Oral Suer, the former chief executive officer and head of United Way in Washington, D.C., pleaded guilty to having embezzled from the organization for nearly three decades. For many years, Suer stole from the charity, taking about half a million dollars. He was sentenced to federal prison and ordered by a judge to make full restitution to United Way. The scandal led the charity to make policy changes and institute a new code of ethics.
United Way of the National Capital Area (UWNCA), located in Washington, D.C., was created in 1974. The D.C. agency was conceived when the United Givers Fund, the United Black Fund, and the Health and Welfare Council were merged, creating the twenty-third-largest United Way office in the United States. In roughly five years, UWNCA became the first United Way branch to include national nonprofits in its annual fund-raising campaign. Some of the most noteworthy nonprofits that participated include the American Cancer Society and the American Heart Association. By the early 1990’s, UWNCA was managing one of the largest United Way campaigns in the United States.
The chief executive officer (CEO) and cofounder of the UWNCA was Oral Suer. Suer took over as the CEO of the Washington, D.C., office in 1974 and continued in that role until his retirement in 2001. During his twenty-seven year tenure as CEO, Suer helped raise more than $1 billion for local charities in the greater Washington, D.C., area. By the early 1990’s, Suer helped to establish UWNCA as the second largest local United Way office in the country. At its peak, the D.C. branch was raising tens of millions of dollars annually from both private sector and federal workers.
Despite nearly three decades of leadership, Suer did not always act in the best interest of the agency and the thousands of people it served. Members of UWNCA’s board, along with previous auditors, had learned early on that Suer had taken monies from the agency and that he failed to repay those funds. However, these board members chose not to fully reveal their information on Suer’s possible illegal activities, which dated back to 1986. A later audit revealed that at least one United Way director was actually alerted that Suer had not reimbursed the charity an amount over half a million dollars for various items, including sick-leave and vacation cash payments and advances on his base salary. Federal investigators, along with an independent audit of the company, later revealed that Suer’s illegal activities might have dated back to 1976, just two years after his start as CEO of the organization.
A federal grand jury began to investigate UWNCA’s financial operations in August, 2002, not long after a series of
Washington Post articles revealed evidence of illegalities by the recently retired Suer and his successor, Norman Taylor. The news articles claimed that Suer took an early pension payout in which he collected thousands of dollars more than he was entitled to. Additionally, the articles also claimed that Suer charged personal expenses on United Way credit cards, expenses that included vacations and trips to see his children in college. The newspaper also found that during his tenure as CEO, UWNCA purposely withheld from local D.C. charities more than $1 million it had collected for them. UWNCA top officials and board members initially denied the allegations of Suer misconduct and then fired numerous employees and board members who had demanded an internal investigation.
By the end of 2002, UWNCA administrators forced the resignation of CEO Taylor, replaced its governing board of directors, brought in a new CEO, Charles Anderson, and commissioned an outside forensic audit of both Suer and Taylor. The financial investigation was carried out by the accounting firm PricewaterhouseCoopers. Although UWNCA leadership had refused to commission such an audit, the organization’s board at the time overruled that decision. In addition, the new board, which was selected in January, 2003, actually expanded the scope and nature of the forensic audit to include a comprehensive look at Suer’s entire career with UWNCA.
The investigation determined that Suer had received an estimated $2.4 million from UWNCA in excess of his salary and that he repaid the agency $961,000. More specifically, the audit revealed that Suer had reimbursed himself about $20,000 more than he had actually pledged at various United Way annual fund-raisers. The report also indicated that under the authority of Taylor, Suer took some $230,000 in additional retirement benefits that were not authorized by the pension regulations of the organization.
