Falvey: Monaghan $ Destabilizes AMSL
Fri, Jan26, 2007 - Category: School of
Law
Report on Ave Maria School of Law's long-term
financial viability
by Joseph Falvey, AMSL Professor of Law
November 24, 2006; redacted December 1, 2006
tabs/attachments not included in the following:
- low-bandwidth PDF (1.8MB; suggested)
- high-bandwidth PDF (3.7MB)
Nutshell: Consistent with the original plan, the Law School must reduce, not increase, Monaghan's financial involvement if AMSL is to regain stability. That can happen if (a) the original financial plan for the school is followed, (b) expenditures are critically analyzed, (c) notions of moving are, again, tabled to stop the instability-dependency cycle, and (d) fund-raising efforts are continued and reinforced. The Falvey Report findings run contrary to the notion promoted by many - that AMSL cannot survive without Tom Monaghan's money.
"The burden is not on me, or any member of the faculty, to establish the continuing viability of the Law School in Michigan. As detailed below [in the report], the long-term viability of Ave Maria School of Law, Ann Arbor, Michigan, has already been established to the satisfaction of the American Bar Association." - Joseph Falvey
Follow the comments and analysis at Fumare
Click on "More..." (below) for introductory information, excerpts from the Falvey Report, a timeline of events leading to the report, and a list of links to important documents and financial statements surrounding AMSL's finances.
by Joseph Falvey, AMSL Professor of Law
November 24, 2006; redacted December 1, 2006
tabs/attachments not included in the following:
- low-bandwidth PDF (1.8MB; suggested)
- high-bandwidth PDF (3.7MB)
Nutshell: Consistent with the original plan, the Law School must reduce, not increase, Monaghan's financial involvement if AMSL is to regain stability. That can happen if (a) the original financial plan for the school is followed, (b) expenditures are critically analyzed, (c) notions of moving are, again, tabled to stop the instability-dependency cycle, and (d) fund-raising efforts are continued and reinforced. The Falvey Report findings run contrary to the notion promoted by many - that AMSL cannot survive without Tom Monaghan's money.
"The burden is not on me, or any member of the faculty, to establish the continuing viability of the Law School in Michigan. As detailed below [in the report], the long-term viability of Ave Maria School of Law, Ann Arbor, Michigan, has already been established to the satisfaction of the American Bar Association." - Joseph Falvey
Follow the comments and analysis at Fumare
Click on "More..." (below) for introductory information, excerpts from the Falvey Report, a timeline of events leading to the report, and a list of links to important documents and financial statements surrounding AMSL's finances.
In October 2006, Ave Maria School of Law (AMSL)
professor Joseph Falvey was asked by AMSL Chairman
Monaghan (on behalf of the Board of Governors) to
submit a "detailed" report on the financial future of
AMSL. This was to include a proposal on "concrete
financial support that would replace Ave Maria
Foundation donations" if the Board decided to keep
AMSL in Michigan (i.e. not move to Chairman
Monaghan's real estate development in Florida).
Falvey was given 45 days and no additional support to
complete the analysis. The task was made more
daunting by Monaghan's refusal to cooperate with
Falvey's queries for even basic information (i.e.
Falvey was denied a full copy of the 2006 budget as
passed by the Board). Falvey completed his assignment
on-time. He asked that his report be shared with the
AMSL community, including students and alumni; an
email was sent to student and alumni leaders on Dec.
1 indicating this.
The request to share the report was reasonable since another "feasibility report" (The Read/White Report) was released by the Dean to the entire AMSL community only two days after its submission to the Board. That report glowed with support for moving AMSL to Monaghan's Florida development despite the fact that Read/White offered nothing to document Monaghan's future financial commitments to AMSL once in his real estate development. In contrast to the speedy dissemination of the Read/White report, the Falvey report stalled. Members of the Alumni Association requested, but were denied, the document. The December Board meeting passed without the report's release. Over fifty days passed. Why?
