LYNCHBURG, Va. (Reuters) – Evangelical leader and prominent Donald Trump supporter Jerry Falwell Jr has personally approved real estate deals from his nonprofit Christian college that helped his personal trainer secure valuable college property, according to real estate files, internal university emails and interviews.

FILE PHOTO: Liberty University President Jerry Falwell Jr. attends the school’s opening ceremonies in Lynchburg, Virginia, U.S. May 11, 2019. REUTERS / Jonathan Drake

Around 2011, Falwell, president of Liberty University in Virginia, and his wife, Rebecca, began personal physical training sessions with Benjamin Crosswhite, then a 23-year-old Liberty graduate. Now, after a series of college real estate deals signed by Falwell, Crosswhite has a sprawling 18-acre racquet and fitness center on the former Liberty property. Last year, a local bank approved a line of credit allowing Crosswhite’s business to borrow up to $ 2 million on the property.

Falwell, one of America’s most influential right-wing Christian leaders, has been rocked by revelations about his private relationships over the past year and a half.

Florida lawsuit has drawn public attention to a relationship between the Falwells and Giancarlo Granda, a young man they befriended while working as a pool attendant at a luxury Miami Beach hotel and then supported a business venture involving a youth hostel. Falwell filed an affidavit in 2018 saying he used his own fortune to loan $ 1.8 million to the $ 4.65 million project with Granda.

And US President Trump’s now-jailed fixer Michael Cohen said he helped the Falwells remove the racy personal photos, as Reuters reported in May, in the months before Cohen persuaded Falwell to approve. Trump’s candidacy for the White House in 2016. There is no evidence that Cohen’s efforts to suppress the photos were in exchange for Falwell’s vital political support.

Falwell’s support for two young men, Granda and Crosswhite, has some parallels. The two were aided in business ventures and both flew aboard the nonprofit college business jet.

One difference: When Falwell helped Crosswhite, he used the assets of Liberty, the tax-exempt university he has run since 2008. Among the world’s largest Christian universities, Liberty relies on the hundreds of millions of dollars that its students receive as federally supported students. Pell loans and grants.

In 2016, Falwell signed a real estate deal transferring the sports facility, with tennis courts and a fitness center owned by Liberty, to Crosswhite. Under the terms, Crosswhite was not required to put its own money on the purchase price, a confidential sales contract obtained by Reuters shows.

Liberty pledged nearly $ 650,000 up front to rent tennis courts to Crosswhite on the site for nine years. The school also offered Crosswhite financing, at a low interest rate of 3%, to cover the remainder of the $ 1.2 million transaction, the contract says.

Crosswhite declined to answer questions about the deal. “All I will say is that my wife and I consult each other before every major trade deal and we bought the resort from Liberty together,” he said in an email. “My wife and I work tirelessly to make our business successful. “

Falwell sent Reuters back to the university for comment. Liberty issued a statement describing the transaction as both appropriate and beneficial for the school.

Liberty had received the sports center as a gift in 2011 from an administrator who has since died, but it quickly became a “drain on university resources,” the statement said. Crosswhite had been renting gym space on the property since 2013 and was therefore “the most viable buyer”. Liberty said they adjusted the price and funded the purchase of Crosswhite because their tennis team would continue to use the courts.

Falwell “tried to be a business mentor” to Crosswhite, according to the college statement, but that effort did not “cause him to give up his fiduciary duties” to Liberty.

As Liberty’s leader, Falwell earns an annual salary of nearly $ 1 million and is forced to put the financial interests of the university ahead of his own personal interests when running Liberty’s business.

“The concern is whether the president of the university was willing to do his personal trainer a favor and used Liberty’s assets to do so,” said Douglas Anderson, governance specialist and former chief audit executive. at Dow Chemical Co, which reviewed both the transaction and Liberty’s explanation. at the request of Reuters. It would be bad governance, he said. “At a minimum, the terms suggest the buyer got a good deal and very little Liberty.”

The Crosswhite Athletic Club is located in a quiet residential lane approximately 7 miles from the Liberty campus. Its large windowless buildings house indoor tennis and racquetball courts, a gym and a clubhouse.

During a reporter’s visit in August, Crosswhite, a muscular 31-year-old man with short blond hair, was leading a client around the well-equipped facility, pushing him through kettlebell swings and barbell presses. On one wall: a sign for “Crosswhite Fitness”, with a cross where the T should be, and a quote from a verse from the New Testament Second Letter to the Corinthians.

