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Truth, justice, and the Liberty Way

The past four years have been rough on Liberty University’s reputation, judging by the sheer tonnage of negative press that the Lynchburg-based evangelical education powerhouse has received.

But with a $2 billion-plus endowment and one of the nation’s largest private, nonprofit college enrollments, Liberty appears to be not only surviving but thriving, even amid embarrassing media stories about its former president and chancellor, Jerry Falwell Jr., as well as far more serious allegations brought by 22 former students and employees who claimed in the 2021 “Jane Does” lawsuit that Liberty officials discouraged them from reporting sexual assaults to authorities.

In 2022, the university settled with all but two of the Jane Doe plaintiffs for an undisclosed amount, but there’s been further turmoil branching from the class-action suit and a 2021 ProPublica exposé in which some plaintiffs went public with their names and stories.

In March, the U.S. Department of Education settled with Liberty, imposing a record-shattering $14 million fine against the university and issuing a 108-page report detailing thousands of violations of the federal Clery Act, which governs the public reporting of criminal incidents on university campuses accepting federal financial assistance funding.

According to the investigation, Liberty either omitted or incorrectly reported 93% of all 3,673 criminal incidents that allegedly took place on university-owned property from 2016 to 2023. More than 1,400 reports of rape, aggravated assault, stalking, domestic violence, hate crimes and other, less serious crimes like liquor law arrests and burglaries were kept off police incident logs and away from the public eye. Liberty’s fine is nearly $10 million more than the DOE’s second-highest penalty, $4.5 million, assessed against Michigan State University in 2019 following its gymnastics sexual abuse scandal.

Financially speaking, $14 million is hardly a crippling blow to the well-resourced Liberty, but what about its reputation among evangelical Christians, including prospective students and faculty members?

Consistent growth

It’s still too soon to know what, if any, impact the U.S. Department of Education’s record penalty will have on Liberty’s application and enrollment numbers, but Provost Scott Hicks says the Jane Doe class-action lawsuit and Falwell Jr. scandals have not had a significant negative impact on Liberty’s growth.

By any business measure, the university remains a booming success, with the state’s largest enrollment this academic year — approximately 98,000 undergraduate and graduate students, including about 83,000 online enrollees, according to the State Council of Higher Education for Virginia (SCHEV). In fall 2023, Virginia’s headcount of all college students grew by 15,273, and Liberty alone was responsible for 5,255 of those students, or nearly 35% of that growth, according to Tod Massa, SCHEV’s policy analytics director.

In the 2022-23 academic year, Liberty accepted $879 million in federal student aid funds, a revenue stream that could be in jeopardy if the DOE determines Liberty hasn’t ceased violating the Clery Act.

But in terms of growth, “we’ve been pretty resilient,” Hicks says. “We either get it right or wrong, and just like any other company … we try to get it right and improve upon it.”

The word “company” is not a slip of the tongue, notes the provost, who was director of retail operations for Mansfield Oil Co. before joining Liberty as a professor in 2007, later becoming dean of its business school. With more than 8,000 local employees, Liberty is Lynchburg’s largest employer.

“We operate more like a business that you would see around the city or throughout the country, versus academia,” Hicks says. “Residentially, we do have chairs, and we have deans and things like that. We have subject-matter experts, we have program directors. …  The professors are coming together to not only add value to the learning experience, but also they hold it accountable. So, when you look at the way that we’re structured operationally, it enables us to deliver the value that people would expect from the [Liberty] brand.”

Meanwhile, residential enrollment at Liberty remains steady at about 15,000 students, Hicks says, and he estimates the school’s total 2024 enrollment — including part-time, nondegree remote students — will reach between 138,000 to 140,000 by the end of the year. To teach those students and “train champions for Christ,” as its mission says, Liberty employs more than 4,500 faculty members, many of whom are based outside of Lynchburg and teach online classes.

By August or September, Hicks anticipates rolling out a strategic plan for online and residential education, in which he expects Liberty “to continue to grow and continue to build.” Two major areas of focus are cybersecurity and health care courses, which are in high demand.

Hicks says that although Liberty’s remote work is attractive to prospective educators, the school has to compete for professors who teach in-demand subjects — as well as making sure they’re on board with Liberty’s Christian ethos.

“Liberty is a very unusual academic institution, compared to most. We’re Christian,” he says. “And we’re predominantly conservative in our thinking. That doesn’t mean that every person here is a conservative thinker, and that’s OK. But they believe in a moral absolute, and for the most part, that’s what drives them.”

‘A giant facelift’

Dustin Wahl, too, thinks Liberty will continue growing, although he has a different take on that than university officials.

A 2018 Liberty graduate, Wahl co-founded alumni group Save71 in 2020 to advocate for reforms at his alma mater, including pushing for Falwell’s resignation and an overhaul of the university’s board of trustees.

“There’s a lot of people in Liberty’s administration that breathed a sigh of relief when [Dondi Costin] became president, because it’s like, ‘OK, we can kind of become normal,’” Wahl says.

A retired Air Force major general who was the branch’s chief of chaplains, Costin earned two degrees at Liberty and was most recently president of Charleston Southern University in South Carolina. In July 2023, he started as Liberty’s president.

Costin succeeds Jerry Prevo, Liberty’s former longtime board chairman, who stepped in as interim president after Falwell’s departure in August 2020 amid revelations of a sex scandal involving his wife, Becki Falwell, and an erstwhile Miami pool boy. Falwell has since sued Liberty twice in federal court, seeking $8.5 million in retirement compensation and to bar the university from using the name and likeness of his father, Liberty’s founder, the late Rev. Jerry Falwell Sr., for a new campus center. Liberty is suing the younger Falwell for $10 million in a breach of contract suit in Lynchburg Circuit Court.

“Liberty essentially got a giant facelift” with Costin’s appointment, Wahl says. “As a leader, Dondi Costin is dramatically different from Falwell and Prevo. He’s qualified to oversee a large academic institution. He has experience working within institutions. He’s way less prone to scandal.”

Also, the school’s increased prominence in Republican national politics and partisan culture wars, especially since Falwell’s January 2016 surprise endorsement of Donald Trump, has changed the character of the student body, making it less vulnerable to external slings and arrows, Wahl asserts.

