February 19, 2021

Is Arthur Keiser in Charge at St. Andrews University?

Is Arthur Keiser in Charge at St. Andrews University?

There is ample evidence that controversial, ultra-wealthy for-profit college owner Arthur Keiser, a powerful figure in business and politics, has obtained dominant influence over tiny St. Andrews University, a non-profit liberal arts school in southern North Carolina. Florida-based Keiser University, the largest institution that Arthur Keiser controls, started making multi-million dollar contributions to St. Andrews and its parent school, Florida’s Webber International University, in 2018, around the time that most members of those schools’ joint board of trustees were replaced, largely, perhaps entirely, by people connected to Arthur Keiser. In addition, St. Andrews/Webber satellite campuses are now sharing locations with campuses of Southeastern College, a separate for-profit career college owned by Arthur Keiser and his wife, Belinda. And last summer, Ellen Bernhardt, who is still listed in the Keiser University catalogue as a top official of that school, became the interim president of St. Andrews.

Now, alumni of St. Andrews are expressing concern that they are being kept in the dark, that St. Andrews is losing its character and integrity. They believe Ellen Bernhardt may be named the permanent president as soon as this weekend when the trustees are scheduled to meet. Last summer on a Zoom call, Bernhardt spoke bluntly to alums who seemed unready to accept her as the replacement for the institution’s beloved long-time president, who had retired. “Get over it,” Bernhardt told them.

In August we published an extensive investigative report describing numerous troubling issues at Arthur Keiser’s schools. Keiser University is a career college chain, with programs ranging from health care to business, criminal justice to culinary arts, and some 19,000 students at campuses across the entire state of Florida. Owners Arthur and Belinda Keiser converted the school from for-profit to non-profit in 2011, in a sketchy deal under which the Keisers continue to run the school — Arthur Keiser is “chancellor and CEO” and his wife is vice chancellor — and the school continues to produce enormous returns for them personally. Relying on accounts from more than fifteen current and former Keiser officials and employees, as well as Keiser students, we wrote about the overlap of personnel and resources between non-profit Keiser University and the Keisers’ smaller for-profit Southeastern College; about questionable business dealings between Keiser University and the Keisers and other board members; about recruiting abuses and academic failings at Keiser schools; about law enforcement problems for the school and personal misconduct by Keiser officials; and about Arthur Keiser’s political influence.

Keiser has long been a powerhouse in his state’s politics, and in federal lobbying efforts to protect for-profit colleges’ access to taxpayer dollars. Appointed by congressional Republicans to the main federal advisory committee on higher education, NACIQI, which will have its next meeting in early March, Keiser now is the chair of that important panel.

Since we posted the article, another two dozen or so Keiser employees, associates, and students have reached out to me, as recently as this week, to describe continuing abuses at Keiser and Southeastern. Matters alleged, which we continue to investigate, include: relentless demands on recruiters to use high-pressure sales tactics to sign up new students in the COVID-19 era; insistence that admissions staff make their recruiting phone calls from campus during the pandemic, in close quarters and with many staff remaining maskless; enrollment of students who are obviously unprepared to succeed in Keiser programs; pressure on instructors to raise grades so struggling students will stay enrolled; and delays and denials of approvals with respect to an employee tuition reimbursement program, leaving staff members owing tens of thousands to Keiser University for taking classes there.

We also learned of the recent elevation of the Keisers’ son Robert from executive director of their for-profit Southeastern College to executive vice chancellor in charge of Keiser University’s graduate school, despite him receiving his doctorate (from for-profit Capella University) only last year — calling into question again whether Keiser University is being operated like the large, regionally-accredited, non-profit institution it supposedly is, or is instead still being treated like a family business.

