Peace Corps Director to Head United Way

Peace Corps Director Elaine L. Chao was named Wednesday to head the United Way of America, the troubled charity whose previous president was ousted earlier this year in a scandal involving lavish spending and financial mismanagement.

Chao, a former deputy secretary of transportation and one of the highest-ranking Asian-Americans in the Bush Administration, will succeed Kenneth W. Dam, who had been leading the organization temporarily since the dismissal last February of United Way President William Aramony.

Board Chairman W.R. Howell said that Chao, 39, was chosen president by an overwhelming majority of the United Way’s 45 board members. “Under Chao, a new era for the United Way movement and all who benefit from it has begun,” Howell said.

A statement released by the organization’s national headquarters in Alexandria, Va., said that Chao, who was appointed Peace Corps director last December, would be paid $195,000 a year in her new job--a little more than half the $369,000 salary Aramony received.

Aramony’s high salary, along with allegations that he misused nearly $3 million of the charity’s money by lending it to affiliated companies in which he and others had financial interests, were the principal reasons behind his forced resignation. The giant organization is still struggling to recover from the scandal.

Earlier this month, in response to internal criticism, United Way adopted new bylaws intended to give its member groups more voice in its decision-making process.

While some member groups said at the time that the changes did not go far enough, Chao pledged at a news conference to pay closer attention to concerns raised by the local charities that compose and fund the national organization, whose revenue has dropped 42% this year.

“They (the member groups) are the ones, day to day, on the front lines,” Chao said. “My first priority always will be to listen to their concerns and act accordingly.”

Chao added that one of her first objectives will be to “get out into the field” to meet officials from as many member groups as possible to discuss their needs.

Dam said last week that the organization had to borrow $2.5 million to help cover its operating costs after its 1,400 local chapters began withholding their dues to protest excessive spending. Nearly 1,000 chapters have since resumed their support and Dam said that he expects the organization to be back on a sound financial footing by the end of the year.