“Christians who … aren’t really into politics and just kind of want to go to a Christian school, that group has shrunk, and more and more of them are not enrolling [at Liberty],” he says. “On the other side, you have more people from Trump country, and Liberty puts its ads on Fox News. That’s who they’re going for, so you have more of those people. They don’t care about what the Department of Education says. In terms of overall enrollment, I don’t think [the fine is] going to make a real impact.”

Although Falwell was careful to make the Trump endorsement on his own behalf and not the university’s, his post as president of Liberty caused some conflation between the two, Liberty General Counsel David Corry says. “I don’t think we stepped over a legal line [as a nonprofit, 501(c)(3) entity] … but there’s a heavy price to be paid for being so closely identified with a polarizing political figure like that.”

Prevo did not endorse a candidate in the 2020 presidential election, and Corry expects Costin to maintain the same course in 2024. 

Nonetheless, Liberty still plays an outsize role in conservative political discourse. U.S. Sen. Marco Rubio spoke at a Liberty convocation last October, and Costin has made several statements in support of Israel following Hamas’ Oct. 7, 2023, surprise attack on Israeli civilians near the Gaza border.

After The Washington Post’s October 2023 story based on a leaked, preliminary version of the Clery Act report about Liberty, Costin chose to respond on Fox News.

DOE investigators, Costin said then, are “claiming that we acted in bad faith. I think there are a number of factual errors in the report … and [Liberty hasn’t] had the opportunity to respond in a way that would allow us, at least in a public setting, to counter these assertions that have been made with factual errors.”

Corry, Liberty’s general legal counsel since 2011, takes a similar rhetorical approach, highlighting the $10 million Liberty has spent on improved campus lighting and hiring more Title IX and Clery Act staff since 2022 — while also implying that politics may have played a role in the DOE investigation of the university. 

U.S. Sens. Tim Kaine and Mark Warner, “bless their hearts, asked the Department of Ed. to come after us, and so the department started that Clery review,” Corry says.

Warner and Kaine, both Democrats, did in fact call for the DOE to investigate Liberty’s handling of sexual misconduct claims in November 2021 after ProPublica’s report came out, according to the senators’ offices.

In a statement following Liberty’s $14 million fine, Kaine and Warner called their investigation request “a reasonable step to ensure student safety. Liberty has entered into a voluntary settlement of the claims, and the senators expect that the terms will be honored by all parties.”

Liberty’s public statement in March also included some defiant words, alleging that the university “repeatedly endured selective and unfair treatment by the Department [of Education].”

But it also had notes of humility, as the university acknowledged “numerous deficiencies that existed in the past. We acknowledge and sincerely regret past program deficiencies and have since corrected these errors with great care and concern.” The statement concluded with a declaration: “It is a new day at Liberty University.”

Costin twice canceled scheduled interviews with Virginia Business for this article, and Liberty’s spokesman said he would not be available for an interview before the April 2024 issue’s print deadline.

Previously president of Charleston Southern University, Dondi Costin became Liberty’s sixth president in July 2023. Photo courtesy Liberty University

Moving forward

S. Daniel Carter, a Tennessee-based campus safety expert who helped craft the current version of the Clery Act established in 2015, says Liberty was not singled out over its evangelical Christian prominence or its conservative Republican Party affiliations.

“The people who conducted this [DOE] review are people I’ve worked with for decades,” he says. “They are not political appointees. They have, year in [and] year out, taken methodical steps to enforce the Clery Act at all kinds of institutions, including many smaller religious institutions, over the years.”

The DOE’s 2010 finding that Liberty was not reporting crime statistics appropriately — as cited in the 2024 report — and Liberty’s failure to implement a reporting system in the intervening years were much more relevant factors, Carter says.

If there is a religious influence on the Clery Act, he adds, it has to do with the school’s strict code of conduct, known as the Liberty Way, which forbids use of alcohol, requires modest dress and prohibits “sexual activity, inappropriate personal contact, any state of undress in inappropriate circumstances, or spending the night with a member of the opposite sex.”

Carter, who advised one of the Jane Doe plaintiffs, says he views the school’s code of conduct as “inextricably linked” with the sexual assault allegations made against former Liberty students and a senior administrator in the Jane Doe lawsuit and referred to in the DOE report. Some plaintiffs claimed that the school rules were “weaponized” against students who wished to report sexual assaults by leading them to believe they would get in trouble for violating the code of conduct.

“The Liberty Way,” Carter says, “was simply at odds with the Clery Act’s requirements. To the extent that there is any religious nexus, that’s it. The law is clear. The law does not allow a federally funded institution of higher education to … afford students and employees who report sexual misconduct any less protection than any other institution. And that’s what this report finds happened, and Liberty, as part of their settlement, does not contest that.”

Corry disputes the argument that the Liberty Way was used to discourage students from reporting sexual assaults, although he acknowledges that the school could have done more to educate students on the issue.

“People just weren’t getting the message that that isn’t the way we do business,” Corry says. “A lot of old rumors and old wives’ tales and old, ‘Hey, be careful, word to the wise’ stuff … gets passed down and accepted as truth. Lore can undermine your desire to have an open [sexual assault reporting] process, where people feel like they will be respected. It is trauma-informed. It is open, and we’re not going to play ‘gotcha’ with curfew violations and alcohol and drug violations when there’s much bigger, more serious things to be ferreted out, like rape and sexual assault, and people feeling unsafe.”

Wahl says that although he thinks Costin and other university officials have continued to deflect blame from Liberty, he’s still hopeful about Costin’s leadership. “I believe that Liberty is trending in a very positive direction, when it comes to policies and procedures and keeping students safe, and I think Costin is a part of that.”

And while the Falwell lawsuits linger, and Liberty must report to the DOE through April 2026 under the settlement, the school will keep focusing on expanding its degree offerings and creating Christian leaders, including in the secular world. 

“We want leaders,” Hicks says. “We want you to be the best employee, then we want you to be the best leader, even to being the best … attorney or judge or politician or CEO. Whatever your role is, we just want you to do it in a way that honors God.”

