Troubled United Way Picks a New Director

Leo P. Cornelius, a 27-year veteran of charity organizations, has been chosen to take the reins of the beleaguered United Way of Los Angeles, it was announced Thursday.

Cornelius, who for the last six years has headed the Philadelphia area United Way, will replace Francis X. McNamara Jr., who will resign June 30 after two decades in the position.

The United Way board’s announcement is expected to give a shot in the arm to the agency’s $90-million fund-raising campaign, which is said to be experiencing some problems after last summer’s revelations of financial improprieties.

Volunteer board Chairman William Kieschnick, in making the announcement, said: “We are excited about his appointment because this is a challenging era. We were impressed with his style and his ability to build bridges in the community.”

Cornelius, in a telephone interview, expressed optimism about the local organization’s future and fund-raising abilities.

“No community in America,” he said, “offers the challenge and opportunity in our field that Los Angeles does. My first priority will be to build upon accomplishments of the past and to strengthen and broaden community coalitions, encourage openness and increase the capacity of United Way and the community for improving the lives of everyone in this region.”

The local United Way agency came under fire when a series of controversial financial dealings that included lending donated money to agency executives were made public. In one of two investigations, a citizens’ committee found that top officials and volunteers of the charity had used poor judgment in authorizing almost $330,00 in loans to five agency executives. But the panel concluded that there had been no dishonesty. The bulk of the money loaned--some of which was unsecured and interest-free--was not repaid until recently.

The citizens’ panel also criticized officials for turning over almost $260,00 in donated money to bail out the now-defunct United Way credit union and for loaning $150,000 to an East Los Angeles human services agency. The investigators recommended sweeping changes in accounting and personnel practices.

A second investigation, by the Los Angeles County counsel’s office, concluded that some of the transactions may have been improper but contended that the officials had acted in “good faith.”

With about 3 1/2 months remaining in the eight-month campaign, some officials in recent weeks have expressed concern that the record $90-million goal may not be met. Some companies that traditionally conducted their fund-raising campaigns in early fall have postponed them until this spring to make certain that United Way has taken steps to overcome its problems, officials said.

United Way has achieved more than $59 million, or 66.5%, of the goal, according to Kieschnick. Officials say that large gifts--those of $10,000 and more--are running 23% above last year, and that major corporate gifts are averaging 8% to 9% more. However, they acknowledged that individual donations from employees and others are experiencing problems. “They are up in some areas and down in others,” said spokesman Tony Harris.

Cornelius, who will be paid a salary of $175,000, declined to discuss the past problems of the agency. “I really don’t feel that it is appropriate to comment on something that is history and has been dealt with,” he said.

As executive director of the United Way of Southeastern Pennsylvania, Cornelius was instrumental in helping the agency raise more than $52 million during 1986. That was a 13.5% increase over the previous year, but still $3 million short of the goal.

In 1985, the Philadelphia agency had incurred the wrath of several organizations, including some environmental groups that were dropped from the member donor option program.

Under that program, donors could mark their money for specific charities, whether they were affiliated with United Way or not. But on recommendation of United Way of America, the agency changed eligibility guidelines to limit participation to those groups strictly geared to human health and social service activities.

Three other appointments were also announced Thursday.

Irwin S. Field was named chairman of the corporate Board of Directors, subject to ratification at the annual meeting June 30, and Louis W. Foster and George F. Moody were named co-general chairmen of the 1987-88 campaign.

Field, president and chief executive officer of Liberty Vegetable Oil Co. of Santa Fe Springs, replaces outgoing chairman Kieschnick. Foster is chairman and chief executive officer of Twentieth Century Insurance Co. of Woodland Hills, and Moody is chief executive officer of Security Pacific National Bank.

Staff writer Roxane Arnold contributed to this article.