Donor Withdraws Gift to Trinity Law School Parent

The head of an Orange County-based trust has withdrawn an offer of a gift worth millions of dollars to the private university that owns Trinity Law School in Santa Ana.

William Welty, trustee of the Joshua Davidson Charitable Remainder Annuity Trust in Yorba Linda, said the trust had planned to give Trinity International University about $7 million annually so its divinity school could be tuition-free. The money was to come from income generated by one video and 16 audio satellite channels controlled by the trust. The channels were appraised at $258 million in 1996 but are not operational. Welty said he expects the channels to begin programming by December 2004 or sooner, after a satellite is launched.

He said he pulled the endowment offer to Trinity International University “because they never accepted it.”

But Welty also said that the university’s firing of Trinity Law School Dean Winston L. Frost last year “was the catalyst that led me to revoke the gift.”

School officials accused Frost of plagiarizing an article that appeared in the school’s law review, which Frost denied. Welty did not defend Frost’s article but said the dean was fired without due process. “Trinity didn’t live up to the principles of a Christian law school in the way they terminated him,” Welty said. “The process was arbitrary and unfair.”

Wes Anderson, Trinity International University’s chief financial officer, said Friday that the school considers Welty’s gift irrevocable.

“We believe that a change made to the 1996 agreement about a year ago made Bill’s gift irrevocable,” said Anderson, who acknowledged that the school received Welty’s letter of revocation. “That’s our position. I can’t say much more, except that it’s all under legal review by our lawyers.”

The trust’s channels are similar to those owned by DirectTV and EchoStar Communications, which provide satellite TV and audio programming, said satellite television analyst Jimmy Schaeffler. Schaeffler, head of the Carmel Group, appraised the channels at $258 million in 1996 for Welty. “Based on what has happened in the direct-broadcast satellite industry since, and the success of DirectTV and EchoStar, I guess they’re worth a lot more today,” he said.

In 1996, Welty’s trust reached an agreement with Trinity International University, based in Illinois, to turn over some of the income generated by the channels. The university, which includes Trinity Evangelical Divinity School, is run by the Evangelical Free Church of America.

However, the channels have generated no income because a satellite for programming has not been launched. Welty said the FCC has required that a satellite be working by December 2004.

“Once it’s operational, we anticipate an annual income of about $8 million,” Welty said. “We were going to use $7 million of that to endow Trinity Divinity School and make it tuition-free for all students.”

Welty said he is a graduate of the divinity school.

He informed Trinity of the gift’s revocation in a Jan. 29 letter to university President Greg Waybright, who did not return telephone calls seeking comment. But Trinity spokesman Zach Kincaid said he was aware of Welty’s letter and added, “It’s a sensitive thing around here.”

In the letter, Welty gave other reasons for pulling the gift, including what he said was the university’s failure to report it “to appropriate taxing authorities or to members of the Evangelical Free Church.” The requirements for reporting the offer are unclear, since the gift does not yet generate any income and therefore does not have value to the school.

That alleged failure “connotes de facto rejection of our gift offer at worst or at best a decision not to accept it,” said the letter. Anderson said he could not comment on the reasons Welty gave for withdrawing the gift.

Welty said he has had discussions with another private university about transferring the gift but declined to identify the school.