At a glance

Founded
The private, nondenominational, conservative Christian Liberty University was started by Jerry Falwell Sr. and Elmer Towns as Lynchburg Baptist College in 1971, later named Liberty Baptist College and, finally, Liberty University in 1984.

Campus
Liberty sits on a 7,000-acre campus in Lynchburg with more than 180 buildings and structures, including the 25,000-seat Williams Stadium and the 275-foot-high Freedom Tower. The Vines Center hosts twice-weekly convocations featuring national speakers that have included former President Donald Trump; former first lady Melania Trump; former U.S. Secretary of State Mike Pompeo; presidential candidates Ted Cruz, Ron DeSantis and Bernie Sanders; former National Rifle Association head Wayne LaPierre; and comedian Jeff Foxworthy.

Enrollment
101,554 (Fall 2023)*

Student profile

Residential: 47% male, 53% female

Online: 41% male, 59% female

Academic programs

Liberty offers more than 700 total programs of study, with more than 600 available online and 350 on the Lynchburg campus. It has 15 colleges and schools, including the College of Osteopathic Medicine and the School of Law.

Faculty

Approximately 4,500 full- and part-time faculty, according to Provost Scott Hicks

Tuition, fees, housing and dining

Residential undergraduate tuition and fees: $23,800

Room and board: $12,920

Online undergraduate tuition: approximately $9,360 per year

*According to the State Council of Higher Education for Virginia, this number includes all residential and enrolled undergraduate, graduate and professional degree students. According to Liberty, total enrollment exceeds 135,000.

Slow and steady

The Lynchburg region has seen the slowest job growth of any metro area in Virginia over the past three years, according to economic analyses, and it typically has a higher unemployment rate than the state average. But there’s more to the story, some officials say.

For instance, the Lynchburg region saw 23 inquiries from economic development prospects in 2023, and half of those companies made site visits, says Megan Lucas, CEO of the Lynchburg Regional Business Alliance.

While she acknowledges that none of those businesses have chosen Lynchburg for their projects yet, the level of activity is an indicator for future growth, says Lucas, who joined the alliance in 2016 and before that was head of the Region 2000 Partnership, an economic development organization serving Lynchburg and the surrounding counties of Amherst, Appomattox, Bedford and Campbell.

“The more we generate awareness and RFPs, the more we generate capital investment and jobs, so that’s really important,” she adds. “When I began here 10 years ago, those numbers were at zero. It is a united front of local economic developers, municipalities and our private-sector investors that are making this happen.”

And, more importantly, the past year has brought some major economic development announcements that are expected to bring hundreds more jobs to the Lynchburg region within a couple years.

Lucas is particularly bullish about “the thriving urban core with a dynamic rural ring” that characterizes the region, but she cautions that breakneck economic growth is not necessarily the most beneficial goal for the area.

“We will continue to see slow, steady growth, marching forward,” she says. “We believe in smart growth and are open to focusing on smart growth principles and strategies. We are not throwing the barn doors open and screaming for everybody to come in in a fast, unorganized manner.”

Positive signs aside, the Lynchburg metro- politan statistical area’s unemployment rate was 3.4% in November 2023, exceeding the state’s rate of 2.9%, according to the Virginia Employment Commission.

Sector-based struggles

Lynchburg’s unemployment numbers aren’t a surprise. Over the past four years, the region has experienced major job losses across its three largest employment sectors: education and health; trade, transportation, and utilities; and manufacturing.

Joe Mengedoth, a regional economist with the Federal Reserve Bank of Richmond, reports that manufacturing employment in the Lynchburg area has grown only 3.5% above pre-pandemic levels, while education and health services employment is 1% below where it was in February 2020. Sectors that have been flourishing most throughout the commonwealth — information technology and professional and business services — are underrepresented in Lynchburg, leaving the city and its surrounding localities unable to reap the rewards of that growth.

“[The] Lynchburg metro area is the slowest to recover since the pandemic,” Mengedoth says.

However, there’s a wrinkle even in the stats from the state and Old Dominion University’s Dragas Center for Economic Analysis and Policy, which produces the annual State of the Commonwealth report on Virginia’s economic outlook.

Lynchburg’s largest employer, Liberty University, is not included in employment statistics produced by the state, because of a religious exemption that allows the private evangelical Christian university to not participate in unemployment insurance. Employers paying that insurance, however, submit regular data that the U.S. Bureau of Labor uses to track jobs numbers.

Dragas Center director Robert McNab, who is also chair of ODU’s economics department, says Dragas’ economic report, which doesn’t include Liberty’s 8,000-plus workers in Lynchburg’s employment data, still captures Liberty’s activities in other ways and paints an accurate portrait of Lynchburg’s important trends.

Liberty officials, however, beg to differ. Liberty General Counsel David Corry, who previously served on the Lynchburg Regional Business Alliance board, says the university has been trying to get the state to count Liberty employees in their statistics, which would improve the city’s employment numbers.

“It made the Lynchburg region look terrible for a long time because our employees were never counted,” Corry says. “We look poor, we look underemployed, and that just wasn’t the reality.”

While the state hasn’t changed the way it collects employment information, Richmond-based Chmura Economics & Analytics included Liberty’s employment data in a December 2023 study conducted for the regional alliance. In that report, Lynchburg’s employment level stood at 111,696 in the third quarter of 2023, about 1,800 jobs below its pre-pandemic peak. Those results would double the region’s growth rate, according to Chmura Economics CEO and Chief Economist Chris Chmura.

Lucas agrees that “we need to do everything we can to make sure that regional data includes our largest employer. Liberty is our region’s economic engine. … As it relates to communicating an accurate regional economic picture, their data needs to be included.”

Lynchburg’s slow economic growth is best understood in the context of the state’s economy, McNab says. ODU’s 2023 State of the Commonwealth report found that Virginia’s economic growth was slower compared with North Carolina, South Carolina and Florida, and that Virginia’s growth is mostly centered in larger population centers along interstates 95 and 64, at
a distance from Lynchburg.

“The problem we’re seeing in the commonwealth is that people, incomes and activities are increasingly concentrated in the urban crescent of Northern Virginia, Richmond and Hampton Roads,” he says. “It’s really hard to move the needle when the economic center of gravity of Virginia continues to move towards Fredericksburg.”

