Charlotte's United Way Defends Gloria Pace King's Settlement: Her Strong Case

United Way Defends $700,000 Payout To King

The day after ending their legal fight with Gloria Pace King, United Way officials defended their $700,000 settlement by saying it would have cost more in legal fees to go to trial against their former CEO.

King sued the agency for discrimination and wrongful termination after it fired her in 2008 amid controversy over her compensation package.

The agency agreed to pay her $233,333, while its insurance carrier will pay $466,666. The United Way's share will come from a variety of sources, including donor dollars from past campaigns and investment revenue.

King had sought a $2.1 million supplemental retirement account, plus about $500,000 in back pay remaining from her three-year employment contract.

"It makes the decision look easy when you look at it like that," United Way Executive Director Jane McIntyre said. "That $233,000 is a big amount of money, but you can see the difference."

Russ Sizemore, the lawyer who handled the United Way's case, noted that the settlement came after a judge said no trial would happen until 2012, and that the pre-trial "discovery" process of exchanging documents and interviewing witnesses would run until the end of next July.

Lawyers, who have already been working - and billing - on the case for months, would be working another year before setting foot in court for a trial.

"That's a good benchmark for people to sit back and say, 'Well, let's see if we can't resolve this' out of court," Sizemore said Thursday. "It's a good settlement for the community."

Asked how big his bill would be, Sizemore said he and his partner on the case, Bo Ketner, were still tallying their fees, which would be paid by the United Way and its insurance carrier. Sizemore added that the settlement doesn't require the United Way to pay King's legal fees.

Veteran Charlotte trial lawyer Jim Cooney said legal fees on a case like King's would likely run "substantially into six figures." In addition, the United Way's staff would have been swamped producing documents for lawyers and preparing themselves for possibility they'd be called to testify.

King's lawyer, Bill Diehl, had suggested he might depose as many as 75 people.

A trial "can be an enormous distraction for an organization," said Cooney, who wasn't involved in the King case. "At a place like the United Way that potentially has to re-fund itself every year (through fundraising campaigns), it can be devastating."

Virtually all civil lawsuits end in settlements, partly because trials are so costly and unpredictable, said Charlotte employment lawyer Brian Clarke.

"You have to (consider settlements), it just makes good business sense," he said.

The United Way's $233,333 will come from $822,507 set aside for King's supplemental pension account in 2007. The rest - about $500,000 - will be returned to the Community Care Fund, the pool of money divided up each spring among United Way's member charities.

Sizemore said the settlement also resolves all claims against United Way board members King named as defendants. Left unclear is the status of a criminal investigation of King by the local U.S. Attorney's Office and the Internal Revenue Service.

Sizemore said he had no knowledge about the probe. A spokesperson for the U.S. Attorney's office said she couldn't confirm or deny the existence of any investigation.





United Way Settles Lawsuit With Former CEO, Gloria Pace King


The United Way of the Central Carolinas has settled a divisive discrimination lawsuit brought by ousted CEO Gloria Pace King for $700,000 although only a third of that money will come from the agency and none from the current fund raising campaign.

The United Way will pay $233,333 out of a reserve fund set aside for the costs of the lawsuit and the remaining $466,666 will be paid by insurance policies.

King was fired after a NewsChannel 36 I-Team investigation in July of 2008 revealed that she was being paid more than $2 million in retirement funds over the course of three years.

The revelation brought a firestorm of public criticism and changes at the charity agency.

New United Way Executive Director Jane McIntyre said she was relieved to have the 26 month ordeal behind her but added, "I don't think there are ever winners in a situation like this."

King hired prominent Charlotte attorney Bill Diehl and filed a race, gender and age discrimination claim. King had earlier dropped a defamation lawsuit against interim United Way CEO Mac Everett. Diehl's assistant said he was out of town conducting a deposition and unavailable for comment.

In August of 2008 then-board Chairman Graham Denton publicly apologized on behalf of the board for the retirement package which he said "...exceeds what the community expects." Faced with plummeting contributions and an erosion of confidence, Denton said, "We have made a serious mistake. We owe the community an apology."

King never apologized.

In a February 2009 radio interview on WBAV-FM 101.9 King defended her salary and retirement benefits saying, "I raised over $500 million." King said she thought the board was fully aware of her salary and benefits. "I have never given myself a raise. I have never asked for a specific amount of money.... Whatever they gave me, I said, 'Thank you very much.'"

But an extensive outside review of the board action leading up to the $2 million retirement commitment concluded that King engineered her own pay by controlling the flow of information from compensation consultants to the board.

The United Way put in checks and balances governing executive compensation after the I-Team's report. The agency also cut the size of the board by two-thirds - from 67 to 22 - and cut the staff more than half - from 97 to 42.

The new leader of the United Way of the Central Carolinas, Jane McIntyre, earns less than half what King was paid.





United Way CEO Hires Lawyer Richard Diehl


United Way President and CEO Gloria Pace King has hired prominent Charlotte lawyer Bill Diehl to represent her in negotiations with her board of directors stemming from the growing controversy over her pay and benefits.

The board added $822,000 to King's retirement benefits last year, a six-fold increase over the $108,000 paid in 2006. It plans to pay between $450,000 and $500,000 into her retirement account each year for the next three years.

King's salary and bonus make her the fourth-highest-paid United Way executive, according to an Observer survey of 32 agencies. Only the United Ways in New York, Detroit and Miami pay more.

The Charlotte board has said the additional retirement payments were needed to make up for short payments in previous years. It has declined to explain why the catch-up payments were needed or say how it set the size of King's pay package.

In response to Diehl's hiring, the Observer called King, and the board's attorney, public relations firm and spokesman, former board chairman Ned Curran. But none commented Saturday.

It's unclear why King hired an attorney. But Diehl told the Observer on Saturday: “She came to me because there's been a big splash in the newspaper.

“The board is making a big to-do about something they previously approved. They're very defensive about the fact that she's gotten this retirement plan they gave her. It's crazy. They gave her the plan two years ago. And now they're concerned about it because somebody's written about it.”

On the eve of the United Way's 2008 fund-raising campaign, anger towards the agency continues to grow, threatening donations that support 91 non-profits.

“It's a publicity nightmare because the board hasn't taken the right approach to the situation,” Diehl said. “If somebody did something wrong, it's not Gloria King.”

Diehl said the board has not asked King to resign. He said she signed a three-year contract in January. “She's 63 years old and she expects to retire in two years.”

King, president and CEO since 1994, has declined to comment since reports about her pay surfaced in June. Her board has defended her salary and benefits as appropriate for top-performing executives.

United Way of Central Carolinas is ranked among the United Way's top 20 largest fund-raisers. The watchdog group, Charity Navigator, gives King's agency high marks for efficiency. The board credits King with boosting the agency to No. 2 in the number of donors giving at least $10,000.

Yet, the controversy over the board's handling of her pay has hung over the city for months.

For the first time in 40 years, philanthropist David Barnhardt will withhold his United Way contribution in protest. He plans to write checks for charity this year, but says they “will go directly to the Girl Scouts or some other nonprofit.”

Barnhardt, 72, whose father was an original director of what became Foundation for the Carolinas, says he's most bothered by “the fact that the board has been sneaky and tried to slip all this past the public.

“They've come up with a lot of excuses and they're not good excuses.”

Richard Snyder served on United Way of Central Carolinas' executive committee in 2000 and said he doesn't remember any discussion about retirement benefits.

