UPDATE, 1/16/08 - To clarify: Non-profit organizations cannot make direct political contributions. The FEC requires that individuals state their place of employment. Any mention of contributions "coming from" a particular organization represents the aggregate of individual private contributions. This is common practice by those who analyze the FEC's data. We assumed people knew this with the original post.

This past week, with less than five days remaining until the Michigan Presidential Primary, a press release was issued by Mitt Romney to announce Tom Monaghan's endorsement. Romney was quoted as being "proud to have his support". We'll hold him to that pride. Monaghan, true to form, reminded people that he sold Dominos to Romney's Bain Capital group ten years ago. Since Bain's money is what built AMU, maybe the eternally-grateful Monaghanites should re-direct their servitude to Romney.

Let's hope that Monaghan's backing isn't the kiss of death for Romney. Monaghan was brought into the campaign of Sam Brownback to help raise money for the Kansas Senator's presidential bid. That campaign flopped early citing poor donor contributions. Luckily, Romney has his own personal wealth to tap into.

More interesting is Monaghan's support for a Republican running for the House of Representatives from Virginia's 11th district in 2008. Keith S. Fimian of Oakton, Virginia is challenging Republican incumbent Tom Davis for his district's seat. As of late December 2007, according to documents filed with the FEC, money coming from "Ave Maria University" is third in Fimian's top three sources for donations. There is even a donation of $2,300 (the limit) from Monaghan's wife, Marjorie (9/25/07).

But why Fimian from over in Virginia?

Call it coincidence, but Fimian is Chairman and Founder of US Inspect - "America's leading national home inspection company - your source for residential, relocation, and commercial inspection services whether you are moving across town or across the country." According to the company's website, "Mr. Fimian is responsible for the Company's long-term business strategy, its key client relationships, and its new business development initiatives." How shrewd it is for a south Florida real estate investor-developer like Monaghan to put money into the campaign coffers of the head of "America's leading home inspection company". Interestingly, the donations attributed to sources from Ave Maria are double those received by Fimian from his own US Inspect employees.

Tags: conflict-of-interest

Yesterday, AveWatch reviewed Tom Monaghan's use of non-profit charities to self-stimulate his for-profit businesses. Today, we reconsider how Tom Monaghan's non-profit and for-profit activities are both directly benefiting his person, via his "Thomas S. Monaghan Living Trust".

In May 2007, AveWatch was the first to report how Tom Monaghan personally acquired 74.55 acres of prime Ave Maria Town real estate in November 2004 valued at $840,000. Given its proximity to what has become the largest construction site in America, Monaghan's privately owned land appreciated (unimproved) to $1,442,500 in 2006. That same year, Monaghan deeded 10 acres of that parcel to an AMU employee for $210,000. The 2007 Assessed Value of Monaghan's 64.55 acres is now at $1,862,550 (Folio No. 00138521008; Collier County Property Appraiser; see shaded area in image below).

His personally owned land in Ave Maria Town has appreciated over $1 million since he acquired it.

This personal asset appreciated in direct response to Tom Monaghan's own for-profit business activity (acting as Ave Maria Development LLC) and in direct response to his non-profit business activity (acting as Chancellor of Ave Maria University and as the Board Chairman of Michigan's Ave Maria School of Law - the Chairman who threatened to financially devastate his own institution if it refused to move 1,300 miles to his for-profit Florida real estate development... a move that directly benefits his personal land asset).

The following are also owned by the Thomas S. Monaghan Living Trust in Collier County:
+ La Piazza, Condo Unit 1302 - $596,500 (bought 2007, see shaded below)
+ 10047 Gulf Shore Dr. - 2007 Market Value = $3,579,778, (bought 1995)
+ 318 N. Storter Ave - 2007 Market Value = $457,432 (bought 2005)

As already stated on AveWatch, it matters not if Tom Monaghan gives his personal land holding, or the subsequent land appreciation, to fund a leper colony. The point is that Mr. Monaghan receives a direct and personal benefit from the management decisions that he makes with his tax-exempt charity and with his for-profit businesses. The conflict-of-interest is stunning.

Tags: conflict-of-interest

Tom Monaghan shamelessly admits to artificially inflating figures to jump start his projects. So, it should come as little surprise that his for-profit south Florida real estate venture engages in the same tactic. The problem here, however, is that Monaghan is using a 501(c)(3) tax exempt non-profit charity - Ave Maria University, Inc. - to bolster and directly benefit the start-up of his for-profit interests as Ave Maria Development LLC.

Consider, for example, the real estate transactions involving Monaghan's Ave Maria Town from just the past two weeks:
+ Mon. Dec. 3 = 0 sold
+ Tue. Dec. 4 = 0 sold
+ Wed. Dec. 5 = 4 sold - 1 to AMU Inc. & 1 to AMU's Jane & Nick Healy
+ Thu. Dec. 6 = 0 sold
+ Fri. Dec. 7 = 3 sold - all 3 to AMU Inc.
+ Mon. Dec. 10 = 6 sold - 4 to AMU Inc.
+ Tue. Dec. 11 = 3 sold; - 2 to AMU Inc.
+ Wed. Dec. 12 = 0 sold
+ Thu. Dec. 13 = 0 sold
+ Fri. Dec. 14 = 0 sold

In summary, of the 16 total units sold over the past two weeks in Monaghan's Ave Maria Town, 10 units - or 62% - were bought by Tom Monaghan himself as Chancellor of Ave Maria University Inc. One of the 16 total units was bought by AMU's lawyer-President.

Consider just the Middlebrooke Townhomes area of Monaghan's development. This is the cheap part of Ave Maria Town where "Sales are limited to buyers meeting certain maximum income qualifications". Ave Maria University Inc. owns 23 total units at an estimated cost of over $12 million (click "More..." below for details). To date, only 2 units in total have been sold to "real" people.