Although McNab’s data showed Lynchburg with a 3.6% unemployment rate in December 2023, a 0.1% increase from December 2022, this isn’t the bad news it may seem at first, he says, because total nonfarm employment also rose 0.5% in the same period.

“This is a point of good news for Lynchburg,” McNab says. “It makes me suspect that real GDP growth in Lynchburg ticked up in 2023 because we see growth in the labor force and individual employment. And that tends to suggest that economic activity picked up.

“Across the commonwealth, we have relatively low unemployment rates, and we have had job growth in 2023 across metro areas, including Lynchburg,” he adds. “We’ve also seen rises in real wages and a recovery in median household incomes from the bout of inflation in 2022. This suggests to me that the prospects for growth in 2024 are broad.”

Growth on the horizon

Other good news for the region included several major economic development announcements last year, led by nuclear energy company Framatome’s planned $49.4 million expansion in Lynchburg, which is set to create an estimated 515 jobs, announced in December 2023.

Centra Health launched a $500 million modernization of its Lynchburg hospital campus in May 2023, with a completion date set for fall 2027, and also in May 2023, power transformer manufacturer Delta Star announced a $30 million expansion of its corporate headquarters and plant in Lynchburg that is expected to create 149 jobs. And last October, lithographic print and custom envelope manufacturer Parkland Direct said it plans to expand its Bedford County facility, a $10 million investment creating an expected 41 jobs.

The Centra and Delta Star projects are on track and on budget, Lucas says, while Parkland Direct has not yet started construction, although it’s hiring more staff now.

These announcements came on the heels of earlier growth, including CloudFit Software’s recent completion of its $5 million renovation of downtown Lynchburg’s historic Carter Glass building to serve as its headquarters, bringing 78 jobs to the city. Also, Liberty University has revamped the River Ridge Mall, which it owns, through a $60 million renovation begun in 2019 — in contrast to many enclosed malls nationwide that have languished in recent years.

Also, says Lynchburg’s director of economic development, Marjette Upshur, there are more projects in the pipeline.

Gov. Glenn Youngkin announced last September that Lynchburg’s Economic Development Authority would receive a $500,000 state grant to transform a one-story former A&P grocery store downtown at 400 12th St. into a four-story, mixed-use building containing 10,000 square feet of retail space and 28 apartments. According to Upshur, residential tenants are expected to move in beginning in April or May, and the commercial space is scheduled for completion around September.

“We are currently working on several active competitive projects due to our efforts in site development and partnering with the private sector to market existing industrial and commercial buildings,” adds Upshur.

The LRBA also led a consortium to apply for a $500,000 grant last fall from the U.S. Economic Development Administration’s Tech Hubs program. The group didn’t win the grant, but Lucas notes, “we are continuing to build out our strategy” for creating the Nuclear Industrial Technology Commercialization Hub, or NITCH. The alliance has applied for a GO Virginia grant to assist with the initiative, which focuses on beefing up the area’s nuclear manufacturing industry and its workforce.

GO Virginia’s Region 2 allocated $240,192 to the alliance in March 2023 to create The Center for Entrepreneurship, which centralizes entrepreneurial support services at the alliance’s downtown Lynchburg office. Surrounding localities dedicated $187,035 in matching funds to support the project.

“At the Lynchburg Regional Business Alliance, our focus is commerce and free enterprise,” Lucas says. “We spend our time in that space working for the good of all businesses and industries that want to grow and be successful here. We always come down on the side of free enterprise and capitalism.”

The LRBA’s approach and the region’s relatively slow post-pandemic economic recovery have caused a minor amount of hand-wringing, and Bedford County conservative activist Isaiah Knight requested last September that the governing bodies of Lynchburg and Bedford and Campbell counties defund the alliance because its website once had a page devoted to diversity, equity and inclusion (DEI), although it has since been taken down, according to a September 2023 report in Cardinal News. Lucas explained at the time that the page was removed because many of its links were broken.

Last year’s kerfuffle did little to dampen the organization’s determination to continue its mission to promote business in Lynchburg, and most local officials remain in support of the alliance.

Asked about diversity initiatives earlier this year, Lucas emphasized LRBA’s broad-based outreach: “We have round-tables, meetings and a diverse membership in the Lynchburg Regional Business Alliance. We have diverse engagement. We walk the walk and talk the talk. It’s part of our philosophy, and we are engaged in commerce for everybody.”

Deputy Editor Kate Andrews contributed to this report.

Lynchburg at a glance

The Virginian Lynchburg. Photo courtesy The Virginian Lynchburg

Settled in 1757 on the James River in the foothills of the Blue Ridge Mountains, Lynchburg lies at the intersection of U.S. routes 29 and 460 alongside neighboring Amherst, Bedford, Campbell and Appomattox counties. Lynchburg’s economy is dominated by education, health care and manufacturing. It is home to Liberty University, the city’s largest employer, as well as Randolph College, University of Lynchburg, Virginia University of Lynchburg and Central Virginia Community College.

Population

79,287 (2022)

Top employers

Liberty University

Centra Health

Lynchburg City Schools

City of Lynchburg

Framatome

Major attractions

Visitors can soak up history and culture at the free Lynchburg Museum; Point of Honor historic plantation; and Old City Cemetery, a 27-acre historic public garden. Families can head to Amazement Square children’s museum. Outdoors lovers will enjoy the James River Heritage Trail along the James River. Westward in neighboring Bedford County, visitors can find waterfront recreation at Smith Mountain Lake and great hiking and views at the Peaks of Otter.

Top convention hotels

Bella Vista Hotel & Suites  164 rooms, 7,200 square feet of event space

The Virginian Lynchburg, Curio Collection by Hilton 115 rooms, 6,753 square feet of event space

Hilton Garden Inn Lynchburg  126 rooms, 2,880 square feet of event space

La Quinta Inn & Suites by Wyndham Lynchburg at Liberty Univ. 120 rooms, 1,539 square feet of event space

Courtyard by Marriott Lynchburg 90 rooms, 637 square feet of event space

Boutique/luxury hotels 

The Carriage House Inn Bed and Breakfast 49 rooms, 8,400 square feet of event space

The Craddock Terry Hotel & Event Center 44 rooms, 4,000 square feet of event space

Acorn Hill Lodge 10 rooms, 1 meeting room

Notable restaurants

Shoemakers American Grille American
shoemakersdining.com

The Water Dog Bar and grill
thewaterdog.com

Isabella’s Italian Trattoria Italian
isabellasitalian.com

The Dahlia Seafood
thedahlialynchburg.restaurant

RA Bistro American
rabistro.com

Top Five April 2024

The top five most-read daily news stories on VirginiaBusiness.com from Feb. 14 to March 13 were led by news that Danish toymaker Lego will delay production at its Chesterfield County facility until 2027.

