United Way Is Close to Deal on Lawsuit

Officials of United Way of Ventura County and a Camarillo couple who sued the charity, alleging fraud and breach of contract over its distribution practices, reached a tentative settlement Thursday.

The agreement calls for United Way to independently raise $65,000 for a one-time payment to 51 member agencies that received funds during the 2001-2002 campaign.

United Way, whose board is expected to vote on the matter Oct. 28, said it admitted no misconduct or liability in the proposed settlement.

“I think it’s important that we have a resolution,” said Michael L. Silacci, United Way board chairman. “It allows us to continue to focus on improving lives and serving the needs of those who need our help in the community.”

The payment would not come from current funds, but would be in addition to money raised in the annual campaign, said David M. Smith, United Way president and chief executive.

After a mandatory settlement conference in Ventura County Superior Court, Smith said he expected no problem in securing the extra funds if the board approved the agreement. United Way officials earlier had said they expected to distribute $2.2 million through June to 48 member charities and 170 other nonprofits in the county.

Dennis Mark Weinberg, an executive vice president at WellPoint Health Networks, and his wife, Allyson, sued United Way in September 2003, alleging that the organization gave charities less than 85% of the more than $5 million it collected in 2001-2002, as promised in solicitations.

The couple also allege the charity took longer than three months to distribute the money. At one point, United Way acknowledged overhead costs of 21.3%.

“This whole process has raised awareness of the public about good stewardship and the needs of the community; about the responsibility of a charity to be efficient and donors knowing exactly where their money is going,” Dennis Weinberg said after the hearing. “I believe they’ll be a better charity as a result of this process.”

The lawsuit also accused a former United Way president, Sheryl Wiley Solomon, of backing out of an agreement to contribute to the Ventura County Council of the Boy Scouts of America.

Weinberg, a seven-year United Way board member through the mid-1990s, and his wife gave about $100,000 to the umbrella charity in 2002 but broke with the organization that summer when they learned of its decision to stop funding groups that ban gays.

United Way had adopted an inclusiveness policy in June 2001 to stop contributions to groups that discriminate on race, religion, sexual preference and other criteria. The Supreme Court a year earlier upheld the right of the Boy Scouts to exclude gays as members and scoutmasters in a New Jersey case.

But on Sept. 23, the local United Way policy was revised to omit specific categories and now asks charities to affirm they provide services, employment and volunteer opportunities without discriminating against any characteristic protected by state or federal law.

United Way said at the time that the change was not in response to the lawsuit but was part of a general review of the organization’s operating procedures.

“The fact that they passed a new inclusiveness policy a couple of weeks ago made this settlement possible,” Weinberg said Thursday.

Though the Boy Scouts lost about $50,000 in funding from United Way in 2003, Weinberg and about 150 business owners and community leaders raised more than $320,000 to support the local council.

Weinberg said he shifted the money he would otherwise have given United Way to Ventura County Friends of Youth, which plans to incorporate as a nonprofit organization and devise a system to funnel public donations to local charities with little or no overhead.

“Our goal has always been to get more money to Ventura County charities,” Weinberg said.

The Weinbergs give away more than $1 million a year through the Dennis and Allyson Weinberg Foundation. Among the groups receiving funds are Pepperdine Center for the Family, Life Skills for the Family in Westlake Village and the National Coalition for the Protection of Families and Children.