Attorney general to resume talks to resolve charity flap
by Kay Moore, Marty Racine
Houston Chronicle; Houston, Tex.; Mar 28, 1986

Texas Attorney General Jim Mattox's office says it will continue negotiations Monday with board members of Action for Research into Multiple Sclerosis (ARMS) of America in an effort to resolve the controversy in the 15-month-old Houston-based charity.

After a two-hour closed session here between two representatives of Mattox and the five board members Thursday night, attorneys agreed to suspend further discussion until after the Easter weekend.

Neither Assistant Attorney General John Vasquez nor ARMS attorney J. Randolph Ewing would comment on what transpired, but Vasquez said the parties are ``engaged in very serious negotiations which we believe will result in an agreement that will be in the best interest of the public.''

Vasquez said the meeting was ``usually harmonious'' and Ewing agreed that no major argument ensued.

ARMS President Ira Morel said he was ``very optimistic that we will not be sued.''

Vasquez said the state and ARMS are committed to doing ``whatever we can to preserve the assets that remain of the ARMS organization,'' being investigated for alleged misappropriation of $1 million in funds and mismanagement.

A complaint filed with Mattox says only $140,000 of that original $1 million remains. Thursday night's meeting was called after Vasquez, head of the attorney general's charitable trust division, and Assistant Attorney General Serena Kuvet pored over ARMS records all day.

They gained access to the records after presenting ARMS officials a ``visitation letter'' from Mattox, and called the meeting in an apparent effort to try to turn up more records of the charity than what the state had found.

However, Vasquez said the need for more records was only one of the concerns addressed.

The investigation was requested by British rock star Ronnie Lane. A donation of $1 million by Lane and his musical contemporaries started ARMS here in December 1984.

Kuvet said it was difficult to tell whether the records are complete.

Vasquez asked Morel to see if any more documents could be obtained, and at one point called the records ``very insufficient.''

``They have everything that I know of that's here,'' Morel said.

ARMS attorney Ewing said the organization ``welcomes the investigation.''

Lane's complaint, filed 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, who resigned in November as director of ARMS.

Records also showed that Lane, removed as an ARMS board member in February, received money from ARMS for his rent, salary and a caretaker.

Morel said Mattox's office was aware that the current board members are new and ``had no firsthand knowledge'' of anything that went on before their terms began.

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

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