Ignore the fact that billionaire Tom Monaghan likely doesn't meet the "maximum income qualifications" to buy at Middlebrooke and, instead, consider the flow of money. Tom Monaghan plunks his private money into Ave Maria Foundation (AMF) to call his investments a lay ministry and protect his enormous wealth from taxes. He then gives that money back to himself to control as Chancellor/Chairman under another tax-exempt charity, Ave Maria University Inc. What does AMU Inc. do with the many millions of its charity dollars? - It recruits donors to collect even more money and then, among other things, buys non-institutional property from Monaghan's own for-profit Ave Maria Development.

Ave Maria Foundation --> Ave Maria University Inc. --> Ave Maria Development LLC

But, it is worse than that. Middlebrooke receives its utilities from Ave Maria Utilities. Who is part owner in the utility company? - Tom Monaghan! Where can a buyer go for a loan to purchase a Tom Monaghan home? - Tom Monaghan's local Shamrock Bank, of course. [follow the links located on this page for a summary] Tom Monaghan is using tax-exempt money under the auspices of a "university" to directly benefit his for-profit real estate ventures.

But, it is even worse than that. In 2007, Tom Monaghan used coercive control as primary benefactor and Board Chairman of Ave Maria School of Law - a Michigan non-profit - to force the institution to move to Ave Maria Town in Florida... an act that directly and substantially benefits Monaghan's Ave Maria Development LLC.

To fully realize what an egregious abuse this is, consider the following excerpts from the IRS on 501(c)(3) requirements:

IRS - Exemption Requirements

To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual.

Organizations described in section 501(c)(3) are commonly referred to as charitable organizations. Organizations described in section 501(c)(3), other than testing for public safety organizations, are eligible to receive tax-deductible contributions in accordance with Code section 170.

The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization's net earnings may inure to the benefit of any private shareholder or individual. If the organization engages in an excess benefit transaction with a person having substantial influence over the organization, an excise tax may be imposed on the person and any organization managers agreeing to the transaction.

Has Tom Monaghan been paying any excise tax on all this self-directed benefit?

After AMU Inc. pumps millions into Chairman Monaghan's non-institutional properties, it has the audacity to tell prospective donors that they should "pray, fast, and give alms" to this "charity" because it "builds the Church" and is "good for my soul".

Given the apparent drive to self-stimulate Town development, Tom Monaghan's hand in real estate might be the hairiest in south Florida.
More...

Tags: conflict-of-interest

The problems that put Oral Roberts University into recent headlines pale in comparison to Tom Monaghan's manipulation of Ave Maria enterprises for his personal, business, and banking interests. Monaghan's management is far more repugnant given its scale, financial scope, coercive nature, and depth of self-servitude.

A central charge against Robert Roberts, President of ORU, is misuse of university funds for personal interests. "University funds" are donations made to a non-profit institution by supporters; except for some guidelines, donors relinquish control of their money to a university. It becomes a university asset.

That is not how Tom Monaghan "gives". In fact, he does not "give" because he fails to relinquish even the smallest bit of control. Tax-exempt money from Monaghan's Ave Maria Foundation is circulated back into his direct control as Chairman/Chancellor at Ave Maria University (AMU) and Ave Maria School of Law (AMSL). He even shares the same CFO between the Foundation, AMU, AMSL, his Florida bank, and his multiple for-profit Florida businesses (via Nua Baile). It would be difficult to imagine a more egregious example of personal interest driving the misuse of a non-profit than for a person to shut-down a highly successful school under his chairmanship in one state (AMSL in Michigan) and uproot it to his for-profit real estate development in another state (south Florida's Ave Maria Town) - a move that directly benefits his other Florida businesses and his chairmanship in a pre-existing non-proft (Florida's AMU) - all while causing chaos for the once-successful institution and its alumni (Michigan's AMSL). AMSL's shutting-down in Michigan and starting-up in Florida may means millions for Monaghan, from condo sales, to land appreciation, to more utility hookups (Monaghan even has a stake in Ave Maria Utilities in Ave Maria Town). It makes the $800 bathtub that ORU put into Richard Robert's house look like peanuts.

But given the recent bubble burst in Florida real estate, Monaghan's land speculation might not make much in the end. The success of AMSL's move from Michigan to Florida is predicated on cash from home sales, not on the Law School's internal success. Chaining the school's future to unrelated businesses, a single decision maker, and unrestrained market forces is the game that this billionaire is playing. The volatility for AMSL is compounded because Monaghan has yet to show any hard guaranteed financial commitment for the school when it gets to Florida. Institutions of higher education should not be the toys of an uber-wealthy businessman with a high school diploma.

Some have argued that Monaghan should be allowed to "spend his money as he pleases". To do so is to disregard restrictions on non-profit and for-profit governance, and the fiduciary obligation to avoid conflicting interests. Tom Monaghan's giving back to himself (i.e. from AMF to AMSL), and his use of non-profits to directly benefit his for-profits, make him a rogue philanthropist of the highest order. He demonstrates nicely why a model founded in self-interest breeds abuse, unaccountability, dysfunction, and failure.

Commonalities Between Monaghan/Roberts:
+ At ORU, Richard Roberts is President; the school's founder, Oral Roberts, serves as Chancellor. Richard Roberts is also Chairman and CEO of Oral Roberts Ministries. Tom Monaghan is Chairman of the Ave Maria Foundation (AMF), an organization that is also run like a one-person "ministry". Monaghan also serves as founder/Chancellor of his Ave Maria University, and as founder/Chairman of Ave Maria School of Law. The Ave Maria presidents are lawyers under Monaghan's direct control; these president-lawyers assume an attorney-client relationship with the Chairman of the supporting "ministry" (Monaghan-AMF).

+ The recent suits against Roberts and Monaghan were each filed by 3 fired professors claiming whistleblower retaliation and breach of contract.

+ The Roberts and Monaghan suits each claimed that their respective institution's nonprofit status was violated. Roberts' case involves a political campaign while Monaghan's involves abusing a Michigan non-profit (i.e. Ave Maria School of Law) to benefit Monaghan's other Florida non-profits (i.e. Ave Maria University), for-profits (i.e. Nua Baile and Ave Maria Development), and personal interests (i.e. Monaghan's private land holdings). See also "Non-profit Watchdog Aims At Ave").

