Last Wednesday, eight days after The Post interviewed Aramony about a variety of subjects including his 1989 hiring of his longtime friend, Thomas J. Merlo, Aramony relieved Merlo of his duties as chief financial officer. The two parties are negotiating a severance agreement, Aramony said.

Over the years, Aramony said, he and Merlo became close friends. They occasionally played poker and gin rummy and visited the racetrack. Aramony sold a Florida condominium to Merlo's son in 1985 and Merlo later employed a young woman at his accounting firm whom Aramony dated in the late 1980s.

United Way of America paid Merlo $211,000 in 1990, $40,000 more than his predecessor. To accommodate his new chief financial officer, Aramony also paid housing and commuting expenses for 18 months so Merlo could continue to live in Florida. United Way paid for a $1,050-a-month apartment in Alexandria as well as weekly flights home. When the 18 months were up, Merlo continued to commute. "If we paid moving expenses, it would have cost us a heck of a lot more," Aramony said. United Way officials could not provide the total cost of this arrangement.