“It seems like somewhere along the line the ball was dropped,” he said. “I don't understand what the benefit package was supposed to be that wasn't being met….I don't ever remember discussing retirement benefits. We discussed salary and bonus.”

“The shame of it is the United Way is a good organization,” he said. “And unfortunately, they're going to be hurt by this…there are services in the community that won't be funded because of this.”

Diehl said the board's leadership approved King's retirement plan.

“She had no role in that,” he said. “She didn't ask for it. They offered it to her.”

Diehl often represents people in the spotlight. Clients have included Charlotte Hornets owner George Shinn and speedway mogul Bruton Smith.

Diehl said he expects that something is going to happen within a week. There are, he said, three choices: King can continue in her job; she can resign; or she can be fired.

“Those are the choices in any employment dispute,” Diehl said.

Diehl said he's negotiating with United Way's attorney. He would not provide specifics.

“We're negotiating about the situation and how it can best be solved,” Diehl said. “I think they need to honor Gloria King's contract.”


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Sources: Biz Journals, McClatchy Newspapers, United Way, Wall Street Journal, WCNC, Wikipedia, Google Maps

Gloria Pace King Wins United Way Defamation-Discrimination Legal Battle: Congratulations!!

United Way Settles Lawsuit With Former CEO, Gloria Pace King


The United Way of the Central Carolinas has settled a divisive discrimination lawsuit brought by ousted CEO Gloria Pace King for $700,000 although only a third of that money will come from the agency and none from the current fund raising campaign.

The United Way will pay $233,333 out of a reserve fund set aside for the costs of the lawsuit and the remaining $466,666 will be paid by insurance policies.

King was fired after a NewsChannel 36 I-Team investigation in July of 2008 revealed that she was being paid more than $2 million in retirement funds over the course of three years.

The revelation brought a firestorm of public criticism and changes at the charity agency.

New United Way Executive Director Jane McIntyre said she was relieved to have the 26 month ordeal behind her but added, "I don't think there are ever winners in a situation like this."

King hired prominent Charlotte attorney Bill Diehl and filed a race, gender and age discrimination claim. King had earlier dropped a defamation lawsuit against interim United Way CEO Mac Everett. Diehl's assistant said he was out of town conducting a deposition and unavailable for comment.

In August of 2008 then-board Chairman Graham Denton publicly apologized on behalf of the board for the retirement package which he said "...exceeds what the community expects." Faced with plummeting contributions and an erosion of confidence, Denton said, "We have made a serious mistake. We owe the community an apology."

King never apologized.

In a February 2009 radio interview on WBAV-FM 101.9 King defended her salary and retirement benefits saying, "I raised over $500 million." King said she thought the board was fully aware of her salary and benefits. "I have never given myself a raise. I have never asked for a specific amount of money.... Whatever they gave me, I said, 'Thank you very much.'"

But an extensive outside review of the board action leading up to the $2 million retirement commitment concluded that King engineered her own pay by controlling the flow of information from compensation consultants to the board.

The United Way put in checks and balances governing executive compensation after the I-Team's report. The agency also cut the size of the board by two-thirds - from 67 to 22 - and cut the staff more than half - from 97 to 42.

The new leader of the United Way of the Central Carolinas, Jane McIntyre, earns less than half what King was paid.





United Way Defends $700,000 Payout To King

The day after ending their legal fight with Gloria Pace King, United Way officials defended their $700,000 settlement by saying it would have cost more in legal fees to go to trial against their former CEO.

King sued the agency for discrimination and wrongful termination after it fired her in 2008 amid controversy over her compensation package.

The agency agreed to pay her $233,333, while its insurance carrier will pay $466,666. The United Way's share will come from a variety of sources, including donor dollars from past campaigns and investment revenue.

King had sought a $2.1 million supplemental retirement account, plus about $500,000 in back pay remaining from her three-year employment contract.

"It makes the decision look easy when you look at it like that," United Way Executive Director Jane McIntyre said. "That $233,000 is a big amount of money, but you can see the difference."

Russ Sizemore, the lawyer who handled the United Way's case, noted that the settlement came after a judge said no trial would happen until 2012, and that the pre-trial "discovery" process of exchanging documents and interviewing witnesses would run until the end of next July.

Lawyers, who have already been working - and billing - on the case for months, would be working another year before setting foot in court for a trial.

"That's a good benchmark for people to sit back and say, 'Well, let's see if we can't resolve this' out of court," Sizemore said Thursday. "It's a good settlement for the community."

Asked how big his bill would be, Sizemore said he and his partner on the case, Bo Ketner, were still tallying their fees, which would be paid by the United Way and its insurance carrier. Sizemore added that the settlement doesn't require the United Way to pay King's legal fees.

Veteran Charlotte trial lawyer Jim Cooney said legal fees on a case like King's would likely run "substantially into six figures." In addition, the United Way's staff would have been swamped producing documents for lawyers and preparing themselves for possibility they'd be called to testify.

King's lawyer, Bill Diehl, had suggested he might depose as many as 75 people.

A trial "can be an enormous distraction for an organization," said Cooney, who wasn't involved in the King case. "At a place like the United Way that potentially has to re-fund itself every year (through fundraising campaigns), it can be devastating."

Virtually all civil lawsuits end in settlements, partly because trials are so costly and unpredictable, said Charlotte employment lawyer Brian Clarke.

"You have to (consider settlements), it just makes good business sense," he said.

The United Way's $233,333 will come from $822,507 set aside for King's supplemental pension account in 2007. The rest - about $500,000 - will be returned to the Community Care Fund, the pool of money divided up each spring among United Way's member charities.

Sizemore said the settlement also resolves all claims against United Way board members King named as defendants. Left unclear is the status of a criminal investigation of King by the local U.S. Attorney's Office and the Internal Revenue Service.

Sizemore said he had no knowledge about the probe. A spokesperson for the U.S. Attorney's office said she couldn't confirm or deny the existence of any investigation.




United Way CEO Hires Lawyer Richard Diehl


United Way President and CEO Gloria Pace King has hired prominent Charlotte lawyer Bill Diehl to represent her in negotiations with her board of directors stemming from the growing controversy over her pay and benefits.

The board added $822,000 to King's retirement benefits last year, a six-fold increase over the $108,000 paid in 2006. It plans to pay between $450,000 and $500,000 into her retirement account each year for the next three years.

King's salary and bonus make her the fourth-highest-paid United Way executive, according to an Observer survey of 32 agencies. Only the United Ways in New York, Detroit and Miami pay more.

The Charlotte board has said the additional retirement payments were needed to make up for short payments in previous years. It has declined to explain why the catch-up payments were needed or say how it set the size of King's pay package.

In response to Diehl's hiring, the Observer called King, and the board's attorney, public relations firm and spokesman, former board chairman Ned Curran. But none commented Saturday.

It's unclear why King hired an attorney. But Diehl told the Observer on Saturday: “She came to me because there's been a big splash in the newspaper.

“The board is making a big to-do about something they previously approved. They're very defensive about the fact that she's gotten this retirement plan they gave her. It's crazy. They gave her the plan two years ago. And now they're concerned about it because somebody's written about it.”

On the eve of the United Way's 2008 fund-raising campaign, anger towards the agency continues to grow, threatening donations that support 91 non-profits.