+ The Roberts suit involves accusations of inappropriate sexually-related activity on university grounds, using university resources. The Monaghan suit involves worse accusations: "In 2006, Plaintiff Safranek discovered even more disturbing activity. Based on discussions with law school employees and reports prepared by the Michigan State Police, he concluded that certain staff at Defendant Ave Maria School of Law used their positions and law school resources to obstruct a criminal investigation into a priest’s alleged involvement in sex offenses, including possession of child pornography. At the time of this involvement of law school staff and resources in assisting the accused priest, the matter had been under investigation by the Livingston County Prosecutor’s Office, the Michigan State Police, and/or the Michigan Attorney General’s Office. Defendant Dobranski became aware of the issue, but refused to alert any law enforcement agencies of the role Defendant Ave Maria School of Law had played in possibly obstructing an ongoing criminal investigation. Plaintiff Safranek filed a report with various law enforcement agencies regarding his knowledge of the efforts to obstruct the criminal investigation into the priest’s alleged involvement in sex offenses. The actions of Plaintiffs have led to ever-increasing retaliation, including disgusting and false smears upon Plaintiff Safranek’s character." See AveWatch's BoysCherries story - background, details, series

+ Both Roberts and Monaghan have an odd obsession with money and a personal Divine calling for their academic enterprises. In 1987, Oral Roberts claimed that God would kill him if he didn't raise $8 million for ORU. The recent complaint filed against Monaghan alleges that a justification for the uprooting of Michigan's Ave Maria School of Law to Monaghan's south Florida Ave Maria Town is that "the Virgin Mary, whom Catholics revere as the Mother of God, personally directed him to develop Ave Maria Town and Ave Maria University in Southwest Florida." See also "Give For the Good of Your Soul" and "Ave Maria Cult of Personality".

+ Both Roberts and Monaghan foster charismatic Christian experiences (public healings through channeling; being "slain in the spirit"; speaking in tongues; happy clappy music at liturgy/worship).

+ Despite the small size of their respective universities, both Roberts and Monaghan conduct school business using a private jet.

+ Both Roberts and Monaghan appear to lack financial accountability. The Roberts suit cites many accusations of university misappropriation for personal interest - i.e. "The Roberts home has been remodeled 11 times in the last 14 years. Each time, Mrs. Roberts demands more changes." Similarly, the former CFO of AMU said, under oath, "Mrs. Healy [wife of AMU President Nick Healy] had spent $90,000 using the College’s credit card in order to furnish the [President's] house without prior authorization or knowledge by me." This same CFO also brought to light a questionable payment of $240,000 made to AMU's then-Provost Fr. Joseph Fessio: "When I inquired as to why there was no liability on the financial statements for that, I was told [by Ave administrators] that the liability was, quote, off balance sheet." What else does Monaghan keep "off balance sheet"? More on the former CFO's testimony can be found here; there are stunning accusations of FERPA violations and preferential treatment given to a banker-friend to manage Ave Maria student loans. Many unconfirmed reports of wasteful spending have been sent to AveWatch, including multiple reports from former AMU employees that $30,000 was spent on a dog house for AMU's bulldog mascot.

+ Within their respective entrepreneurial fiefdoms, both Roberts and Monaghan appear to have excessive control over their institution's Board. In the suit, Roberts is quoted as follows concerning ORU's Board: "I have the deck stacked - I am elected to three year terms and if a Regent appears to give me trouble, I remove him. I stack the deck..." AveWatch readers will recall AMSL cofounder and former Board member Charles Rice's controversial removal (1,2,3), as well as Monaghan's other Board manipulations (1,2,3,4), including his use of a small "Executive Team" at the Ave Maria Foundation to make decisions for one school based on factors involving another school.

+ Monaghan and Roberts share tastes in architecture. ORU has its futuristic Prayer Tower while Monaghan has his giant Oratory shaped like a salmon steak. Neither structure is formally recognized as a Catholic Church. Monaghan wants to build the world's largest crucifix on his campus while Roberts has the largest (60-foot-tall) praying hands statue on his campus. The estimated value of ORU's buildings is over $250 million, the same amount that Monaghan claims to be investing into AMU.

Differences Between Monaghan/Roberts:
+ The ORU Board is not chaired by Roberts (Oral or Richard). In fact, the ORU Board Chairman is actively investigating matters using independent third parties - lawyers and accountants - to review and audit the allegations. President Richard Roberts was put on a leave of absence, with his duties given to a Board member. The ORU Chairman is also communicating directly to constituents and the local community, recognizing that "our precious students, faculty, and staff have all suffered". In contrast, Ave Maria Foundation, Law School, University, etc. are all Chaired by Monaghan. His Boards have ignored multiple faculty and alumni votes of no-confidence against the AMSL President. In fact, Ave Maria administrators have initiated a contemptuous campaign of disengagement and intimidation (1,2,3,4,5,6,7) against constituents.

+ ORU is showing transparency by releasing statements from all involved (including the allegations) and by hiring independent third party investigators. ORU's governing board has become "hands-on". Ave Maria, on the other hand, ignores calls for independent outside investigations, releases few details to the public, and lets Monaghan and his lawyer-president run unchecked. This includes the crushing of students and alumni who publicly ask for answers and state opposition to Monaghan's governance and treatment of employee. Requests from a former AMSL Board member to secure new independent investigators for the BoysCherries scandal were denied.

+ The ORU "Golden Eagle" mascot is related to the university's location/wildlife on the Oklahoma prairie. It makes sense. In contrast, AMU's mascot relates to, and makes sense to, just one person - Tom Monaghan. The Ave Maria Gyrenes (short for GI Marines) reflect Monaghan's three years of military service immediately after high school, 50 years ago (1956-1959). Of that service, Monaghan said: "When I was in the Marine Corps, I was aboard a ship in the Pacific doing something I've always done a lot of: day-dreaming. I was thinking about my future, the lifestyle I was going to have, all the cars and the beautiful home and the yachts and the airplanes. I wasn't sure it was going to happen, but it wasn't any fun doing this daydreaming if it wasn't possible. I saved half the money I made in the Marine Corps, but it went to a con artist with an oil-drilling scheme." (Fortune Small Business, September 2003)

+ It is only a matter of time until Monaghan, like Roberts before him, goes on the Larry King show to "set the record straight" (Richard Roberts interview here and here).