Falvey's report makes an objective case for the following:
+ that the School clearly can be independent of Monaghan's money if it only followed the institution's original financial plan
+ that the pressure to move to Florida coincides with odd administrative decisions to make AMSL more dependent upon Monaghan
+ that speculation on a move to Florida is generating a dependency-instability cycle (i.e. more scholarship money is needed to retain students who are jittery about the move's impact on accreditation and quality of education)
+ that AMSL expenditures can and should be cut to improve stability
How can large donations from a billionaire destabilize a non-profit educational institution? simple - when the institution is required by its accrediting agency to be financially independent from any single donor. That makes sense. An institution dependent upon the whim of one man or foundation is not a stable institution. From the beginning, it was a stated goal of the School and Tom Monaghan to have AMSL free from Monaghan's money in due time. A plan was made at the outset. In September 2004, that plan was reiterated to the American Bar Association (ABA). In reliance on that plan, full accreditation was issued by the ABA in August 2005.
But financial oddities started to occur. Budget projections approved by the Board became bloated. New faculty and staff positions were budgeted but chronically unfilled. FY2006 had almost $1,000,000 in "suspicious expenditures". AveWatch reported that building loans from Monaghan's Ave Maria Foundation (AMF) were not being re-paid by AMSL. At the time of this posting, the ABA is sending a fact-finding team to evaluate the situation. To this observer, it appears that Monaghan wants AMSL in a chronically dependent financial position to strengthen his unquestionable sole-proprietary authority over operations.
Other noteworthy points from Falvey:
+ the Read/White study did NOT analyzed the financial feasibility of remaining in Michigan, contrary to their statements to AMSL faculty
+ Monaghan is bound with financial commitments to AMSL to FY 2009; this was important in the ABA's decision to accredit the school; however, in an October 2006 letter to Falvey, Monaghan appears to call that commitment into question
+ since the ABA's initial site visit in 2001, it has called into question the financial dependency upon Monaghan and the legal binding nature of Monaghan's commitment
+ in 2004, an AMSL self study expressed the goal to "achieve financial independence from its primary benefactor..."
Timeline:
+ 10/12/06 - Falvey asked to prepare report on long-term viability of AMSL staying in MI
+ 11/20/06 - Read & White submit their own "feasibility study" to Board
+ 11/22/06 - Dean releases Read/White study to alumni/students two days after submission (Fumare)
+ 11/24/06 - Falvey completes his report in 45 days
+ 11/30/06 - AMSL faculty issue communique; their concerns were inaccurately documented in Read/White study (Fumare)
+ 12/1/06 - Falvey issues redacted version of his report to Board, faculty, and legal writing instructors; includes comment on Read/White study (Fumare)
+ 12/1/06 - Falvey requests that alumni & students have access to his report (Fumare)
+ 12/8/06 - Dean emails AMSL alumni that decision to give them Falvey report to come at Board meeting next week (Fumare)
+ 12/14/06 - AMSL Board meets but makes no decision on release of Falvey report to alumni (Fumare)
+ 1/26/06 - 56 days pass since Falvey requests release of report to alumni & students
Related to financial/feasibility studies:
+ AveWatch report (8/19/06)- conflict between Monaghan statements and IRS 990's
+ AveWatch report (11/25/06)- balance rises on AMSL building debt to Monaghan's Foundation
+ Read/White "Feasibility Study" to move to Florida
+ AMSL Faculty respond to Dean's Study (PDF file; 11/15/06)
+ AveWatch report (11/25/06)- Michigan (not Florida) bonds used to finance AMSL needs
Journalist Note: The Falvey Report was sent as a package from an anonymous source. The tab/attachment portions of the report are not now, and never have been, in my possession. There was no solicitation to obtain this report. I have no reason to discard the document as "not credible"; however, the reader should be aware of AveWatch's limited ability to assess the document's origin. This website is not run by current or past AMSL employees, alumni, or students. It is an effort in investigative journalism, to serve as a resource for other journalists and the common public good.
The request to share the report was reasonable since another "feasibility report" (The Read/White Report) was released by the Dean to the entire AMSL community only two days after its submission to the Board. That report glowed with support for moving AMSL to Monaghan's Florida development despite the fact that Read/White offered nothing to document Monaghan's future financial commitments to AMSL once in his real estate development. In contrast to the speedy dissemination of the Read/White report, the Falvey report stalled. Members of the Alumni Association requested, but were denied, the document. The December Board meeting passed without the report's release. Over fifty days passed. Why?
