Liberty University is seeking tens of millions of dollars in damages from its former president, Jerry Falwell Jr., for what it asserts were breaches of contract and fiduciary duty and a conspiracy to withhold information about allegedly extortive threats that put both Falwell’s and the university’s reputations at risk.
A lawsuit filed by the university Thursday in Lynchburg Circuit Court in Virginia is further reflection of the depth of the rupture in the relationship between Liberty and Falwell, a son of the conservative evangelical university’s founder.
Falwell resigned from Liberty last August after Reuters reported on scandalous claims of a years-long sexual relationship involving Falwell; his wife, Becki; and another man, Giancarlo Granda. Falwell, who denied that he was party to the affair, claimed the man had an affair with his wife and tried to use the threat of publicly revealing the relationship in order to extort him. Granda has denied the blackmail claims.
The lawsuit builds on the blackmail claims, arguing that Falwell had a “fiduciary duty” to Liberty to disclose the alleged extortion threats.
“Instead of disclosure, Falwell Jr. furthered the conspiracy of silence and negotiated a 2019 Employment Agreement that contained a higher salary from Liberty,” the complaint states. “Moreover, anticipating revival of Granda’s threats, Falwell Jr. also negotiated a revised severance provision that doubled the separation benefits” provided in his previous contract.
Liberty claims in the lawsuit that had it known of the alleged extortion efforts, it would not have entered into the new employment contract with Falwell in 2019. As part of that contract, Falwell successfully negotiated a $1.25 million annual salary, which represented a “significant annual raise,” as well as new retirement benefits and severance of two years’ pay if Falwell resigned for “good reason” or was terminated without cause.
Liberty also claims in the lawsuit that “Falwell Jr. failed to timely disclose and address the issue of his personal impairment by alcohol, which impairment led Falwell Jr. to actions and courses of conduct detrimental to the spiritual mission of Liberty.”
The complaint describes various actions by Falwell that contradicted the evangelical Christian university’s strict standards on sexual morality and prohibitions on drinking. He was placed on leave Aug. 7 after posting a vacation photo on Instagram in which he posed with a woman with both their pants unzipped. He held what looked like a drink, though a caption on the Instagram photo described it as "black water," and "a prop only."
According to the complaint, Liberty initially planned to pay for Falwell to attend rehab, but the agreement broke down over a dispute over the type of treatment, with Liberty leaders favoring a residential program and Falwell "suggesting more superficial approaches."
After widespread news coverage of the allegations of the affair and blackmail, the executive committee of Liberty's board requested Falwell's resignation on Aug. 25. The suit states that the decision was driven by a number of factors: "the litany of compromising decisions entered into by Falwell, Jr., Becki's revelations about the alcohol abuse that was fueling this erratic string of events, Falwell, Jr.'s denial of an alcohol problem. Falwell Jr.'s resistance to commit to treatment deemed appropriate by the Executive Committee, Falwell's now-admitted concealment and misrepresentation of the Granda Allegations, and Falwell Jr.'s unwillingness to take seriously the grave threat that his aggregate actions posed to Liberty."
Following his resignation, Falwell sued Liberty for breach of contract and defamation but subsequently dropped the suit.
Falwell commented on Liberty's new lawsuit against him via text message.
"The Executive Committee of the Liberty University Board of Trustees has made yet another attempt to defame me and discredit my record, following a series of harsh and unnecessary actions against my children, Becki, and me," he wrote. "Throughout all my years at the University, where we built a multi-billion-dollar enterprise that reaches Christian’s [sic] worldwide, I always abided by the requirements that applied to everyone on the University staff. This lawsuit is full of lies and half truths, and I assure you that I will defend myself against it with conviction."
A Liberty spokesman said via email that “the university’s only word on the subject is the lawsuit itself.”
Calum Best, a Liberty alumnus and co-founder of SAVE71, an organization seeking reforms at Liberty, said he would like to see other leaders at Liberty admit responsibility for their failures in oversight.
“I think it’s interesting that the board has yet to make an apology to the Liberty University community about how their own blindness contributed to these problems existing for years,” Best said. “This is the first time we’ve ever seen them even publicly state that Falwell did something they consider to be wrong. They have never once stated that in the past -- they’ve always had his back -- and even in this lawsuit they still did not admit any sort of culpability on their part, any failure of oversight, any failure of keeping Falwell accountable.”