“It's a publicity nightmare because the board hasn't taken the right approach to the situation,” Diehl said. “If somebody did something wrong, it's not Gloria King.”

Diehl said the board has not asked King to resign. He said she signed a three-year contract in January. “She's 63 years old and she expects to retire in two years.”

King, president and CEO since 1994, has declined to comment since reports about her pay surfaced in June. Her board has defended her salary and benefits as appropriate for top-performing executives.

United Way of Central Carolinas is ranked among the United Way's top 20 largest fund-raisers. The watchdog group, Charity Navigator, gives King's agency high marks for efficiency. The board credits King with boosting the agency to No. 2 in the number of donors giving at least $10,000.

Yet, the controversy over the board's handling of her pay has hung over the city for months.

For the first time in 40 years, philanthropist David Barnhardt will withhold his United Way contribution in protest. He plans to write checks for charity this year, but says they “will go directly to the Girl Scouts or some other nonprofit.”

Barnhardt, 72, whose father was an original director of what became Foundation for the Carolinas, says he's most bothered by “the fact that the board has been sneaky and tried to slip all this past the public.

“They've come up with a lot of excuses and they're not good excuses.”

Richard Snyder served on United Way of Central Carolinas' executive committee in 2000 and said he doesn't remember any discussion about retirement benefits.

“It seems like somewhere along the line the ball was dropped,” he said. “I don't understand what the benefit package was supposed to be that wasn't being met….I don't ever remember discussing retirement benefits. We discussed salary and bonus.”

“The shame of it is the United Way is a good organization,” he said. “And unfortunately, they're going to be hurt by this…there are services in the community that won't be funded because of this.”

Diehl said the board's leadership approved King's retirement plan.

“She had no role in that,” he said. “She didn't ask for it. They offered it to her.”

Diehl often represents people in the spotlight. Clients have included Charlotte Hornets owner George Shinn and speedway mogul Bruton Smith.

Diehl said he expects that something is going to happen within a week. There are, he said, three choices: King can continue in her job; she can resign; or she can be fired.

“Those are the choices in any employment dispute,” Diehl said.

Diehl said he's negotiating with United Way's attorney. He would not provide specifics.

“We're negotiating about the situation and how it can best be solved,” Diehl said. “I think they need to honor Gloria King's contract.”


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Sources: Biz Journals, McClatchy Newspapers, United Way, Wall Street Journal, WCNC, Wikipedia, Google Maps

Charlotte Workers Giving Less To Charity...Their Tired Of Charlotte's Public Corruption

Workplace giving dwindles



Charlotte's two biggest workplace giving campaigns are struggling, and the immediate reasons seem obvious: a once-in-a-lifetime recession, the banking crisis and a CEO pay controversy that dented public confidence in the United Way of Central Carolinas.

But leaders in philanthropic circles say it's not that simple.

"We don't have the full picture of why giving has gone down to the extent it has," said Michael Marsicano, head of the Foundation for the Carolinas. "Some of the shifts were starting before the down economy and the controversies."

The foundation has joined the United Way and the Arts & Science Council in creating a task force to look for answers. The 12-member group is scouring the country, looking at other cities' workplace giving campaigns for telling trends or new ideas.

They came up with the idea last winter, as they raced to rescue homeless shelters and other charities hobbled by the economic downturn and skyrocketing need.

As leaders hammered out a $2.7 million rescue fund, they noticed the broader challenges facing the annual fundraising campaigns. The campaigns are critical, they say, because human-service charities and arts groups depend on the annual drives to supply huge chunks of their operating budgets.

The United Way, in the midst of its annual workplace campaign, is having another rough year. It says contributions to local charities are running almost 20 percent behind last year's troubled effort. Without more help, executive director Jane McIntyre has said, the agency could be forced to make more budget cuts for the 90-plus groups it supports.

The ASC, which runs the city's other major workplace campaign, saw its donations drop 37 percent last year.

One big issue the task force is studying: the question of how United Ways can thrive in an age when employees increasingly want to send their dollars to agencies beyond the United Way's orbit.

Traditionally, United Ways have preferred gifts to come without strings, allowing them to analyze community needs and shift money among programs as necessary.

But increasingly, donors want to choose for themselves. United Ways in Charlotte and other cities often let employers decide. Such choices carry big impact.

Last year, United Way's campaign raised $31 million. But nearly $6 million was designated by local donors to nonprofits outside the United Way network; $4 million in designations bypassed the agency entirely.

More change is afoot this year. Wells Fargo, with some 19,500 Charlotte-area employees, has joined the ranks of corporations allowing an "open" campaign with broader choices. Carolinas HealthCare System once held a United Way-only drive, but now includes the ASC and the Children's Miracle Network.

And Mecklenburg County government has said it will add non-United Way charities to its 2010 fundraising drive.

"These are trends that have been coming for a while, and they've accelerated," said Bart Landess, a senior vice president with the Foundation for the Carolinas.

Task force members have studied campaigns in 10 to 12 cities, including Atlanta, Minneapolis, Seattle and Orlando. They've noticed, for instance, that Seattle has heavy donor-designated giving while the opposite is true in Minneapolis, where about 80 percent of dollars are given to the United Way without restrictions.

Task force officials wonder: Is the United Way in Minneapolis benefitting because many corporations there haven't opened their campaigns? Or is it that the United Way there has marketed itself so well that donors pick it above other options?

Both, said Andy Goldman-Gray, senior vice president of marketing at the Greater Twin Cities United Way. Few companies have opened their campaigns, he said, and the agency also takes a "donor-centric" marketing approach by researching donors' favorite causes and tailoring communications to emphasize work in those areas.

"People feel less need to pick a specific agency," he said, "because they see the value of what we are doing."

McIntyre, the United Way director in Charlotte, said workplace giving campaigns can help define a company's philanthropic role in the community.

"Some companies believe it is very important for their employees to understand the community, the needs in the community, and to impact change," she said. "And there are others that that might not be as important in their culture."

Scott Provancher, head of the ASC, said the local workplace giving campaigns have proven highly successful over the years. He hopes the task force can find helpful new ideas, but he believes the recession and banking crisis should take much of the blame for the recent downturn in giving.

He's cautiously optimistic as he prepares to launch the ASC's campaign in January.

"There's a lot of uncertainty out there," he said. But "I think as the economy improves and people feel more stable in their personal lives, we will have more opportunities to have conversations (about giving) with them."







The Charlotte-Mecklenburg DSS Fraud mystery: Where did money go?


Internal e-mails reveal new allegations of misspending at the Charlotte-Mecklenburg County Department of Social Services, raising more unanswered questions about what happened to money intended to help needy children.

Some of the more than 1,000 e-mails the Charlotte Observer obtained through a Public Records Request provide the most detailed account to date about the agency's accounting fiasco.

E-mails show:

Officials suspected an employee wrote $80,000 in checks to herself from donations.

An administrator questioned why other donations were used to buy $340 diamond earrings, leather coats and a $300 DVD player.

A top executive complained that a senior fiscal administrator frustrated co-workers with her "inability to explain the simplest concepts of revenue and expenses."

After nearly a year, officials have never said who was at fault for $162,000 that disappeared or whether anyone was disciplined.

No one has been charged in an ongoing police investigation and a county report says officials cannot be certain where the money went.

Meanwhile, donors are left to wonder whether their generosity ever helped buy Christmas gifts for those in need.

