RIFT AT NMMI [Albuquerque Journal, N.M.]
(Albuquerque Journal (NM) Via Acquire Media NewsEdge) Sept. 08--An acrimonious split between the New Mexico Military Institute and its former Alumni Association has triggered not only a lawsuit, but a war of words reminiscent of the ouster of the institute's superintendent five years ago.
Some longtime association members liken the division -- which involves more than $5 million in association assets -- to a "civil war" that has pitted "brother against brother."
NMMI regents warned the NMMI Alumni Association in February that it had 30 days to improve its accounting practices and provide audited financial statements.
When that didn't occur, the regents severed relations with the nonprofit organization and closed its campus office. The regents formed a new Office of Alumni Relations and hired James D. Lowe -- previously executive director of the Alumni Association -- as its director.
In June, NMMI sued the association, saying its officers had repeatedly "failed to generate or provide the most basic monthly account- ing statements showing the status of its financial affairs" and "is no longer able to carry out its purpose" or "manage its corporate affairs in accordance with the corporation's governing documents."
The suit asks the 5th Judicial Court to freeze the association's accounts, transfer about $5.2 million in assets to the NMMI Foundation Inc., provide an accounting of the funds it has collected and stop using NMMI's name or logos.
In its July 31 response, the Alumni Association said, "Despite the claims of the institute of financial mismanagement, negligence and malfeasance, the association has maintained appropriate financial records, has filed all tax returns required, has undergone audits of its accounting procedures, and has otherwise properly managed the corporate affairs of the association."
The filing also says the association, formed in 1966, has remained "a private, stand-alone charitable institution" dedicated to promoting NMMI, providing student scholarships and serving the needs of the institute's alumni.
The response claims the lawsuit "is the culmination of a concerted and wrongful attempt by the institute" to take over governance of the association and gain control of roughly $5.2 million in assets. Those endowed assets consist of funds established for scholarships, awards and cadet activities. They include about $3 million in permanently restricted funds, $770,000 in temporarily restricted funds and about $1.58 million in unrestricted funds, according to Carl Hansen, NMMI's public affairs officer.
After the regents filed suit, Alumni Association president John Phinizy issued a statement claiming NMMI Superintendent Maj. Gen. Jerry Grizzle was seeking "complete control" over the association and its assets.
Grizzle is "continuing his 'campaign of lies' ... in his attempt to seize the Association's $5.2 million in assets," Phinizy said in a June 22 letter to alumni.
David Metz of Albuquerque, a life member of the Alumni Association, shares Phinizy's opinion that Grizzle -- who has been NMMI's superintendent since June 2009 -- is intent on controlling the alumni association and its assets.
"It's kind of like a civil war, and it was started by the current superintendent of the institute, Jerry Grizzle," Metz said recently. "Grizzle apparently didn't like having an independent alumni group on campus ... ."
Grizzle declined to respond to Phinizy and Metz's claims, citing the pending litigation.
But Hansen said it was the institute's five-member, governor-appointed regents who filed the suit, not Grizzle.
"(This) has never been about control of any kind," Hansen said. "As the (lawsuit) makes clear, the issues are about poor oversight and faulty financial management relating to the donor-provided funds that the Association considers 'assets.'"
Regents President Steve Paternoster said Grizzle enjoys "very strong support, not only from the Board of Regents but from the cadets, their parents and the state Legislature."
Though NMMI superintendents typically work under a one-year contract, the regents in May gave Grizzle a three-year renewable contract with an annual salary of $185,857.
"I think that (contract extension) shows people that we're confident in our leadership and that we intend to keep our leadership in place," Paternoster said.
Grizzle's 34-year military career included a stint as commander of the Department of Defense's Joint Task Force Civil Support, which was charged with developing terrorism response plans for major cities and public events in the wake of 9/11. He also is a former adjutant general of the Oklahoma National Guard.
He has a master's in finance, a doctorate in marketing and has been chief financial officer for a handful of private businesses, including the Sonic drive-in restaurant chain.
Alumni vs. superintendents
Phinizy, who is also an assistant district attorney in Roswell, declined to discuss the lawsuit, saying it would be "inappropriate" because it's being litigated.
Metz, however, said the current flap is reminiscent of the 2008 resignation of Grizzle's predecessor, retired Navy Rear Adm. David R. Ellison. Ellison, hired by the regents in 2004, faced withering criticism in 2008 when a number of Alumni Association members -- including Metz -- called for his resignation. They cited dwindling enrollment, high student attrition and low student retention.
Ellison said the criticism was coming from a small number of alumni, but he tendered his resignation and left the institute in May 2009. The regents then hired Grizzle.
"He (Grizzle) hasn't done any better," Metz said.
During the five years Ellison headed NMMI, enrollment averaged 792 cadets per year.
Average annual enrollment under Grizzle, who's been at the helm four years, has been 810 cadets, according to NMMI enrollment records.
Retention rates under Ellison averaged 91 percent per year. Under Grizzle, it's been 92 percent -- despite the economic recession that has paralleled most of his tenure.
Metz said the lawsuit is essentially a power grab by the superintendent and regents.
"I think he and the regents did not want an independent group that could resist them right there on campus, and decided to take them over -- including the $5.2 million endowment," Metz said.
Paternoster said neither the regents nor Grizzle want control of the Alumni Association's assets.
"We are not suing for control of the money," Paternoster said, adding that because NMMI has severed relations with the Alumni Association, the school could not accept those assets.
He acknowledged, however, that the suit seeks to transfer the association's funds to the NMMI Foundation.
The foundation has 14 members, nine of whom are elected at-large at its annual meeting. Four members are appointed by the regents, but no more than two of those appointees can be serving as regents when elected. The NMMI superintendent is an ex-officio, nonvoting member, foundation president Jimmy Barnes said. Regents Paternoster and Jesse Eckel currently serve on the foundation board.
Paternoster said it's unfortunate the controversy has turned personal for some.
"Sadly, it's one of those things where it's brother against brother. The folks that are opposing us in court, they're all men that I know, men that I care about," he said. "This doesn't have anything to do with relationships. It has everything to do with the institutional responsibility to protect" NMMI's good name.
Metz said the Alumni Association needs to remain independent and not a branch of the institute.
"We figure that an elected, representative-based organization is better than one (whose board is) appointed by the superintendent," he said. "That's why we have resisted them. ... Understandably, the association is not wanting to be complicit in its own extinction."
But Hansen questioned the association's claim of being independent of the institute, saying that when it filed as a nonprofit with the IRS, its stated purpose was " ... providing financial assistance to students through loans and scholarships" and "... organizing, assisting and promoting activities which promote and increase the enrollment" at NMMI.
"Any characterization of the association as 'independent' is in error," Hansen said.
Fifth Judicial District Court Clerk Kennon Crowhurst said the suit was assigned to Judge Jane Shuler-Gray in Eddy County after four Chaves County judges recused themselves from the case. No date for hearing the case has been set.
(c)2013 the Albuquerque Journal (Albuquerque, N.M.)
Visit the Albuquerque Journal (Albuquerque, N.M.) at www.abqjournal.com
Distributed by MCT Information Services
[ Back To Technology News's Homepage ]