Keiser’s growing influence on St. Andrews/Webber

St. Andrews University, the apparent increasing focus of Keiser family interest, is a Presbyterian-founded college located in Laurinburg, North Carolina, and, according to its website, a “branch” of another non-profit school, career education-oriented, Babson Park, Florida-based Webber International University. The two schools merged in 2011, when St. Andrews was in financial trouble and at risk of losing accreditation. At the time Webber had about 750 students, and St. Andrews about 440. Long-time Webber president Keith Wade is a St. Andrews graduate.

In June of last year, a St. Andrews press release announced that “Effective immediately, Dr. Ellen Bernhardt has been appointed Interim Campus President for St. Andrews University, a branch of Webber International University.” According to the release, Bernhardt had already been at St. Andrews for two years, holding the title senior vice president of operations and chief operating officer, and she “assumed total leadership responsibility for the campus in November of 2019” when the previous university president, Paul Baldasare, announced his retirement.

Yet, according to the 2020-21 Keiser University catalog, Ellen Bernhardt remains the associate vice chancellor of Keiser University. Bernhardt’s LinkedIn profile lists her Keiser job as her current position. She still can be reached at a Keiser University email address.

Webber International University and St. Andrews share a single board of trustees. Oddly, Arthur Keiser is listed as a member of that board of trustees in one version of Webber International University’s 2019-2020 catalogue posted online (as we pointed out in our August 2020 article), but not in another version, even though both are titled “2019-2020 UNIVERSITY CATALOG NUMBER 79.” He’s not included as a trustee on the same list in the St. Andrews catalogue for that year, and he’s disappeared from the 2020-21 Webber catalogue trustee list as well.

But Keiser may not need to conspicuously keep a board seat himself to have influence. Comparing the Webber and St. Andrews college catalogues for 2018-19 with the ones for 2019-20 and 2020-21 reveals that twelve people on the 16-member joint board of trustees left and were replaced in that period by nine new members (not counting Keiser), and at least some of them, maybe all, are tied to Arthur Keiser.

For example, new board member Ana Waldman is married to the brother of James Waldman, the long-time general counsel of Keiser University. New board member Donald Jones is the retired patriarch of a family that, like the Keisers, has profited handsomely from operations and deals involving Florida non-profit colleges; an industry executive told me Jones and Keiser have known each other for many years. Another new board member, Melissa Wade, worked for years in the for-profit college industry, according to two former Keiser officials; one said Wade “knows Art for a very long time” but that her real ties are to Peter Crocitto, Keiser’s top lieutenant.

The other new board members — Joe Miranda, Arvid Albanese (who, like Arthur Keiser, appears to have posted a five-star review of New Bedford, Massachusetts’ LePage & Sons Roofing), Sonny Van Arnem, Maria Wells (the name of a south Florida realtor who actively supported Belinda Keiser’s failed 2018 campaign for state Senate), Ronald Schmidt (a one-time for-profit college executive, now in real estate, and long-time friend of Peter Crocitto, according to a Keiser associate), and Robert Colton, MD (who has served on the board of directors of the elite private K-12 Pine Crest School, as has Arthur Keiser, class of ’71) — all hail from South Florida, home of Arthur Keiser.

Keiser and Webber/St. Andrews are now also tied financially. The IRS 990 disclosure form filed for 2018 by Everglades College, the non-profit organization that runs Keiser University, shows that Everglades donated that year $2.2 million to St. Andrews and $2.1 million to Webber, in both cases for “PROGRAMS/ADMIN.” The donations from Keiser-controlled Everglades thus appeared to come around the time the Webber/St. Andrews board of trustees was remade with Keiser associates. One could infer that Arthur Keiser bought himself a new governing board.

Marty Martin, a St. Andrews alumni council member who attended St. Andrews for two years before completing his bachelors at the University of North Carolina-Chapel Hill, is now a Raleigh, NC, lawyer with extensive expertise in nonprofit organizations and taxation. He says the alumni group was not notified of the radical makeover of board membership or of the millions in Keiser donations.

