ARMS founders in rift over charity's spending
by Kay Moore, Marty Racine
Houston Chronicle; Houston, Tex.; Mar 24, 1986

She was a strong-willed, high-powered Houston trial lawyer who once listened only to classical music.

He was a British rock musician who once thrilled audiences with his blues-rock beat.

It's unlikely that the paths of Mae Nacol and Ronnie Lane would ever have crossed had it not been for one factor - both suffered from multiple sclerosis.

Now an argument over money to fight this debilitating physical condition has thrown them into a bitter dispute that has reached the state attorney general's office.

A state investigation is under way into what has become of the more than $1 million raised mainly by rock concerts for the Houston-based Action into Research for Multiple Sclerosis (ARMS) of America, Ltd.

Lane and his Scottish physician, Dr. Phillip James, requested the investigation. They claim that Nacol, as director of the group, has mismanaged the funds that Lane donated to start ARMS here in 1984. A spokesman for the attorney general's office in Austin says the charity's officials have been accused of ``self-dealing.'' Highlights from the records show:

Of the original $1.1 million raised in the 1983 U.S. tour by a cast of British rock stars and $66,700 more in 1985 income, ARMS financial records show only $65,920 given to Texas A&M University for research, paid in two checks in May 1985.

The largest expenditures during the period from November 1984 through October 1985, totaling at least $206,202 for legal fees, salary and reimbursement for expenses and entertainment, went to Mae Nacol. Barbara Leigh Hunt Nacol, who Mae Nacol originally represented as her sister but now says was only a close family friend, received $71,557. Barbara Nacol is a former president of ARMS.

At least $43,500 went to several advertising and public relations firms, including Smyth & Katzen and Coco Advertising.

Almost $500 was spent for six volumes of various editions of ``Who's Who''. Subscriptions to publications ranging from Rolling Stone, People, the Washington Monitor and daily newspapers were paid from ARMS funds.

Lane, who frequently uses a wheelchair, also received money from ARMS and paid rent and salary for an assistant to help with his care.

N.R. ``Ray'' Ashley, a member of the ARMS executive membership committee, was paid $23,213 for services.

A local attorney was paid a salary from ARMS while she was associated with Nacol's law firm.

Nacol has claimed that an audit performed last fall by the local accounting firm of Stinson, Robertson, Layne and Co., showed no wrongdoing.

Robert A. Levit, the CPA who performed the audit, said Saturday he could not comment beyond the standard letter saying the analysis had been prepared from the unadjusted general ledger. Generally, accountants don't judge the propriety of expenditures; instead, they make sure accepted accounting principles were followed.

No one involved has been able to pinpoint any specific incident that caused the rift in the ARMS group. Lane said earlier he became suspicious when an old Lincoln-Continental limousine that Nacol owned and which he described as a piece of trash was sold to USA-ARMS for nearly $7,000.

However, Stanley Jacobiwsky, an engineer from Bethlehem, Pa., who was on the ARMS board until February, generally described a falling out between Lane, Mae Nacol and Barbara Nacol that first surfaced at a board meeting last September.

He described an acrimonious session in which insults were hurled. ``I got down there for the board meeting when everyone started yelling at each other.'' Jacobiwsky, who said he met Nacol when he helped her install the hyperbaric oxygen chambers at the HBO centers four years ago, said he never saw any receipts or authorizations for expenditures.

``People were just passing pieces of paper around. It was a real Chinese fire drill.''

He says he requested the audit to determine whether there was any wrongdoing.

Jacobiwsky said he knew of no board authorization to purchase the Lincoln or a Cherokee Chief Jeep, which Lane said ARMS purchased for $9,000, and only heard about these purchases later.

``I didn't know we were in the car business,'' said Jacobiwsky.

Even though he resigned from the board in February because of distance from his home, Jacobiwsky still admires Nacol. ``I love her very dearly,'' he said. ``She's a fantastic lady.''

No other board members, either present or former, could be reached for comment, nor could Nacol.