Liberty University Officials Turn on Jerry Falwell Jr., Exposing Corruption: 'No One Craps' Without His Approval

Jerry Falwell Jr.

On Monday, Liberty University alumnus Brandon Ambrosino published a mammoth expose into Liberty University President Jerry Falwell Jr. Officials at the school spoke on condition of anonymity, revealing business dealings that allegedly benefitted Falwell and his family, embarrassing episodes Falwell attempted to cover up, and political activism unbefitting a non-profit university.

"We’re not a school; we’re a real estate hedge fund," a senior university official with inside knowledge of Liberty’s finances told Politico. "We’re not educating; we’re buying real estate every year and taking students’ money to do it."

Ambrosino reported having interviewed members of the college's board of trustees, along with senior university officials and rank-and-file staff members who work closely with the president. "They are reluctant to speak out—there’s no organized, open dissent to Falwell on campus—but they said they see it as necessary to save Liberty University and the values it once stood for," the alumnus wrote. He added that all his sources consider themselves conservative and many are strong Trump supporters.

When the reporter reached out to interview officials for his Politico story, Liberty's attorney sent an email to board members. "All trustees sign a confidentiality agreement that does not expire at the close of Board service."

Sources described a school run by Falwell with an iron fist. "It’s a dictatorship," one current high-level employee said. "Nobody craps at the university without Jerry’s approval."

What kind of corruption would drive these people to break their confidentiality agreements? Ambrosino reported a culture of corruption centering on Jerry Falwell, Jr.

When Jerry Falwell, Sr. — founding pastor of Thomas Road Baptist Church, the founder of Liberty University in 1971, and a co-founder of the Moral Majority in 1979 — passed away, his sons Jerry Falwell, Jr. took over the university while Jonathan Falwell followed his father's footsteps to lead Thomas Road Baptist Church. Slowly, Jerry Falwell, Jr. pushed his brother aside and emerged as his father's heir in the Religious Right.

"Jerry never removed Jonathan," a former top Liberty official told Politico. "He just kind of pushed him aside." Jerry used Liberty's resources to consolidate control over his late father's properties. "He bought all the [Thomas Road Baptist Church] properties, [Liberty Christian Academy], Jonathan’s building at the airport, and a couple of others. Jonathan complained but never stood up to [Jerry] because he knew [Jerry] controlled the purse strings."

Liberty has flourished under the younger Falwell. When he took over in 2007, the school listed $259 million in assets on its most recent IRS Form 990. By the June 2017 filing, its assets had surpassed $2.5 billion. That number has increased to more than $3 billion, according to Falwell's public statements in 2018.

The Politico article alleges that Falwell used that massive wealth to benefit himself and his family. In July 2012, Falwell sent an email notifying university executives that his son, Trey Falwell, would be "starting a new company to do the management" of properties owned by the school.

"It raises red flags to have your kids being able to profit off the activities of the organization," Philip Hackney, an associate professor at the University of Pittsburgh Law School who specializes in taxation and nonprofit management, told Politico.

University officials told Politico that Trey Falwell is a silent shareholder in Comeback Inn LLC, which owns the LaQuinta near Liberty University. In a December 2018 affidavit, Falwell Jr. described Comeback's owner as his "partner in ... real estate ventures in Virginia." Emails reviewed by Ambrosino "show that on at least one occasion, university employees were asked to promote the LaQuinta on the school’s website—what several current and former high-ranking Liberty officials and employees described as part of a process where the school 'funnels business' to the hotel."

Officials also recounted Liberty loaning money to the Falwells' friends. In 2014, the university gave at least $200,000 in loans to Prototype Tourism LLC, a "destination marketing" company founded by Liberty grad Josh Oppenheimer, whom Falwell Jr. described as "a friendly supporter." Trey Falwell said he was "not surprised" when Oppenheimer struggled to repay the loans.

In 2013, Robert Moon, a friend of Falwell's, founded Construction Management Associates Inc., a construction company devoted to work on and around campus. Liberty gave Moon a loan of $750,000 to form the company before awarding it more than $130 million in contracts and selling it land owned by the university. Liberty officials complained about CMA becoming the school's go-to contractor — previously, the school bid out its construction work.