In one e-mail, a woman describes calling the county in 2007 to give $900 for single mothers at Christmas. The person who answered the phone told her to make a check payable to the worker's sister.

The donor said she grew suspicious and made the check out to the county, but the idea that it may still have been misused is "like a kick in the stomach."

In another e-mail, a founder of Second String Santa said he was concerned whether kids received the more than 50,000 toys his group had donated since 1989.

Will Miller said he believes some of the toys reached children, but he's not sure about the rest.

"Will we ever know? Probably not," he said.

Two Charlotte-Mecklenburg County Commissioners said they have asked County Administrators for a full accounting of what went wrong at DSS but have yet to receive answers. County officials have never explained who was responsible, they said.

"To fix it, you have to admit all the stuff that is messed up," Commissioner Bill James said. "They don't want to do too much digging."

County administrators declined interview requests. Instead, a county spokesman released a prepared statement saying appropriate fiscal controls have been installed in response to an outside audit and an internal investigation.

"Our review of the e-mails we provided and your follow up questions did not reveal any new information that would suggest any change in the audit findings or in management's response to those findings," the statement said.

Some commissioners said they have been told that the employees involved have either left county government or been placed in new positions.

Unusual spending patterns

DSS spends $176 million annually and employs 1,200 workers to assist Mecklenburg's poor and neglected. The agency administers everything from food stamps to foster care and child protection services.

Last spring, DSS Director Mary Wilson ordered financial audits following reports of suspicious spending.

Auditors looked at multiple spending programs and financial practices in the agency. They found a $10,000 check made out to an employee, missing and altered receipts and money for kids spent on office supplies.

County leaders responded by suspending the programs, putting DSS finance under direct county control, training workers on accounting procedures and ordering a review of financial procedures in each county agency.

The Observer reviewed e-mails dating from December 2008 to July 2009 for seven current and former county administrators, including Wilson, County Manager Harry Jones, County Finance Director Dena Diorio and Internal Auditor Cornita Spears.

E-mails show county officials noticed unusual spending patterns as early as last December but did not disclose problems to the public until March.

On New Year's Eve, Wilson told staff she had suspended a voucher program the agency used to purchase clothes and other items for clients at local stores. She wrote that officials were worried about a lack of oversight and a spike in spending.

One monthly retail bill leapt from between $5,000 and $6,000 to more than $20,000 in October 2008, the e-mail says. Employees turned in receipts only 30 to 35 percent of the time, she wrote.

At one time or another, workers possessed or had access to numerous credit cards and gift cards, including some to Bath & Body Works, Bass Pro Shops, Macy's, the Cheesecake Factory and Outback Steakhouse.

Outside auditors verified for county administrators that DSS workers possessed county-issued credit cards, including 10 credit cards for Sam's Club, three for Harris Teeter and an online charge account with Amazon.com

In February, county officials asked internal auditors to look into questionable spending, including purchases of diamond earrings, leather coats and a DVD player.

An e-mail to one of the auditors from a human resources consultant said the purchases raise "many questions and concerns."

According to the county's statement, most gifts were typical children's items such as toys, clothes and books. More expensive items such as diamond earrings and leather coats were approved purchases for foster children who reached special milestones like high school graduation, the statement says.

"Receiving a gift of some significant value was viewed as an incentive for other children who were in foster care to set goals and accomplish them," the statement said.

Commissioner Harold Cogdell said he spent part of his early childhood in foster care and believes the gifts are a good idea.

"It makes sense to me to show the kids some love," Cogdell said.

A new Accountant

DSS has endured multiple management shakeups in recent years. The latest came when Wilson reorganized the agency after she was hired in July 2008.

She laid out the reasons to hire a new finance director in a February e-mail.

Wilson wrote that the senior fiscal administrator who managed DSS finances failed to provide reports about oversight, alienated staff and lacked the ability to conduct productive discussions with senior county executives. The e-mail does not name the senior fiscal administrator.

DSS later hired accountant Angela Hurlburt to oversee its finances.

James, the commissioner, said he has asked for the names and background information on Hurlburt's predecessors. He wants them to answer questions from the Board of Commissioners' Audit Review Committee, which investigated accounting lapses at DSS.

He said administrators have failed to respond to his requests and complained that officials "keep us in the dark."

Other Charlotte-Mecklenburg Commissioners disagreed.

Chairman Jennifer Roberts and Commissioner Dumont Clarke said county leaders have already put in place reforms that will protect taxpayer and donor money.

"The highest priority" is implementing new financial controls, Clarke said.

Shifting the Finances

Auditors from Cherry, Bekaert & Holland reviewed DSS and found that Mecklenburg officials responded appropriately. The county's Audit Review Committee came to the same conclusion.

But DSS Director Wilson bristled at one of the major reforms.

Leaders put DSS finance under the direct control of the county's main finance department after allegations of misspending surfaced.

In April, Wilson sent an e-mail to County General Manager Michelle Lancaster to complain. Calling the decision "premature" and "shortsighted," Wilson said there are emergencies when DSS workers must write checks immediately, including occasions when the agency takes children in custody who need clothes, toiletries and school supplies.

"I understand the urgency at the time, but there was a reason DSS had check writing capability and I think we threw the baby out with the bathwater instead of fixing the underlying issue, which is documentation and accountability," Wilson wrote.

Donors left with questions

Past supporters of the DSS Christmas charity include Young Lawyers, employees of Wachovia and Bank of America, and Project Joy, the holiday fund drive initiated by Observer columnist Tommy Tomlinson. The Christmas charity, known as the Giving Tree, is now run by the Salvation Army.

The donor who gave $900 e-mailed the county in July after learning about accounting failures from news accounts. She attached a picture of the check copy she made around Christmas in 2007.

She wrote that she did not remember the name of the woman she spoke with on the phone.

The donor said she and her family all pitched in to raise the money so she could assist women like her who had struggled as single mothers.

When she heard there were allegations of misspending in a DSS charity program, "It's like your stomach just drops."







Charlotte-Mecklenburg County Manager Harry Jones apologizes for sending email to man's employer (Retaliation)



County Manager Harry Jones this afternoon apologized for forwarding an email sent by a resident critical about alleged misspending at the Department of Social Services to the man's employer.

Jones said he apologized to the resident, Harry Lomax, on the telephone earlier today and the two agreed to meet in the near future.

He said there have been several media reports about the email and “understandably heated public reaction to my response.” But Jones said there have been several misconceptions about the email, and apologized to Lomax for the confusion.

“I want to be very clear that there was never any malicious intent in my action,” Jones said at an afternoon meeting with county commissioners. “But it was wrong for me to send a copy of Mr. Lomax's email to his employer.”

The incident was the subject of an article in Sunday's Observer, and the emails were obtained from the county through an open records request about the reports of misspending and accounting lapses at DSS.

Some commissioners and ethics experts previously said the actions by Jones and the bank official were improper because they could stifle free speech and blur the lines between employment and citizenship.

On July 7, Lomax sent his e-mail to commissioners, Jones, DSS Director Mary Wilson and County Finance Director Dena Diorio. He wrote that he had planned to speak during a commissioners meeting the same day at the urging of Commissioner Neil Cooksey.

Lomax wrote that he left before speaking and decided to e-mail his comments.

The e-mail criticizes county management for failing to prevent accounting failures and accuses some commissioners of a "flippant, hands-off response" to the issue. "There seems to be a need for a wholesale cleanup of many county agencies, and I think that starts from the top down," Lomax wrote.

