Bethune-Cookman and the Survival of the HBCU, Part 2: An Inside Job<em></em>

Bethune-Cookman and the Survival of the HBCU, Part 2: An Inside Job

Editor’s note: Read Part 1, “Critical Condition: Bethune-Cookman and the Survival of the HBCU.”

In Greek mythology, Cassandra was given the ability to see the future but was cursed with the fact that no one would believe her. According to the legend, when the people of Troy were given a large wooden horse, Cassandra tried to warn the Trojans that it was a trick. She knew it would bring destruction to her city, but no one listened to her.

Bethune-Cookman is its own Trojan horse.

“Almost every wound Bethune-Cookman has suffered is self-inflicted,” notes Belvin Perry, Bethune-Cookman’s current Board of Trustees chairperson.

Time and time again, B-CU’s leadership would ignore warnings of treachery that was readily apparent to everyone else. Instead of heeding the warnings, the school would open the gates and invite the enemy in, only to fall prey to nefarious forces looking to enrich or empower themselves at Bethune-Cookman’s expense. As Robert Delancy, president of B-CU’s National Alumni Association (who just happens to be a former IRS investigator), told The Root:

“If Bethune-Cookman dies, it’s not because someone killed Bethune-Cookman, it’s because Bethune-Cookman committed suicide.”

Act III: Second Verse, Same as the First

After members of the Bethune-Cookman family realized the details of the multimillion-dollar dormitory agreement, heads exploded while others rolled. B-CU eventually filed suit against the Jackson Triad, Darnell Dailey and the companies involved in the dorm deal. Dailey and his company, Quantum Equity, countersued Bethune-Cookman for the money it says the school owes Quantum. Dailey’s attorney, Amy K. Rotenberg, issued a statement to the News-Journal denying many of the allegations and said Dailey might sue B-CU for “frivolously and wantonly dragging him and Quantum into the lawsuit.”

The $306 million figure stems from the dorm deal that was configured this way:

  • Bethune-Cookman would install Dailey’s company, TG Quantum, as the owner of the B-CU land by “selling” it to Dailey for $1.
  • TGQ would get the financing to build a dorm.
  • After TGQ built the dorm, they would rent the dorm back to B-CU for gradually increasing monthly rental payments over a period of 40 years.
  • At the end of the 40-year lease, TGQ would sell the property back to B-CU.
  • The total of the payments over the duration of the lease would equal $306,070,922.

“Repeated statements in the media that the dorm project is costing B-CU $306M are grossly misleading,” the TGQ statement (pdf) read. “Just like a home purchased on a 30-year mortgage, at the end of the payment term, the total cost of the home is well above the stated purchase price. Moreover, the net ‘cost’ of the sublease to B-CU is zero because the room revenue more than covers the rent.”

The statement failed to mention that the agreement between Quantum and B-CU was not a mortgage, in that B-CU won’t have ownership equity in the building for 40 years—when the lease is paid in full.

“Most of Bethune-Cookman’s problems stem from the board not doing what it was supposed to do in terms of vetting,” explained one current Bethune-Cookman trustee. “How in the world—if anybody had vetted Jackson—would anybody have brought him in as president? What board would enter this kind of deal without looking at the amortization schedule? If Quantum was such a reliable company, why did they need someone to front the money for the dorm deal?”

It is still unclear whether university President Edison O. Jackson was swindled or if he was a willing participant in a long con that bamboozled the beloved school out of millions of dollars. But after students, alumni, faculty and staff realized that the university was on the hook for more than $300 million, Jackson stepped down from his position as president of B-CU in July 2017. Jackson, the recently disbanded members of the Jackson Triad, and everyone who had anything to do with the more than quarter-billion dollar debt for an overpriced dormitory that B-CU couldn’t afford was run out of town.

Well, not everyone.

The board of trustees remained intact and after Jackson’s “retirement,” Bethune-Cookman’s board turned to Hubert Grimes, a retired judge that had been serving as the school’s legal counsel, to become the interim president. He was charged with, among other things, restoring “the fiscal integrity of the institution ... and enhancing governance, and accountability,” his university bio reads. However, Grimes was not without fault.