1   |   Lego delays Chesterfield production start to 2027

Lego Group will begin production at its $1 billion manufacturing facility at Meadowville Technology Park at least a year later than originally announced. (Feb. 15)

2   |   Capital One to buy Discover in $35.3 billion deal

McLean-based Capital One Financial plans to acquire Discover Financial Services in an all-stock deal that would make Capital One the nation’s biggest credit card lender. (Feb. 19)

3   |   Dominion to sell 50% interest in Virginia Beach offshore wind farm for $3 billion

Dominion Energy reached an agreement to sell a 50% noncontrolling stake in its Coastal Virginia Offshore Wind project to investment firm Stonepeak. (Feb. 22)

4   |   Liberty University fined $14 million for underreporting campus crime

The U.S. Department of Education levied a record fine against Liberty in a settlement of alleged Clery Act violations by the Lynchburg-based Christian university. (March 5)

5   |   Norfolk looks to renovate Scope, Chrysler Hall instead of building arena

Norfolk is considering renovating the older city-owned venues rather than building anew arena at the former Military Circle Mall site. (Feb. 22)

Dominion Energy is selling a 50% noncontrolling stake in its $9.8 billion Virginia Beach offshore wind farm to Stonepeak. Photo by Mark Rhodes

Liberty University fined $14M for underreporting campus crime

The U.S. Department of Education has fined Liberty University a record penalty of $14 million for underreporting crime on campus, in a Clery Act settlement announced Tuesday. The amount far outstrips the department’s previous highest-ever fine, $4.5 million, assessed in 2019 against Michigan State University for the gymnastics sexual abuse scandal involving Dr. Larry Nassar.

According to the final report released by the DOE, Liberty either omitted or erred in reporting 93% of all criminal incidents that took place on university-owned property from 2016 to 2023 on daily crime logs that are required to be made public under federal law.

Of 3,672 reported criminal incidents reported to campus police during the reviewed period, 1,452 reported crimes ranging from aggravated assault and rape to stalking, fondling and motor vehicle theft were left off Liberty’s daily crime logs, which are supposed to provide the public with an accurate picture of criminal incidents. Over the same period, according to the DOE report, there were 1,949 crime log entries that either contained one or more errors or omitted information. The 3,401 omitted or incorrect crime log entries are all viewed as finable violations of the Clery Act, which requires any university — public or private — that participates in federal financial aid programs to track crime statistics and other information regarding campus safety.

“In calendar year 2022 alone, 571 incidents of crime that were required to be entered on the log were omitted in their entirety,” the report says, noting that Liberty’s Clery Act investigation started that year.

The Lynchburg-based private evangelical Christian university originally faced up to $75 million in fines, Liberty’s legal counsel, David Corry, said in an interview with Virginia Business earlier this week. The Department of Education, he said, “threatened to fine up to $75 million and offered to settle for half of that,” or $37.5 million, the amount Liberty officials publicly disclosed the university was facing in October 2023, after a DOE preliminary report was leaked to The Washington Post earlier that month.

In a statement released Tuesday in response to the fine, Liberty University asserted that “many of the Department [of Education]’s methodologies, findings and calculations were drastically different from their historic treatment of other universities. Liberty disagrees with this approach and maintains that we have repeatedly endured selective and unfair treatment by the department.”

The school also acknowledged “numerous deficiencies that existed in the past,” and said that “Liberty is fully committed to maintaining the safety and security of students and staff without exception. … We acknowledge and sincerely regret past program deficiencies and have since corrected these errors with great care and concern.”

In addition to the $14 million fine, the university agreed to spend $2 million on campus security improvements over the next two years as part of the settlement, and a third-party accounting firm will audit progress on this work. Also, the DOE will conduct post-review monitoring of Liberty through April 2026 to ensure it complies with the promised improvements.

“Any further lapses in Clery Act compliance could jeopardize the terms of the university’s participation in the federal student aid programs or result in other administrative sanctions against the institution,” the DOE statement said.

In Tuesday’s announcement, the Department of Education’s Federal Student Aid office, which conducted the lengthy investigation, said Liberty was found to have committed multiple violations in 11 areas of the federal Clery Act.

  • Lack of administrative capability — Liberty “substantially failed to develop and implement an adequate Clery Act compliance program between 2016–23, the years FSA reviewed, and did not meet its regulatory responsibilities in numerous and serious ways.”
  • Inaccurate and incomplete information disclosures regarding campus safety and criminal activity
  • Failure to comply with Violence Against Women Act requirements
  • Failure to identify and notify campus security authorities and to establish an adequate system for collecting crime statistics from all required sources
  • Failure to properly classify and disclose crime statistics
  • Failure to issue emergency notifications in accordance with federal regulations
  • Failure to maintain an accurate and complete daily crime log
  • Failure to define Clery Act geography in accordance with federal regulations
  • Failure to comply with Title IV record retention
  • Failure to publish and distribute an annual security report in accordance with federal regulations

“Students, faculty and staff deserve to know that they can be safe and secure in their school communities. We respond aggressively to complaints about campus safety and security,” Richard Cordray, chief operating officer of the DOE’s Federal Student Aid office, said in a statement Tuesday. “Through the Clery Act, schools are obligated to take action that creates safe and secure campus communities, investigate complaints and responsibly disclose information about crimes and other safety concerns. We will continue to hold schools accountable if they fail to do so.”

According to a senior FSA official, investigators conducted interviews of more than 100 current and former students, staff members and others connected to Liberty, some more than once.

