, the agency sometimes missed deadlines for grant applications.

``Whenever Pete got in a jam, the social work was second in importance to Pete's needs,'' she said.

Tribby said board President Randolph told her in early October that it would be difficult to dismiss Viele, who was a good fund-raiser.

When another agency staff member raised questions about Viele's tenure and the oversight role of the board, Hughes, who in January succeeded Michels as executive director, wrote back that those issues had been resolved.

``The Executive Committee and the Board are very aware of the stress to the staff during the Pete situation,'' Hughes wrote to Marilyn Copeland, then an agency program director, on March 19. ``The situation with Pete has been resolved to the satisfaction of the Board,''

The agency fired Copeland on March 21, two days after the memo was written, according to interviews and agency documents. They cited, in part, Copeland's secret taping of her conversation with a board member and his anger over the taping. Copeland said she believes her firing was due in part to her criticism of Viele and the board.

Some board members also voiced their displeasure with how the agency was run.

Board member Sherry Theodosiou and her husband, Phil, met with executive director Hughes and chief financial officer Theresa Graves on Jan. 10 to discuss their concerns. The agency put Phil Theodosiou in charge of the post-dismissal negotiations between Viele and the board, according to board meeting minutes.

Phil Theodosiou ``demanded that . . . any board member who had knowledge of the Pete Viele situation and failed to act on it once it was discovered, be forced to resign,'' Hughes wrote in an internal memo to Randolph, board president.

But Sherry Theodosiou, who founded Big Sisters in South Hampton Roads, said in a recent interview that all of her and her husband's concerns have been satisfied. No board members have left since Viele's dismissal.

``When people are not supervised carefully, they sometimes interpret things in the wrong way,'' she said. ``I regret that things were misinterpreted.''

She added: ``If I thought that things were not going right, ethically, I would not be on the board now. The board and our programs are going in a positive direction.''

Jeff Ainslie, a past board president of Big Brothers Big Sisters, said, ``Pete was a great fund raiser. . . . But he did not provide the level of leadership we needed.''

Ainslie added: ``We didn't find out most of it until Pete was gone. We brought our acting director in and did an in-depth investigation of the files.''

Most of the other 32 members of the agency's board of directors, including board President Randolph, did not return phone calls or they declined to speak about Viele's employment.

``Most of the board members are volunteers who have full-time jobs of their own, but it's not like we don't care or we wouldn't be here,'' Ainslie said. ``Unfortunately, Pete wasn't doing things like he should have.''

Mike Hughes, president of United Way of South Hampton Roads, said he is satisfied with the actions taken by the board of directors regarding Viele. United Way gave Big Brothers Big Sisters more than $325,000 during Viele's tenure, amounting to about one-quarter of the agency's total revenue, records show.

Rita Hughes, current executive director of Big Brothers Big Sisters, said she plans to step down soon and return to a job in health care, meaning the agency will lose its third director since November. Mike Hughes said the quick succession of three executive directors is a slight cause for concern.

``We have gotten assurances from their board, but they seem to be in a process of transition and are instituting greater controls,'' Mike Hughes said.

The cities of Virginia Beach and Norfolk also have a financial stake in Big Brothers Big Sisters. The agency received almost $40,000 in grants for its school-based mentoring program from Virginia Beach over the past two years and $25,000 from Norfolk in 1995, officials said.

The Norfolk Redevelopment and Housing Authority also contributed $30,000 for the school-based mentoring programs last year and $20,000 in 1995 for Big Brothers Big Sisters to run the now discontinued youth job-skills program with the Diggs Town Tenant Management Corporation.

The Diggs Town public housing program, said Vera Franklin, the authority's resident service manager, was not renewed after ``it seemed to lose some steam. . . . There was a difference of opinion . . . over how to involve the kids.''

Big Brothers Big Sisters of South Hampton Roads, which celebrated its 25th anniversary in 1996, has matched about 150 children with adults for its core One-To-One program and another 100 youths through its newly created school-based mentoring program in Norfolk and Virginia Beach. The participants are screened and monitored with the help of a nine-member staff, including social workers. ILLUSTRATION: Color photos

Graphic

AT ISSUE

Peter S. Viele, left, was fired last fall from his job as

executive director of Big Brother Big Sisters of South Hampton

Roads. Before his dismissal, agency officials charged that he had

misused agency funds, and they garnisheed his wages to collect

money they said he had misspent. After he was fired, a state police

investigation was concluded without finding criminal wrongdoing. In

interviews, Viele denied misusing agency funds and said the board of

directors is to blame for the agency's woes.

Below is the headquarters of Big Brother Big Sisters of South

Hampton Roads at 5690 Greenwich Road in Virginia Beach.