Martin and other alums told me they believe there is not a single person on the current board of trustees with any affiliation with St. Andrews or its local area.

Meanwhile, there are growing connections between St. Andrews-Webber campuses and those of Keiser’s for-profit Southeastern College.

On the website of its accreditor, SACS, Webber lists the address of an off-campus instructional location, “Webber International University West Palm Beach,” as 1756 North Congress Avenue — the same address as the main campus of Southeastern. It lists another Webber location in Miami Lakes as 17395 Northwest 59th Avenue — also a Southeastern campus location. Webber also lists on the accreditor site three other St. Andrews University locations — in Columbia and North Charleston, SC, and Charlotte, NC — all located at the same addresses as Keiser’s Southeastern College (previously called Southeastern Institute) schools.

More recently the St. Andrews website announced that the school will this spring begin offering classes in business and health administration (not the full range of liberal arts courses taught on the Laurinburg campus) at a new Charlotte campus. As on the SACS site, the address for the Charlotte campus is listed as 207 Regency Executive Park Drive. Guess what? That’s the very same address as the Charlotte campus of Southeastern College, owned by Arthur and Belinda Keiser.

What’s the point?

The purpose of all this new, Keiser-dominated alignment between schools is unclear.

Arthur Keiser and a Keiser University spokesperson did not respond to a request for comment. Ellen Bernhardt and Webber president Keith Wade also did not respond.

It’s possible Keiser may be planning a reprise of the controversial deal he did to convert Keiser University: sell a for-profit school, in this case Southeastern, to a non-profit, Webber/St. Andrews, on terms that strongly benefit the Keisers, and then allow for-profit businesses operated by the Keisers to rent buildings and sell goods and services to the non-profit school.

Absorbing Southeastern into Webber/St. Andrews would also upgrade that Keiser school from oversight by the national accreditor ACCSC to the more prestigious regional accreditor Southern Association of Colleges and Schools Commission (SACS), which also oversees Keiser University.

These kinds of conversion deals, pioneered by Keiser and others, and pursued by predatory for-profit operations including Kaplan, Bridgepoint, Dream Center, and CEHE, have allowed for-profit barons to obtain coveted non-profit status and benefits, and escape the stigma and regulations that the for-profit college industry provoked with its bad behavior, while still making big money.

But any such deal might catch the eye of the IRS which, as we previously reported, investigated Keiser University’s finances in recent years. Also, congressional oversight of these for-profit to non-profit conversions is increasing, and the new Biden administration may be prepared to look harder at the risks.

So perhaps Keiser is considering options, maybe not a formal merger but other synergies between the institutions that could benefit his bottom line.

Alumni speaking up

Whatever Arthur Keiser has in mind — and some active alumni I spoke with seemed to have no inkling of Keiser’s possible designs until they recently read our article from August 2020 — members of the St. Andrews alumni council are expressing multiple concerns: that interim president Bernhardt is treating them brusquely and making it difficult for them to obtain information about the school’s operations and finances; that Bernhardt will be named permanent president at this weekend’s trustees meeting; that their school is losing its character entirely.

“Many of us are quite concerned,” says Carol Wood, St. Andrews class of ’69. Wood and others say that when alumni have asked Bernhardt to provide them with financial documents, such as audited financial statements and IRS 990 returns, Bernhardt, despite the pandemic, has declined to send such documents electronically, instead offering them for review only on the Laurinburg campus, which sits about 110 miles north of coastal cities Wilmington, NC, and Myrtle Beach, SC.

“What are they hiding, and why are they making the financials so hard to see?” asks Wood.

“My concern,” says Martin, the non-profit law expert, “would be with transparency and disclosure, the failure to make financial information available, the inherent conflict of having overlapping boards with no input from the St. Andrews community, and what I am beginning to learn about newer board members’ affiliations.”

“It makes me wonder,” Martin added, “what it means for the future of St. Andrews as an independent university.”

