Alabama committee sets deadline for Univ. of Mobile debt plan
MONTGOMERY, Ala. (BP)--The University of Mobile cannot comply with requests made by the executive committee of the Alabama Baptist state board of missions. That was the blunt response of the university's interim president, Walter Hovell, after the board's executive committee requested June 3 written certification by July 15 that the university is in compliance with the 1994 agreement with the Alabama Baptist State Convention.
The University of Mobile agreed in 1994 that it would only use funds specifically designated for its Nicaraguan campus and funds generated on the Nicaraguan campus to support its Latin American Branch Campus. Also, the university agreed to return to the Mobile campus about $2.2 million, which had been used to establish the Nicaraguan campus.
On May 13, trustees of the university released information saying the school had not lived by the agreement and the indebtedness of the Nicaraguan campus to the Mobile campus had grown to $3.3 million. That discovery played a part in the decision of longtime President Michael Magnoli and the university "to go separate ways."
Speaking to the Alabama board's executive committee June 3 in Montgomery, Hovell promised the university would have a balanced budget for the 1997-98 school year. "With a balanced budget, I can tell you there will be no more money in Nicaragua at the end of the next fiscal year than we have now," he declared.
He explained the university will have to send funds to Nicaragua until students return in September for the fall semester.
Hovell also told committee members it would be "hypocritical" of him to promise a plan to recover the $3.3 million by July 15. He said the school's director of finance, Steve Lee, was in Nicaragua to employ an international auditing firm to do a thorough accounting of the Nicaraguan campus' four years of existence.
"We want to get people who know the language and the culture and how business is done in Nicaragua. We also want people who are bound by the same standards of accounting that we are here in the U.S.," Hovell said. "I do not know how long that will take, but we will not have a plan in 45 days."
Hovell told board members the university is in the midst of "belt tightening." He said many of the cutbacks will be made "in the eyes of people." He explained about 45 percent of the university's $24 million budget is personnel-related. "You can't reduce the budget without reductions in personnel.
"Where I need your help," Hovell continued, "is to give me the freedom to do what has to be done." He explained a "lot of outside pressure" is trying to "keep him from doing what has to be done."
Hovell said on June 2 he had been told some people were "off- limits" for cutbacks. He said when that is enforced, he will resign. The interim president did not explain his comments further but added he regretted the university is becoming bogged down in a "moderate-conservative (theological) division."
Hovell's comments came after the executive committee unanimously adopted the resolution requesting the University of Mobile certify in writing by July 15 that it is abiding by the 1994 agreement with the state convention and has a plan to recover the $3.3 million from Nicaragua.
The resolution also expressed the executive committee's "serious concern" when an entity of the convention "violates agreements" made with the convention. State board of missions chairman Tom Whatley, pastor of Woodward Avenue Baptist Church, Muscle Shoals, told committee members the resolution was not a "threat" to the university. "It is a statement to the churches of the Alabama Baptist State Convention that their Cooperative Program gifts are a sacred trust to the trustees of the convention," Whatley said.
Whatley said state board of missions members are the trustees of the convention responsible for allocating and accounting for Cooperative Program receipts. "If the people in our churches lose faith and heart in the Cooperative Program, our convention and all its entities are doomed," he added. Whatley warned that if the university chooses not to recover the $3.3 million from Nicaragua, the state board of missions must consider "any and all opportunities for the money to be recovered within the framework of the (convention) bylaws."
At the beginning of the executive committee meeting, Troy Morrison, executive-secretary for the ABSC, read a prepared statement in which he advised committee members "to let the University of Mobile handle their own indebtedness and other matters."
He warned "any involvement (on the part of the executive committee) could result in bankruptcy for the Alabama Baptist State Convention."
Morrison said he raised questions about the Nicaraguan campus four and a half years ago. "If they (the questions) had been addressed, (it) could have prevented this crisis," he declared.
Referencing a June 1 story in the Mobile Press-Register about the Nicaraguan campus, Morrison said the total amount of indebtedness of the university would not be known for months or years.
Morrison pointed to allegations in the Press-Register that the school had swapped student grants and scholarships to the Nicaraguan government in return for favors, including acquisition of buildings and land.
"If this is true, this could spell big-time problems if these scholarships involve U.S. monies for grants or loans," he said. "I am deeply concerned that we do all we can do at this point to avoid becoming involved as the Alabama Baptist State Convention in an international scandal."
Morrison told executive committee members he had been interviewed by a federal agent in December 1995 about the University of Mobile and its work in Nicaragua. At that time, he learned five other U.S. government agencies were investigating the school. "I have been advised in recent days that the investigations continue," he said.
"I am ashamed and embarrassed that this has happened to an entity of the Alabama Baptist State Convention. It could have been prevented, but it wasn't," Morrison said.
Explaining entities of the convention have boards to protect them, Morrison added, "If they fail, it is still your responsibility to protect the mission and ministry of the Alabama Baptist State Convention."
University of Mobile trustee chairman Robert Maxwell, an attorney from Atmore, acknowledged he embraced many of the "facts" presented by Morrison. However, he cautioned that many of the concerns may prove to be unsubstantiated.
Maxwell said trustees are now "enlightened" and can therefore do a better job of overseeing the university than they have up until now. He pledged all the "wrongs" perceived by the trustees will be "righted."