Where was the oversight?
There is a common element with Bethune-Cookman University’s potentially disastrous real estate deals: an alarming lack of oversight.
What is needed: Accountability. That should begin with a dismantling of the school’s current Board of Trustees. But it must not end there.
B-CU is suing its former president Edison O. Jackson, two former school officials and the developer of the university’s newest dorm, claiming that bribery, corruption and fraud surrounded the project. The long-term financing of that dorm could cost the school $306 million.
The News-Journal also reported last week that university and Daytona Beach city officials were unaware of an undisclosed agreement between a developer and Jackson to build a high-rise apartment building, MLK Lofts, in the Midtown neighborhood and use it to house B-CU students. The university now wants out of the project, which has yet to break ground, but the developer says the school will have to pony up $10 million to terminate the agreement, or face a lawsuit that could cost it tens of millions of dollars.
Those deals have contributed to B-CU’s financial woes, which include mounting debt and a downgrade in its credit rating. Some alumni fear the latest revelations could prove a tipping point that endangers the future of the institution.
Jackson may be the fulcrum for these crippling transactions, but plenty of others failed in their supervisory responsibilities.
Where was B-CU’s Board of Trustees, to whom the president is supposed to answer? Why choose a six-month-old company with no experience to build the dorm? Why did evidence of a forged Jackson signature on a contract between B-CU and the builder not stop the deal in its tracks?
It seems dissent was not welcomed. Two former trustees are suing the university, alleging that they were unlawfully prevented from serving on the board after questioning the school’s financial dealings, including the new dorm. Another former trustee was suspended from board meetings in 2015 after he threatened to sue if the board didn’t hire forensic auditors to investigate its finances.
Many trustees ignored the red flags, or failed to ask appropriate questions. How can the board be trusted to move forward? Board leaders who signed off on these decisions should resign, and the board reconstituted with new members — men and women with fresh eyes and untainted by past associations.
Interim President Hubert Grimes also has a lot to answer for. He served both as a personal legal adviser to Jackson and as the school’s general counsel. According to the MLK Lofts developer, Heron Development Group, he approved the letter of intent. He needs to be more publicly forthcoming about what he knew and when he knew it.
Meanwhile, Daytona Beach officials should be asking similar questions about why they were unaware of the MLK Lofts lease agreement between Heron and Jackson when city commissioners last March approved $3.6 million in property tax breaks for the project and a $2.5 million road improvement in front of the building.
City Manager Jim Chisholm brushed aside the fact that Jim Morris, who represented Heron on the MLK Lofts project when he was a private attorney and who now serves as Daytona Beach’s deputy city manager, never mentioned the deal to him. Commissioner Rob Gilliland told The News-Journal’s Eileen Zaffiro-Kean that he wasn’t bothered by it because “in the end we don’t care who they rent to.”
But public officials should care who all the partners are in a project that involves taxpayer dollars, and they especially should care if that information was withheld from them. The public should not be kept in the dark. City Commissioner Paula Reed has the right perspective: B-CU’s hidden involvement in the MLK Lofts project has made her “wonder what other deals were made we don’t know about.” Indeed.
These examples of financial mismanagement and obfuscation justify federal and/or state investigation — and cry out for B-CU to recommit to the principles of integrity and stewardship embodied by its founder, Mary McLeod Bethune.