Early last October I received a set of documents that were provided to Southwestern Seminary trustees stating the intention of the school’s president to shift more than $90 million from management with the Baptist Foundation of Texas to the school’s own seminary foundation. The documents included the dates, names, and figures that Paige Patterson thought was necessary to inform trustees to make a decision of such tremendous financial concern.
What Paige Patterson didn’t provide the trustees was that the seminary’s foundation was going to be placed with a non-profit investment cooperative whose investment portfolios included alcohol, tobacco, and gambling industries. Neither did Patterson find it necessary to tell his trustees that the man he recommended for chairmanship of the seminary foundation board had been cited and fined by the Securities and Exchange Commission for failing to disclose conflicts of interest and violations of other federal guidelines. The fact that he was a Presbyterian winebibber was likewise excluded from Patterson’s dossier.
I faxed the documentation to Marty Duren over at SBCOutpost, who started making phonecalls and digging through the internet to find more information about the seminary foundation. On Sunday evening, October 15, 2006, Marty posted the information on the Outpost, and sent seminary administrators and trustees scurrying to figure out how those pesky bloggers had gotten their hands on their hush-hush plans. Rather than express appreciation that bloggers had informed seminary trustees in a way that the administration had neglected, some Southern Baptists cried foul and spun their oft-repeated allegations that a “conspiracy” was afoot to bring Paige Patterson down.
On that Sunday afternoon, Marty and I talked at length about the timing of his post. We had, as we saw it, two options. We could let the trustees vote to shift the money and elect the new foundation board, then release the information we had uncovered and hit the whole institution in the face with a nasty scandal that involved Paige Patterson’s negligence or deceit. We could let them proceed as planned, then gather like hyenas and nip at the wounded institution. Or we could release the information on the eve of the trustee meeting and hope that the board might start to understand how Paige Patterson thinks information pertinent to the governance of the seminary should be provided on a need-to-know basis, with the trustees not needing to know. More importantly, we could spare the convention another embarrassing example of systemic hypocrisy and bureaucratic bungling.
We could act beforehand and protect the seminary from its own lapse of judgment and preserve the assets and interests of Southern Baptists in a way that the seminary board and administration had become lax. Or we could wait and act afterwards, leaving the school with $90 Million worth of egg on their faces.
We chose preemption.
Seminary trustees responded by delaying the action for further investigation, and Baptist Press reported the matter. In the news coverage, the following “facts” were listed:
1. Seminary trustee Geoff Kolander read a statement that assured Southern Baptists that the board was committed to pursuing a path that avoided any appearance of evil when it comes to the issue of alcoholic beverage.
2. The business administration committee, led by Mr. Jack Sherrod Smith, a long-time member of First Baptist Dallas and Mrs. Criswell’s Sunday School class, reported that the board would seek “outside counsel” before making any changes to the seminary’s investment vehicles.
3. The seminary acquired the foundation from a long-time donor named Harold Riley — for whom trustee Geoff Kolander works — in 1998, though it took until 2005 for the Executive Committee to approve the seminary’s controlling interest in the foundation.
This chain of events pressed me to begin researching the history and purpose of the Southwestern Seminary foundation. My search has uncovered the following:
1. Southwestern Seminary drafted original articles of incorporation for a foundation in 1960, and the Texas Comptroller approved those articles in 1962. The original articles can be found here.
2. In 1985, the seminary foundation’s registered agent was amended from Wayne Evans to Hubert Martin, the seminary’s former vice president for business administration. The documentation can be found here.
3. In 1988, the seminary filed restated articles of incorporation. The revised articles can be found here.
4. In 2001, the Harold E. Riley Southwestern Seminary Foundation filed its report with the State of Texas, naming the foundation trustees as Harold Riley, two of his sons, and Ralph Smith, former pastor of Hyde Park Baptist Church in Austin, TX. The report can be found here.
5. In May 2004, the seminary filed a notice that the earlier seminary foundation had changed its registered agent from Hubert Martin to Joe Breshears, the seminary counsel. The notice can be found here.
6. The second foundation, awarded to the institution by Harold Riley, similarly changed its registered agent from Riley to Joe Breshears. That notice can be found here.