A former insider in the Roberts ministry recently said "What others may call extravagance, he (Richard Roberts) may not see as extravagant." (CNN, Oct. 10, 2007). How much more distorted is the perspective of a billionaire and his ministry?

Benjamin Franklin wrote "Sell not Virtue to purchase wealth, nor Liberty to purchase power." When will conservative Catholics stop giving their virtues as cheap barter to access Tom Monaghan's wealth? When will students and employees stop giving their liberties as cheap barter to access his idiosyncratic self-interested power? Whatever degree of disconnected megalomania and kookiness that conservative Catholic supporters of Tom Monaghan might see in Richard or Oral Roberts, they fail to see in their own man Monaghan - another entrepreneur of religion, but with significantly more money, more control, and less charisma.

Tags: accountability, conflict-of-interest, environment

It would be a daunting task to list the many and varied ways in which Tom Monaghan has, over the years, carefully populated his Ave Maria Boards with people beholden to him. Many conflicts of interest exist, but the task is made more difficult by high Board turnover, lack of transparency (i.e. access to Board meeting minutes), old web-based data, shifting corporate structure, and the frequent use of shell organizations that conceal relationships (i.e. "Ave Maria University", a Michigan corporation vs. "Ave Maria University, Inc" in Florida; "Nua Baile", the Michigan company that hides Monaghan ownership in Florida's "Ave Maria Development" partnership). As far back as 2000, Monaghan was warned by multiple people to stop surrounding himself with conflicted relationships. For example, consider the paid consultant report of Fr. James T. Burtchaell, an expert on Catholic higher education, given to Ave Maria senior staff (excerpts):

+ "The board of trustees has functioned under several handicaps. The most immediate one is a pervasive conflict of interest. The majority of its members are already so beholden to Mr. Monaghan through employment, benefaction, family, or business that they could not be reasonably expected or trusted to offer disinterested and independent advice and judgement on matters... Still further, it needs the presence of other independent and experienced executives and philanthropists who are prepared to join Mr. Monaghan as peers, not clients.."
+ "The chairman, Mr. Monaghan... has followed a well-practiced tradition of close, entrepreneurial management which obliterates the requisite separation between independent governance and professional administration. Besides the obvious impropriety in the governance of an institution of higher learning, this corporation sole will deny Ave Maria any access to further funding sources."

Is there a relationship between being a member of Tom Monaghan's Board and having accepted a benefit from Monaghan? Consider this very incomplete list based on Ave Maria Foundation (AMF) IRS 990s up to 2005:

+ Leonard Leo (photo left; AMSL Board), Executive Vice President, Federalist Society & Chair of "Catholic Outreach" at the Republican National Committee; AMF Contribution to Federalist Society = $100,000

+ Edward Cardinal Egan, Archbishop of New York (AMSL Board) & Fr. Benedict Groeschel, Director of Office for Spiritual Development, Archdiocese of New York (AMU Board); AMF Contribution to "Cardinal's Office" Archdiocese of New York = $125,000

+ Anthony C. Rea (AMU Board), Committee Chairman, Papal Foundation; AMF Contribution to Papal Foundation = $89,400

+ Adam Cardinal Maida (AMSL Board), Archbishop of Detroit & President of Pope John Paul II Cultural Center; AMF Contribution to John Paul II Cultural Center = $1,023,100

+ Fr. Michael Scanlon (AMSL Board), former President, Franciscan University of Steubenville; AMF Contribution to Franciscan University of Steubenville = $198,000

+ Ralph Martin (AMC Board), President, Renewal Ministries; AMF Contribution to Renewal Ministries = $14,000; [Update - An AW reader astutely noted that Martin did co-author "The Martin Report", which was critical of certain AMC administrative practices. Martin left the AMC Board shortly after that time.]

Other relationships to consider:
+ Steve Ray (photo left; AMC Board & AMU Board), Owner, Distinctive Maintenance (a building services/housekeeping company); Monaghan has served as a significant source of business/referrals for years, including Ave Maria contracts; website features testimony of Ave Maria School of Law stating "I have to compliment the floor crew for the outstanding job they did yesterday."; offers free $25 Domino's Pizza gift cards for projects exceeding $500; has also significantly benefited from book/cd/dvd sales through the Fessio/IgnatiusPress tie into Monaghan; Ray also runs "Defenders of the Faith" and uses Monaghan to promote his CDs (i.e. website post June 28, 2005 concerning one of Ray's CDs for sale: "Tom Monaghan said that it was one of the best talks he had ever heard"; Monaghan is featured on Ray's "Endorsements for Steve" page).

+ NAPCIS, National Association of Private Catholic and Independent Schools; AMF Contribution to NAPCIS = $174,931; Ave Maria has hosted the NAPCIS meetings for years, featuring Monaghan as speaker; Dan Guernsey of AMF was appointed to the NAPCIS Board; NAPCIS is now moving it headquarters from California to Monaghan's Ave Maria Florida development; the Ave Maria Grammar and Preparatory School run by Guernsey and funded by Monaghan is now applying to NAPCIS for accreditation

+ Deal Hudson (photo left), Director of The Morley Institute for Church & Culture, former publisher/editor of CRISIS Magazine, and former advisor to Republican National Committee on things Catholic; photo shows Monaghan (far left) receiving CRISIS Magazine award from Hudson (far right) in September 2000; in 2000 and 2001, Hudson's Morley Publishing Group accepted $15,000 from AMF; in 2003, while serving as Chairman of AALE (Ave Maria College and University's lone accrediting agency), Hudson entered into questionable dealings on accreditation with Monaghan's AMU lawyer-president Nick Healy; Hudson suggested that Ave Maria's Monaghan, Healy, and Fessio may be saints for canonization.