In 2010, Liberty’s campus crime program was investigated by the Department of Education after an alleged victim of sexual violence in a 2005 incident at the university said that Liberty had violated “numerous provisions of the Clery Act as the law existed at that time,” before the Violence Against Women Act was enacted, according to Tuesday’s report. Under the legal standard 14 years ago,  investigators in 2010 “identified serious violations related to the classification and counting of crimes, the compilation and disclosure of accurate and complete crime statistics, the issuance of timely warnings [and] the maintenance of a compliant crime log,” Tuesday’s report continues. In 2010, senior officials at the university said they would take “comprehensive remedial action,” according to the 2024 report, which concludes, “it is now clear that the efforts were not adequate or comprehensive.”

The Washington Post reported in Oct. 3, 2023, that the DOE’s preliminary, confidential report on the private Christian university “paints a picture of a university that discouraged people from reporting crimes, underreported the claims it received and, meanwhile, marketed its Virginia campus as one of the safest in the country.” According to the Post, which obtained a copy of the report, the DOE’s Federal Student Aid office was investigating Liberty’s adherence to the Clery Act from 2016 through 2022.

The investigation came after 12 anonymous former students and employees — known collectively as Jane Does — filed a Title IX lawsuit in July 2021 claiming that Liberty discouraged them from reporting sexual assaults or punished students who reported sexual abuse or rape if they violated the university’s code for students, known as the “Liberty Way,” which prohibits drinking alcohol or having premarital sex. Later, other plaintiffs joined the suit, which was partially settled in May 2022. At least two plaintiffs declined to settle with the university, according to media reports at the time.

Following the Post’s story, Fox News reported later in October 2023 that Liberty officials said the school could be fined $37.5 million for numerous violations of the Clery Act.

In the Post story, Liberty was accused in the DOE preliminary report of failing to warn the campus repeatedly about “gas leaks, bomb threats and people credibly accused of repeated acts of sexual violence — including a senior administrator and an athlete.” Those allegations and others remain in the final report released Tuesday, although the final report reversed an earlier finding that Liberty had failed to protect a whistleblower from retaliation.

In the preliminary report, the Department of Education investigation team made an initial finding that a former Liberty senior vice president of communications and public engagement who alleged that Liberty “had retaliated against him based in part on his attempts to address serious violations of the Clery Act,” constituted a violation of the anti-intimidation and retaliation provision of the Clery Act.

Although the DOE report does not name the former employee, the complaint echoes allegations made by former Liberty spokesperson Scott Lamb in his lawsuit against the university, which dismissed him in 2021. The lawsuit was dismissed by a federal judge in 2023.

Liberty responded to the DOE’s preliminary finding in favor of the former employee’s allegations with other reasons for terminating the employee, including “mismanagement of university funds, poor leadership of the Standing for Freedom Center and insubordination.”

In the DOE’s final report, investigators find “that on balance Liberty’s response to this finding is persuasive. Therefore, the department does not sustain the finding and considers it closed.”

Changes at Liberty

In response to the Post story, Liberty released a statement Oct. 3, 2023, saying that the university was cooperating with the DOE and had hired two consulting firms, Cozen O’Connor and The Healy+ Group to “help facilitate and administer a multi-year review of Clery Act compliance.”

According to Liberty’s statement, the university received a report of the DOE’s preliminary findings in May 2023, to which Liberty responded on June 30, 2023, “including the results of a comprehensive file review conducted by Healy+, and a supplemental response on Sept. 21, 2023. detailing significant errors, misstatements, and unsupported conclusions in the Department [of Education’s] preliminary findings.

“Based on the extensive information and documentation it provided to the department, Liberty has every expectation that the department will carefully evaluate the information and documents and correct the errors in the preliminary program review report.”

Corry said this week that Liberty has spent more than $10 million on campus safety initiatives since the federal Clery Act investigation began, including installing improved lighting and more closed-circuit cameras on campus, as well as changes to Title IX personnel and overall staff training.

Also, the university has implemented recommendations from a Title IX task force created by Liberty’s board of trustees, Corry said.

“There was a kind of a sense that even if Liberty was technically complying with [Title IX and Clery Act requirements], it needed to not reluctantly do so but it needed to enthusiastically do so,” said Corry, who has been the university’s general counsel since 2011. “The numbers were just demonstrating that even though people are coming to the Title IX office and asking questions and starting the process [of reporting an incident], somewhere along the line, they got scared and they discontinued the process or they chose not to go through with it and so we tried to find all the barriers — psychological, procedural, image, whatever — all these barriers that might have caused people to either be misinformed or misunderstand or just think this is too much trouble.”

As of Jan. 25, the maximum fine per Clery Act violation is $69,733. The amount is adjusted annually for inflation, and higher education institutions can accrue multiple maximum fines based on the number of confirmed violations.

Liberty’s full statement in response to the DOE fine is below:

“Liberty University and the U.S. Department of Education (‘department’) have finalized the Clery Act Program Review and entered into a settlement agreement.

“This comes after the university has made more than $10 million in significant advancements since 2022, in areas including corrective measures, educational programming, new leadership and staffing, infrastructure, and facilities in order to focus on compliance and ensure strong and sustainable Title IX and Clery Act programs. Liberty is fully committed to maintaining the safety and security of students and staff without exception.

“In the report, many of the department’s methodologies, findings and calculations were drastically different from their historic treatment of other universities. Liberty disagrees with this approach and maintains that we have repeatedly endured selective and unfair treatment by the department. The university concurs there were numerous deficiencies that existed in the past. Examples include incorrect statistical reports as well as necessary timely warnings and emergency notifications that were not sent. We acknowledge and sincerely regret past program deficiencies and have since corrected these errors with great care and concern.

“We will continue to work in cooperation with the department to prioritize safety in our Liberty University community and to advocate for a fair, consistent, and principled standard of Clery compliance that is applied equally to all universities without prejudice.”

Top Five February 2024

The top five most-read daily news stories on VirginiaBusiness.com from Dec. 15, 2023, to Jan. 15 were led by the announcement that Fortune 500 IT company DXC Technology replaced its top executive.