Calling Grimes a “good man,” and a mentor, alumnus Terrance Cribbs-Lorrant added: “Although Judge Grimes did not serve as legal counsel during the deplorable dorm deal, he was general counsel for the university while Dr. Jackson was still present and while the demands for the audit and transparency were being requested. He was also instrumental in one of the biggest national news circuses around the 2016 graduation and Secretary of Education Betsy DeVos speaking.”

And although Grimes repeatedly reminds his detractors that he wasn’t the general counsel during the dorm deal, former trustee Johnny McCray calls it a “half-truth,” explaining that Judge Grimes was hired by Jackson to represent the Jackson Triad’s position during the dorm deal’s negotiations.

Yes, you heard that right. The lawyer who was working for the Jackson Triad at the time of the financial and legal dumpster fire of a dorm deal was now supposed to extinguish the fire.

Within a year, Grimes would face the same questions as his predecessor, including accusations of disappearing money, knowledge of the dorm deal and fraud.

For years, Bethune-Cookman alumni, trustees and students have begged the board of trustees to conduct a forensic audit, a measure that was repeatedly struck down by the Jackson administration and the board of trustees. In 2015, as soon as Jackson announced the dorm deal, board member Johnny McCray sent board chairman Joe Petrock two letters requesting a forensic audit.

He lost his appeal by a trustee vote of 33-1 and was subsequently suspended from the board.

Finally, in August 2018 with B-CU facing the loss of its accreditation, Grimes commissioned Eric Orr to conduct a forensic accounting review of suspected financial fraud at Bethune-Cookman that primarily covered 2017 and 2018; however, the audit said there was “information to support a pattern of behavior derived from 2014 forward.” The review, which was only seen by the board members, implicated college officials in an “elaborate scheme” that concealed Bethune-Cookman’s dire financial straits, refused to pay vendors, manipulated bank accounts and falsified financial records.

According to a not-for-public-consumption summary of the Orr report (pdf) obtained by The Root, in 2017, Angela Poole, the school’s chief financial officer under Jackson, hired and trained Andrea Hampton for a new position as the school’s new accounts payable clerk.

The summary, prepared by alumni board members, alleges that Poole, Hampton, and others manipulated financial records to conceal the school’s negative balances and “directed the withdrawal” of at least $20 million from the college’s bank accounts. After Orr reviewed emails, financial statements and conducted interviews, the report says Orr found that the group hid deficits through a complicated process called “check-staging”—floating checks between accounts to make it seem as if the school had more money than it really did. And, according to the audit, this was all done without Grimes’ knowledge or approval.

“... President Grimes was not aware of the financial state of B-CU because he was presented with incorrect reports,” the summary reads. “When he [Grimes] questioned Poole, she never provided a full accounting of what was owed and to who.”

Along with the Southern Association of Colleges and Schools Commission on Colleges (SACSCOC) announcement of the accreditation probation, the audit summary sparked an uproar. Students protested; alumni demanded answers and the faculty asked a million questions. How could a school with record enrollment be going broke? How could the man who was supposed to fix this travesty not even know what was going on?

Neither Poole nor Hampton was ever implicated or formally accused of any financial impropriety. Poole eventually left B-CU when her contract ended and the Orr report was never made public, although, in a press conference, Grimes admitted to its existence and that it revealed “malfeasances.”

When pointing fingers, no one blamed one single source. In every case, there was always an unspoken figure whose name seemed as off limits as Lord Voldemort or Candyman. Some blamed Grimes, the lack of accountability and “you-know-who.” Others placed responsibility for the school’s woes at the feet of the former president, the Jackson Triad and “that lady.” Her name was whispered as if the people were afraid she might hear them. So who was this omnipotent being whom everyone seemed to blame for the financial trouble at B-CU?

As we have seen, college presidents come and go. Students are a temporary commodity. Faculty members often leave. But one name rang throughout the kingdom of Bethune-Cookman as if she were the wizard ruling over her own, personal land of Oz:

The great and powerful Michelle Carter-Scott.