+ Fr. William Thomas, former pastor, Holy Spirit Catholic Church (Hamburg, MI); AMF Contribution to Holy Spirit Catholic Church in 2000 = $10,000; in 2001, AMF and Thomas attempted to convince parishioners to start a school designed and run by AMF; Thomas received computer-related help at the invitation of Ave Maria School of Law and Ave Maria College when Thomas was investigated for Internets-based child pornography; that help was not reported to police investigators (background here, series here)

+ Cardinal Newman Society; AMF Contribution to Cardinal Newman Society for the Preservation of Catholic Higher Education = $10,000; in an October 1, 2007 press release, AMU announced that it was chosen by the Society "as one of the best Catholic schools in America for undergraduate students" and stated that AMU students would be shown on the front cover photo of the Society's forthcoming guide to Catholic colleges; keep in mind that AMU just moved to untested unfinished facilities, is not fully unaccredited, is on shakey-ground to continue receiving federal funds, is on its 3rd application for regional accreditation, has suffered high faculty turnover and student transfers, and has been said to have a "climate of fear" by students and parents; the Society gave this honor to AMU despite its Provost stating less than one year ago that "problems" were near "crisis" level, and despite the recent statement by the Bishop of Venice that Ave Maria is not even a "Catholic university"!

Tags: conflict-of-interest, accountability

If any shred of respectability is left among the Ave Maria School of Law administrators and Board, this is going to hurt. The stellar list of Catholic legal scholars who run the respected blog "Mirror of Justice" issued a joint statement this evening on the issue of AMSL's governance and employee treatment:

Excerpts:
"The AMSL administration has violated several procedural norms of the secular academy. In this case, we see no tension between those norms and the norms of faith and reason that should guide a Catholic law school. Indeed, what has happened at AMSL appears to us to violate core Catholic norms."

"In suspending the one tenured and two untenured faculty members, AMSL has deprived them of the dignity of their work – their vocation – without adequate process. And, in suspending the tenured faculty member without pay, AMSL has failed to take into account the well-being of that faculty member’s family."

"By the failure to live their Christian commitment, the AMSL Dean and Board cause scandal in the legal, academic, and religious communities. This scandal is exacerbated by the fact that their actions are taken on behalf of a law school named for the Blessed Mother of Christ."

Signatories:
+ Robert John Araujo, S.J., Boston College Jesuit Community
+ Stephen M. Bainbridge, William D. Warren Professor of Law, UCLA School of Law
+ Thomas C. Berg, St. Ives Professor of Law, University of St. Thomas School of Law (Minnesota)
+ Patrick McKinley Brennan, John F. Scarpa Chair in Catholic Legal Studies, Villanova University School of Law
+ Richard W. Garnett, John Cardinal O’Hara, CSC Associate Professor of Law, Notre Dame Law School
+ Elizabeth R. Kirk, Associate Director, Notre Dame Center for Ethics & Culture (formerly a member of the Ave María Law School faculty)
+ Eduardo M. Peñalver, Associate Professor, Cornell University Law School
+ Michael J. Perry, Robert W. Woodruff Professor of Law, Emory University School of Law
+ Mark A. Sargent, Dean and Professor of Law, Villanova University School of Law
+ Michael A. Scaperlanda, Gene and Elaine Edwards Family Chair in Law, University of Oklahoma College of Law
+ Elizabeth R. Schiltz, Associate Professor of Law, University of St. Thomas School of Law (Minnesota)
+ Steven Shiffrin, Charles Frank Reavis, Sr. Professor of Law, Cornell University Law School
+ Gregory Sisk, Orestes A. Brownson Professor of Law, University of St. Thomas School of Law (Minnesota)
+ Susan J. Stabile, Robert and Marion Short Distinguished Chair in Law, University of St. Thomas School of Law (Minnesota)
+ Robert K. Vischer, Associate Professor of Law, University of St. Thomas School of Law (Minnesota)

This is a very important pivotal moment that shows the true unity that uniquely binds both Catholic scholars and the community of academic legal professionals. Let's see if the as-of-yet-silent "Fellowship of Catholic Scholars" shows a fraction of the character and authentic fellowship on display at Mirror of Justice.

How many good people - from students, to employees, to estranged colleagues, to well-respected professionals in the field - how many need to shout "Enough!" before Tom Monaghan puts his pride aside and recognizes that he is destroying the very thing that he claims to be upholding?

Mirror of Justice - full text | Fumare - commentary

UPDATE, 9/13/2007 - Frontpage headlines in today's issue of The Wanderer (subscription required): "At Ave Maria Law School.. Professor 'Terminated' For 'Touching' Secretary". It discusses the railroading of AMSL co-founder and tenured Professor Stephen Safranek [1,2], and quotes heavily from Fumare's comments [1,2].

UPDATE, 9/14/2007 - Media coverage about the Mirror of Justice statement is spreading: Chronicle of Higher Education News Blog, Naples Daily News (syndicated to Bonita News and Marco News), Catholic News Agency, ABA Journal [1,2], Brian Leiter's Law School Reports, Professor Bainbridge, Univ. of Cincinnati's TaxProf, Professor Greg Reynolds' Instapundit, Mark Shea, PrawfsBlawg,
5pm - add Commweal Magazine blog, Blast Furnace Canada blog

Tags: dean-amok, conflict-of-interest, accountability

"Assimilate." The Oxford American Dictionary definition is "to absorb or integrate and use for one's own benefit".

Tom Monaghan has done it quite well, laying claim to the careers, sacrifice, and dedicated work of many Catholic educators, staff, and students.

Despite the rising mass of individuals who are now making known their opposition to Monaghan's conflict-laden approach to higher education governance (1,2,3,4,5,6,7...), relative silence is heard in public from conservative Catholic academic circles.

Well, they'd better wake-up before resistance is futile. New evidence shows that Monaghan's tentacles of influence are reaching beyond his Ave Maria "brand". For an examination of that influence, click "More..." below.

More...