Interim DXC CEO Raul Fernandez. photo courtesy DXC Technology

1   |   DXC Technology replaces Mike Salvino

The Ashburn-based company replaced Salvino, its chairman, president and CEO, with interim President and CEO Raul Fernandez. (Dec. 20, 2023)

2   |   Trucking company plans $50 million facility in Botetourt

Michigan-based Universal Logistics Holdings is planning a $50 million expansion into Botetourt County, which is expected to create
45 jobs. (Jan. 3)

3   |   Lynchburg and Danville law firms to merge

Petty, Livingston, Dawson & Richards in Lynchburg and Southern Virginia Legal (SoVa Legal) in Danville merged to become PLDR Law, beginning Jan. 1. (Dec. 27, 2023)

4   |   Virginia Credit Union, Member One announce merger

Chesterfield County-based Virginia Credit Union and Roanoke-based Member One Federal Credit Union announced plans to merge and create the state’s third largest credit union. (Jan. 11)

5   |   Norfolk HeadWaters casino could break ground in spring 2024

The HeadWaters Resort & Casino’s developer has submitted new plans to the City of Norfolk, aiming to start construction in spring 2024. (Dec. 19, 2023)

HeadWaters Resort & Casino, which is planned for Norfolk, has to meet a deadline of November 2025 to open. Rendering courtesy HeadWaters Resort & Casino;

Lynchburg and Danville law firms to merge

The law firms of Petty, Livingston, Dawson & Richards in Lynchburg and Southern Virginia Legal (SoVa Legal) in Danville will merge to become PLDR Law beginning Jan. 1, 2024, the two law firms announced Wednesday.

Together, the two firms will jointly have 16 attorneys and have offices in Lynchburg and Danville, serving communities across Central and Southern Virginia, according to a news release announcing the merger.

Scott Kowalski, president of Petty, Livingston, Dawson & Richards, will be president of the newly merged firm. Steven Gould, founder and managing attorney of SoVa Legal, will chair the firm’s transactional practice and manage the Danville office. Holly Trent will join the new firm to lead its health care practice. Trent was most recently senior vice president and chief legal officer of Centra Health.

Kowalski practices construction law, surety law and litigation and has practiced since 1995. He clerked at the U.S. Court of Federal Claims and practiced for more than a decade in McLean for Watt, Tieder, Hoffar & Fitzgerald. He returned to his hometown of Lynchburg to join the firm in 2009. He attended William & Mary for his bachelor’s in history and earned his law degree at George Mason University School of Law.

“We are thrilled to announce this merger of two accomplished firms,” Kowalski said in a statement. “Petty Livingston has experienced significant growth the last two years, and SoVa Legal has developed a tremendous reputation assisting clients who are helping to drive economic revitalization in the Danville area. By combining our resources and talents, we can expand our offerings to clients even further. The addition of Holly Trent is a key component of that expansion.”

Before Gould formed SoVa Legal, he co-founded Byrnes Gould Law and practiced at Williams Mullen in Richmond and Clement Wheatley in Danville. He has served as chair of the Virginia Bar Association’s Young Lawyers Division and will serve on the VBA’s Board of Governors in 2024, a board he has previously served on. Gould also was on the Board of Directors of the Virginia Law Foundation. Before attending law school, Gould spent five years as a policy adviser in the governor’s office in Richmond, where he worked on economic and workforce development, agriculture, housing and executive clemency. He worked under U.S. Sen. Mark Warner and U.S. Sen. Tim Kaine when each served as governor. He earned his bachelor’s degree from the University of North Carolina and his law degree from the University of Virginia.

“We have enjoyed a strong collaboration with the attorneys at Petty Livingston in recent years to supplement the business, employment, and estate planning services we offer to our clients. The opportunity to join forces allows us to ensure that the Danville market continues to be served by a robust, full-service firm that can grow with our community,” Gould said in a statement.

This story has been corrected since publication.

Framatome plans $49.4M expansion, creating 515 jobs

Framatome, a French nuclear power company with its United States headquarters in Lynchburg, will invest $49.4 million to expand, modernize and enhance its facilities, creating an estimated 515 jobs, Gov. Glenn Youngkin announced Thursday.

The expansion will meet increased demand for servicing existing nuclear power plants and developing solutions for advanced and small nuclear reactors. At the end of October, Framatome had 1,350 employees in Lynchburg, where it has had a presence since 1989. Framatome designs, services and installs components, fuel and instrumentation and control systems for nuclear power plants worldwide.

“We are building the world’s leading nuclear energy hub right here in Virginia, thanks to the continued growth of industry leaders like Framatome,” Youngkin said in a statement. “The commonwealth is implementing an all-of-the-above energy plan to ensure abundant, reliable, affordable and clean energy, and Framatome is key to increasing our workforce in this critical technology for our future. Virginia can set the standard when it comes to energy innovation and has a pipeline of world-class talent prepared to meet demand.”

Virginia competed with North Carolina and Pennsylvania for the project.

In 2018, Framatome moved its North American headquarters from Charlotte, North Carolina, to Lynchburg and now has three operational and corporate sites in Lynchburg for its fuel, installed base and instrumentation and control (I&C) business units.

The company also operates its Framatome Nuclear Technology Academy at Lynchburg’s Central Virginia Community College, with the academy announcing a major revamp in May.

“The greater Lynchburg region and the commonwealth of Virginia have been Framatome’s North American base of operations for over a half-century. Now, we’re strengthening our commitment to our home and our shared goal of safe, reliable, low-carbon power generation,” Kathy Williams, CEO of Framatome North America, said in a statement. “Our extensive investments in facility expansion and modernization, broadening our labor pool and escalating recruitment will help energize our community and align us with the Commonwealth of Virginia as catalysts in the transition to a clean energy future.”

The Virginia Economic Development Partnership worked with the City of Lynchburg to secure the project. Youngkin approved a $5 million grant from the Commonwealth’s Development Opportunity Fund to assist Lynchburg with the project. Framatome is eligible to receive state benefits from the Major Business Facility Job Tax Credit for full-time jobs created, as well as benefits from the Virginia Enterprise Zone program, administered by the Virginia Department of Housing and Community Development. VEDP will also provide support to Framatome through its Virginia Talent Accelerator Program.