Falvey's report makes an objective case for the following:
+ that the School clearly can be independent of Monaghan's money if it only followed the institution's original financial plan
+ that the pressure to move to Florida coincides with odd administrative decisions to make AMSL more dependent upon Monaghan
+ that speculation on a move to Florida is generating a dependency-instability cycle (i.e. more scholarship money is needed to retain students who are jittery about the move's impact on accreditation and quality of education)
+ that AMSL expenditures can and should be cut to improve stability
How can large donations from a billionaire destabilize a non-profit educational institution? simple - when the institution is required by its accrediting agency to be financially independent from any single donor. That makes sense. An institution dependent upon the whim of one man or foundation is not a stable institution. From the beginning, it was a stated goal of the School and Tom Monaghan to have AMSL free from Monaghan's money in due time. A plan was made at the outset. In September 2004, that plan was reiterated to the American Bar Association (ABA). In reliance on that plan, full accreditation was issued by the ABA in August 2005.
But financial oddities started to occur. Budget projections approved by the Board became bloated. New faculty and staff positions were budgeted but chronically unfilled. FY2006 had almost $1,000,000 in "suspicious expenditures". AveWatch reported that building loans from Monaghan's Ave Maria Foundation (AMF) were not being re-paid by AMSL. At the time of this posting, the ABA is sending a fact-finding team to evaluate the situation. To this observer, it appears that Monaghan wants AMSL in a chronically dependent financial position to strengthen his unquestionable sole-proprietary authority over operations.
Other noteworthy points from Falvey:
+ the Read/White study did NOT analyzed the financial feasibility of remaining in Michigan, contrary to their statements to AMSL faculty
+ Monaghan is bound with financial commitments to AMSL to FY 2009; this was important in the ABA's decision to accredit the school; however, in an October 2006 letter to Falvey, Monaghan appears to call that commitment into question
+ since the ABA's initial site visit in 2001, it has called into question the financial dependency upon Monaghan and the legal binding nature of Monaghan's commitment
+ in 2004, an AMSL self study expressed the goal to "achieve financial independence from its primary benefactor..."
Timeline:
+ 10/12/06 - Falvey asked to prepare report on long-term viability of AMSL staying in MI
+ 11/20/06 - Read & White submit their own "feasibility study" to Board
+ 11/22/06 - Dean releases Read/White study to alumni/students two days after submission (Fumare)
+ 11/24/06 - Falvey completes his report in 45 days
+ 11/30/06 - AMSL faculty issue communique; their concerns were inaccurately documented in Read/White study (Fumare)
+ 12/1/06 - Falvey issues redacted version of his report to Board, faculty, and legal writing instructors; includes comment on Read/White study (Fumare)
+ 12/1/06 - Falvey requests that alumni & students have access to his report (Fumare)
+ 12/8/06 - Dean emails AMSL alumni that decision to give them Falvey report to come at Board meeting next week (Fumare)
+ 12/14/06 - AMSL Board meets but makes no decision on release of Falvey report to alumni (Fumare)
+ 1/26/06 - 56 days pass since Falvey requests release of report to alumni & students
Related to financial/feasibility studies:
+ AveWatch report (8/19/06)- conflict between Monaghan statements and IRS 990's
+ AveWatch report (11/25/06)- balance rises on AMSL building debt to Monaghan's Foundation
+ Read/White "Feasibility Study" to move to Florida
+ AMSL Faculty respond to Dean's Study (PDF file; 11/15/06)
+ AveWatch report (11/25/06)- Michigan (not Florida) bonds used to finance AMSL needs
Journalist Note: The Falvey Report was sent as a package from an anonymous source. The tab/attachment portions of the report are not now, and never have been, in my possession. There was no solicitation to obtain this report. I have no reason to discard the document as "not credible"; however, the reader should be aware of AveWatch's limited ability to assess the document's origin. This website is not run by current or past AMSL employees, alumni, or students. It is an effort in investigative journalism, to serve as a resource for other journalists and the common public good.