Tags: accreditation, conflict-of-interest

That is the opinion of many individuals in the Ave Maria School of Law community.

Dean Bernard Dobranski shirks his fiduciary duty to attend AMSL Alumni Association Board meetings and answer the questions of these elected stakeholders; yet, he spends 2 hours on the phone doing an interview with the blog "Above the Law: A Legal Tabloid". PART 1 | PART 2

In Part 2 of that interview, in response to the question of whether AMSL's governance is overly influenced by Tom Monaghan's financial support, Dobranski said "If you want to get call it meddling, you can call it meddling, but I think it's proper for the Chairman of our Board, who has been our chief financial benefactor, saying I think our law school would thrive and do better down there [in Naples]."

Meddling? How about "gross conflict of interest"? Dobranski cannot be serious when he talks of Chairman Monaghan's "I think our law school would thrive and do better" as if it were merely a "suggestion" to the Board. Tom Monaghan is not only AMSL Board Chairman and primary donor, but also a speculative Florida real estate developer. The facts are that:

• Monaghan has personal land holdings, for-profit businesses (including the local utility company), and a bank as part of Ave Maria Town's development
• Monaghan had an ultimatum that AMSL move to his Florida development or have the school's money yanked

This is the epitome of coercive conflict of interest, where a non-profit entity is manipulated to bolster the Chairman's other entities.

In the same interview Dobranski said "I'm not ashamed of getting as much money as I can, including from Tom's foundation, to help defray the financial burdens for our students". I bet. But why stop at scholarships. With that thinking, the Dean should get as much money as he can from Tom for faculty salaries, and books, and nice cherry paneling. Those are all "good" too, just like scholarships. But a simply understanding of utilitarianism would show that the goodness of the end does not determine the goodness (or sensibility) of the means. If the Dean has neither the will, the discipline, nor the plain sight to recognize the undue influence that financial dependency on one donor brings to a non-profit academic enterprise, he should step down for putting Monaghan above mission.

The good people at Holy Spirit Catholic Church had the foresight to see that Tom Monaghan "gives" to "get" control; they also had the discipline to reject such a "gift". Dobranski is the only law school dean in the country who is bound to report regularly to one donor, at the donor's office. That bind might bring tuition down via scholarships, but it also brings down autonomy and institutional integrity. It is interesting how those who sell their autonomy to Tom Monaghan demand that everyone else in the organization do the same.

AveWatch issues a public invitation to the Dean: Write a brief piece for AW in which you formally recognize...

• that AMSL Board Chairman Monaghan's for-profit ventures, personal land holdings, and Florida non-profit investment (AMU) will directly benefit from AMSL's move to the Chairman's real estate development;
• that AMSL Board Chairman Monaghan intended to pull his financial support from AMSL unless it agreed to move to his real estate development;
  

... then explain how this situation is not a coercive conflict-of-interest.

It would be even better if Dobranski first explained this to his faculty, students, and alumni instead of AveWatch.

Tags: conflict-of-interest, accountability

AveWatch was the first to report back in May that Tom Monaghan's Florida bank project changed its application name to "Shamrock Bank of Florida". Today, Naples Daily News reports on that change, and the opening of a physical location for the bank in Naples.

The article mentions: "The new bank’s chairman is CPA Paul R. Roney, the only director who does not live in Naples." Naples Daily News failed to state why he isn't in Naples. Chairman Roney lives in Michigan where he works as CFO of Tom Monaghan's Ave Maria Foundation. NDN also failed to state that Roney is the CFO for Ave Maria University, Ave Maria School of Law, and is Tom Monaghan's business partner in Nua Baile, the company that partnered with Barron Collier Company to make "Ave Maria Development" (AMD) - the developer of Ave Maria Town and a number of businesses orbiting the Town's creation, including Ave Maria Utilities.

In addition to Roney, Tom Monaghan and Timothy Kaiser are also on Shamrock's Board. All three happen to serve together on the board of another for-profit venture, "Ave Maria Financial Corporation".

Is this the vision?: A faculty member receives his paycheck from Tom Monaghan as AMU Board Trustee and Paul Roney as AMU CFO. The professor, an at-will employee, got his paycheck because he followed policies approved by Tom Monaghan (Trustee) and also implemented by Tom Monaghan, who also serves as AMU Chancellor. The professor goes home to his house purchased from Pulte / Ave Maria Development, of which Tom Monaghan is a part owner in AMD. Part of the sale of his house went to benefit AMU via the agreement that exists between AMD and AMU. The professor turns-on the light at his desk, powered by Ave Maria Utilities, of which Tom Monaghan is a part owner through AMD's management of Ave Maria Utilities. He signs his mortgage payment to Shamrock Bank, managed by Paul Roney (bank chairman) and Tom Monaghan (bank trustee). He then writes the check for his children to attend Ave Maria Grammar and Prep School, run by Ave Maria Foundation/College employee Dan Guernsey, and whose Board includes AMU's Fr. Fessio. He also writes a donation to the place where he attends daily mass, Ave Maria Oratory, a place of worship that is "located in the boundaries of the Diocese of Venice, and is not related to the Diocese of Venice" (according to the Bishop, NDN, 3/22/07).

Conflict of interest: a situation when a professional in a position of trust has competing personal or professional interests; when duty to one interest influences decisions in another interest; a conflict of interest exists even if no unethical or improper act results from it.

Naples Daily News: full text
AveWatch: background on Shamrock Bank

Tags: conflict-of-interest

The Naples Daily News ran a piece on Monday titled "Ave Maria remains focused on gaining accreditation." It took an entire article to simply say that AMU applied, again, for accreditation from SACS (The Southern Association of Colleges and Schools). By AveWatch's count, this is their third application request to SACS since 2003; the first two applications were said to have been pulled after submission (in 2003 and earlier this year). It makes one wonder if this third attempt will meet the same fate.

There are at least two things that make this particular 'story' on accreditation curious. Other watchdog websites, besides AW, have also connected accreditation, board structure, and conflicts-of-interest for both AMU and Ave Maria School of Law.More...