Even before COVID-19, times were tough financially for many small non-profit colleges. But a fate worse than death for some schools might be to become the unrecognizable playthings of cynical for-profit college empire builders — operators who may conceal the extent of their influence.

A former Keiser executive likened the situation to the “Godfather” movies: “There’s a guy who is the owner of the casino in Vegas, but it’s another guy who really owns it. It’s brilliant, but it’s disgusting.”

One alum described Ellen Bernhardt as responding in a “snippy” manner, not the usual way a non-profit college president speaks to an alumni gathering, when asked on a Zoom call about the possibility of separating St. Andrews from Webber and restoring its independence.

Two alums said that in Bernhardt’s first Zoom conference with alumni as interim president, in June 2020, she said that people on the call who were concerned or upset about her being interim president should “get over it.”

A former Keiser executive who worked with Bernhard and professes to like her says she is “rough around the edges…. When you come from for-profit, non-traditional education, you don’t look at alumni the same way, you don’t treat them the same way.”

Carol Wood sensed the difference. She said that in 1969 the St. Andrews campus was “liberal, welcoming, happy, and academically it was hard — intellectual rigor united us, you were proud you went to St. Andrews.”

“I fear,” she said, “that spirit of St Andrews in getting lost in the new programs” with new campuses in various locations. Future students “will never have experienced St Andrews.”

Wood, whose career has been in education, said that if Bernhardt is named permanent president, “I know if I was a professor there I would make sure my resume is out there.”

Donald “Mick” Meisel, a 1976 graduate and an urban planner living in Hamilton Township, NJ, is vice president of the St.  Andrews alumni council. He reports that a council meeting had been set for this weekend, just before the trustees meeting, as is traditional. Concerned about the direction matters were heading, Meisel prepared resolutions for the council to vote on calling for the addition of trustees with connections to the school, for St. Andrews alumni to serve on a search committee for a new president, and for more openness about the school’s financial information.

But the president of the alumni council pushed the meeting back a week, citing his own scheduling conflict.

Multiple alums expressed concern to me that by the time the alumni council meets, Bernhardt’s appointment will be a done deal, without their input.  Meisel suspects that the decision to make Bernhardt the permanent president was made when she was named as interim leader.

“I’m concerned,” Meisel said, “that the alumni were promised 18 months ago that there would be presidential search. Our understanding was that the association with Webber would be a temporary situation that would end when St. Andrews got back on sound financial footing. That path isn’t being followed.”

From the evidence, it appears that St. Andrews’ current path may instead be directed by Arthur Keiser.

UPDATE 02-20-21:

Four hours after we posted this report, the St. Andrews website posted an announcement that it had added to the board of trustees one Frederick McCoy, Jr., a Chapel Hill business executive, a former board member, and “[a] native of Laurinburg, North Carolina.” According to the post, “Electing Mr. McCoy to the Board was a unanimous decision.”

Then, this morning a reader shared with me some interesting additional information.
First, this excerpt from Webber International University’s latest audited financial statement:
Note N – Campus Lease Commitments
 
 
In September 2011, the University entered into a sale-leaseback arrangement whereby it sold its St. Andrews campus, consisting of certain campus land, buildings, and improvements, including the equestrian center, to Scotland Development Corporation, a North Carolina nonprofit corporation. Concurrent with this agreement, the University entered into a contract to lease the same real estate for an initial term of ten years, with two consecutive five-year renewal options. During the term of the lease, the University is required to pay all executor costs such as taxes, maintenance, and insurance. Monthly rental payments for the St. Andrews campus are $60,000. The lease is accounted for as an operating lease. Rent expense for the years ended May 31, 2020 and 2019, was $766,275 and $854,000, respectively.
 
