Confidential Document Shows AIB Misled Public Over Merger

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DES MOINES, Iowa -- It's the document AIB College of Business does not want you to see. The minutes of the January 14 Board of Trustees meeting, where board members discussed the planned merger with the University of Iowa. The document shows a lot of what the public and students were told about the merger simply isn't true.

During a Monday press conference, AIB President Nancy Williams said she first talked with U of I President Sally Mason about the merger last summer.  "The idea for this merger stemmed from a casual conversation with President Mason this summer," Williams said.

But according to the confidential documents we obtained, that's not true.  The idea of merging AIB with another schools has been in the works for years.   Earlier this month Williams reminded the board, "In 2010 the board wanted us to look at succession planning," and that she had "Paid a call to Larry Zimpleman, chair of the Drake Board, and said that we were looking. He didn't seem interested."

During the press conference, Williams assured us that the school is in good financial shape, and this gift to the University of Iowa is just the evolution of AIB.   "AIB College of Business is not seeking any kind of financial relief. In fact the college is virtually debt free," Williams said.

But the meeting minutes say the college is $1.4 million in debt and, in terms of endowments, AIB is down to "$4m by the end of Aug. 15. $2m. We would have 2.5 years of cash to fund things."

AIB is currently at about half of its enrollment capacity level.  Still, Williams says enrollment is strong.  "Our enrollment has actually been going up at a time when others have potentially been going down," she said at the Monday press conference.

But she told the board, "Recruiting is hard and will get harder with the funding formula. DMACC is our biggest competition and they're more affordable and now the president wants community college to be free."

Board of trustees member Sheila Tipton seemed confused by the proposed merger, according to the minutes, saying "The last time we met was to have a three year plan to go forward and right the ship. What happened? Are financials so bad?"

We've also asked Williams about student athletics. She said the school hasn't had that conversation yet.  "The sports program, we have not figured that out yet," she told reporters.

But that's not true either. The board discussed it at its January 14 meeting saying athletics "Would be phased out right away. You'd find out quickly. 300 student athletes, not all are on the court or the field...If they want to do their sport they could apply someplace else."

That leaves student athletes like Brennen Flores disappointed.  "I just want answers," Flores says, "I want to know why they weren't up front with us. We're a business school and so I'm assuming it was a business related decision to lie to us. And I just don't see how that would make sense."

The AIB Board of trustees also discussed the importance of keeping this plan from the Iowa Board of Regents saying "PW (President Williams) went to visit with Sally (Mason) and stressed the confidentiality of it," and that giving AIB to the University of Iowa instead of selling it, "Allows Sally to get it through the Regents"

During the press conference, President Mason also stressed the importance of keeping students and the public up to date every step of the way during the merger.  "We share your commitment to being inclusive and transparent throughout the process. This is important for all of us and is certainly most important to our students," Mason told reporters.

But, according to the document, the board's discussion has to remain "Confidential. No one talking about this outside of this room. We need to work on what the message will be early. If it gets out and we're not in control it won't be good."

We did call a spokeswoman for AIB to get her take on this. She hung up on us. So we went above her head, and called AIB President Nancy Williams on her cell phone. She said she will not comment on the documents because she says they were stolen from the college and because the contents were supposed to be confidential. She does say AIB plans to release more information next week.

We also reached out to University of Iowa President Sally Mason. We were told she wasn't in town, and her spokeswoman did not return our calls for comment. What we wanted to know is, why does the taxpayer subsidized University of Iowa want to take over AIB, when even AIB trustees seem to acknowledge the school is a sinking ship?

View the complete document below:

 

43 comments

  • marcopolish

    Given the way this was handled, and the way Sally Mason operates as well, one has to wonder whether there is some financial malfeasance or embezzling involved, particularly if there was some sort of enrichment of key members of the AIB administration. A full and complete accounting should have been done at the very least. With this Governor and his hand picked hand controlled Regents (yes, I know there are plenty of convenient legal buffers for the Gov and friends to hide behind), anything is possible.

  • John

    So the students of AIB are victims of a hostile takeover in our state! Not on our watch! We must rally to condemn the guilty perpetrators of this deception (ie: Pres Williams) and above all save our kids and their futures. We are legion, will not forget, we not forgive, fear us.