Suer received close to $694,000 for twenty-seven years’ worth of unused sick leave and vacation time, even though evidence shows that he frequently took vacations. It also was discovered that he stole more than $400,000 in cash advances and $180,000 in extra deferred compensation, none of which he was authorized to receive. From 1997 through 2001, estimates show that he charged more than $80,000 in purchases without providing receipts. In fact, it was found that many of those charges were indeed personal in nature, including charges for lavish meals and weekend getaways. For example, in 1991, Suer claimed more than $500 in expenses for a United Way conference in Tampa, Florida; coincidentally—or not—the Super Bowl was in town that same weekend. The audit later discovered that no United Way conference had been held in Tampa for that particular weekend. The investigation concluded that Suer, along with some of his top managers, had absconded with more than $1 million during his period in office.
The results of the forensic audit were passed along to the federal investigators, who had already commenced their own inquiry into Suer’s alleged illicit activities. Finally, on March 4, 2004, Suer pleaded guilty to transporting stolen money across state lines, making false statements, and concealing facts relating to an employee retirement plan. Based on his plea, he admitted to stealing close to $500,000 from the charity. In particular, he confessed to charging the organization for personal expenses and vacations, paying himself close to $333,000 for annual leave he had already used, and stealing nearly $94,000 from the charity’s pension plan. On May 19, he was given the maximum sentence of twenty-seven months in federal prison and was ordered to pay $497,000 in restitution to United Way.
Suer was not the first executive officer from United Way to be indicted by a federal grand jury. In 1995, former United Way chief executive and president of twenty-two years, William Aramony, was convicted for twenty-five counts of embezzlement and imprisoned. Aramony had taken an estimated $500,000 during his tenure as CEO of the national agency. In total, some thirty United Way top executives over the last twenty years have been involved and subsequently punished for their illegal activities.
Suer’s illegal activities had a grave impact on United Way donations. After his corruption became known to the general public in January, 2001, major longtime donors refused to give to the agency. By 2003, annual contributions declined by two-thirds, from $95 million to $34 million. A local workplace fund-raising drive among both private and government employers of the greater D.C. area in 2002 collected contributions totaling only $19 million, a small sum compared to the more than $90 million raised in 2001. Additionally, UWNCA was forced to lay off more than half of its staff. The D.C. office, which formerly employed about ninety people, was reduced to a staff of thirty-five. Furthermore, several regional offices were forced to close, causing a further reduction in charitable offerings.
By the summer of 2002, United Way’s national headquarters accepted that its governance structure was partly responsible for the decaying reputation of the organization. In response, United Way appointed Rodney E. Slater, former U.S. secretary of transportation, to lead a task force focused on ethics and policy restructuring of the agency. The task force was asked to create both a new code of ethics along with a set of business and financial procedures that emphasized the essential mission of United Way. By September, 2005, the task force produced its final report, recommending a reduction of board and staff members, stronger financial controls, and the creation of an ethics committee to deal with agency misconduct, all of which were eventually instituted.
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Coenen, Tracy. Essentials of Corporate Fraud. Hoboken, N.J.: John Wiley & Sons, 2008. An introductory guide to the white-collar crime of corporate fraud, written by a forensic, or investigative, accountant. Although geared to the corporate world, this work is relevant to all types of organizations that rely on sales—and donations—to succeed. -
Glaser, John S. The United Way Scandal: An Insider’s Account of What Went Wrong and Why. New York: John Wiley & Sons, 1994. An inside-account of the corrupt leadership of United Way, with a particular focus on William Aramony, United Way president who led the organization for more than two decades. Predates the Suer scandal. -
Jackson, Peggy M., and Toni E. Fogarty. Sarbanes-Oxley for Nonprofits: A Guide to Building Competitive Advantage. New York: John Wiley & Sons, 2005. Explores the relevant themes and requirements of the Sarbanes-Oxley Act, formed to ensure the accountability of nonprofits. Addresses potential unethical actions by employees at all levels. -
Zack, Gerard M. Fraud and Abuse in Nonprofit Organizations: A Guide to Prevention and Detection. Hoboken, N.J.: John Wiley & Sons, 2003. A guidebook for those who work in nonprofits. Useful tips on detection and deterrence of fraud.
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