A week after receiving the e-mail, Jones forwarded the e-mail to Lomax's employer, Bank of America, and wrote, "Do you know Harry Lomax."

Betty Turner, a Bank of America vice president replied to Jones about one hour later, writing that she was "embarrassed" by Lomax's e-mail.

"I am tracking it down. I don't know him - I have alerted charles. Will be back to you," she wrote.

It's unclear how Jones knew Lomax worked at Bank of America. Lomax sent his message from a personal account and did not mention the bank by name.

Jones previously did not respond to interview requests from the Observer. A county spokesman referred a reporter to a statement the county released, but it does not directly address questions about Lomax's e-mail.

Nicole Nastacie, a spokeswoman for Bank of America, said "on their personal time, employees are free to express personal opinions" to government officials about any issue that is not related to the company.

Betty Turner, the bank's government liaison who responded to Jones, suspected that Lomax's e-mail involved issues related to the bank and appropriately looked into the situation, Nastacie said. When she determined Lomax was speaking as a private citizen, there were no further discussions, Nastacie said.

Lomax declined to comment.






The E-mail behind Harry Jones'Apology


Here is the e-mail exchange from County Manager Harry Jones to Bank of America's Betty Turner that came under scrutiny this week:

(We've put in bold the text section of each e-mail, obtained through an Observer open records request.)

_______________________________________________________________

From: Turner, Betty M [mailto:betty.m.turner@bankofamerica.com] Sent: Tuesday, July 14, 2009 10:20 AMTo: Jones, Harry L.

Subject: Re: Tonight's Meeting - DSS Comments

I am embarrassed by his comments, his tone and doing this. I am tracking it down. I don't know him - I have alerted charles. Will be back to you

From: Jones, Harry L. To: Turner, Betty M Sent: Tue Jul 14 09:11:19 2009

Subject: FW: Tonight's Meeting - DSS Comments

See the email below: Do you know Harry Lomax

Harry L. Jones, Sr.
County Manager
Mecklenburg County
704-336-2087 (o)
704-336-5887(f)

A society grows great when old men plant trees in whose shade they know they shall never sit.
Greek proverb


From: Jones, Harry L. Sent: Tuesday, July 07, 2009 8:56 PMTo: Diorio, Dena R.

Subject: Fw: Tonight's Meeting - DSS Comments

Fyi

From: Harry Lomax To: Roberts, Jennifer; Cogdell, Harold; Murrey, Daniel B; Bentley, Karen; Leake, Vilma; Cooksey, Neil; Dunlap, George; James, Bill; Wilson, Mary; Diorio, Dena R.; Jones, Harry L. Sent: Tue Jul 07 20:04:37 2009

Subject: Tonight's Meeting - DSS Comments

All-

I was looking forward to addressing the Commission in person tonight as part of the public forum section of the agenda. It was pretty frustrating to sit there for over an hour watching PSA after PSA on how great the DSS is from your

Mecklenburg Matters video. I finally had to leave to go to the store, feed dogs, get prepped for work, etc...you know...real world stuff. That said, I'd like to give send you my prepared comments and hope that I am not you take these to heart as if I were there tonight.

I'd like to express my displeasure with the recent activities involving the DSS. My comments may be premature pending the upcoming audit results, but I still think they are appropriate. Up until recently, I have been generally pleased with how the county government has performed - but for lack of a better term - I feel duped.

Duped that my company and I have donated time and money to this Giving Tree sham which the DSS has chosens to use as their personal petty cash fund.
Duped by the County Management, Finance Department and past/current DSS leadership's lack of controls (not to mention the cronyism involved with the recent hires within the DSS).

And duped by the flippant, hands-off response by some of the commissioners with regard to the audit and the County Manager's subsequent response.
Commissioner Cooksey encouraged me to speak tonight, and between him and Commissioner James, I feel llike they are the only one who are living in the real world here.

Any honest, non-government entity would have audit controls in place for a $176MM, 1200+ employee department. Regardless of the fact that the DSS Leadership and County Manager failed in their duty to implement these controls, the employees who broke the law should still be prosecuted. I hope the County Commission will support a thourough investigation by the DA and make the decision to prosecute if necessary.

What other organizations are being scrutinized a s a result of the DSS issues coming to light? There seems to be a need for a wholesale cleanup of many county agencies, and I think that starts from the top down.
Thanks for your time and I look forward to some answers not only going forward, but also some accountability/repercussions for those who are implicated in this scandal.

Regards-

Harry Lomax

----------------------------------------------------------------------------------------

Jones apologized today for forwarding the e-mail from Lomax, speaking as a citizen, to his employer.






Charities fear United Way issue may cost Needy



Take everything wrong in Charlotte and multiply it. More homeless, more dropouts, more hungry families, more abused women, more desperate people.

That's what charities linked to United Way of Central Carolinas expect, should the Gloria Pace King pay controversy cause a predicted plummet in donations during the agency's annual fund drive.

The campaign's Sept. 5 kickoff couldn't be more poorly timed, falling less than two weeks after the agency's board of directors admitted it was mistaken to have paid King $1.2 million in salary and benefits last year.

This week, the board relieved King of her duties, apologized to the community and announced a committee will try to find out what went wrong.

But all this may have come too late to appease angry donors, who view the salary as grand excess.

Some companies have already announced plans not to participate in the campaign, including Shook Kelly, a Charlotte architectural firm. It sent out e-mails to its 32 Charlotte employees Tuesday, telling them the company was opting out for the first time in nearly 15 years. Employees were encouraged to write checks directly to the charity of their choice.

Company co-founder Terry Shook says he called United Way and told them of his decision.

“Given the controversy surrounding the executive director's compensation package, I could not see having my staff supporting that kind of infrastructure,” says Shook. “I just don't think charities require infrastructures that are similar to international banks, and require people who head them to be compensated so much.”

Bigger operations in Charlotte, such as Charlotte-Mecklenburg Schools, are also preparing for a tough sell during this year's campaign. Superintendent Peter Gorman, a United Way board member, said he'll honor whatever the district's 19,800 employees decide to do.

“I don't think it's unreasonable to think there will be a drop in the dollars raised at CMS,” he said.

Even a small drop could be disastrous for charities that depend heavily on United Way. Some get as much as 30 percent of their budget from the agency.

Deronda Metz, director of social services for the Salvation Army of Greater Charlotte, says a 5 percent drop in its United Way money would translate to 250 people being refused admission to the Center of Hope shelter in 2009. The need for beds is already too great, she says, due to the slumping economy. About 320 women currently are being served by the charity, she says.

“We're turning away 15 to 20 people a day now, because we don't have enough room,” says Metz. “This is the place where police bring people who have no place else to go. Last night, we had an elderly lady that the police brought in, seeking shelter, and we didn't have room. It was so difficult to watch. She left with the police, and I don't know where they took her. It really bothered me.”

Crisis Assistance Ministry is also turning away an increasing number of people, about 20 percent more than at the same time last year. The ministry helps people who can't pay rent and utility bills, problems that have worsened as unemployment has risen, says Carol Hardison, the ministry's director.

“We have an average of 125 people in our lobby in the mornings,” says Hardison, who admits the charities were just as upset as the public over the controversy.

