On May 31, 2024, Birmingham-Southern College (BSC) ceased operations and closed its doors for the first and last time.
We can only speculate what BSC will become. A HBCU? A government hospital or storage facility? An Amazon Fulfillment Center?
BSC was pronounced dead and DNR (do-not-resuscitate) over the last several years by an Alabama Legislature largely unsympathetic to its plight. But we only see the tip of the iceberg.
BSC’s present plight is attributable to a toxic affliction - financial malfeasance - that has worn away at the institution’s foundations for almost 50 years.
There are three men primarily responsible for BSC’s messy ruin: Dr. Neal Berte, Dr. David Pollick and Alabama State Treasurer Young Boozer III.
Berte, BSC’s president from 1976-2004, arrived shortly before the horrific rape and murder of BSC graduate Quenette Shehane at a convenience store near campus shook the school and community. Berte responded to the incident by building a gated wall around the campus with secure entry points, making “The Hilltop” a protected fortress.
Berte implemented various aesthetic projects to beautify the campus with new buildings and facilities to entice prospective students, but these projects were funded primarily with debt. Mortgages were taken out on the campus property in 1996, 1997 and 2002 under the Private Education Building Authority of the City of Birmingham. Tuition revenue bonds totaled approximately $30 million. Almost immediately after their issuance, these bonds began receiving rating downgrades from Moody’s bond rating service. By the time Berte left, the bonds had received three downgrades. Although BSC’s endowment grew to roughly $130 million during Berte’s tenure, BSC was heavily in debt and bleeding money from these expensive “home improvement” projects.
Berte’s most disastrous decision, however, was taking BSC into NCAA Division I athletics. Berte did not prepare or present BSC’s board with a financial projection of the implications for moving into Division I athletics, and there was no board discussion when this move was adopted, only a motion by Berte and an obligatory show of hands.
The NCAA requires all Division I schools to give full tuition scholarships to its athletes. In BSC’s case, this amounted to approximately 110 athletes receiving full scholarships. Board members were never advised of this requirement prior to BSC’s move to DI. BSC did not have a scholarship fund in its endowment to pay for these athletic scholarships, so Berte wrote off the tuition of the athletes and called them “scholarships,” causing BSC to incur significant annual operating deficits without tuition revenue from athletes. These deficits were hidden from BSC’s board by improper accounting.
Such compulsory, often dictatorial leadership was common for Berte, who often withheld information from the board and operated autonomously with little oversight or checks and balances.
Berte attempted to grow BSC out of its nagging financial conundrum - not receiving enough tuition revenue to cover fixed operating costs - by beautifying the campus, adding new programs, and qualifying BSC for NCAA Division I athletics. All these decisions were disastrous.
Financial mismanagement and malfeasance
The history of BSC is marked by such calamitous fiduciary carelessness. Deficits in the operating account were continuously covered by funds from the endowment, some of which were restricted funds that could be used only for specific purposes.
The board did not learn that BSC’s financial statements were out of compliance with the Financial Accounting Standards Board (FASB) until 2001, thus failing to provide an accurate account of BSC’s financial performance until this time. Thirty years of improper accounting is a death sentence for almost any business, BSC included.
Berte, who had total control over every aspect of BSC’s operations, denied knowing about this fatal commingling of funds, but his nefarious negligence was finally exposed. Berte finally retired June 30, 2004.
Out with Berte, in with Pollick. A West Coast native with a doctorate in philosophy, Pollick appeared as far from the Birmingham Rotary Club and Canterbury UMC poster boy as one can imagine. And because the board realized they had not properly fulfilled their legal duty overseeing BSC’s operation, they vowed to keep a watchful eye over the college’s affairs.
Such newfound vigilance arrived too late. BSC was already locked in an inescapable orbit with oblivion.
Pollick was never informed of the problem concerning BSC’s financial statements when he interviewed for the job. Learning about the issue on the first day he started work at BSC, Pollick told Byron B. Mathews, Jr. (BSC Class of 1970 and an unofficial advisor to various BSC administrators over the years): “I sh*t my pants.”
Poor Pollick. But he had a job to do.
It soon became clear to the board that the college was incurring large annual deficits, caused in part by the tuition write-offs attributed to BSC’s Division I athletes.
When the board met and narrowly approved the resolution to drop Division I athletics, an enraged Berte, retained as chancellor to mentor Pollick and serve as a familiar face to donors and board members, stormed out of the meeting, immediately faxing a letter resigning as chancellor, but conveniently failing to “cc” Pollick. Berte never spoke to Pollick again.
Switching to Division III athletics did not, as hoped, prove more fruitful to BSC’s financial woes. To participate in the NCAA Division III conference, BSC had to offer a total of 22 varsity sports. Half of BSC’s student body were Division III athletes. Although Division III athletes could not be offered “athletic scholarships,” there is little doubt that most received substantial, if not total, tuition discounts.
As a BSC basketball athlete from 2013-2015, I can personally attest to veracity of this (though I received only partial “merit scholarships,” not a generous “full ride”).
Dowd Ritter, CEO of Regions Bank, and now the chairman of the BSC board of trustees, told at least some trustees that his bank would pay for BSC’s new football stadium in exchange for naming rights.
This was not the first nor the last of personal favors and under-the-table kickbacks benefiting those at the top of BSC’s convoluted hierarchy. While Regions Bank was on the precipice of financial collapse and BSC was hurling into fiscal jeopardy, Ritter hardly attended any board meetings, choosing instead to jet off on Regions’ fleet of private jets to Greenbrier for golfing.
It became clear that the endowment funds would eventually run out if BSC continued incurring the annual deficits which began during the Berte administration.
Pollick’s game plan, meanwhile, was to grow the dwindling enrollment. Very similar to Berte’s goals: build a prettier campus and they will come.
The efforts to beautify BSC, a gleaming “light on a hill” in a not so savory area of town, only destroyed it.
But failed, foolish projects are not responsible for BSC’s demise. People are.
To be continued…
SEE ALSO: Conner Hayes: The men who murdered Birmingham-Southern College, part II
Works cited: Birmingham-Southern College - My View
Conner (CR) Hayes is a small business owner based in Nashville, Tennessee. He is a 2017 alum of Birmingham-Southern College and a screenwriter, novelist, and poet. CR Hayes is published in various mediums, including academic articles, journalism, prose, and poetry.
The views and opinions expressed here are those of the author and do not necessarily reflect the policy or position of 1819 News. To comment, please send an email with your name and contact information to Commentary@1819news.com.
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