Stay up to date with our Higher Ed Now podcast.

Trustees | Trusteeship

Questions about Liberty University Turn to Falwell’s Contract, Trustees’ Oversight

WORLD MAGAZINE   |  September 2, 2020 by Michael Reneau

The executive committee of Liberty University’s board of trustees announced Monday that it’s hiring a forensics firm to investigate “all facets” of Jerry Falwell Jr.’s tenure as the school’s president.

Critics had pointed to Falwell’s erratic behavior, public statements, and questionable business for years. But it took salacious personal scandals to force Liberty University’s board finally to take action in August. First it suspended Falwell indefinitely after Falwell posted a racy photo on Instagram, then accepted his resignation when details of his wife’s extramarital affair came to light.

Despite the scandals, Falwell says he’s walking away with a $10.5 million severance package, though it’s not clear what of that may be severance pay and what could be deferred retirement income.  “The board was gracious not to challenge that,” he told The Washington Post. “There wasn’t any cause. I haven’t done anything wrong.”

The executive committee statement Monday acknowledged skepticism about the board’s governance: “Some may say that all the signs were there for a long time before last week, but all the signs were not there until the start of last week.” But critics—including many Liberty alumni—say the board of trustees, particularly its executive committee, didn’t provide enough accountability to Falwell in recent years. They point to his brash behavior and reports of questionable business deals. The private foundation of one executive committee member received a $30,000 donation from Liberty, disclosed in a 2017 tax filing.

By late 2015, at least three Liberty board members had resigned because of the full board’s inability to provide checks and balances to Liberty’s president.

Jimmy Thomas and his family have invested much in Liberty in the last 30 years. In 1992, Thomas and fellow Lynchburg, Va., businessman Daniel Reber donated $1.4 million for construction of Liberty’s dining hall, known as Reber-Thomas. When Liberty was drowning in debt and struggled to make payroll in 1995, Thomas and Reber bought $30 million of Liberty’s debt and forgave it. Thomas accepted an honorary doctorate from Liberty in 2019. Son Glen, after attending Liberty, donated hundreds of thousands of dollars’ worth of land to Liberty in 2008.

In November 2013, Liberty alumni Glen and Jimmy Thomas Jr. joined their father, Jimmy Thomas Sr., on Liberty’s board of trustees. But what went unreported until now: Their tenure didn’t last long—two years later they had all resigned. Critical of the board’s ability to hold the president accountable in managing Liberty, the three proposed changes. But the board didn’t enact those changes. “The reason we resigned from the board was because we felt like we were in a role where we had accountability but we had no authority,” Glen Thomas told me. “I felt like, if I’m going to be on the board, I have a fiduciary responsibility to be on that board and be an overseer of the university.”

So who does have the authority to hold the school’s president accountable? Falwell’s claim that the board had no cause to fire him raises questions about the terms of his contract. Because Liberty is a private school, it doesn’t have to disclose the contract’s terms. Non-disclosure agreements keep trustees and other officials from sharing details with the public, and few people have even seen Falwell’s employment contracts. 

Liberty’s tax filings do state Falwell’s compensation, which in 2017 (the last year available) topped $ 1 million. It had been just shy of $1 million for several years prior to 2017.

Liberty’s bylaws hand the responsibility of negotiating a president’s contract and evaluating his job performance to the board of trustees’ executive committee (currently comprised of five people), independent of the full, 32-member board. The bylaws don’t require the executive committee to disclose the terms of the president’s contract to the full board, nor does the full board vote on the employment contract. People familiar with how Liberty’s board works say the full board never would have seen the full terms of Falwell’s employment contracts, the latest of which Falwell signed in 2019.

Michael Poliakoff, president of the American Council for Trustees and Alumni (ACTA), warned against all-powerful executive committees: “That is not healthy. It’s common enough, but it’s not healthy.” ACTA is a non-profit that advocates for trustees providing more accountability for colleges and universities, among other things. An entire board rubber-stamping an executive committee’s decisions means the board “is not performing its duty as a fiduciary, governing board,” Poliakoff said.

Falwell’s claims also raise the question of whether his contract included a morals clause barring immoral behavior. Because of board protocols and non-disclosure agreements, only a few people actually know whether Falwell’s contracts had morals clauses. If they did, Liberty’s board has given no indication it’s going to enforce them. 

Price Harding is chairman of executive search firm Carter Baldwin, which has performed work for Liberty in the past. He says most Christian schools don’t include morals clauses in presidents’ contracts because doctrinal and community life standards usually keep administrators in check and give trustees enough authority to hold them accountable.

Some of Falwell’s more alarming behavior—his possible involvement in his wife’s affair, his posting of an Instagram photo of him and another woman with pants unzipped and stomachs exposed, his calling a Liberty parent a “dummy” and a Liberty student “retarded”—could constitute morals clause violations. 