So let us review. Southwestern Baptist Theological Seminary has had a foundation — since 1960. That foundation was joined by the Harold E. Riley Southwestern Seminary Foundation, which was approved by the SBC Executive Committee in 2005, according to Baptist Press. In 2006, Southwestern Seminary’s administration wished to move $90 million from management with the Baptist Foundation of Texas to the Harold. E. Riley Southwestern Seminary Foundation, to be privately managed by the seminary through a non-profit collective utlitizing a variety of breweries and casinos to “do better in [their] yield,” according to Paige Patterson.
Marty Duren released information about the $90 million transfer that exposed details previously unavailable to the seminary trustees by the school’s administration. The trustees acted wisely to delay and changes to the seminary foundation or their investment management until further study could be conducted. The business affairs committee of the seminary reported that no immediate action would be taken except retaining the assistance of outside counsel.
The seminary trustee meeting ended on October 17, 2006, and Southern Baptists were content to let the seminary trustees study the endowment fiasco further. No action was taken in the plenary sessions of the board to elect new trustees of the seminary foundation. The slate of candidates who had been recommended by the seminary were tabled, and trustees went home satisfied that the administration would abide by their decisions.
If all of this is so, why did the seminary file a new slate of new foundation directors with the State of Texas three days after the end of the trustee meeting?
According to the 2006 Foundation Periodic Report, the earlier seminary foundation has seven directors. These directors include Jerry Yowell, Seminary Trustee Harlan Lee (AZ), Seminary Vice-President Greg Kingry, Seminary Trustee Mike Eklund (AR), George L. Weaver, Seminary Trustee Jack Smith (TX); and Mr. Richard Headrick of Mississippi.
The final director, Mr. Headrick of Mississippi has been a supporter of Paige Patterson’s causes for years, and shares membership with the Pattersons in the Council for National Policy (also listed here). He endowed a chair in World Missions at Southeastern Seminary in 1998. In 2001, Headrick was elected to serve on the Southeastern Board of trustees, having been appointed to that post by the wife of a Southeastern dean and an SEBTS doctoral student.
Four years subsequent to his election as a Southeastern trustee, however, Mr. Headrick resigned abruptly, after voicing dissent from the seminary’s intention to name an academic building rather than a student center for Paige and Dorothy Patterson. I must add the caveat that the Headricks are, without a doubt, two of the most generous and committed Christian evangelists in the Southern Baptist Convention.
The seminary also filed restated articles of incorporation for the Harold E. Riley Foundation, which were adopted by the board of trustees at their August 15, 2005 meeting.
The questions will follow…
The Baptist Blogger 
The plot thickens.
It should be noted that the date of the restated Articles of Incorporation was October 9, 2006. Does that mean the Trustees knew about this at the time of their meeting later in October? Including the change of membership/composition of the Foundation trustees?
Ben,
If someone has done something illegal or unethical, they should be called to account for it.
However, what I would like to know is: why is a SWBTS trustee giving you trustee documents prior to a BoT meeting? I cannot help but wonder about the legality, or at the very least, the ethics of such an act.
Enlighten me, if you please.
Regards,
Les
Les:
You have asked me to adjudicate a question of motives. You ask, ‘why is a trustee giving you trustee documents prior to a BoT meeting?”
First, you have assumed that I received the documents directly from a trustee. This assumption will not assist you in the least as you try to figure out what is going on at Southwestern Seminary.
Second, I cannot answer the question of “why” I am given something. As far as I can tell, my only responsibility is to determine whether or not I will receive something, and if so, what I will do with it. When making those prudential judgments, I must seek to assess my own motives, not others.
And like every one born of woman save Christ, I am oftentimes frustrated by sin when seeking to know my own heart in a matter.
For now, let us not get into the issue of motives. That will allow us the gracious response of believing, if we will, that Paige Patterson exercised carelessness rather than deceit. Rather let us ask whether or not an action is proper and just, rather than the heart of the actor.
BSC
Ben,
Please excuse the inprecision of my writing. I do not claim to be in your league as a
wordsmith. :)
Please allow me to attempt to clarify. When I stated “I cannot help but wonder about the legality, or at the very least, the ethics of such an act” in regard to the act of leaking confidential documents to anyone outside of the BoT, that was my pitiful attempt to ask whether or not an action is proper and just.
Do you believe that action (the release of BoT documents prior to a BoT meeting) was proper and just?
Kindest regards,
Les