“We understand the anger of people out there. We have experienced frustration ourselves. But when I walk through the lobby, I see 125 hurting people and I can't imagine having to look at them and announce they'll get no help because some people in the community made a mistake.”

Among the first in the community to raise concerns over the King controversy was the council of agency executives, which consists of the heads of the 91 agencies supported by United Way. The council met with United Way board members two months ago, when news of King's salary was made public, and urged the board to take action to “correct the situation.”

Jane McIntyre, chairman of the council, says the executives are satisfied with the board's decision to replace King and to take steps to make sure the situation is not repeated. She says the council is concerned but hopeful about the fund drive.

“My worst nightmare is the campaign falling short and us all being faced with having to cut services to people, so rebuilding public trust is critical,” says McIntyre, who heads the YWCA Central Carolinas, which shelters the homeless and supports after-school programs for needy kids.

Carol Hardison's concern: “That the community will forget that the United Way is about serving vulnerable women, men and children in the community. And it's not about mistakes in judgment.”





United Way's challenge: Rebuilding a region's trust


For months, the United Way of Central Carolinas board said Gloria Pace King was worth every penny of her controversial $1.2 million pay package.

Tuesday, 37 of those board members unanimously called on their longtime CEO to resign or be fired.

King's fall was breathtakingly quick, but not clean.

Critical questions remain. How the board handles them will affect 91 nonprofit agencies and the thousands in need that they serve.

Can the board regain enough public trust to rescue its ongoing fundraising campaign?

How will it settle accounts with King, even as it pays her interim replacement $20,000 a month?

And the most fundamental question of all: How did a group that includes some of the region's savviest corporate leaders allow all of this to happen?

At its hastily called Tuesday press conference, the board offered no specific explanation about what had gone wrong and why King has been asked to leave.

“This was not an error made by a single individual at a single point in time, but a collective breakdown at many levels over a period of time,” board chairman Graham Denton said.

“We owe the community a sincere apology.”

King's attorney, Bill Diehl, listened to Denton's comments from the back of the room. He contends his client is owed an apology and more – at least $1 million remaining on a retirement contract the board agreed to in 2006.

Denton said the board has a legal right to cancel the remaining payments, and will do so.

“She is not happy with this,” said Diehl. “She worked there for 14 years and did a great job. Everybody agrees on that … It's hard to figure where (the board) is coming from.”

Denton said the board authorized firing King by Sept. 30 if she doesn't resign.

He said the board believes it needs a new CEO to restore public confidence.

Mac Everett, a retired Wachovia Corp. executive, will step in as interim president to lead the organization through its campaign drive.

He declined to discuss the King situation, commenting instead on the difficulty of raising money in a down economy. Last year, the United Way drive raised an unprecedented $43.5 million.

“I'm an optimist,” he said, “and what's done is done. We can't change the economy today. We'll have to deal with it and do the best we can.”

Everett will be paid $20,000 a month for up to four months. Denton said the board plans to seek private donations to pay him and King. If the money isn't raised, he said, the board will trim expenses in the agency's budget to avoid cutting aid to nonprofits. The dispute with King centers on a decision by the board's executive committee to add $822,000 to her retirement benefits in 2007. That was more than seven times the $108,000 paid the year before. The board has said the increase was to make up for short payments in previous years.

But Denton called the decision a mistake. He said six past and future board presidents studied the issue the past two months. They concluded that, while such retirement plans aren't unusual for top United Way executives, Charlotte residents found it excessive.

An Observer analysis of tax records shows that King's combined salary and benefits are the highest among 31 United Way organizations nationwide. Her salary ranks fourth; her bonus is the biggest among a sampling of 14 agencies of similar or larger size. Even at $108,000, her retirement benefits were the highest found among the 31 groups.

The board will pay the 21/3 years remaining on the three-year employment contract King signed in January. It pays her $290,000 annually, but allows that amount to be cut if she gets another job. Denton said he has talked with business leaders about finding King a new post. If nothing pans out, he added, the board will pay off her contract in full – even if it winds up having to pay a permanent replacement simultaneously.

The United Way will not pay what's left on King's retirement plan: $450,000 to $500,000 a year through 2010. Denton and Russ Sizemore, the board's attorney, said King's retirement contract lets the board cancel benefits if her employment ends.

Diehl disagrees. He said the board approved King's salary and benefits but is backtracking because of negative publicity. He said he's been seeking a solution, but that the board opted instead for what he called “a grandstand play” at the press conference.

“That's not something I can do anything about,” he said. “It might be something I can do something about later.”

A search committee will be appointed within weeks to find King's replacement, Denton said. He also said prominent Charlotte lawyer Robert Sink will lead a task force charged with finding out what went wrong and how to keep it from happening again.

Denton and others said the board likely will be revamped as a result of the inquiry.

Sink told the Observer he plans to ask seven or more people to join his group within the next 10 days. He expects to present findings to the board and the public by the end of the year.

In a statement Tuesday, United Way of America called the task force's creation “important and necessary.”

“United Way of America believes local United Way leaders have a duty of transparency and accountability to their stakeholders: donors, agencies, corporate partners and the United Way system.”

Critics say a lack of openness and accountability have worsened the King situation.

Asked whether minutes from board meetings cast light on King's upgraded retirement, Denton said the minutes were unclear. Asked for copies of the minutes, he and Sizemore said such documents are confidential and would be shared with Sink's panel, but not the public.

When reporters asked for copies of the employment and retirement plan contracts, they said those were confidential as well.

Incoming board chair Carlos Evans said he'll push to make both board meetings and the minutes public when his term starts in 2009. The Wachovia executive said the full board never voted on King's pay, only on the agency's multi-million dollar budget.

But, “as board members, we should all take responsibility (for CEO pay),” he said. “I take responsibility for not asking more questions.”






Her pledge: A different, better Way


Jane McIntyre has never met Roy Brown of Matthews, but this husband and father represents the challenge she faces as the newly picked executive director of Charlotte's United Way.

He's among the donors who threw up hands in disgust last year after learning of the pay, benefits and expenses enjoyed by the agency's now-fired president, Gloria Pace King.

“Tear it down, let it burn,” says Brown, who isn't sure he'll ever donate again. “In its place, from the ashes, have the charities in Charlotte meet and form a new organization, with new employees, new management, new bylaws, a new name, new everything.”

Ironically, that's sort of what McIntyre has in mind starting Wednesday, her first full day on the job.

She won't be firing the staff and burning the building, but her intent is to take the agency, purge it of the status quo and create a new model based on common sense.

“It will be completely different, in structure, in the way we do business, and in the way donors feel about it,” she says.

Brown, 62, and other skeptics aren't holding their breath. Is McIntyre tough enough to take on an entire organization that, in his words, “is steeped in excess and entitlement?”

“It can be fixed. But I think it would be easier, quicker, more cost-effective and more transparent to start over.”

To that, McIntyre has one response: Give her five years.

A Hero to some

It's common knowledge that many donors – from the little people with pocket change to the corporations with million-dollar campaigns – believe United Way lost its collective mind in giving King a $1.2 million pay package, using money meant for poor, hungry and homeless people.

All eyes are now on McIntyre – who spent the past nine years running one of the charities that depended on that money, the YWCA. Donors are waiting to see if the 5-foot, 116-pound grandmother was a safe choice by the embattled United Way board of directors, or a radical one.

McIntyre has already earned praise with her demand to be paid less than half King's salary. She believes what went wrong at United Way goes well past pay and benefits.