Charles Spence, the school's then-vice president of planning and construction, sent an email to Falwell expressing concern "about cost control on all the projects" after CMA took over.

In June 2013, the year CMA was formed, Falwell shared a photo on Instagram showing him, his wife Becki, and his son Trey joining Moon for a cruise down the James River on Moon's private boat. Falwell admitted joining Moon on his boat "about five or six times," but claimed that "these afternoon outings did not cause me to lose my negotiation skills or abandon my fiduciary duties to enter into deals in the interest of the University."

On July 23, 2013, Liberty University began renting space to Ben Crosswhite for use as a fitness center. "The facility was specifically built into the old Racket Club for Jerry and Becki to train privately" with Crosswhite, a longtime university official familiar with the arrangement told Politico. While the trainer worked with Falwell and his wife, Liberty began to pay for expensive upgrades to the facility. Eventually, in 2015, Falwell had a university executive draft a proposal for Liberty to sell the property to Crosswhite at a discount, paying him up front for Liberty’s use of the facility for the next seven years.

An official said no one else was allowed to bid on the property. Randy Smith, the school's vice president and chief operating officer, insisted that this deal was nothing out of the ordinary. "It is VERY common practice for the university to dispose of an asset that is in financial and operational distress … especially if it can do it in a fashion that is advantageous to the university. To accomplish that while still making the facility available for the university to use is what most would consider to be a win-win situation."

Falwell emphatically denied having personally benefitted from contractor work. "I have not personally benefited financially from CMA’s or any other contractor’s work for Liberty University nor has any member of my family," he told Politico.

Yet perhaps the more damaging allegations involve claims about Falwell's personal behavior and attempts to cover it up.

On July 19, 2014, Swedish DJ John Dahlbäck performed at Wall, a nightclub in Miami Beach, Fla. The club's photographer took shots of the party, and a photo appears to have captured Jerry Falwell, Jr. in the crowd. Other photos showed that his son Trey had attended the party.

Such a photo would be extremely embarrassing for Falwell, the president of a conservative Christian college that frowns upon co-ed dancing and prohibits the consumption of alcohol (which can get students expelled). Liberty staffers told Politico that Falwell went to John Gauger to downgrade the photos' prominence on Google searches.

Falwell emphatically denied the existence of any photo showing him at the club. "There was no picture snapped of me at WALL nightclub or any other nightclub," he wrote. He further insisted, "I never asked anyone to get rid of any pictures on the internet of me and I never have seen the picture you claim is of me below. If the person in the picture is me, it was likely photo-shopped."

Whether or not the photo was genuine, Gauger's position at Liberty is fascinating. He has worked at the school since earning his MBA there in 2009. In 2016, he was promoted to become the school's chief information officer, after having been previously named deputy CIO. Several university officials described Gauger's rise as perplexing.

"I’m not being disrespectful, but John was a nobody," one longtime Liberty official said. "And the next thing you know, he’s high up in IT."

Sources described Gauger as a sort of fixer for Falwell, promoted because he would obey the president's orders without complaint.

Gauger is not only a Liberty official — he also runs RedFinch LLC, an online business he founded in 2009 to offer search-engine marketing work. Tax records show Liberty paid RedFinch $123,950 during 2016. In August 2013, Falwell asked Gauger to defend him personally in the comments section of a local news article. "I'm having my RedFinch guys blow this up right away," Gauger responded in an email.

Longtime Liberty employees told Politico it is extremely unusual for university employees to be allowed to own and run side businesses that do contract work for the school. "I’ve always had a problem with RedFinch because there never was any clear and distinct lines, one former Liberty employee said. "You can’t work at Liberty 8-5 on the clock and get paid from somebody else for the same hours."

Early this year, the Wall Street Journal reported that as Donald Trump was preparing the ground for a presidential campaign, Trump's personal lawyer Michael Cohen hired Gauger to manipulate online polls in Trump's favor. Liberty University sources told Politico that Trey Falwell joined Gauger for his trip to New York to collect payment from Cohen. Trey posted a now-deleted photo on Instagram showing around $12,000 in cash spread on a bed.

