NEW ORLEANS (BP)–New Orleans Baptist Theological Seminary (NOBTS) trustees voted April 14 to offer messengers to the 2005 Southern Baptist Convention a choice between two different charter amendments. One will utilize “sole member” language requested by the SBC Executive Committee (EC) and a yet-to-be-written alternative that will confirm the Southern Baptist Convention as the school’s rightful owner.
By a vote of 33 to 6 with one new trustee abstaining, the NOBTS board decided Southern Baptist messengers are the best audience to settle whether NOBTS should name the Southern Baptist Convention as the sole member of the NOBTS’ corporation.
Sole membership is a legal mechanism that allows a parent organization to establish its ownership (as sole member of the corporation) of a subordinate entity while setting limitations to the parent entity’s control, thereby limiting the legal liability of the parent for the subsidiary.
In 1997, the North American Mission Board became the first SBC entity to name the convention as sole member of its corporation. The remaining SBC entities except NOBTS adopted similar charter changes. In October 2003 NOBTS trustees voted against naming the SBC as the sole member of their seminary’s corporation.
INTENSE DISCUSSION
NOBTS trustees discussed sole membership intensely at times during their April 14 plenary session, referring negatively to dealings with the SBC Executive Committee including interactions at the SBC EC meeting in February of this year when a resolution passed asking NOBTS trustees to name the SBC as sole member.
“We picked up a lot of heat at the meeting,” acknowledged trustee chairman Tommy French of Baton Rouge, La. “Many of those folks are my friends so I’m not going to become their enemy. I am not going to conduct myself in a way others have conducted themselves, so let us not as a board develop friction between us and the Executive Committee.”
French restated the board’s responsibility to look after the interests of the Southern Baptist Convention, adding that the Executive Committee has a similar task. “They have one opinion and we have an opinion. We’re Baptists. It’s a wonder we don’t have three opinions. Let them do their work and then the Southern Baptist Convention will settle the matter. We’ll still be friends, still work together for the Kingdom of God, this institution and this great denomination.”
NOBTS President Chuck Kelley indicated that since the Feb. 17 action by the SBC EC he had reviewed three options, preferring that messengers in 2005 pick from the two choices of charter amendments that are to be drafted. The second option included the same two amendment choices but called for action at this year’s SBC annual meeting, which is only two months away. The third option proposed to set aside all objections and use the sole member language originally proposed by the SBC EC.
Trustee Don Taylor of Alameda, Calif., made a motion that basically affirmed Kelley’s preference, but using his own language, proposed that the board “delay a further decision until next year at which time we will put two alternatives before the SBC, pre-approved by the board, and ask the convention to choose which [one] it prefers.”
“Whichever one the convention chose would be enacted immediately without further action by the board. One alternative would be some form of sole membership that takes into consideration the unique issues of Louisiana law. The other would be our best alternative to sole membership.”
Taylor’s motion passed with six trustees voting in the negative — five of these expressed concerns about the wording of Taylor’s motion and the other noted that he didn’t see sole membership as a threat.
IMPACT OF SOLE MEMBERSHIP
In a Dec. 16, 2003, letter to NOBTS trustees, SBC EC President Morris H. Chapman explained why the SBC had pursued the issue of sole membership with its entities.
“The greatest single reason for sole membership, of course, is to ensure that the Southern Baptist Convention’s ownership of its various entities would be recognized by the secular courts of law in the United States without expending hundreds of thousands of Cooperative Program dollars trying to prove ownership,” Chapman wrote. He also noted that by establishing SBC ownership of all entities as subsidiary corporations, the convention would be further protected against dangers of ascending liability.
Kelley disagreed, maintaining that Louisiana lawyers have advised him that sole membership would be viewed differently in that state, possibly increasing liability for the denomination.
During the SBC EC February meeting, Kelley and Southern Baptist Convention attorney Jim Guenther presented differing cases to SBC Executive Committee members — Kelley arguing against sole membership, Guenther arguing for it — in which both addressed this point. Guenther, who has served as attorney for the Southern Baptist Convention for 40 years, disagreed with NOBTS’ lawyers, saying that he was “satisfied that we’re going to be better off from the point of view of ascending liability as the sole member.”
Kelley also expressed polity concerns about sole membership, telling SBC EC members at the Feb. meeting that the problem was that Louisiana corporate law gives the sole member “complete power.”
“In Louisiana corporate law, the sole member always has the rights and can in fact change the trustee rights anytime they want to. That’s again our polity concern — there is a polity question that is there.”
