FAMU foundation board member speaks out on sketchy $237 million gift
Florida A&M University is putting the $237 million donation “on hold” while it searches for answers about its source.
Members of Florida A&M University’s foundation and Board of Trustees were blindsided when they learned of a historic $237 million donation that was announced at the school’s commencement ceremony.
“We didn't get an official announcement, an email or anything from the university until Sunday, over 24 hours after commencement,” a board member for the foundation told What I’m Reading days after the emergency meeting of the FAMU Foundation Thursday. The foundation is the steward of the university’s endowments, and is responsible for knowing all about the donation processes.
The university had signed a non-disclosure agreement, which ensured that only a handful of FAMU’s leadership knew about the donation before Issac Batterson 7th Family Trust and Batterson Farms Corporation CEO Gregory Gerami made the announcement after his commencement speech. Even though Gerami told the FAMU graduates and their families that “the money is in the bank," the purported nine-figure gift actually came in the form of shares of stock. In other words, there is no tangible money in the bank at the moment.
“The donor donated 14 million shares of stock of intrinsic value worth at least $239,000,000 and will donate an additional $61,000,000 over 10 years,” read the gift agreement obtained by the Tallahassee Democrat. These numbers don’t match what the university initially announced.
The donation made national headlines as one of the biggest gifts ever made to a historically Black college or university, eclipsing the $100 million donation made to Spelman College earlier this year. During the emergency meeting, Vice President for University Advancement Shawnta Friday-Stroud mentioned that Gerami allegedly wanted to increase his donation after he learned of Spelman’s historic gift.
The donation has sparked much skepticism as online sleuths dug into the 30-year-old hemp farmer’s background. Very little is known about Gerami’s business, his past philanthropic efforts and why his prior planned gifts to Coastal Carolina University in South Carolina, The University of Texas at Austin and other universities failed.
Former Birmingham, Alabama city council member Kimberly Abbott, who was listed as co-CEO and vice chair of Batterson Farms Corp on the company’s website, has known Gerami for years, according to the Tallahassee Democrat. However, she said that she’s never worked for him and has “no faith” in the donation.
"Without disclosing any information, I can tell you that nothing he ever said made sense. It didn't add up, and I don't feel good about this gift that he's given to this university," Abbott told the outlet. "If it works out, God bless him and God bless the university."
Several days after FAMU issued a statement hoping to quell concerns, in which the institution stated that it “has done its due diligence when it comes to this matter,” university president Larry Robinson announced that the processing of the gift is now “on hold.”
"I just want to let you know that already, with regards to the gift and processing and future processing, we’ve already decided that it’s in our best interest to put that on hold," Robinson said during the meeting.
“Serious concerns have been raised regarding the validity of the gift, the adequacy of the due diligence processes and whether the Foundation Board and Board of Trustees have been provided ample oversight opportunity. I regrettably share these concerns,” Board of Trustees chair Kristin Harper said in a statement. “We will get to the bottom of this.”
However, as Inside Higher Ed points out, Harper signed the gift agreement as well — which means she also knew about the donation before the announcement.
Posts about the purported gift have also been removed from the university’s social media channels.
Last week, Gerami told the Tallahassee Democrat that the shares have been in the university’s account for over a month, and that he didn’t understand the “confusion or the skepticism.”
However, the board member said there’s no way to tell how much the shares in Gerami’s privately held company are worth. “It’s basically that he says [the shares] are worth so and so, and we didn't do anything to verify that. What we learned [during the emergency meeting] is that our team didn't do anything to have a third party come in and verify the valuation he claims. That's a big problem,” they explained. The shares could be worth nothing at all.
“This is nonsense,” the board member said.
It is unclear how Gerami’s Batterson Farms Corp could have stock worth millions, as it appears to be a rather small and little-known hemp farming company, POLITICO noted. A financial expert told Inside Higher Ed that the probability the privately held stocks could be converted to millions “appears to be about zero.”
Still, the university moved forward with the gift, despite the discrepancies in Gerami’s background and did not reach out to Coastal Carolina to see why their deal with him fell through.
Friday-Stroud acknowledged that the university took a risk by accepting Gerami’s gift, but saw a “potential upside” when considering the future of the hemp industry. “Yes, there is clearly risk and we are seeing that in everything that has shaken out,” she explained during the emergency meeting. “But at the time that was the decision.”
It is this hubris, the board member said, that is preventing Florida A&M University from being the best HBCU that it can be. FAMU’s leadership moved in a way that exclaimed, “Hey, look at us! Look what we were able to do,” the board member said. “And it's just, yeah, but you did it in such a way that now there’s negative publicity.”
The board member doesn’t think Gregory Gerami is the real story. “The story is how did we let him get this far? And how did we get this far internally without the Board of Trustees or the board of the foundation being involved?”
This isn’t the first time questions were raised concerning leadership decision-making. The board member pointed to Friday-Stroud’s three roles as dean of the FAMU business school, vice president of university advancement and executive director of the foundation. “The Board of Trustees pushed back on that. There was an executive search, and then you had [President Larry Robinson] who said, ‘Yeah, yeah, yeah, I want her to stay in all three roles so we can keep things tight.’”
“That whole mentality of keeping it tight and under control is how we got here — excluding board members from this process and hiding behind some NDA,” they said.
The board member said they view this entire debacle as an opportunity to strengthen the ways in which the university operates and to reexamine strategic efforts. “There's a lesson in terms of investing the time and effort in transparency, accountability, and strong leadership.”
The Florida A&M Board of Trustees will hold an emergency meeting on May 15 at 3 p.m. It will be open to the public.
Clarification: An earlier version of this story stated that the FAMU Foundation is the university’s fundraising foundation. There are several fundraising arms of the university.
I believe that I smell a rat. Something is not kosher, Something smells fishy in Denmark.
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