The Men Who Killed Birmingham-Southern College, Part I

On May 31, 2024, Birmingham-Southern College (BSC) ceased operations and closed its doors for the first and last time.

We can only speculate what BSC will become. An HBCU? A government hospital or a warehouse? An Amazon fulfillment center?

BSC has been declared dead and DNR (do not resuscitate) in recent years by an Alabama Legislature largely unsympathetic to his plight. But we only see the tip of the iceberg.

BSC’s current situation is attributed to a toxic condition – financial misconduct – that has worn away the foundation of the institution for almost 50 years.

There are three men primarily responsible for BSC’s messy ruin: Dr. Neal Berte, Dr. David Pollick, and Alabama State Treasurer Young Boozer III.

Berte, BSC’s president from 1976-2004, arrived shortly before the gruesome rape and murder of BSC graduate Quenette Shehane at a convenience store near campus shook the school and the community. Berte responded to the incident by building a closed wall around the campus with secure entry points, making “The Hill” a protected fortress.

Berte implemented various aesthetic projects to beautify the campus with new buildings and facilities to attract potential students, but these projects were mainly financed with debt. Mortgages were taken out on the campus property in 1996, 1997 and 2002 under the City of Birmingham Private Education Building Authority. Tuition revenue bonds totaled about $30 million. Almost immediately after their issuance, these bonds began receiving ratings from the Moody’s bond rating service. By the time Berte left, the bonds had received three downgrades. Although BSC’s endowment grew to about $130 million during Berte’s tenure, BSC went heavily into debt and accumulated money from these expensive “home improvement” projects.

However, Berte’s most disastrous decision was bringing BSC into NCAA Division I athletics. Berte did not prepare and present to the BSC board a financial projection of the implications of moving to Division I athletics, and there was no discussion in council when this motion was passed, only a motion by Berte and a mandatory show of hands.

The NCAA requires all Division I schools to award full tuition scholarships to its athletes. In the case of BSC, this amounted to approximately 110 athletes receiving full scholarships. Board members were never informed of this requirement prior to BSC’s move to DI. BSC did not have a scholarship fund to pay for these athletic scholarships, so Berte canceled the athletes’ tuition and called them “scholarships”, causing BSC to run significant annual operating deficits without tuition revenue from the athletes. These deficits were hidden from BSC’s board of directors by improper accounting.

Such mandatory, often dictatorial leadership was common for Berte, who often withheld information from the board and operated autonomously with little oversight or checks and balances.

Berte tried to grow BSC out of its nagging financial dilemma—it did not receive enough tuition revenue to cover fixed operating costs—by beautifying the campus, adding new programs, and qualifying BSC for NCAA Division I athletics. All of these decisions were disastrous.

Financial mismanagement and abuse

BSC’s history is marked by such calamitous fiduciary negligence. Deficits in the operating account were continuously covered with funds from the endowment, some of which were restricted funds that could only be used for specific purposes.

The board did not learn that BSC’s financial statements were not in compliance with the Financial Accounting Standards Board (FASB) until 2001, thus failing to provide an accurate description of BSC’s financial performance up to that point. Thirty years of poor accounting is a death sentence for almost any business, including BSC.

Berte, who had total control over every aspect of BSC’s operations, denied knowledge of this fatal commingling of funds, but his nefarious negligence was eventually exposed. Berte finally retired on June 30, 2004.

Out with Berte, with Pollick. A West Coast native with a PhD in philosophy, Pollick appeared as far removed from the Birmingham Rotary Club and Canterbury UMC poster type as one could imagine. And because the board realized that they had not properly fulfilled their legal duty to oversee the operation of the BSC, they promised to keep a close eye on the affairs of the college.

Such new vigilance arrived too late. BSC was already stuck in an inevitable oblivion orbit.

Pollick was never informed of the problem with BSC’s financial statements when he interviewed for the job. Learning of this problem on his first day at BSC, Pollick told Byron B. Mathews, Jr. (BSC Class of 1970 and unofficial advisor to various BSC administrators over the years), “I shit your pants”.

Poor Pollick. But he had a job to do.

It soon became clear to the board that the college was running large annual deficits, caused in part by tuition waivers attributed to BSC Division I athletes.

When the board met and approved the resolution to divest from Division I athletics, an enraged Berte, retained as chancellor to mentor Pollick and serve as a familiar face to donors and board members, stormed out of the meeting, immediately sending by fax a letter resigning from the position of chancellor. , but conveniently failing to “cc” Pollick. Berte never spoke to Pollick again.

The move to Division III athletics did not, as hoped, prove more fruitful for BSC’s financial problems. In order to participate in the NCAA Division III conference, BSC had to offer a total of 22 varsity sports. Half of BSC’s students were Division III athletes. Although Division III athletes could not be offered “athletic scholarships,” there is no doubt that most received substantial, if not total, tuition discounts.

As a 2013-2015 BSC basketball athlete, I can personally attest to the veracity of this (although I only received partial “merit scholarships”, not a “full ride”).

Dowd Ritter, CEO of Regions Bank, and now BSC’s board chairman, has told at least some trustees that his bank will pay for BSC’s new football stadium in exchange for naming rights.

This was neither the first nor the last of the personal favors and under-the-table rejections enjoyed by those at the top of the BSC’s complicated hierarchy. With Regions Bank on the brink of financial collapse and BSC in fiscal jeopardy, Ritter hardly attended any board meetings, choosing instead to fly Regions’ fleet of private jets to the Greenbrier to play golf.

It became clear that the endowment funds would eventually run out if BSC continued to run the annual deficits begun during the Berte administration.

Pollick’s game plan, meanwhile, was to increase declining enrollment. Very similar to Berte’s goals: build a nicer campus and they will come.

Efforts to beautify BSC, a “shining light on a hill” in a not-so-savory part of town, have only destroyed it.

But failed, reckless projects are not responsible for the demise of BSC. People are.

Will follow…

Conner (CR) Hayes is a small business owner based in Nashville, Tennessee. He is a 2017 graduate of Birmingham-Southern College and a screenwriter, novelist and poet. CR Hayes is published in a variety of media, including academic articles, journalism, prose and poetry.

The views and opinions expressed herein are those of the author and do not necessarily reflect the policy or position of 1819 News. To comment, please email your name and contact information to [email protected].

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