"The idiot posted [a picture of] money on a bed?!" one current senior Liberty official said. "Why do that if you’re not involved with it?"

This past May, Reuters reported that Cohen helped Falwell contain the fallout from some racy "personal" photos. Falwell attacked the report as "not accurate," insisting that "there are no compromising or embarrassing photos of me."

Yet longtime Liberty officials close to Falwell told Politico that the university president has shown or texted his male confidants photos of his wife in provocative and sexual poses. One official said Falwell is "very, very vocal" about his "sex life." One senior Liberty official who had since left the school described a car ride about ten years ago. "All he wanted to talk about was how he would nail his wife, how she couldn't handle [his penis size], and stuff of that sort." Falwell refused to comment on this car ride.

In one case, Falwell shared a photo of his wife wearing what appeared to be a French maid costume, according to a longtime Liberty official. The president intended to send the image to Crosswhite as a "thank you" for helping his wife achieve her fitness goals. Yet he accidentally sent the message to several other people, leading to the need for a cleanup.

Falwell denied this incident. "I never had any picture of Becki Falwell dressed in a French maid uniform, and never sent such a non-existent photo to Ben Crosswhite," he said.

In addition to the connection with rigging online polls for Trump, the Politico article also addressed the sale of t-shirts and baseball caps emblazoned with Trump's name in big letters for the 2017 Liberty University commencement. Falwell insisted that Liberty profited from selling the merchandise, but Eve Borenstein, an attorney and tax expert, said, "a 501(c)(3) organization cannot be selling those shirts or gifting space to someone selling t-shirts with a candidate's name on it, since that is advertising for a candidate."

Falwell has also rescheduled school events so that students could participate in local elections.

In tweets about his position, the Liberty president said on Twitter, "I have never been a minister. UVA-trained lawyer and commercial real estate developer for 20 yrs. Univ president for last 12 years-student body tripled to 100000+/endowment from 0 to $2 billion and $1.6B new construction in those 12 years. The faculty, students and campus pastor @davidnasser of @LibertyU are the ones who keep LU strong spiritually as the best Christian univ in the world. While I am proud to be a conservative Christian, my job is to keep LU successful academically, financially and in athletics."

In other words, Falwell Jr. does not consider his position a trust of spiritual leadership, despite his role leading a conservative Christian college and his national profile in the Religious Right. This is a considerable departure from his father's legacy.

When asked about the corruption, Falwell presented not unreasonable responses, but the stories added up to a very negative picture. Whatever the truth of this article, it seems unlikely Liberty University's president will be held accountable.

A Liberty University alumnus who worked in the film industry and is now pursuing another degree elsewhere told PJ Media he thinks the Politico story is "likely true."

"I experienced a lot of corruption while there, and know of many others who have seen things as well. There’s almost no chance of a change in leadership. Those who oppose Jerry are usually squeezed out, and a number of his Dad’s friends who he didn’t have the clout to ouster left of their own accord in 2016, like Mark DeMoss," the founder of America's largest Christian PR firm who left the Liberty board after clashing with Falwell over his endorsement of Trump.

The alumnus said Falwell faces "virtually no resistance." As for the president's scraping before Trump — calling him a "dream president" and taking a photo with him in front of a Playboy magazine — "the only impact is in good name, which hasn’t been impacted in conservative circles much, despite what David French and World Magazine have published on the topic. And it’s easy to chalk up loss of good name elsewhere to persecution," the alumnus said.

Animus against conservative Christians is real, but this story has far more to do with corruption than any persecution. Many evangelical Christians have spoken out against Falwell's sycophantic embrace of Trump — and for good reason. A Christian's ultimate loyalty is to God and His Son Jesus Christ, not to any earthly ruler.

While Falwell does not feel the pressure from this scandal, the alumnus said he and his fellow alumni very much do. "I'm very glad to be at a new institution now," he concluded.

Follow Tyler O'Neil, the author of this article, on Twitter at @Tyler2ONeil.