“The focus at United Way was on United Way,” she says. “We lost the focus on the families, the seniors, the children. It had lost its commitment to the community, because it was focused on bigger totals for the campaigns, not on the needs.”

The rescue effort won't be her first. In 2000, when she took over the YWCA, it was in such bad shape that the agency's leaders almost shut it down and sold the land to start an endowment. Nine years later, the YWCA is one of the city's most respected charities.

People who know McIntyre aren't surprised she's now been selected to pull off another turnaround at the county's best-known nonprofit. They say her eight years on the Charlotte-Mecklenburg school board show she's willing to stick her nose in a fight.

John Murphy was superintendent at the time, and had a reputation for trying to intimidate board members.

“John was controversial and strong-willed,” recalls Bill Anderson, head of Communities In Schools, who served as a school principal under Murphy's tenure. “Jane may not be of large stature, but she never backed down from him, and always spoke her mind in a way that maintained the integrity and dignity of others.

“Even back then, she was somewhat of a hero.”

Among the issues she championed: forcing the school system to be honest and accurate in reporting how bond money was spent, particularly when it went for something other than what voters approved.

She had her share of angry parents to contend with but consistently won re-election until deciding in 1995 to leave the board.

“I've had parents come to me after a vote and really scream at me, and they were crying,” recalls McIntyre. “I just listen ... I do have a very long fuse and it usually never burns to the end.

“But when it does ...”

She makes it happen

Her name was Elizabeth Brown and she was 24 but had the mind of a 9-year-old.

It was 1966. McIntyre was 19, a student at Columbia College and volunteering at Columbia's Pineland facility for people with disabilities.

What she remembers most about the day is the blood. When she walked into Brown's cell, it was everywhere.

“Elizabeth's head was bleeding and all swollen and her elbow was completely bruised and huge,” says McIntyre. “She was in solitary confinement and had been banging her head and hitting her elbow against the concrete.”

McIntyre decided on the spot to challenge Brown's care by confronting an administrator. He responded with a lecture on rules and regulations, and suggested she butt out.

“Finally, I said: ‘Here's the deal: I'm going to go to The State newspaper and find the editor, and I'm going reveal all of this story if we don't get her out of that cell and into the health center – while I'm here.'

“It took several hours, but she was transferred. Elizabeth was much bigger than I, so when I walked into the health center, there was such a celebration that she picked me up off the ground in a bear hug and twirled me around.”

When McIntyre looks back on the episode, she realizes it did little to the alter the fate of Elizabeth Brown, who has since died.

“I hadn't changed her disability and I hadn't changed her future,” says McIntyre. “But for one little period of time, I gave her hope.”

It also marked the start of what has since become a habit for her, this butting-in thing.

Her daughter, Jane Barghothi, recalls when McIntyre learned of an impoverished scholarship student at Queens University of Charlotte, whose big dream in life was to have her misshapen teeth corrected.

“Her teeth stuck out so horribly, it was the only thing people saw when the looked at her,” recalls Barghothi. “My mother went to our orthodontist and said: ‘I need you to help this young lady and I need you to do it pro bono, because I can't afford it.' And she made it happen. It was so bad that they had to break her jaw and reconstructed it, but my mother still made it happen.”

It has to be now

Born in Presbyterian Hospital and raised near downtown Rock Hill, McIntyre's first ambition was to teach children with disabilities.

She was earning a degree in special education when she went on a blind date with a Citadel cadet named D.G. McIntyre. They dated on and off for three years, married in 1968 and had three children – all daughters – who are grown, married and successful.

Among the challenges the couple have faced over 41 years was a lump in her throat diagnosed as a malignant tumor. She was in her late 20s when doctors removed her thyroid.

“What it really taught me was that you have to approach every day like it's your last day,” McIntyre says. “I knew every day, I had to make a difference. I couldn't wait five years, 10 years or 50 years. It had to be now.”

Her family learned to expect all manner of adventures. Barghothi still marvels at how, in 1994, her mother successfully lobbied Carolinas Medical Center for a job, because she liked the drastic changes there made by its new management, including its new building.

Not long after, McIntyre told the family she was going back to college for a master's degree. Recalls Barghothi: “She told my dad: ‘I've got to study, so you can cook or we'll eat cold cereal every night. For a week, we did. Then my dad went out and bought some pots and pans and a couple of cookbooks. And he was actually good at it.”

Finding someone to say something critical of McIntyre has proved daunting. Asked to assess her own faults, McIntyre says she can be impatient, blunt and stubborn. She says her biggest mistakes have been needlessly “hurting people's feelings, embarrassing people.”

“I have learned my weaknesses, and I have tried to work on them to be better,” she says. “I've become more patient. I try not to get upset because it does no good.”

Still, among family and friends, McIntyre's self-described “hardheadedness” is legendary. In 2001, a Florida restaurant owner called the police after she refused to leave until he divided up the tab for a party of eight YWCA executives (all on expense accounts).

“I turned to the group, said, ‘It's a boring night. Put your feet on the floor and don't move,'” she says. “The young policemen who arrived could have been one of my children.”

He also helped divide up the check when the owner continued to refuse.

D.G. McIntyre, 64, says their marriage has endured because neither of them expects complete control of anything. They were planning her retirement from the YWCA in the next 18 months when United Way approached her. The couple talked it over, and he suggested it would be a good opportunity for her and the community.

Looking back, Jane McIntyre says she can't recall her husband ever telling her not to do something; with one exception. “I told him one evening that I should take up golf, so we could play together. And he told me not to. ‘You will not be good at it, and you will not want to work as hard as you'll have to just be mediocre.' He was right.”

Watching the Fallout

When King's pay controversy erupted 14 months ago, McIntyre was on the agency's board of directors, representing the member charities.

She stopped attending the meetings soon after, telling board members it was a conflict of interest since her agency was financially dependent on the United Way. King was relieved of her duties not long after.

“It was not good for me to act as a representative for the agencies, when United Way was the single biggest donor of the YWCA. I worked so closely with Gloria and the staff at United Way and closely with the agencies that it didn't feel right for me.”

In the months that followed, United Way officials made a string of heavily criticized decisions, including attempts to defend King's salary and refusing to release details of her benefits.

Asked whether the community would have been better served if she had kept her seat to challenge those decisions, McIntyre said only a few board members knew what was going on. An independent report released after King's firing concluded that a small circle kept most of the board in the dark about King's salary and benefits.

“It was like a roller coaster,” she says. “There wasn't a meeting for discussion, if you know what I mean ... At that point in time, no one had all the details. If (the full board) had had more information, I believe their response would have been completely different.”

McIntyre says she worked with the agencies to prod United Way into taking quick action. She started with a meeting of charity executives the day after the pay story broke.

“I remember one agency executive said that it was very important to just apologize, and ultimately United Way did,” she says. “Some felt that she (King) should be defended, while a larger number felt they should not defend her. In the world of nonprofits, I felt it was very difficult to defend.”

Now, McIntyre is left to deal with the fallout. The agency's money-raising campaign starts Sept. 10, and she admits it will be a challenge.

Plans are being drawn for an entirely different campaign, one that moves away from the bloated goals of the past.

Executives at the member charities like what they're hearing, even if they remain skeptical that donors have exhausted their anger. “One of the best things United Way could have done was hire of a new president, to let the public know someone new is in charge,” says Mark Pierman of United Family Services. “What she needs now is the ear of the community, to at least listen.”

