News & Politics

The Boy Scouts Is Going Bankrupt, But It's Not for the Reason You Think

Boy Scouts lead the Pledge of Allegiance to begin a Veterans Day ceremony in Wrightwood, Calif., on Sunday, Nov. 11, 2018. (James Quigg/The Daily Press via AP)

After a tumultuous four years, the Boy Scouts of America (BSA) may go bankrupt. The BSA allowed openly gay scouts in 2014, openly homosexual leaders in 2015, girls who identify as boys in 2017, and this year it opened its membership to girls and dropped the name “Boy Scouts.” But the #MeToo movement may put the final nail in the coffin.

“We are working with experts to explore all options available to ensure that the local and national programming of the Boy Scouts of America continues uninterrupted,” Michael B. Surbaugh, chief scout executive at BSA, wrote in a letter to members. He made no attempt to hide the reason BSA is on the edge of bankruptcy — impending lawsuits from people who claim to have been sexually abused as children.

More than 250 former members have sued the Scouts, alleging inappropriate conduct by leaders and volunteers going back to the 1960s, The Wall Street Journal‘s Katy Stech Ferk and Valerie Bauerlein reported. More than 90 percent of these claims came before the Scouts implemented a “two-deep leadership” program in the late 1980s, requiring two adult leaders at all activities.

It does seem as though the BSA has responded fairly well to the horrific tragedy of this child abuse.

“We have a social and moral responsibility to fairly compensate victims who suffered abuse during their time in Scouting, and we also have an obligation to carry out our mission to serve youth, families and local communities through our programs,” Surbaugh wrote. “We care deeply about all victims of child sex abuse and we are steadfast in our belief that one incident of child abuse is too many. We sincerely apologize to anyone who was harmed during their time in our programs.”

He pledged that BSA will “fairly compensate” all victims, “and we have paid for unlimited counseling, by a provider of their choice, regardless of the amount of time that has passed since an instance of abuse. … I want to stress that at no time in our history have we knowingly allowed a sexual predator to work with youth, and we always seek to act swiftly when alerted to abuse allegations.”

The Wall Street Journal‘s Katy Stech Ferech broke the bankruptcy news on Wednesday, reporting that the BSA hired the law firm Sidley Austin LLP for assistance with a possible chapter 11 bankruptcy. Filing for bankruptcy would stop new litigation and give the nonprofit a chance to negotiate with the plaintiffs.

An onslaught of sexual abuse lawsuits have driven many other organizations into bankruptcy. More than 20 Roman Catholic dioceses and religious orders have filed for chapter 11 to negotiate payouts to thousands of victims. Last week, USA Gymnastics, the gymnastics governing body, filed for bankruptcy thanks to lawsuits from decades-long abuser Larry Nassar, the former doctor of the national Olympic team.

BSA has not yet made a decision on bankruptcy, but the organization is gearing up for the possibility. “It’s due diligence for an organization whose motto is ‘be prepared’ to explore all of our opportunities and pathways forward,” spokeswoman Effie Delimarkos told WSJ.

The Scouts had been able to manage many lawsuits, but the organizations began considering bankruptcy as California and New York began considering laws to lengthen the statute of limitations for abuse victims. Many other states have changed their rules in recent years.

“The Boy Scouts sees the writing on the wall,” Gillion Dumas, an attorney in Portland, Ore. who represents about 24 plaintiffs against the Scouts, told WSJ. She suggested that BSA would be able to cover the current suits, but any new legislation would stretch the organization to its breaking point.

The Scouts hired lobbyists to fight the new laws, leading Democrat members of Congress to send a complaint letter.

Bankruptcy would allow BSA to pool money from its assets and set deadlines for victims to come forward. The Scouts valued its assets at more than $1.5 billion, according to its most recent annual report. Most of that ($827 million) is in the form of stocks, bonds, and investments. The organization also owns about $483 million in land, buildings, and equipment.

BSA has lost 12 percent of its members since 2012, falling from 2.6 million to 2.3 million. Membership peaked in 1969 at 6 million.

While many liberals have praised the Scouts for opening its ranks to openly gay scouts and leaders, to girls who identify as transgender, and eventually to all girls, these decisions have also cost BSA membership.

As of January this year, approximately 130,000 youths ages 14-18 who participated in BSA’s Varsity and Venturing programs through Mormon troops left the organization. By 2020, the Church of Jesus Christ of Latter-day Saints will fully sever ties with BSA, removing the approximately 425,000 Mormon boys in Cub Scouts and Boy Scouts. This will cost the Scouts nearly 20 percent of its membership.

Despite winning a massive Supreme Court victory in 2000 that gave the Boy Scouts the free association rights to exclude openly gay members, the Scouts began allowing openly gay scouts in 2014, openly gay scout leaders in 2015, and biological girls who identify as boys earlier this year. The Mormon Church only objected to the 2015 decision about scout leaders, announcing that it was “deeply troubled” and that “the century-long association with Scouting will need to be examined.”

In May, the Boy Scouts changed its name to “Scouts BSA” and opened its doors to female troops, finally allowing girls to attain the coveted rank of Eagle Scout (and giving girls a mainstream scouting option without ties to Planned Parenthood).

The Wall Street Journal‘s Stech Ferech emphasized the positives in these changes, quoting an Eagle Scout who has proudly stuck with the BSA, enrolling his sons and daughter in the programs. Stech Ferech also pointed out that BSA has recruited 70,000 new girl members (about half of the Mormon Varsity and Venturing scouts it lost).

Yet this new openness has also cost Scouts BSA, as the Girl Scouts filed a trademark lawsuit last month. In this battle of the sexes — the case is Girl Scouts of the United States of America v. Boy Scouts of America — the Girl Scouts said the BSA name change threatens to “marginalize” Girl Scouts activities and has already sown confusion with families, schools, and communities somehow thinking the Girl Scouts either no longer exists or has merged with BSA.

Many conservatives have left the Scouts for groups like Trail Life USA, a Christian alternative. For many, the acceptance of transgender identity was a bridge too far.

Some have joked that the #MeToo bankruptcy was inevitable after the Scouts admitted openly homosexual leaders, but that seems unlikely if 90 percent of the cases date to before the 1990s. It does indeed seem as though the Boy Scouts survived one social issues battle after another, only to be felled by #MeToo.

Whether or not the bankruptcy happens, Scouts BSA will look entirely different in 2020 than it did in 2010. In the past decade, it will have embraced the LGBT movement, opened its doors to women, dropped the “Boy” in “Boy Scouts,” faced hundreds of lawsuits from abused children, and lost its Mormon constituency.

The BSA is already on the verge of bankruptcy, and it still has one more year of Mormon participation. If 2018 has been difficult to stomach, imagine what 2019 and 2020 will bring.

Follow the author of this article on Twitter at @Tyler2ONeil.