Free college degree offered, but costs add up (re New Direction)

MARYVILLE, Mo. – In a former convent high atop a hill, The Academy offers college students one of the most unusual scholarships in America.

The rules are strict: Academy students, imitating military cadets, must dress smartly, exercise religiously, study five hours a day and maintain a B average at nearby Northwest Missouri State University.

For students who follow the rules, college is free – from tuition to toiletries, funded by contributions from corporations, alumni and others. And if they make it through, Academy graduates should rank among America’s corporate elite – “Olympic caliber professionals,” boasts founder David J. Hemmerling, on their way to becoming “global champions. ” But in reality almost no one graduates at all. Instead of tomorrow’s business leaders, The Academy has spawned dozens of dropouts, many angry and disillusioned over 18-hour days of study and menial chores, cash fines for trivial mistakes and harassment that forced some to flee for home.

Instead of a free ride for their children, angry parents today claim they spent thousands of dollars on unnecessary travel expenses and the required Academy accouterments, such as briefcases, suits and ties.

And an investigation by The Kansas City Star has revealed that the program is on the verge of going broke and apparently has violated U.S. tax laws.

Hemmerling, 46, steadfastly maintains there has been no impropriety at The Academy, either financial or academic. Simply put, most students couldn’t cut it, he said.

“I don’t want anybody that isn’t becoming exceptional,” he said. “There’s not a lot of fun in our program, I’ve got to admit that. ” But Academy officials also admit they’ve lied about their finances. For the last three years, The Academy apparently has failed to file annual reports with the Internal Revenue Service required of most tax-exempt institutions. The reports, among other things, disclose revenue, expenses and salaries.

Michael Nakayama, Hemmerling’s assistant and The Academy’s treasurer, first told The Star that current IRS reports, called Form 990s, were available for public inspection, as required by law. But when a reporter arrived at The Academy to view the documents, he found they didn’t exist.

“I lied,” Nakayama explained. “I lied through my teeth. ” Academy of contradictions Hemmerling and his school present a series of apparent contradictions.

Although housed in a cavernous former convent and run as a tough cadet school, The Academy recruits only 16 students or so a year and is not affiliated with any religion or military branch.

Nor is the program officially part of Northwest Missouri, where students attend classes.

Scholarships are paid for by contributions from alumni, corporate foundations such as Southwestern Bell, and unions. The scholarships are advertised in union publications or brochures posted on company bulletin boards, parents and students said.

Hemmerling started The Academy in 1970 in Pennsylvania with only “$35 and a dream,” shortly after changing his mind about becoming a priest. He moved the program to Maryville 18 months ago.

Hemmerling claims to have a bachelor of religion degree, but he does not tutor the students. And although an Academy brochure boasts of its “structured environment,” Hemmerling and Nakayama admit to being gone days at a time on fund-raising trips, leaving students alone.

The newspaper’s examination found other contradictions in the program’s educational philosophy as well. For example: Among its many rules, The Academy professes to have one of the “strictest anti-drug policies,” banning even tobacco. Yet several students, one underage, said Hemmerling provided them with beer and wine. Hemmerling acknowledged giving alcohol to students, but said none was given to minors. “I don’t consider alcohol a drug,” he added.

Before The Academy moved to Missouri in 1989 to cut expenses, it operated for about 19 years near Latrobe, Pa., where it was known as The New Direction. Its students then attended nearby Saint Vincent College.

But the program still owes that college about $60,000 for unpaid tuition, Hemmerling said. As a result, some students’ credits were not transferred to Northwest Missouri, jeopardizing graduation until their bills are paid. Some board members said they were unaware of that debt. Hemmerling said it would be paid.

Hemmerling said he is paid less than $1,000 a year to run The Academy and has no property. Yet he said he bought about $8,000 in goods and services, mostly with his personal bank credit cards, to help the program through tough times. “I have premium credit,” he said.

Hemmerling also has offered conflicting estimates on what it costs to support an Academy student – at one point as high as $25,000 annually. Other times those figures ranged from $6,000 to $16,000 a year per student, if housing is included.

Such figures are puzzling to Northwest Missouri State officials, who say it costs only about $4,000 a year for the typical in-state, non-Academy student living on campus, excluding pocket money.

Now with only seven Academy students left, Nakayama estimated annual costs for each one at $19,000. “You could almost go to Stanford or Harvard for that,” he acknowledged.

`Total waste of time’ To be sure, The Academy has its defenders. Parents Bob and Barbara Bailey of Plano, Texas, whose son Bob Jr. remains at The Academy, praise the program’s boot-camp environment.

“I’d hate for anything to happen to The Academy,” Barbara Bailey said.

The only two students to survive the last four years – Joe Jobe, 22, of Russellville, Mo., and Stan Chorzepa, 23, of Connecticut – idolize Hemmerling. Together, they sent the newspaper 12 pages of handwritten notes praising Academy life.

