Seven Westminster Choir College alumni and donors have filed a new lawsuit in Mercer County Superior Court alleging that Rider University is selling the school to a “sham non-profit” in violation of Internal Revenue Service regulations, original land bequest rules for the property, and an agreement with Princeton Theological Seminary.
Donor plaintiffs who have contributed to the college and its endowment are seeking an injunction to block the sale of the choir college to the Chinese group Beijing Kaiwen Education, which has no experience operating an institution of higher education or professional music training school. The plaintiffs say Kaiwen Education is actually a subsidiary of the Badachu Holdings Group, a real estate investment company owned and controlled by the government of China. The plaintiffs are being represented by Princeton lawyer Bruce Afran.
The lawsuit argues that Rider University, which operates Westminster Choir College, is bound to the purposes, intent and conditions of the Sophia Strong Taylor grant and trust, donors, and a 1992 Princeton Theological Seminary agreement with Westminster Choir College. The seminary previously filed a separate lawsuit challenging the sale of the choir college to a commercial company.
In filings with the Shenzhen Stock Exchange last month, Beijing Kaiwen confirmed that it will take possession of Westminster Choir College’s $20 million endowment. The company lists the endowment as part of its corporate assets. According to documents found by the plaintiffs, annual income or losses generated by the endowment would be transferred to the subsidiary holding company at the company’s discretion.
“Not only will Westminster come under the direct control of the Chinese government, but its endowment will be transferred to the books of Beijing Kaiwen, a violation of IRS regulations that require charitable endowments to be controlled by non-profit organizations,” said Constance Fee, president of the Westminster Foundation, a group that was created to ensure the continued existence of and support for Westminster Choir College.
“Except for six months of partial management of a primary and middle school in Beijing, Kaiwen has no experience in higher education, which is hardly sufficient to qualify it to operate a world-renowned American professional school training singers, conductors, and music educators,” Fee said.
Afran also claims the sale of Westminster by Rider University threatens national security by giving the Chinese government a base of operations in the Princeton community. “Now China, for the first time, will be seeking to directly control an American college, an irreversible threat to our traditional academic freedoms,” Afran said. “We know that members of Congress have been making inquiries about this transaction with the U.S. Department of Education.”
Rider University has not released a statement about the lawsuit yet. This story will be updated if a statement is released in response to an inquiry by Planet Princeton.
A non-profit called the Westminster Choir College Acquisition Corporation has been set up by Kaiwen to own the school, but the plaintiffs say the organization is fully controlled by Kaiwen and is
not a legitimate not-for-profit corporation. The plaintiffs say two of the three trustees for the non-profit are executives or officers at Kaiwen Education, and they claim a third trustee is a consultant or employee of Kaiwen Education. The continuing education and conservatory divisions at Westminster will be transferred to the direct control of two commercial corporations: the Beijing Wenhuaxuexin Education Investment Limited Company, a wholly-owned subsidiary of Kaiwen Education, and Princeton Westminster International, LLC, a subsidiary of Beijing Wenhuaxuexin Education. The Badachu Holdings Group shares the same offices and phone number as Badachu, a Chinese government-owned property investment corporation. The Beijing charter school that Kaiwen owns, Kaiwen Academy, is listed online as a subsidiary of Badachu subsidiary Beijing Kevinson Educational Investment Ltd.
The Kaiwen Education company previously was the Jiangsu Zhongtai Bridge Steel Structure Co. Ltd., a maker of steel bridges and ship blocks, until this year. The company’s name was changed to Kaiwen Education on January 1, shortly before the announcement was made that the company was selected as the buyer of the choir college.
The Sophia Strong Taylor Trust
In 1935, Sophia Strong Taylor donated 23 acres of land in Princeton to create a school to train ministers of music. The land houses Westminster Choir College, the Westminster Conservatory, and the continuing education division of the school. Strong Taylor also provided funding for the creation and construction of buildings on the campus. If Westminster ceased to pursue its purpose to train ministers of music, the property would become the seminary’s property. “This covenant shall run with the land and be binding upon [Westminster], its successors and assigns,” reads the deed recorded August 8, 1935.
“Rider has acted in the belief that it can sell Westminster and the campus in Princeton for its own account without dedicating the proceeds of such sale to Westminster,” reads the lawsuit. “Rider has stated publicly that it will cease to maintain Westminster following the sale of the property, that it will retain the proceeds of such sale for its own account, that the prospective buyer will be required to maintain and operate Westminster as a college for not more than five years and it has informed Seminary that it will not honor the provisions, purposes and/or intent of the 1935 Strong Taylor grant or the assumption agreement.”
The lawsuit contends that the original trust and assumption agreement between Westminster and Princeton Theological Seminary were never intended to be a vehicle to enable the sale of Westminster to a commercial entity with the proceeds being dedicated to Rider’s secular, non-religious purposes, without being used to support Westminster’s programming.
“Following the sale of the College and its property, Westminster will be controlled and operated by China-based managers of a government-controlled entity that is subject to severe religious registration rules and that will have a chilling effect upon, and prejudice, the academic freedom associated with Westminster as an American college of higher education, contrary to the Strong Taylor grant and the plaintiff donors that sought to create a school of higher education within the American academic tradition,” reads the lawsuit.
“Rider’s proposed sale of Westminster to Kaiwen, an entity, that is, in actuality, a subsidiary or unit of the Chinese government through a government-controlled real estate conglomerate, is contrary to the purposes and intent of the Strong Taylor grant that sought to to keep ownership of the Westminster property within the private communitarian Presbyterian community,” reads the lawsuit. “(It) is contrary to the purposes of and intent of the individual plaintiff donors, who expected and intended that their grants be to and for an American academic institution practicing American values of academic and religious freedom.”