Falwell has publicly credited Crosswhite with helping him lose 75 pounds. “He’s the kind of guy he is,” Crosswhite told Reuters. He asked Reuters to submit written questions about his dealings with Liberty and Falwell, but did not respond.

PRESENTATION OF A “SWEET DEAL”

The history of the business relationship between Crosswhite, Liberty and Falwell seems to start in 2011.

That year, Falwell urged fellow Liberty staff in an email to strike a “good deal” with Crosswhite to provide private gym training at the then famous Lynchburg Fitness Center. under the name Sports Racket, which Liberty had recently acquired with a donation from the trustee.

“Becki and I wouldn’t hesitate to work there with Ben as a coach because it’s more private,” he wrote in the email, which was reviewed by Reuters. Falwell and his wife, who goes by the name Becki, each train with Crosswhite twice a week, the university said. Falwell has become a strong advocate for trainer skills, as have other academic executives and clients who work with Crosswhite.

The Falwells took the trainer in Liberty’s private jet on a trip to Miami in 2012. Later, Falwell sent an email asking Liberty to rent his gym space from Crosswhite’s fitness company. , which began a five-year lease in 2013. The cost, according to a rental document: $ 2,300 per month.

Liberty said Falwell uses the university-chartered jet to travel to his annual medical exam in Miami each year. Crosswhite joined him in 2012 “to explain Mr. Falwell’s diet and exercise program to doctors and help document the results,” the university said. Because Liberty’s board of directors requires an annual medical examination for Falwell, the president does not have to reimburse the university for the business jet trip to Miami, the statement said.

It was also in Miami in 2012, that Falwell met Granda, the guardian of the pool he would later finance in business. The financial ties between Falwell and Granda have been detailed by BuzzFeed and others.

In 2016, Falwell signed the agreement transferring the facility to Crosswhite. The contract says the price is $ 1.2 million, but notes that the “net purchase price” is $ 580,000 because Liberty “agrees to credit” Crosswhite with rental payments for seasonal use of the properties. On-site tennis courts until 2025. The courts are used by the Liberty tennis team for training and tournaments.

Liberty “agrees to finance the purchase” at an interest rate of 3%, the contract says. To help Crosswhite with the deal, Liberty was loaning Falwell’s fitness trainer more than half a million dollars to buy his property. The university would not receive money in advance of the sale, the contract says.

Transactions on such favorable terms could raise concerns about the stewardship of the company’s assets and potentially insufficient scrutiny by the board of directors, said Anderson, the independent governance specialist.

In 2017, after Liberty sold the facility to Crosswhite, some university officials expressed concern over whether the indoor tennis courts and the roof above were receiving the necessary maintenance, such as the sales contract. required it, as internal emails show. Falwell was not included in the chain of emails.

Liberty attorney general David Corry responded that the school should remind Crosswhite of its maintenance obligations, according to the email exchange, which has been reviewed by Reuters. But Corry, referring to Liberty University by his initials, added a note of caution: “Ben Crosswhite has a close working relationship with several directors of LU, including the president. Anyone who communicates with Crosswhite should do so “knowing in advance that it can be guessed,” Corry wrote.

When asked about Corry’s warning, Liberty said he raised the possibility that Crosswhite could complain to one of Liberty’s “several people” if he felt he was being treated “harshly” for maintenance obligations. . Therefore, Liberty said, the university must “have an approach that is not only legally sound, but cordial, professional and faultless.”

In 2017, Liberty provided Crosswhite with another line of credit of $ 75,000 to perform maintenance and repairs, the university said in its statement.

In an email sent earlier this month, Corry, citing “persistent” attempts by a Reuters reporter to reach former board members and the Falwells, reminded former directors that they had signed confidentiality agreements. He told them that they were bound “forever” to keep what they knew about college a secret.

Crosswhite’s acquisition of the sports facility appears to continue to benefit him. Last year, according to a Lynchburg Circuit Court file, the trainer’s company secured a $ 2.05 million line of credit from a local bank against his stake in the facility. Liberty said the amount on the line of credit was tied to the future value of the property after Crosswhite built a swimming pool there.

On April 23, 2018, the day after the $ 2.05 million bank financing, Liberty University filed documents indicating that the $ 576,000 note Crosswhite owed for the property had been paid in full.



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