QUESTIONS RAISED
Trustee Craig Campbell of Russellville, Ark., asked why a Feb. 16 legal opinion by NOBTS lawyers included in trustee packets had been held for distribution until April. Kelley said it did not arrive in time for the SBC EC meeting, adding, “This is the first time we’ve been together as a board for me to share that with you.” The NOBTS president suggested the letter be included with other information supporting their recommendation to messengers.
In stating his preference to “have our package together” before distributing documents publicly, Kelley said, “I’ve gotten to a point in which I do not have confidence in my ability to predict what the Executive Committee staff will do with any information given them. I didn’t want to do anything until we do it as a body and you have it.”
When asked to supply a copy of the legal opinion to Baptist Press, Kelley said the attorney had restricted distribution to the trustee body.
Trustees also received a paper prepared by Assistant Theology Professor Ken Keathley and Assistant Church History Professor Lloyd Harsch, both of NOBTS, titled, “A Program of Cooperation.” It was offered as a rejoinder to a paper, “The Relation of the Southern Baptist Convention to Its Entities,” by SBC EC Cooperative Program Vice President David Hankins. Hankins wrote in response to a paper written and distributed by Kelley, “The Baptist Way: A Personal Perspective.”
Each of the papers presents a perspective on sole membership.
During a lively discussion that prompted comments by at least a dozen trustees, preference was expressed for the longer time frame in which to develop alternative language in consultation with attorneys representing both parties.
When one trustee asked whether the SBC Executive Committee had the authority to raise the issue at the upcoming Indianapolis meeting, Kelley referred to a Nov. 23, 2003, letter from SBC EC Vice President for Convention Policy D. August Boto.
“If a motion is made at this year’s convention, the standard procedure is that it will be referred to New Orleans Seminary,” Kelley said, drawing from Boto’s opinion. “Any motion directed to an entity of the Southern Baptist Convention must be referred to that entity. A second bylaw says that any entity receiving a referral from the Southern Baptist Convention must report on its response at the next convention.”
MISTRUST EVIDENT
Taylor expressed frustration over the lack of answers to questions he raised in response to a Feb. 25, 2004, letter from Chapman. “I find myself coming to the meeting ill-equipped to move from the position that I had felt was the right decision and that is to hold out against adopting sole membership.”
Trustee Don Davidson of Danville, Va., compared the approach of EC members with NOBTS to their handling of another “big issue that night — the Baptist World Alliance vote.” He elaborated, stating, “There was no real openness to listen to any other side. I think Dr. Kelley did a wonderful job, but the moderator who began by saying he would be very fair was not fair throughout the entire presentation.”
The moderator for that SBC EC meeting was SBC EC chairman Gary Smith, a Texas pastor. Smith was not available for comment by publication deadline.
Kelley offered that the NOBTS trustees had studied the charter change for several years. “This board does a good job of having to make decisions. You stay focused on issues, everyone gets a hearing and you never try to shut down discussion before it’s through,” he added.
“I will fight tooth and nail about only one thing — that this issue will be completely resolved either by [the] 2004 convention or 2005 convention.” By accepting their responsibility to make decisions, Kelley said the board demonstrates “the genius of Baptist polity” as “we always leave our most important decisions in the hands of a group — never in the hands of any one individual.”
The NOBTS president asked trustees to consider whether their original concerns about sole membership had been addressed and resolved and to determine whether the seminary would suffer great harm by failing to adopt sole membership immediately. He predicted that an extended time of formulating two options from which messengers will choose opens them up to further criticism. “Certainly I’d be subject to more attacks and quite possibly you and the institution will be subject to more attacks.”
Kelley shared that he struggled only about the time frame for presenting the two alternative amendments to SBC messengers. “The way I was brought up is to focus on one simple thing — that you do what is right as well as you know how to do it. My conscience tells me that the right thing to do is give the Southern Baptist Convention an alternative to sole membership for accomplishing the same thing.”
Kelley stated that acceptance of the language preferred by the SBC Executive Committee would be “easy and quick,” but decided against it. “In a way it would condone what the Executive Committee has done in issuing to us a time deadline” which he labeled a violation of SBC bylaws by directing the affairs of another entity.
“They could chalk it up and say, ‘Well, it worked,'” Kelley speculated. “They put that kind of pressure on an entity, keep that in their toolbox and do it again.”
The resolution passed by the SBC Executive Committee asked New Orleans trustees to adopt the legal corporation organizational model known as sole membership at the NOBTS spring meeting so that it could be presented to messengers at the June 2004 SBC annual meeting.
French recalled the lesson of the Three Little Pigs who learned to build a house out of brick. “I’m not afraid of the big bad wolf — never have been, never will be, I don’t think.” He added, “All the stuff that goes on I’m not going to let it worry me. I’ll do what I think I need to do as a member of this board.”