In May 2018, the University amended its lease agreement with Scotland Development Corporation to become current on outstanding lease payments owed of $1,214,000. In addition to the scheduled monthly rent payments of $60,000, the current outstanding liability shall be repaid at a rate of $5,000 per month beginning June 1, 2018 until paid in full; with one-half of the remaining balance paid on or before October 1, 2021 and the remaining balance paid on or before October 1, 2022.
 
Note O – Consulting Agreement
 
In June 2018, the University entered into a ten year consulting agreement with a non-profit organization for both campuses. Under terms of the agreement, the organization will provide comprehensive administrative consulting services to the University. Monthly consulting payments are $16,667 in addition to reimbursing business expenses incurred by the consultant. The monthly consulting payments will be reviewed annually and adjusted to the determined fair market value of consulting services.
The reader helpfully analyzed these provisions:
In other words, Webber was $1.2 million behind on the lease of St. Andrews’ facility and reached a deal to get caught up the same year Everglades opened up its wallet. Also that year, Webber started receiving “comprehensive administrative consulting services” from some unnamed nonprofit (maybe Everglades?). I think the timing corresponds with when Ellen Bernhardt started….

Filings with the Scotland County Register of Deeds shows St. Andrews borrowed more than $600,000 [$642,000] from Webber in 2017 that it happened to pay back in … June of 2018…. Between the significant unpaid rent and this loan, it looks like Webber/St. Andrews had a serious need for cash — and that is before Hurricane Florence caused extensive damage to the school. This means they were likely in a position to be receptive to money with strings attached.

UPDATES 02-22-21 6:00 pm:
St. Andrews tells employees they can’t speak to the media without permission from acting president (and Keiser employee) Ellen Bernhardt. Funny though, for this story I did reach out to Bernhardt — the only staff member at St. Andrews I contacted — and she didn’t respond.
As of February 12, the South Carolina Commission on Higher Education was considering an application from St. Andrews to offer courses in business administration, starting in May, to be held at two “off-campus locations” in Columbia and North Charleston, SC. As explained in an internal memo prepared at the commission:
St. Andrews University included in their its application for licensure a signed copy of a memorandum of
understanding for use of the facilities proposed at the North Charleston and Columbia campuses. The
University entered into an agreement on January 24, 2020 with B.A.R. Education doing business as (DBA)
Southeastern Institute and Southeastern College. This agreement establishes the guidelines for a
cooperative relationship to facilitate co-location and post-graduation matriculation of students.
UPDATE 05-17-21:

After the Laurinburg Exchange newspaper republished this article in early March, it published an article based on an interview with Webber International University president Keith Wade. Among Wade’s comments, as reported by the Exchange: “First of all, I will say that (the Republic Report) is a blog; anyone can have a blog… There are some libelous points that need attention and there are some points that are correct; they are public record. I’m surprised it’s created the attention it has because it’s merely a regurgitation of what was said in August…. We have a consulting agreement with Everglades, and it’s been a very successful one. But Mr. Keiser has no connection to St. Andrews whatsoever. He probably doesn’t even know anything about the contract we have with his university.”

As I noted above, Wade did not respond to my request for comment before I published this article. As I also noted, among other things, a long-time Keiser University employee, Ellen Bernhardt, is the interim president of St. Andrews; campuses of St. Andrews are now co-located with campuses of Southeastern College, owned by Arthur Keiser; and Keiser was previously listed as a board member of Webber, which is also the governing board of St. Andrews. So Wade’s statement that Keiser “has no connection to St. Andrews whatsover” is ludicrous.

UPDATE 06-15-21:

In a letter sent last night, Rep. Kathy Manning (D-NC), writes to U.S. Secretary of Education Miguel Cardona: “In the last few years, St. Andrews’s nonprofit legacy has been threatened as for-profit college operator Arthur Keiser and his associates exert control over St. Andrews through what one expert characterized as a ‘hostile takeover.'” Manning asks Cardona to report on “what steps have been taken to ensure that St. Andrews continues to operate as a bona fide nonprofit as defined by ED regulations?”