Act IV: She Who Shall Not Be Named

No one doubts that Michelle Carter-Scott loved Bethune-Cookman University.

She graduated from B-CU with a bachelor’s in business education. While she was a student, Carter-Scott won the title of Ms. Bethune-Cookman University. The Embassy of Hope, the charity that she runs in conjunction with her son, NBA legend Vince Carter, pledged to spend hundreds of thousands of dollars in scholarships to send needy students to Bethune-Cookman.

No one doubted that Michelle Carter-Scott controlled Bethune-Cookman University.

When Edison Jackson took the reins at B-CU, one of his first acts as president was to honor Carter-Scott with an honorary doctorate (pdf), a favor that she returned by honoring Jackson at her charity’s gala the next year. That same year, Carter-Scott and the Embassy of Hope announced that she would give 10 scholarships to Volusia County, Fla., students who wanted to attend her alma mater.

After serving years as a trustee, Carter-Scott’s philanthropy is part of the reason she was appointed as chairwoman of the college’s board of trustees in January 2018, even though alumni thought she should be investigated by the FBI and another responded to her chairmanship by saying: “We do not have a new deck of cards. It is the same deck that has been reshuffled!”

One of Carter-Scott’s first moves as chairwoman was to pass a resolution giving the board’s executive committee, filled with her allies, authority over almost every major financial decision at the school. It seemed smart. Why wouldn’t B-CU want to limit the chances of another financial scandal after two presidents had been duped out of dollars?

Well, maybe because Michelle Carter-Scott has herself been implicated in some of the financial malfeasances at the university.

An entire section of the aforementioned forensic financial review is dedicated exclusively to the Embassy of Hope. According to the report, Carter-Scott’s eagerness to send students to B-CU was not backed by a desire to live up to her financial obligations. The summary states that the Embassy of Hope never paid B-CU for the scholarships even though the students attended the college. The review notes that, as of 2017, B-CU had absorbed $259,689 in scholarship funds that were supposed to be paid by the Embassy of Hope. And by 2021, the school will have absorbed $843,682 in unpaid scholarships from Carter-Scott’s charity, according to the forensic review’s summary.

The Embassy of Hope’s website is filled with pictures of students who were awarded scholarships and often mentions its “Believing in Your Dreams” Scholarship Fund. And when The Root examined five years of tax returns filed by the Embassy of Hope and signed by Carter-Scott, the returns specifically stated:


Yet, according to the internal audit and a newsletter from Volusia County Schools, Edison O. Jackson and Carter-Scott said there would be 10 scholarships.

Illustration for article titled Bethune-Cookman and the Survival of the HBCU, Part 2: An Inside Job
Screenshot: Volusia County Schools

In an email to The Root, Carter-Scott and the Embassy of Hope noted that the organization was only responsible for “executing the scholarship application process, reviewing and vetting the applications, selecting the scholarship recipients, and attending the high school program to present the scholarship,” despite the IRS forms’ assertion that the charity “specifically provided” the scholarships.

“Bethune-Cookman University has always been responsible for funding the Community Scholars Scholarship,” the Embassy of Hope statement continued. “It is important to note that each academic year (since 2013), the Embassy of Hope Foundation has sought and has received permission from each sitting President of Bethune-Cookman University to continue with this scholarship program.”

But trustee chairman Belvin Perry, who spoke with The Root on Monday after reading the first part of the series, says that board members had no idea that the Embassy of Hope scholarships were supposed to be funded by the university.

“When it was brought to board members’ attention, there was a violent reaction by the vast majority of board members,” said Perry.

Still, no one would utter Michelle Carter-Scott’s name. Student groups and others grumbled, without mentioning Carter-Scott specifically. President Grimes publicly criticized her but was powerless to remove her from her throne, surrounded by her powerful clique of cotrustees. Trustees who dared criticize Carter-Scott were removed from the board. Perry, a retired judge, even accused the board of orchestrating an attempted coup to oust Grimes and replace him with Carter-Scott’s handpicked lieutenant. Perry was a Grimes supporter and had previously called for a halt to a presidential search. Of course, Carter-Scott rejected that request out of hand.

