byline: Kate Andrews

A legal complaint filed last week by former Liberty University President and Chancellor Jerry Falwell Jr. alleges that President Emeritus Jerry Prevo and members of Liberty’s executive committee received in excess of $1 million from the university “through a series of questionable self-dealing transactions that have the appearance of kickbacks.”

Filed in the U.S. District Court for the Western District of Virginia in Lynchburg, Falwell’s amended federal lawsuit also alleges that “Liberty has forced out certain faculty and staff members and vendors simply because they are associated with or perceived to be closely associated with Mr. Falwell. Such faculty and staff include individuals with outstanding credentials and a track record of high performance, including several individuals who are African American.”

The university responded Tuesday that it would address what it called Falwell’s “improper and unsupported allegations designed to diminish former colleagues, family and friends and to discredit the university where he formerly served” in a legal filing “in due time.”

The allegations are part of an amended federal lawsuit against Liberty, Prevo and Falwell Jr.’s younger brother, university chancellor Rev. Jonathan Falwell. While the older brother did not accuse the younger Falwell of enriching himself via the university’s endowment, Jerry Falwell Jr. alleges that Jonathan Falwell went back on recusing himself from the legal dispute, which stems from Falwell Jr.’s claim that Liberty is improperly using the likeness, signature and name of their late father, university founder and televangelist Jerry Falwell Sr.

In July, Jerry Falwell Jr. and the Dr. Jerry L. Falwell Family Trust sued Liberty University in U.S. District Court for $5 million. Last week’s filing argues that the senior Falwell, who died in 2007, would not want his name or brand associated with “Liberty, at least as it exists in its current incarnation, under the control of a small group of members of the so-called ‘executive committee’ who have seized control of the university after Mr. Falwell’s resignation as president and chancellor of the university in August 2020.”

The amended lawsuit, filed Sept. 13, adds as defendants Jonathan Falwell and Prevo, who stepped down as Liberty’s interim president earlier this year but remains on the executive committee, the body to whom Liberty’s presidents and chancellors answer. Jonathan Falwell, who was named chancellor of the Lynchburg university in March, at the same time that retired Maj. Gen. Dondi Costin was named Liberty’s president, also serves as pastor of his father’s former church, Thomas Road Baptist Church.

Falwell Jr. resigned in late August 2020 under a cloud of controversy — including reports that his wife, Becki Falwell, participated in an affair with a young man she met at a Miami hotel, and that the Falwell family became financially involved with the man, Giancarlo Granda, over several years. While Falwell Jr. has acknowledged that his wife was involved in an affair that began in 2012, he has refuted reports — including allegations by Granda in news interviews, a streaming documentary TV series and a book — that Falwell watched Granda having sex with his wife. Amid the fallout, Liberty sued Falwell for breach of contract, a matter still underway in Lynchburg Circuit Court, and Falwell has sued the university for $8.5 million in retirement funds he says he is owed. Additionally, Falwell filed a $5 million federal suit over the university’s use of Falwell Sr.’s name and likeness in what Falwell Jr. calls a marketing effort.

Filed as part of Falwell’s second federal lawsuit against the university, the 55-page complaint alleges that “certain members of the executive committee and the board of trustees maneuvered to eliminate Mr. [Jerry] Falwell [Jr.] from the leadership of Liberty and wrest control over the university and its sizable $2 billion endowment … for their own benefit, without oversight by or interference from Mr. Falwell, who they knew would seek to protect the institution his father founded and stand in the way of their attempts to exploit Liberty for their own gain. Indeed, after Mr. Falwell left Liberty in August 2020, these members directed Liberty to dole out hundreds of thousands of dollars in self-dealing transactions, purportedly as ‘donations,’ to organizations controlled by these members and/or their close affiliates.”