But even if Falwell’s newest contract didn’t have a morals clause, the school’s bylaws lay out the president’s responsibilities: “He provides spiritual and worldview leadership to the university in the pursuit of excellence.” Another section outlining the removal of board members allows trustees to hold each other accountable, saying trustees can be removed “should the board member’s conduct discredit the institution or be detrimental to the reputation, character, standing, or Christian mission of the institution.” As president, Falwell was a member of the board of trustees.

Several of Falwell’s public statements in recent years call into question whether he lived up to those mandates. He told pastor David Platt on Twitter to “grow a pair” in 2019. He removed the tweet but in response said he’s not a spiritual leader: “I have never been a minister. UVA-trained lawyer and commercial real estate developer for 20 yrs,” he tweeted. “The faculty, students, and campus pastor … are the ones keeping LU strong spiritually.”

That same year, a reporter for sports website The Ringer asked Falwell how much his faith informed his politics. “Not at all,” Falwell told him.

In May 2020, Falwell protested Virginia’s COVID-19 facemask mandate. He tweeted a medical school yearbook photo of Virginia Gov. Ralph Northam in blackface standing next to a man in a Ku Klux Klan robe. The photo—which previously had become a scandal of its own for Northam—was superimposed onto a facemask. Backlash ensued. Black students transferred, and black faculty and staff resigned.

Maina Mwaura, a 1997 Liberty alumnus, pastor, speaker, and writer, organized a letter from Liberty’s black alumni, which asked Falwell to retract the tweet and take a job in politics, not leading Liberty. Mwaura got 35 people to sign the letter, and almost 40,000 people signed an online petition supporting it.

Mwaura wasn’t surprised by the groundswell of support he and his letter received—or the rollercoaster of events leading to Falwell’s resignation. But the board’s inaction before the sex scandals did: “The lack of accountability really bothered me. At the end of the day, the board of directors completely failed us as an institution … It wasn’t just one thing.”

Mwaura says he approached three board members directly about Falwell’s behavior. “Literally on almost every occasion I got nothing back,” he said.

The executive committee in its Monday statement alluded to a lack of spiritual leadership from Falwell: “We are also committed to learning the consequences that have flowed from a lack of spiritual stewardship by our former president.” The committee announced while beginning a search for a new president, it may establish a new position “in the top leadership of the university” to be a spiritual coach to Liberty administrators.

In 2016, one influential board member spoke out against Falwell’s political endorsement of Donald Trump. Then-executive committee chairman and former Jerry Falwell Sr. chief of staff Mark DeMoss told The Washington Post in March that the Trump endorsement was a mistake. DeMoss told reporters that at the next board of trustees meeting in April, other executive committee members asked him to resign from the committee. DeMoss did and also resigned from the full board.

DeMoss is now on a list of people a group of Liberty alumni, called Save71, have suggested the board of trustees tap for a national search committee for a new president. Calum Best, who co-founded Save 71 earlier this year to advocate for Falwell’s removal, told me the day that Falwell resigned the group doesn’t have much faith in the board of directors: “Falwell left today because he was humiliated, not because the board chose to respond to years of failed leadership. They had the opportunity to. Instead, they shirked their responsibility once again.”

Liberty’s board of directors didn’t respond to my questions about Falwell’s contract or requests for interviews. Senior Vice President of Communications Scott Lamb said the school isn’t yet announcing the forensics firm conducting the independent investigation, but the firm may decide to announce its involvement later. “Transparency is the goal,” Lamb said.

Falwell critics and media outlets pointed out several business deals that benefitted Falwell family or friends during his tenure. One transaction unreported until now also involved the chair of the board of trustees’ executive committee: Harvey Gainey. In 2017, Liberty made a $30,000 contribution to Gainey’s private foundation which, according to tax filings, provides scholarships for Christian student-athletes. 

The Gainey Foundation’s tax filing discloses that it made a $52,000 contribution to Liberty University the same year.

Liberty’s bylaws state, “The chairman of the executive committee and a majority of the other voting members of the executive committee shall have no contractual, employment, personal, familial, or financial interest in the institution.”

Liberty’s board didn’t provide responses to my questions about the transaction.

Poliakoff, the president of ACTA, said recent years’ reports of self-dealing under Falwell raise questions about trustees’ oversight: “All the rumors that come out from Liberty suggest that kind of transparent, careful analysis of what’s in the best interest of the school has not been done before.” He said the board should have demanded more transparency: “Liberty made a desperate mistake in vesting pretty much everything in its one leader.” 

WHO WE ARE

Launched in 1995, we are the only organization that works with alumni, donors, trustees, and education leaders across the United States to support liberal arts education, uphold high academic standards, safeguard the free exchange of ideas on campus, and ensure that the next generation receives an intellectually rich, high-quality college education at an affordable price.

Discover More