  • John Smith

    I’m not seeing a smoking gun, here. At all. Maybe dueling accountants might see something, I suppose, but that scarcely justifies this headline, IMO.

    Has WHO-TV News succumbed to the dreaded Des Moines Register disease? You’ve all seen it: “Everyone we say has to tell us every detail of everything we want them to, and present it in the format we say, dammit! First Amendment!” Oh, and “Peoples Republic of Johnson County!”

    God save us all from slow news days, and the “journalists” that always pop up to try to capitalize on them.

      • John Smith

        Obviously, I DID read the article. Just as obviously, you cannot point out the smoking gun in the story.

        But, somehow, even with NOTHING to add to the discussion, you just can’t seem to stop yourself from posting. As is your standard MO.

    • bjertbjaeger

      I suggest you actually read the story, the parties involved lied to the public and misrepresented the entire process, including conspiring to avoid regent scrutiny, then again it’s AIB, if they were closing, the feds would be on them soon enough. Probably will be anyway. Pity for you.

      • John Smith

        And, now, we move on from merely ridiculous to maniacally idiotic. Also your standard MO.

        Dear Dimwit: Have you noticed, by any chance, that these “confidential documents” WHO-TV is blithering about were PROVIDED TO THEM by the subject of their great scoop? Does that tell you anything? At all?

      • John Smith

        Sure, dimwit. You come here with nothing to add to any thread, but I’m the troll.

        I reckon that’s the way it works all over the www: dimwit little slugs who just run their mouths are the contributors on a discussion board, while those trying to take part in discussions are the trolls.

        Really, dude, your special doctor needs to get you some effective meds, he really does.

  • Joshua D. Gerena

    I am currently an AIB Student. The blatant disregard for the future and the well-being of the student is a violation of business ethics. Nancy Williams is a liar and continues being dishonest with us. During a question and answer session with student she lied and was caught by us. This needs to go national. More people need to hear. Fox New and CNN needs to report this also.

    • Jimothy

      I work for one of the bigger companies in Iowa. This is how business in the 21st century operates. Profits over people. Tell the truth when it’s convenient, water down the truth and wordsmith carefully when it’s not. What I’ve read here is no different than what the large companies around town do.

      You just learned the lesson a few years earlier than others.

  • Melissa

    I think all these kids and families have been lied to. The reason they kids play sports is to help them pay for school. This is ridiculous that it has been known for this long and they allowed recruitment, and only to tear this away from them, this could make a really good lawsuit. Any takers because my daughter is one of those athletes. Now we are going to have to find another school that will accept this soon to be non-existent school

  • Positive thinking

    Thug life baby! I feel bad for the students. Can’t trust this high way robbers. I wish I could win the lottery and buy this school and educate these kids. Did I read something “faculty is not qualified” in the minutes? Wow

    • Mitch

      They would not be qualified to teach at a Carnegie Research-1 institution. Only two of their faculty members have acquired a PhD. This is a requirement for anyone that wants to be a professor at a Research-1 institution. Their staff is at most qualified for teaching at one of the state’s Community Colleges. It is too bad for them, because they will be phased out in the next year or two, otherwise they (being on the staff) will affect the University of Iowa’s various rankings.

  • Randy Graven

    they”re using Donald Trump’s business model -wonder how much the prez and the board will run off with while the taxpayers have to pick up the bankruptcy.

  • Vengeance

    This is classic “PW”/AIB mode of operation. Make a big announcement assuming everyone will just be dazzled and then worry about the details (and people) later. The arrogance and stupidity of this woman and college is astounding.

  • TC

    :What we wanted to know is, why does the taxpayer subsidized University of Iowa want to take over AIB, when even AIB trustees seem to acknowledge the school is a sinking ship?:

    Aaron, is this a serious question? Oh i dont know, perhaps it is the $44mm in assets and endowments vs. only $1.5mm in debt with quality infrastructure in a prime location? Just a hunch.