Prevo, the complaint alleges, “sought for Liberty to improperly divert hundreds of thousands of his salary [as interim president] to his personal foundation, which Liberty eventually ceased to do on advice of counsel.” The suit also alleges that Prevo “racked up at least hundreds of thousands of dollars in expenses associated with his use of Liberty’s corporate jet,” which the lawsuit says Prevo used “on numerous occasions” to fly between Virginia and his homes in Alaska and Arizona, based on public flight records. Earlier, when Falwell was president and Prevo served on the executive committee, the complaint alleges that Prevo “pressured Mr. Falwell for Liberty to pay thousands of dollars for Prevo’s grandson to receive training in flying planes at Liberty’s expense.”

The lawsuit also states that two nonprofits connected to Prevo and his close friend and adviser, Franklin Graham, son of the late televangelist Billy Graham, received large payments from the university following Falwell Jr.’s resignation.

In the fiscal year ending June 2021, according to the lawsuit, “Liberty paid $200,050 to Samaritan’s Purse,” a charitable organization led by Graham as president, and for which Prevo served as a board member. During the same fiscal year, the university paid $200,000 to Hope Partners International, “which is an organization that is, upon information and belief, controlled by Kirk Nowery, the former chief operating officer of Samaritan’s Purse,” and the next year, Liberty gave $414,960 to Hope Partners, “by virtue of its ties to Prevo and Graham.” William F. Graham IV, Franklin Graham’s son, serves on the Liberty board of trustees.

Prevo — whose appointment to the executive committee expires in 2025 and who served on the committee before becoming interim president in August 2020 — also benefited financially after his wife received “a substantial sum for her role as the wife of the president,” Falwell’s suit alleges. Liberty’s 990 forms disclosed that Carol Prevo received $39,824 in fiscal year 2021 and $53,574 in fiscal 2022 in compensation.

The lawsuit then lists payments of more than $100,000 that “Mr. Falwell has learned Liberty made” to organizations connected to two current members of the university’s executive committee and a former member of the committee who died in November 2021. The amounts are publicly available in Liberty’s 990 forms filed with the IRS for fiscal years 2020, 2021 and 2022. According to the complaint:

• Liberty paid $100,000 during fiscal year 2020, which ended June 2021, to the ministry of university executive committee member Jerry Vines, a clergyman who lives in Georgia. “While designated as a not-for-profit on Liberty’s books, Jerry Vines Ministries is in the business of selling religious media through its e-commerce store,” the complaint says. The ministry has filed 990 reports to the IRS, as required of nonprofit organizations.
• In the same fiscal year, Liberty paid $100,000 to Tim Lee Ministries, a nonprofit organization run by Lee, who is on the executive committee and chairs the board of trustees. Similarly to Vines, the suit alleges that Lee’s ministry runs an online gift shop and collects “speakers’ fees for Lee to appear at events.” The lawsuit also alleges that in the fiscal year ending June 2022, Liberty gave $76,000 to Wylie Preparatory Academy, “a school in Texas that Lee’s granddaughters attended.”
• The late Harvey Gainey, who died in November 2021, served as vice chairman of the board of trustees and as a member of Liberty’s executive committee. The complaint alleges that between 2020 and 2021, “Liberty paid $125,000 in purported ‘donations’ to Gainey Foundation,” which operated Two Moose Camp in Montana, “which was allegedly run as a not-for-profit.” The suit says that after a trucking company owned by Gainey went bankrupt from “approximately $240 million in unpaid debts, he used Two Moose Camp to finance his lifestyle.” Falwell’s complaint adds that from 2018 through 2021, Gainey secured “annual contributions from Liberty” for students, staff and faculty to “‘visit’ his camp for a week” at costs of $30,000 and more. In 2008, Wachovia sued Gainey Corp. for $238 million.
• Falwell’s complaint also alleges that “in the past two years, a significant number — at least 12 — members of the board of trustees have also received substantial payments from Liberty, all in different amounts, many in the range of tens of thousands of dollars, and one as high as in excess of $100,000.” The lawsuit claims that’s in violation of standards set by the Southern Association of Colleges and Schools, which accredits Liberty, and requires that accredited educational institutions ensure that the presiding officer and a majority of voting members of their governing board “are free of any contractual, employment, personal or familial financial interest in the institution.”