Having lived in Louisiana for over 45 years, French said he had learned, “You better listen to Louisiana attorneys.” He challenged trustees to demonstrate the innovative character of New Orleans Seminary by selecting the best option.
“I just want to say this is not only a house made of bricks and mortar, but providence and prayer,” stated one trustee. “I came to this meeting ready to raise a white flag and adopt [sole membership].” After prayerful consideration, Hanberry said, “I’m convinced we need to delay action.”
COMPETING INFORMATION
Several trustees dismissed setting a 2004 deadline due to the difficulty of quickly informing messengers of the issues at stake.
“I’ve heard messengers don’t give much thought and typically adopt Executive Committee recommendations,” said trustee Jim Davidson of Ruston, La.
Estimating the floor discussion would last about 15 minutes, Kelley agreed that the additional year would provide more time for Southern Baptists to understand the issues.
“There will be a misinformation campaign,” Davidson said, drawing his conclusion from letters he received that he described as based on “misinformation or, at best, misunderstanding.”
“If I make it as well known as possible,” Kelley said, “and say in advance that sole membership is going to be on the table in 2005 it makes it harder for the kind of disinformation campaign they’ve been doing.”
Trustee Jerry Garrard of Tallahassee, Fla., questioned whether the board “could get a fair hearing on the convention floor.” He asked whether the Executive Committee might propose removing a disagreeable trustee body, recalling a conversation with SBC President Jack Graham following the SBC EC fall meeting. Garrard said Graham expressed concern that the issue might surface at the convention and indicated he “would hate for us to have to elect convention trustees right there on the floor.”
In a telephone interview with Baptist Press, Graham responded to Garrard’s statement saying, “My position from the beginning has been that if the trustees of the New Orleans Baptist Theological Seminary and the members of the SBC Executive Committee are unable to resolve this issue, that it should be brought to the floor of the convention and let the messengers decide.
“It is inaccurate to suggest that I propose, favor or fear that NOBTS trustees should or would be removed.”
Another trustee asked whether compliance with sole membership threatened the progress that had been made through a conservative resurgence.
“Whoever’s at the top would have an easier time staying at the top,” Kelley answered. “You have a means of shutting off grassroots reformation movement that was unthinkable to an earlier generation.”
“That’s my biggest concern,” said trustee Glenn Simmons of Scottsdale, Ariz. “Everything is okay right now but what about two years from now when somebody has to stand up and say, ‘I’m not going to take it anymore.'” While Simmons raised the possibility that litigation might halt excessive power, Kelley opposed the idea.
“I could not endorse anything like that. My great concern is not our relationship with the Southern Baptist Convention,” Kelley said, “but how this is being used to strengthen the power and authority of the Executive Committee.” Though unintentional, the push to adopt sole membership “is a step in that direction and a step away from historic Southern Baptist practice.”
Expressing disappointment over what he described as “the tactics the Executive Committee has used,” Kelley added, “Sole membership is developing a mentality that did not exist in Southern Baptist life. There was no strategy that we accomplish anything by removing or eliminating a board of trustees.”
During the February SBC EC meeting, attorney Guenther, representing the interests of the SBC, addressed similar issues about power and control that were raised by Kelley. Guenther said that the SBC Executive Committee would not have any control under sole membership. He underscored that the Southern Baptist Convention, not the Executive Committee, would be named the sole member of the seminary.
During that same meeting SBC Executive Committee chairman Gary Smith added to Guenther’s assessment stating that the SBC EC “absolutely has no authority over any entity.”
“Any recommendation now or in the future must be approved by the Southern Baptist Convention,” Smith said. “So there would be no way in our bylaws 50 years from now [that] we could ever approve anything that is not approved by the convention.”
Guenther also emphasized that the convention’s messengers are the ultimate authority.
“To express a fear of the messengers is to express a fear of the ultimate authority in this denomination,” he said. “It is the messengers who constitute the annual meeting, who are the link between the churches, who make all this possible.”
Addressing issues of intent in asking NOBTS to name the Southern Baptist Convention as sole member, Guenther added, “The Southern Baptist Convention decided a long time ago that it means to own and control its entities. Sole membership accomplishes that goal. It fits our polity.”
During the April 14 discussion at NOBTS, trustee Dan Crow of Ellicott City, Md., charged the Executive Committee with framing the issue of endorsing sole membership as a test of allegiance to the Southern Baptist Convention.
“Not to comply is to say that we are wanting to insurrect,” he said. “We are the outsider trying to take away an entity of the SBC. It’s offensive in the very suggestion of that to me as a trustee of that institution. Honestly, how can we not be angry about that?”
French remarked, “Be angry and sin not.” As the discussion drew to a close, he said, “It doesn’t matter how they frame it, we have to do our work.”
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