Jerry Falwell has never been one to back down from a fight, whether it has been trading jabs with the American Civil Liberties Union or sparring with theological liberals. In the past, the 58-year-old pastor of Thomas Road Baptist Church has taken credit for key Religious Right victories, celebrated election wins by Ronald Reagan and George Bush, and sounded the cry against abortion.
But last December, the punch-toughened Falwell almost suffered his greatest defeat when Liberty University, which he founded in 1971 as Liberty Baptist College, faced financial ruin. The universities regional accrediting agency placed Liberty on probation, pending investigation into the rapid growth of the school’s extension program. And a three-year audit by the Internal Revenue Service into all of Falwell’s ministries was being conducted.
Falwell, however, rallied his supporters, and in January he told CHRISTIANITY TODAY the worst year of his life was behind him and that Liberty’s debt problem was all but solved.
In September 1989, Falwell, chancellor at the $200 million Liberty campus, announced a plan to refinance the school’s short-term debt by issuing $61 million in tax-free bonds. Rapid enrollment growth had made extensive construction necessary, according to Falwell. Liberty’s campus today includes about 5,000 acres, 64 buildings, and 12,000 students.
When three local Lynchburg, Virginia, men opposed the bond proposal as a violation of constitutional separation of church and state, the issue went to circuit court (CT, Feb. 19, 1990, p. 36). There a judge found that Falwell’s school met the state’s criteria for issuing tax-free bonds: Liberty was an accredited, liberal arts school whose primary purpose was not to train pastors ...1
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