The lawsuit also alleges that “at least a majority of the board of trustees” are “paid by Liberty, or … control organizations that Liberty has paid,” and some trustees and executive committee members “have been so bold to … deflect and distract from … their own questionable financial dealings” while alleging that Falwell “had committed unspecified financial wrongdoings.”

In late August 2020, shortly after Falwell’s resignation, the board announced it would hire a forensic accounting firm to investigate the university’s finances while under Falwell’s purview. “Ultimately the investigation cost Liberty … millions of dollars, and has revealed nothing improper about Mr. Falwell’s actions at Liberty,” Falwell’s complaint says. However, the university’s general counsel, David Corry, disputed that assertion in a memo to trustees, calling it “obviously false.” Purportedly sent by Corry on behalf of board chairman Tim Lee to the board of trustees in response to the amended lawsuit, the memo was published Tuesday in a post on X (formerly Twitter) by Liberty alumni group Save 71, which has advocated for reforms including the removal of Falwell and some longtime board members.

Falwell’s lawsuit also alleges that executive committee members gave Falwell an ultimatum to resign or face termination after Granda went public in a news story published by Reuters in August 2020. Falwell also alleges he was held to a different standard than “other high-ranking officials” at Liberty, including an unnamed former president who was sued by a former Liberty employee for sexual harassment but remained employed by the university, which settled with the former employee, and that a former divinity school dean and a former provost kept their jobs after they were alleged to have had extramarital affairs, according to the complaint. By contrast, Falwell “had not … engaged in similar misconduct or had any affair.”

Liberty spokesman Ryan Helfenbein released the following statement Tuesday: “In response to Liberty’s compelling motion to dismiss his complaint, Jerry Falwell Jr. filed an amended complaint containing improper and unsupported allegations designed to diminish former colleagues, family and friends and to discredit the university where he formerly served. These personal attacks have no place in a legal dispute over the use of a person’s name, image and likeness. Liberty will file the appropriate response to these claims in due time and defend its legal right to continue the use of Dr. Jerry Falwell’s name. Furthermore, we stand by our initial statement that Liberty University and its Board of Trustees have only sought to honor the visionary leadership of Dr. Jerry Falwell and the mission of training Champions for Christ.”

In a Sept. 14 order, Judge Norman K. Moon denied as moot Liberty’s request to dismiss the $5 million lawsuit. In Falwell’s original complaint filed July 27, he and the Falwell Family Trust sued the university, but as of last week, Falwell Jr. is the sole plaintiff and represents the trust, according to the suit.

In the leaked memo published by Save71, Liberty’s general counsel wrote to trustees, “Unfortunately, it seems Jerry Jr. wants to use this lawsuit as a vehicle to attempt to write his own misleading narrative on his resignation and issue a scathing critique on the Board, its Executive Committee and Jerry Prevo as his successor. It feels odd and inappropriate that all this is part of a lawsuit about use of Jerry Falwell Sr.’s name, but Jerry Jr. tries to paint … Liberty University after his leave of absence as being operated so inconsistently with the Jerry Falwell brand as to be disqualified from continuing to use it. To do this, he throws a lot of mud. On the other hand, his narrative attempts to burnish his own leadership abilities and excuse his behavior.

“Many of these new allegations are completely false and baseless. Others have omitted facts that would balance them out to be unremarkable. One regularly omitted fact is that Jerry Falwell Jr. made and presided over many of the decisions and types of decisions that he claims to now find fault with.”

The message continues, claiming that the accreditation organization “quickly rejected” Falwell’s allegations that its board members, having been paid by the university, are in violation of SACS rules.

“We do not see these new allegations added to the complaint as changing our trajectory for success in resolving the case fairly quickly,” Corry wrote in the leaked memo, which also included the prepared statement for media inquiries that was released by Helfenbein on Tuesday afternoon.

Lee, Vines, Jonathan Falwell and Corry did not respond to requests for comment Tuesday, and neither did an attorney for Liberty. Phone numbers listed for Prevo were out of service, and he was unable to be reached Tuesday.