A grave internal struggle brewing amid two camps inside New Mexico Military Institute’s banished Alumni Association threatens to pull apart what’s left of the embattled group that already faces a legal lock down by the Institute.
But despite the conflict, a small band of Association board members continue to plow ahead, spending as much as $300,000 in alumni contributions to pay for a newly rented office, a lawyer, a new executive director and a public relations firm.
Some Association members are concerned rogue members are quickly spending $1 million in unrestricted money meant to benefit cadets and NMMI without the support of their peers.
The Institute sued the Association June 10, asking the Chaves County District Court to immediately freeze all Association accounts until a receiver is appointed, including the unrestricted funds and an additional $5.2 million in restricted funds meant to be allocated to cadet scholarships, NMMI programs specific to donor requests.
“I estimate they’ve spent already $200,00 to $300,000 in unrestricted funds,” said one alumnus, Jerry Phifer, of northern Virginia. “They’re spending so much money each month that they’re going to exhaust the unrestricted funds if they keep spending at the current rate and I don’t want that to happen.”
The Alumni Association, now headed by appointed President John Phinizy, was banned from its on-campus office in late April after it failed to meet a deadline to meet financial reporting standards it had agreed to in order to operate. NMMI Board of Regents had several concerns since 2009 about the Association’s financial operations, according to past reports.
The Association still does not have current financial reports, Phinizy said. But although he has hired an accountant, the group cannot complete its 2013 due to blocked access by NMMI.
“We’re still trying to obtain information from the Institute to adequately complete our 2013 financials,” Phinizy said.
NMMI Spokesman Carl Hansen said NMMI has not prevented access to the necessary information.
“We have nothing that would prevent them from doing their financials,” Hansen said.
The Association was offered an agreement by NMMI Board of Regents to remain on campus and sort through its remaining business, but the group could not sign the deal.
NMMI’s suit also calls for the Association to stop using the Institute’s images, logos, name or likeness for promotion; and order the group to account to the Institute for any funds received while acting as an agent of NMMI. The case was assigned to Judge Charles Currier Tuesday after Judge Steven Bell recused himself.
Phinizy confirmed Thursday the Association has retained a lawyer who is drafting a response to the lawsuit. The group has 30 days to file it.
The Association has also leased space inside the courtyard area at the Best Western Sally Port Inn & Suites to house its offices. A contractor is expected to retrofit a conference area. Hotel management confirmed Thursday that an agreement was signed.
The board has hired a new executive director, who Phinizy declined to identify, to handle day-to-day operations.
Phinizy said he is also concerned about spending the unrestricted funds, but in order to continue operating the non-profit according to New Mexico law, the group must remain operational.
“We are mandated under the law … to take care of the Association and its properties,” Phinizy said.
The Association must continue to raise money and pay for office space, phones, computers, light bills, lawyers and pay travel expenses for the executive director to host fundraisers, he said.
“To not do so would be in breech of our duties,” Phinizy said. “To not do so would be against state law.”
Phifer has gained a following among members following recent troubles surfaced with NMMI, he said.
He regularly communicates concerns with an increasingly shrinking alumni board. Only four directors remain after several resignations recently, including that of former President Jock Brownfield and Director Ryan Davis, Phifer said.
Phifer has called on Phinizy to cease spending the funds, return them to the Institute’s foundation for safekeeping and has asked for a general membership vote twice to determine whether the 2,500 members want to remain as an Association.
An official general membership vote is the only action that can dissolve the non-profit status with the state.
Phinizy has denied the request twice. The most recent denial came Thursday.
“This is the second time I’ve called for an actual vote for the board to allow the general membership to vote on whether to dissolve the Association or accept the Association,” Phifer said. “Now, they have no legitimacy without the vote. I’m taking this as a stalling action or denial to have a vote.”
Phinizy said he is unable to gain access to the general membership information as NMMI has locked the computer data.
“I don’t have an accurate list of who our membership are,” he said. “I can’t mail out ballots.”
Phifer said he plans to submit his resignation today as an Association member and make a $1,000 donation to the NMMI Foundation. He hopes the estimated 20 percent of alumni who have shown him support during these trying times will consider following his lead.
“I do not want my name associated with their organization. They are not legitimate and I do not want my name associated with an organization that is being sued,” Phifer said. “I’m going to take the positive road.”
Another alumnus, Frank Elliott a professor of law of Texas Wesleyan School of Law, also asked Phinizy to reconsider his media campaign against the Institute.
“The regents have acted, and that should be enough,” Elliott wrote to Phinizy in an email June 12. “What is so important about the Association, that it cannot agree that NMMI is the important thing, not Phinizy or (General Jerry) Grizzle? The assets will no more be under the control of Grizzle than they are of Phinizy … Get a life.”