Tags: conflict-of-interest, accreditation

Word is spreading. The website "Where Most Needed: The Charity Industry Observer" recently turned its watchful eye to Tom Monaghan's Ave Maria Foundation. The site is run by a former executive director for the National Council of Nonprofit Associations. Excerpts:

We have noted that short board tenure is a factor leading to the unaccountability of charity organizations, especially if other key players have an indefinite term.

The Ave Maria Foundation (EIN 38-2514364 Form 990) as of the end of 2005 had assets of "only" $121 million, but there's more where that came from. The foundation's report indicates that it made a $20 million payment in start up costs for the Florida location of Ave Maria University and has pledged $114,750,000 in future support.

To me it is telling that the foundation [IRS tax] return was self prepared by the treasurer of the foundation, which suggests that the organization is unaudited, despite its size.

"Faculty at Ave Maria Law School Fights Founder's Flighty Vision" - here

[Side note - The reorganization of Michigan's nonprofit structure may be of interest to some.]

Tags: accountability, conflict-of-interest

Forbes.com; March 3, 2006:

"There's a lot of misconceptions about this. I don't really have a vision for the town. I have a vision for the university," Monaghan said Friday on U.S. television.

For a man with no vision for Ave Maria Town, Tom Monaghan is engaged in a visionary series of for-profit ventures in business, banking, and personally-owned land that will all benefit from the Town's construction and operation.

Tags: conflict-of-interest

If a new town was being built from scratch near you, what for-profit business ventures would you like to own/manage? Maybe a bank for "small businesses and individual real estate investors"? [Yesterday, AveWatch reported on the new bank run by Tom Monaghan and Paul Roney.] How about land sales? Utilities? Road & construction materials? Housing? Tom Monaghan & his CFO Paul Roney have all of those covered in south Florida with their for-profit businesses.

Wasn't this supposed to be about starting a Catholic university?More...

Tags: conflict-of-interest

Over one year ago, Naples News reported that Tom Monaghan was interested in creating his own bank in the Naples area. Since then, the project has proceeded silently... until now.

Late last week, the Florida Office of Financial Regulation confirmed for AveWatch that a denovo bank application for "Shamrock Bank of Florida" was accepted three weeks ago bearing the names of Tom Monaghan and his CFO for all things Ave Maria, Paul Roney. In short order, the Florida Department of State received and filed a For-Profit Corporation application for Monaghan's bank.

Monaghan, Roney, and another Shamrock bank Board member, Timothy N. Kaiser, serve together on the board of yet another Florida For-Profit, "Ave Maria Financial Corporation", formed in November 2005.

It was reported last year that the bank would be called "Gulf Coast Bank". Missing from the current list of officers for Shamrock is the former director of the Bank of Naples, Robert Carney Jr., who was slated to be Gulf Coast's director; Carney, however, still serves as President of Ave Maria Financial Corporation. It was also reported in 2006 that Paul Roney would be Shamrock bank's chairman; in that report, Naples News neglected to mention that Roney was also the CFO for Monaghan's Ave Maria Foundation, Ave Maria University, Ave Maria College, and Ave Maria School of Law. It is unclear whether Roney is designated as Shamrock's chairman.

The stated target of the bank is "small businesses and individual real estate investors".

It is no wonder that, just yesterday, Senator Charles Grassley, a long-time advocate of increased financial accountability in the non-profit sector, initiated a strong push to increase transparency in how non-profits manage and report endowments, joint ventures, governance, and related organizations.

For additional details on Shamrock Bank, click below.More...

Tags: conflict-of-interest

AveWatch already reported on AALE's six year history of non-compliance with the standards of accountability put forth by the Department of Education (DOE).

AveWatch now reveals what AALE and AMU neglected to tell the public for the past two months -

AMU's sole accreditor, AALE, had its status as a nationally recognized accrediting agency put on hold ("deferred"), and its scope of abilities limited, until further review by the Department of Education in December 2007. By order of the Secretary of the DOE, new schools that are awarded accreditation by AALE will NOT be eligible for Title IV funding (i.e. federal student loans) until AALE is reviewed for compliance by the DOE.

DOE Secretary Spellings in a March 2007 letter to AALE:
".. I wish to remind you that if the AALE does not [come into full compliance], the Department may be compelled to take action to further limit, suspend, or terminate the AALE’s recognition at or before the December 2007 meeting of the Committee."

The websites of AALE and AMU do not mention any of this, nor have any other public statements on this topic been made by either organization. Are AALE's currently accredited schools even aware of this action by the DOE?

For more details, including the full text of the Secretary's letter, click below.More...

Tags: accreditation, conflict-of-interest

Deal Hudson is the former go-to man on all things Catholic for the Republican National Committee - "former" because of a sex scandal with one of his college freshman students [1, 2, 3]. On March 23, 2007, he released a statement on the firing of AMU Provost Fr. Joseph Fessio. Excerpt:

A friend asked me yesterday "why do conservative Catholics beat each other up so much?". Good question. One reason that I have observed is their parochialism, in the generic sense, that is. They recognize only the validity of their familiar, local form of belief, worship, and spirituality. They need to keep in mind that the Church has a legitimate diversity, as illustrated by the lives of the saints themselves. Fr. Fessio may be one of those saints, for all we know. Monaghan or Healy another.

Is Hudson suggesting that belief-based parochialism on the part of the aforementioned saints in potentia is the basis for Fessio's firing? This seems unlikely given the co-existence of both 'traditional' and more 'charismatic' conservative elements on the Michigan Ave Maria campuses (AMSL, AMC, and St. Mary's). One should also consider the opportunism of these administrators, including the chance to "use" each other to enhance their own personal and collective influence over orthodoxy's rule-or-ruin. Finally, this observer finds no evidence in any available Ave Maria documents to corroborate belief-based tension on any scale, much less that of a magnitude to trigger implosion.