  • Martini

    Gifted a college campus to U of IA? How does endowment drop when the market is up? I don’t feel bad as a taxpayer since the U just was gifted 20 acres of prime real estate in downtown Des Moines, including existing infrastructure. In less than a year, the campus will provide courses that are in demand at a lower cost. Feel bad for the staff and students that were misled by the administration, mainly from the top. Misleading the Board may be a larger transgression.

  • WHO Gets it!

    How unfortunate for these students. And it seems WHO is the only one reporting on this. Good work 13! I know some people say, “this is business as usual…,” but at least somebody is asking President Williams tough questions.

  • Dana

    I am a student at AIB and liked it’s status as a nonprofit private school, AIB was reorganized as a nonprofit institution in 1941 (own words on website), So now we will be considered the University of Iowa? That actually pisses me off because if I wanted to go there I would have in the first place and not paid the high tuition of a private school just to have it ripped out from under me without so much as a ‘sorry’. So does this mean that we are no longer a nonprofit private school and don’t have to pay the outrageous tuition? I’m almost done with my degree and do not see the advantage in changing locations at this point but the deceit is just as hurtful.

    • Mitch

      AIB has little to no prestige inside or outside of Des Moines. You are being given a chance at a degree from a top-25 business school.

      • Mitch

        Not angry, just rational. The school is lower-tier and the University of Iowa has little to gain outside of land/buildings from this acquisition. DMACC and Kirkwood CC both have better credibility than AIB in the state of Iowa. Don’t worry, there are plenty of private/non-profits in the region that you can go to instead if you have the academic credentials.

  • Mike Cee

    What a pathetic bunch. I find it refreshing that these roaches are dragged out into the light and their lies exposed.

  • Ray Cox

    Aib president. Williams must go,I will give my proceeds this weekend of Uber driver,To help students but Williams must go and then we can address Mary and Iowa merger.

  • Mark

    This could possibly be best for AIB students in the long run. If AIB’s numbers are decreasing because of increased competition from DMACC, et. al., and, if as Obama wants, tuition at 2 year community colleges will be subsidized by the government in the future resulting in even poorer numbers for AIB, then AIB and the students there should get out while the getting is good. It could be possible that AIB would inevitably be forced to close in the future. Then what? It seems to me it would be better for present AIB students to transfer elsewhere and have a diploma from a viable institution with decent credentials than from one that is defunct. I’m sorry for the athletes but you all know that athletics is “extra-curricular” and supposedly not why you went to college, though the University of Iowa is a poor example of that! So again, if athletics is your reason fro going to college, then get moving and find someplace where you can participate in sports with the time you have left rather than complaining.

    • Dustin

      I think you missed the point. While athletics is extra curricular, some of those kids get pretty healthy scholarships. Scholarships that they might not get anywhere else.. And while they say they will honor them.. What about the price of tuition? (out of state tuition is about 15k more at iowa). I think a little honesty, even if it hurts would of went along way. Instead president Williams and her board of rejects lie lie lie. Letting kids/staff/coaches learn from the news papers and stations. Bunch of cowards, and that school is failing as a direct result of their poor leadership.

      • marcopolish

        Not so much failed leadership, more likely progress. Traditional models of education have been eclipsed by communication technology allowing distance learning on a massive scale, for one, and a generation of predatory financial exploitation saddling students with staggering debt with questionable educational marketability, for a few generations now, just like the financial undermining of much of the country by corporate and financial lobbying interests in many endeavors. The post secondary education system has been greatly expanded and also turned into a national system of payday loans underwritten by laws and government programs that let them steal on a generational scale without necessarily delivering a competitive product. It’s come to roost to make education unaffordable, administrations bloated, content questionable, and brick-and-mortar parts of it obsolete (online education is available at a few hundred colleges and universities, it can all be skyped now). The cow has been milked until it is dead and sour. Schumpeter had a term for it: “creative destruction.” We call it progress.

      • Martini

        Poor leadership indeed. I hope through your coursework, you were able to incorporate ethics into your curriculum…you have a perfect example of what not to do. One of my profs said “take the Monday morning paper test”. if a contested policy is about to leak, or pending press conference, how will it look in the paper the next day. PW and the board really whiffed on this. Obviously didn’t think the students would have an objection to continue in the high tradition of AIB (aka. making Fenton’s money)

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