Attorney general's office studying records of ARMS charity
by Kay Moore / Marty Racine
Houston Chronicle; Houston, Tex.; Mar 28, 1986

The state attorney general's office met with board members of Action for Research into Multiple Sclerosis (ARMS) of America in an apparent effort to try to turn up more records of the charity than what the state found during a daylong investigation.

The closed meeting Thursday night was called by Assistant Attorneys General John Vasquez and Serena Kuvet, who gained access to ARMS records early Thursday after presenting ARMS officials a visitation letter from Attorney General Jim Mattox.

Vasquez and Kuvet traveled from Austin to make the investigation in the wake of claims that the Houston-based non-profit organization has misappropriated and mismanaged funds.

Kuvet would only say that the five ARMS directors were summoned to the group's offices at 1801 Main so that she and Vasquez could discuss the investigation, which was requested by British rock star Ronnie Lane. A donation of $1 million by Lane, who has MS, and his musical contemporaries after a rock tour funded the start of ARMS here in December 1984.

However, after examining documents furnished by ARMS Thursday, Kuvet said it was difficult to tell whether the records ``as they exist on the premises'' are complete.

At several points during the day, Vasquez asked ARMS President Ira Morel to see if any more documents could be obtained. At one point, Vasquez told Morel that the records were ``very insufficient.''

``They have everything that I know of that's here,'' Morel said. He said he did not know why the directors were being summoned to meet.

Vasquez and Kuvet said they cannot comment at this point on whether a lawsuit should be filed against ARMS. Earlier, a spokesman in the attorney general's office said that one course of action would be to appoint a receiver to ``completely take over the corporation.''

Records that Lane and his Scottish physician, Dr. Phillip James, furnished the attorney general's office indicated that only about $70,000 of the original $1 million went for research at Texas A&M University.

ARMS attorney J. Randolph Ewing said the organization ``welcomes the investigation'' and said ARMS has ``nothing to hide.''

The complaint by Lane, filed with the attorney general's office in December, accused ARMS officials of self-dealing. It cited a $206,202 expenditure for legal fees, salary and reimbursements for expenses to Houston attorney Mae Nacol, former director of ARMS. Nacol resigned her job in November, as controversy over the funds grew. Records also indicated that Lane, who was removed as an ARMS board member in February, also received money from ARMS for his rent, salary and an assistant to help with his care.

However, all of the current ARMS board members have some ties to Nacol. Morel says he is former director of the HBO (hyperbaric oxygen) Medical Center that Nacol founded here in 1981. Among the other board members, Paul Truitt said he practices law with Nacol, Esther and Jon Marsac said they live across the street from Nacol and Gene Blackwell, a private investigator, said he worked with Nacol about five or six years ago in legal and investigative areas.

Nacol has claimed that much of the research was to be done over the phone in the ARMS office as MS sufferers called a nationwide hot line number. At the ARMS offices Thursday, secretaries produced long lists of patients that had phoned there in 1985. They showed files that attempted to classify people by state in order that ARMS could draw some conclusions about MS by region.