Lynchburg association lands $310k in grants to aid downtown efforts

With help in part from three state grants, Downtown Lynchburg Association is working to brighten the city’s scenic Bluffwalk for the holidays and fill downtown stores.

DLA combined a $75,000 Virginia Main Street Downtown Investment Grant with other funding to launch Bright Nights on the Bluffwalk, an eight-week event set to kick off Nov. 17 with a festival.

DLA received the funding as part of $2.91 million in Virginia Main Street, Community Business Launch and Virginia Business District Resurgence grants awarded in September for 45 projects across Virginia.

The association received a total of $310,000, the most of any locality. It included a $135,000 Virginia Business District Resurgence Grant for a microgrant program to allow small businesses to make storefront and beautification improvements and a $100,000 Community Business Launch Grant for DLA’s Launch LYH entrepreneurial support program and pitch competition, which begins its second program in 2024.

Bright Nights will transform the city’s four-block pedestrian walkway overlooking the James River into a wonderland of lights, large-scale installations and festive music, says DLA Executive Director Ashley Kershner. The organization had wanted to create a holiday experience to attract people downtown after Lynchburg’s annual Christmas Parade moved to midtown in 2016. The state grant provided the last piece of funding needed for the $210,000 celebration, she says.

“We anticipate that this event will draw families and new visitors to our vibrant downtown area, creating a significant boost to local businesses, hotels, and attractions, and enriching the overall holiday spirit of our community,” says Marjette Upshur, Lynchburg’s economic development and tourism director.

DLA serves a 73-block area that currently has a 23% vacancy rate due largely to an ongoing project to replace old water lines and install new sidewalks, according to Kershner. The first Launch LYH program, which launched in January 2023, is helping fill empty buildings, Kershner says.

Launch LNY received more than 100 applications, and selected 25 applicants to participate in an eight-week education course culminating in a pitch competition. Seven winners received cash grants to help with new venture costs. The grants ranged from $10,000 to $25,000 and could be used for rent, build-out, inventory, or other startup costs. They also received a prize package that included assistance with site selection, permitting and marketing.

Four winners have already signed leases and will open their businesses in the next few months. Among them is Tia Hancock, who is opening an indoor plant boutique, PREAM (Plants Rule Everything Around Me), at 409 Fifth St., where customers can create their own potting soil mixes.

Hancock says she gained a wealth of knowledge from Launch LYH about the back end of running a business and forged strong connections with her classmates and mentors. The program also helped her find her store location, which has large windows that let in lots of light for plants.

“Honestly, the most valuable thing I got out of this whole program was the people that I met in the class and the people teaching it,” Hancock says. “The four winners … have built a close relationship. We went through this process together, so not only am I not alone, but when things fall apart, I have at least three other people to call and vent to, and they know exactly what I’m talking about. I do have mentors that I can call for that same exact thing. A lot came out of this more than simply money.”

Former Lynchburg Chapstick factory sells for $1.9M

A 218,818-square-foot industrial property in Lynchburg where Chapstick was once manufactured has sold for $1.9 million, Cushman & Wakefield | Thalhimer said.

Valley Properties purchased the industrial/manufacturing building, located at 1000 Robins Road, from KDC/One as an investment. KDC/One, a global contract manufacturer of personal beauty and home care items based in Canada, announced in 2022 that it would close the location, where as many as 675 full- and part-time employees worked, by the end of 2023, according to The News & Advance.

Norman K. Moon Jr. and Thacher Jennings, both of Cushman & Wakefield | Thalhimer, handled sale negotiations on behalf of the seller.

Chapstick, a lip balm created by Lynchburg pharmacist Charles Browne Fleet in the 1890s, was at one point manufactured in the building, Moon told Virginia Business. Fleet sold the Chapstick formula, and rights to it, to his friend John Morton for $5 in 1912, according to a company history. Morton revamped the product, and created the Morton Manufacturing Co., which produced Chapstick in Lynchburg until 1963, when it was bought by Richmond-based A.H. Robins Co. A Fortune 500 pharmaceutical company, Robins went bankrupt in the 1980s amid thousands of lawsuits over its Dalkon Shield birth control device and was acquired by American Home Products. That company in turn became Wyeth, which was acquired by pharmaceutical giant Pfizer in in 2009 for $68 billion.

Framatome revamps nuclear training pipeline

A French nuclear power company with its United States headquarters in Lynchburg is ramping up hiring to meet a growing global need for clean, low-carbon energy.

Framatome North America is recruiting for 200 positions in the U.S, about 125 of which are in Lynchburg, and it anticipates a “significant” number of additional openings in coming years, says CEO Katherine Williams.

Some of those employees will come from the 20-year-old Framatome Nuclear Technology Academy at Central Virginia Community College in Lynchburg, which in May saw a major revamp after realizing its enrollment, which was limited to employees, had dwindled from a high of 25 students at a time to as few as five. The academy, a pathway to an associate degree, produces nuclear technicians who monitor and help maintain nuclear plants.

Nationally, about 600 openings for nuclear technicians are projected annually during the next decade.

Framatome has been in Lynchburg since 1989 and has about 1,320 employees in the location. It designs and provides equipment, services and fuel for nuclear power plants around the world. After noticing a skills gap in its entry level applicants, the company donated $1 million to CVCC to establish the academy in 2004. More than 100 employees have graduated from it, and 70% still work at Framatome, says Williams.

In May, Framatome announced it was donating $400,000 over four years to revamp the academy, adding equipment and condensing classroom instruction into semesters instead of two, five-week sessions annually for four years. (The rest of the time, Framatome’s students work at nuclear plants globally.) Employee pay was also made more competitive for students enrolled in the academy, which is tuition-free. Enrollment has reached a company goal of 30, says Marci Gale, head of CVCC’s mechatronics and electronics faculty.

The academy also is now open to the public; 16 non-Framatome employees have enrolled. Those who don’t work for another company that might cover academy tuition are likely to get an interview with Framatome.

L.A. Wills, 24, worked for a Framatome subcontractor when he learned about the academy. He’s in his third year now and works on steam generators for Framatome. He’ll graduate next year with a degree in applied nuclear mechatronics.

“Personally, it gives you an opportunity to show the company that you’re willing to put in the work to better yourself, so that way you can grow with the company,” Wills says.