“I really like the training and the discipline,” said Jobe, who says his schedule is so demanding he doesn’t have time to date. “I get off on a challenge. ” Jobe is the exception. Hemmerling estimates that 41 of 107 students have graduated while attending The Academy. But in the last four years, he acknowledges, The Academy has managed to graduate only one man. Only one woman has ever graduated in the program’s 20-year history.

“Our daughter…gave up a lot for this; it was a total waste of her time,” said Betty Christle, of Palm Beach Gardens, Fla., whose daughter Audrey quit last October. Ten of the 16 students left by the end of the fall semester, although one other enrolled for the winter term.

Others who left complained of Academy staff tape recording conversations – which Hemmerling admits doing once – “spying” on them as they exercised and ever-changing rules.

“I felt it was like being in prison,” said Renee McCord, 19, of Greenville, Texas, who quit in December 1989, after just one semester.

Some women students – who said they slept on cots when they first arrived while the men got beds – also felt unwanted. Their parents worried about no female supervision, particularly with Hemmerling and Nakayama absent on fund-raising trips.

“My daughter didn’t feel safe,” said Carol Whitehead of Jupiter, Fla.

Mary Hernandez of Kansas City, Kan., said the family’s doctor recommended her daughter, Angie, leave because of “mental stress. ” Many students told The Star they had planned to stick with the program but left after Hemmerling warned that financial troubles were forcing The Academy to close last December.

They are angry because after they left – and gave up their scholarships – the program has remained open for seven students who liked Academy life.

“I talked to Hemmerling and asked him point blank if The Academy was shutting down and he said, `Yes. It’s in the best interests of your daughter to find some other school,’ ” said Paul Christle, Audrey’s father.

Christle and other parents say the “free ride” ended up costing them thousands of dollars spent on Academy clothing and plane tickets as they shuttled their children back and forth from Maryville. One parent said he had to sell his van to keep his son in Northwest Missouri after he left The Academy. Others said their children turned down scholarships elsewhere to attend the program.

“The kids were victims in all this,” said Betty Christle. She said her daughter missed a special Girl Scouts program because of The Academy.

Whitehead said her daughter Kim, an honor student, gave up a scholarship at Florida State University to go to The Academy. Her son Patrick also attended – until Whitehead pulled both out last summer after just five weeks.

Now she’s paying for her children’s education elsewhere. “I’ve lost several thousands of dollars,” she said.

Going broke Despite the continuing exodus, Hemmerling said The Academy’s philosophy will not change.

But its future is still in doubt. Although he denies ever saying The Academy was closing, Hemmerling acknowledges he suggested it was a possibility and still is. The program needs about $45,000 to continue through Friday, he said.

“I have to figure out how to survive until Feb. 15, and I haven’t figured that out yet,” Hemmerling said.

How much money the program takes in, where it comes from and how it is spent is unclear. Hemmerling confirmed Southwestern Bell was a contributer but declined to reveal others. Nakayama at first offered a reporter full access to financial records; later he made available only some of that information and selected the documents himself.

Those records show The Academy spent only $8,168 on tuition last year at Northwest Missouri.

Records further disclosed that The Academy operated at a loss in three of its last four years. The latest IRS 990 report available, dated 1986, showed The Academy was facing financial troubles even then.

Contributions totaled nearly $57,000, but expenses ran more than $200,000. Annual salaries for Hemmerling and Nakayama were listed at $1,310 for both.

Nakayama couldn’t produce an updated list of Academy board members. Those directors who could be reached uniformly expressed support for the program, although acknowledging problems.

“Since day one it has faced financial problems,” said board member Andy Anderson, an alumnus who is a vice president of the Rosewood Hotel Corp. in Dallas.

But apparently few of the directors have visited the Maryville campus. Some said the board meets elsewhere about once a year, mainly to discuss fund raising.

And none of the four board members contacted was aware The Academy had not filed the IRS reports.

T.O. Parsons, a board member who is a vice president of the Communications Workers of America in St. Louis, raised about $30,000 late last year “to help keep them going through the end of the fall semester,” he said.

But Parsons, who would not reveal the donors, said he might not raise any more until the IRS reports are filed.

Meanwhile, a spokesman for the Southwestern Bell Foundation, which contributed $125,000 to The Academy in the last three years, contacted The Academy and the IRS after learning about the missing reports from a reporter. Spokesman Jerrell Ross said the foundation requires only that a recipient of funds be tax-exempt. “The IRS says The Academy is still tax-exempt,” Ross said.

Not filing the reports, however, could result in fines and eventual revocation of an organization’s tax-exempt status, according to an IRS official.

Hemmerling said the reports weren’t filed because The Academy owes an auditing firm for past audits. He and Nakayama maintained new reports must be prepared by an independent auditor.

But Barry Barbeau of the IRS said there is no such requirement.

“If they have an accountant in the organization, they could do it,” Barbeau said.

In fact, Nakayama said he was a certified public accountant, though his license is inactive. “I’d almost welcome an IRS agent at our front door,” Nakayama said. “I have nothing to hide. ”

Free college degree offered, but costs add up, few succeed Academy’s unusual program has angered students and parents.
BILL DALTON
The Kansas City Star
February 10, 1991