To understand the parochialism that does appear to be at work, one must go beyond spiritual narrowness and consider managerial and cultural narrowness. Unfettered access to extreme wealth creates a dulling insulation that constricts the ability to recognize other valid assessments of situations. When reading Nick Healy's explanations to Tom Monaghan on the basis for strife at Ave Maria, this becomes apparent. Healy's speculative focus on "what is motivating" critics belies his own parochialism - and it is anything but saintly. There may be no better example of this than Healy's analysis of "Thoughts on AMC", a document by former AMC faculty member Janet Smith.More...

Tags: conflict-of-interest, employee-treatment, accountability

AveWatch is happy to be partnering with a Catholic university as an advertising partner. The university is looking to generate increased interest in the university, particularly in the area of real estate around the univeristy.

We are currently in a two-week trial period of advertising. Depending on results, the contract could be expanded dramatically. The results that need to be seen are primarily identified as hits on the university's website. Please take a few minutes on many occasions this week to go to their website and click around.

Please also let your friends and family know how important this is to AveWatch and encourage them to visit the web-site this week as well, and pass on this message.

Please click below for details on the project and to see how much AW stands to make -

UPDATE, 3/25/07 - Comments to AveWatch show that visitors are not reading the full article. This is a parody of an actual technique employed by Monaghan to artificially bump the number of people that appear interested in his South Florida real estate development, Ave Maria Town. Click below for the scoop:More...

Tags: conflict-of-interest

Pope Pius XI's exhortation for truth-seekers was "Go to Thomas" (Aquinas). So too, focused insight on things Ave can be found by going to the memos of Charles E. Rice, co-founder & former Board member of Ave Maria School of Law, and Professor Emeritus of Law at The University of Notre Dame. His memo to AMSL Dean Dobranski and Tom Monaghan from March 28, 2006 is deserving of a complete read by the public (click below). In the letter, Rice tackles head-on two very troublesome issues that are not well understood by the public:

1) .. the questionable basis of Ave Maria Town's "catholicity", and the representation of such characteristics to the public - excerpt:

However, these and other similar Monaghan-Marinelli statements raise an overall inference that there never was an intention to institute a regime in AMT comparable to what Tom described in his Boston address. Those statements can be reasonably understood to create the impression that anyone who said that the founding intent resembled in any way the content of Tom's Boston statement was uttering a falsehood.

2) .. the terms under which Ave Maria University could be acquired by Barron Collier Companies (BCC) in Monaghan's current 50/50 real estate development deal with them - excerpt from draft of AMU-BCC agreement:

If the University intentionally ceases to be a Catholic university, or intentionally or materially deviates from its stated plan to become a broad-based high quality institution for higher-learning and does not correct these defaults after due warning from Collier, then.. Collier shall have the option to... acquire the University's 50% interest in undeveloped lands at the original cost to the University, and... acquire the University's remaining interest in the Partnership at the then current market value. (edited)
More...

Tags: accountability, conflict-of-interest

According to the New York Times (July 30, 2006), long-time Ave Maria Board-member favorite Bowie Kuhn said "This is not a bunch of trained dogs.." in defending against Ave boards that appear to act as rubber stamps for Tom Monaghan. Other Board members have offered similar defenses over the years in popular media.

But evidence to the contrary exists within the walls of Ave Maria itself.More...

Tags: conflict-of-interest, accountability

Note the highlighted plot in the northwest corner of Ave Maria Town, immediately off of Ave Maria Blvd.More...

Tags: conflict-of-interest, accountability

The most dangerous place in the world for a journalist to investigate the administration of Tom Monaghan is San Marcos, Carazo, Nicaragua.

With issues on his Nicaraguan campus like...
- financial irregularities
- an employee who refers to his secretary as 'whore' (Spanish equivalent)
- a disbarred lawyer who teaches business law and offers legal advice
- an employee whose house was surrounded by gun-drawn police
- secretly-taped conversations
- a faculty member's dog poisoned by a chemical uncommon in Nicaragua

... one is left asking "How deep does this rabbit hole go?"More...

Tags: conflict-of-interest

Dr. F. Russell Hittinger (University of Tulsa) and his brother Dr. John P. Hittinger (University of St. Thomas, Houston) share more than just the same last name. As leading scholars within the Catholic academic community, they also share the respect and admiration of many.

What they do not appear to share, however, is a similar view of Tom Monaghan and Ave Maria University. Such disagreement is characteristic of the growing polarization that AMU's Monaghan, Nick Healy, and Fr. Fessio are thrusting upon American orthodox Catholics.

UPDATE, 3/25/07 - John Hittinger responds!More...

Tags: accountability, conflict-of-interest

Any doubt as to whether Ave Maria School of Law is run by Tom Monaghan's sole-proprietor "do-then-ask" model can be put to rest. The timeline leading-up to Tuesday's press conference in Naples reveals much.

Feb. 17 - Saturday - Board holds emergency meeting; vote taken after supposedly "fair" and "candid discussion", including option to not close
Feb. 18 - Sunday (Lord's Day)
Feb. 19 - Monday (President's Day)
Feb. 20 - Tuesday - morning announcement in Ann Arbor; statements released; afternoon press conference in Naples

Tuesday was incredibly well orchestrated despite not having any business days between the vote and the media blitz. Monaghan employees and consultants were flown-in from around the country. Even the Alumni Association President, a Detroit lawyer who surely had to rearrange his schedule, appeared in Ann Arbor and Florida. A prepared statement from the Governor of Florida was read. Representatives from Florida were flown to Ann Arbor to sell Ave Maria Town. To organize for Tuesday morning's flurry, it must have taken weeks of coordination prior to the Board's Saturday meeting. You don't ask a Governor for a statement unless it is in the bag. The announcement was even timed with a 48-hour sale of homes in the Ave Maria Town development! So much for the Board of Governor's thoughtful prudent deliberation as a group.

As Fr. Richard John Neuhaus, a member of AMU's Board of Regents, recently said "I think Tom is inclined to say, 'This is my business. It's called Ave Maria University, and they're working for me. And that has some very powerful built-in tensions." (New Yorker Magazine, Feb. 2007)

UPDATE, 2/22/07 - Accreditat