Then, National Alumni Association President Robert Delancy spoke Michelle Carter-Scott’s name.

Robert Delancy is unapologetically apologetic.

He apologizes for loving Bethune-Cookman unapologetically. He will ask you to forgive his career as an IRS investigator when he explains the details of financial audits. Delancy will even apologize for cussing as soon as you bring up the name Michelle Carter-Scott.

“My only goal is to save B-CU,” Delancy told The Root. “And the only way B-CU will survive is to have all hands on deck. But only the hands that want to help.”

At many colleges—especially HBCUs—a certain number of seats on the board of trustees are reserved for special positions. In many cases, positions like the student government president, president of the Faculty Senate and president of the National Alumni Association automatically assume positions on the trustee board. At B-CU, the rule was not written into the school’s charter, but the National Alumni Association’s chief traditionally served on the board.

In late 2017, Delancy, who was ostracized from the decision-making at B-CU despite his position as the leader of the largest group of supporters in the school’s community of stakeholders, filed a lawsuit against B-CU’s board of trustees claiming he was unreasonably denied his seat as a trustee. This was before the probation or the audit. A few months later, when he found out about the disappearing money, he immediately sent a letter addressed to Carter-Scott (pdf), demanding her resignation as well as her allies, writing:

The alumni of Bethune-Cookman University, the faculty, the staff, Mid-Town citizens, local ministers, and other B-CU supporters stand united in demanding that you, Joe Petrock, Kent Sharples, and other members of the Board of Trustees step down and allow the board to be reconfigured with new members.

Our demand is based upon three years of actions/inactions by the Board of Trustees. It is well documented that you and the Board of Trustees are solely responsible for Bethune-Cookman University’s current financial and academic crisis. We have students without scholarships. We have students experiencing bad customer service, yet Boards Chair Carter-Scott is expending time and energy trying to terminate employees. The Board’s actions clearly demonstrate a woeful lack of leadership skills...

We are very clear in our position that, the Bethune -Cookman University Board of Trustees have no credibility and have lost the confidence of alumni, parents, students, philanthropists, financial institutions, and Corporate America. Have common decency and do the right thing: RESIGN IMMEDIATELY!

Please know, we will not stand idly and allow you to bring further irreparable harm to Bethune-Cookman University!

He called her name.

It was as if a magic spell was broken.

Four days after Delancy sent his letter, Carter-Scott’s allies began resigning from the board. Within two weeks, federal state and local officials began investigating the dorm deal and the other financial irregularities. A month later, in October 2018, retired Judge Belvin Perry threatened to file a lawsuit against Michelle Carter-Scott for changing the bylaws that essentially made her the school’s “shadow president.” Then the students called her by name. Then the faculty said it. By November 2018, almost every group of B-CU stakeholders had called for Michelle Carter-Scott’s resignation.

And just like that, the great and powerful Michelle Carter-Scott was gone.

The trustees chose Belvin Perry as Carter-Scott’s replacement. Perry has openly asked the FBI to investigate and has suggested that the entire board resign, reapply and allow an independent body to choose a new board.

In April, the school announced that E. LaBrent Chrite will replace Grimes as the school’s seventh president.

To replace Angela Poole, the board also installed its eighth chief financial officer in four years. Amid rumors of financial irregularities and bad deals, the board chose John Pittman—who left his previous job at the University of Central Florida when the school’s president threatened to fire him for his ties to a scandal where school officials improperly used funds to construct a building on campus.

But you shouldn’t worry. If Bethune-Cookman falls, it will probably won’t be because of Chrite, Perry or Pittman, even if they team up with the Jackson Triad, the Grimes group, Thanos and the Night King. In fact, if Bethune-Cookman’s revamped leadership sounds a lot like Bethune-Cookman’s old leadership, feel free to ignore the Cassandra.

Because, according to a newly released report, it may already be too late.

Tomorrow, Part 3: Things Fell Apart.

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Once again Mike thank you so very much Bruh...You laid out the entire history of what went down as well as the who in all of this....