McIntyre believes it will. After her hiring, she received a note in the mail that she sees as a first step.

It read: “I've never given to United Way before, but if you're willing to assume this responsibility, enclosed is my check.”



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Sources: McClatchy Newspapers, Charlotte Observer, Charmeck.org, Youtube, Google Maps

Defund ACORN Act Bill Applies To All Non-Profits & Companies With Incidents Of Fraud

Whoops: Anti-ACORN Bill Ropes In Defense Contractors, Others Charged With Fraud


(Here is video of ACORN CEO Bertha Lewis appearing on Fox News Sunday recently, where she was questioned by Chris Wallace. GOP Rep. Darrell Issa also appeared on the show.)




(ACORN chooses to fight back against allegations of Fraud and agency misconduct. It may be too late.)

Visit msnbc.com for Breaking News, World News, and News about the Economy

Going after ACORN may be like shooting fish in a barrel lately -- but jumpy lawmakers used a bazooka to do it last week and may have blown up some of their longtime allies in the process.

The congressional legislation intended to defund ACORN, passed with broad bipartisan support, is written so broadly that it applies to "any organization" that has been charged with breaking federal or state election laws, lobbying disclosure laws, campaign finance laws or filing fraudulent paperwork with any federal or state agency. It also applies to any of the employees, contractors or other folks affiliated with a group charged with any of those things.

In other words, the bill could plausibly defund the entire military-industrial complex. Whoops.

Rep. Alan Grayson (D-Fla.) picked up on the legislative overreach and asked the Project on Government Oversight (POGO) to sift through its database to find which contractors might be caught in the ACORN net.

Lockheed Martin and Northrop Gumman both popped up quickly, with 20 fraud cases between them, and the longer list is a Who's Who of weapons manufacturers and defense contractors.

The language was written by the GOP and filed as a "motion to recommit" in the House, where it passed 345-75. It carried the Senate by an 83-7 margin.

POGO is reaching out to its members to identify other companies who have engaged in the type of misconduct that would make them ineligible for federal funds.

Grayson then intends to file that list in the legislative history that goes along with the bill so that judges can reference it when determining whether a company should be denied federal funds.

The Florida freshman is asking for direct assistance. He has set up a Google spreadsheet where people can suggest contractors who have been charged with violations and include a link to a media or government report documenting the alleged transgression.

The weapons manufacturers might have a better line of defense in court, however. Immediately after the bill passed, Rep. Jerry Nadler (D-N.Y.), a constitutional whiz, noted that the measure appeared to be a "bill of attainder" -- specifically targeting a company or organization or individual -- and is therefore specifically barred by the Constitution. If it's not targeted at one group, then Northrop Grumman is in trouble.

Reps. John Conyers (D-Mich.) and Barney Frank (D-Mass.) sent a letter to the Congressional Research Service on Tuesday asking it to clarify, among other things, if the Defund ACORN Act is constitutional.




If Congress Attacks the Mighty Oak of Contractor Misconduct, It Shouldn't Just Settle for an ACORN

Last week, the House and Senate voted to prohibit the federal government from awarding contracts and grants to the Association of Community Organizations for Reform Now (ACORN), a national network of community-based organizations that advocate for low-income families. Congress rushed to cut off all federal funding to ACORN days after several ACORN employees were caught on camera giving advice to a couple posing as a prostitute and a pimp on ways to evade the law.

The House’s bill is called the “Defund ACORN Act”. The bill specifically targets ACORN, but it also applies to “any organization” or its employees who are charged with violating federal or state election, campaign finance or lobbying disclosure laws or filing a fraudulent form with any federal or state regulatory agency.

Rep. Alan Grayson (D-FL) is particularly interested in the fraud provision. Recognizing that there are probably worse offenders than ACORN in this area, Grayson is looking for help in coming up with a list of organizations that have committed fraud against the government or employed someone who did. Rep. Grayson will put his list in the Congressional Record as part of a legislative history that judges and lawyers can use to interpret the law.

POGO’s Federal Contractor Misconduct Database is a great place to start. At last count, it includes 87 instances of government contract fraud – federal and state – involving 43 contractors. You might want to focus on Lockheed Martin, which has 11 government contract fraud instances, or Northrop Grumman with 9 contract fraud instances including this $325 million False Claims Act settlement from earlier this year.

Bear in mind that, since 1994, ACORN has reportedly received a total of $53 million in federal funds, or an average of roughly $3.5 million per year. In contrast, Lockheed Martin and Northrop Grumman respectively received over $35 billion and $18 billion in federal contracts last year. (Their totals since 2000 are $266 billion for Lockheed and $125 billion for Northrop.)

Congress should clamp down on contractor fraud and waste, but it needs to keep a sense of proportion. If ACORN broke the law it, should be punished; however, Congress also needs to crack down just as rigorously on the contractors who take an even larger share of taxpayers’ money and have committed far more, or far more egregious, acts of misconduct. POGO hopes the mentality behind bills like the “Defund ACORN Act,” combined with the new contractor / grantee responsibility database and mandatory misconduct reporting rule, reflects a new zero-tolerance attitude toward contractor misconduct.



Activist Financier "Terrorizes" Bankers in Foreclosure Fight But Won't Open Books

Despite receiving Taxpayer money, NACA doesn't provide public reports on either its loan-brokerage business or its campaign to modify mortgages. Jim Campen, an economics professor emeritus at the University of Massachusetts, Boston, says he tried in the 1990s to analyze the performance of loans arranged by NACA, but Mr. Marks refused to provide data.

Mr. Marks says he feared the data would be used by another nonprofit to discredit his group. NACA does provide information to lenders that work with it, he says, but sees no duty to disclose it to the public.

"He's been very effective in shaking money out of the banks," says Mr. Campen, but "he's not one to open up his records to public scrutiny."




United Way asks CEO Gloria Pace King to resign

The United Way of Central Carolinas is asking CEO Gloria Pace King to resign following fallout from a NewChannel 36 report that King was paid $1.2 million last year.

If King doesn't resign by Sept. 30, she will be fired.

United Way Board Chairman Graham Denton says they will pay King two more years of salary at $290,000 per year, but they will not make $1 million in retirement payments.

Denton said the board is taking responsibility for the controversial retirement package, which sparked backlash from donors.

"We owe the community an apology. We are sorry," Denton said at a news conference on Tuesday.

Denton said the board is committed to rectifying the mistake; however, no board member is resigning. The board is calling for a task force to review its makeup and process.

The board also says it can assure the community that it's not paying any more on the supplemental retirement that NewsChannel 36 first reported on nine weeks ago today.

The action comes on the eve of the United Way's annual campaign, which begins next week.

Meanwhile, King has retained high-profile attorney Bill Diehl, who attended the board meeting on Tuesday.

Diehl says his client does not consider this to be honoring the contract and they'll consider their options. He said they've been negotiating with the board's attorney, but he said, "What I do for a living is litigate."

Mac Everett was named as interim CEO of the United Way and will serve through the 2008 donation campaign. Everett is a retired Wachovia executive and past chairman of the UNC Charlotte board of trustees.



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Sources: Huffington Post, OpenCongress.org, Project on Government Oversight, Wall Street Journal, MSNBC, House.gov, Fox News, WCNC, NACA, United Way, Google Maps