In Old School, when Mitch, Frank, and Beanie tied string to cinderblocks and their prospective members’ members before throwing the blocks off the roof, their fraternity gravely injured a pledge. While Weensie ended up just fine in the film, fraternities across the country cause injuries and even deaths with some frequency.

If someone is negligently or intentionally injured by a multi-million dollar organization, one would expect to see a lawsuit followed by a quiet, insurance-funded settlement.

But fraternities don’t roll like that, bro…

Or more accurately, national fraternity organizations don’t roll like that. For those who’ve never interacted with the Greek system (or seen any college movie ever), college fraternities are merely chapters of larger, entirely corporatized non-profit entities that license their Greek names to local chapters. These national entities make a nice wad of cash from dues paid by members at local chapters:

National fraternities, which grant charters to campus chapters and collect dues from undergraduate members, have at least $170 million in annual revenue, along with valuable holdings ranging from real estate to Tiffany windows.

The headquarters of some of these organizations sound like the lairs of Bond villains. On that note, the $170 million figure understates the wealth of national fraternities, who often own the very houses occupied by local chapters. National organizations are thought to own a collar-popping $3 billion in real estate.

But when someone gets hurt, directly through hazing or indirectly through drunkenness, national organizations walk away from responsibility. Insurance carriers, paid for by rank-and-file members, are selected by the national organization and slyly contend that the national organization is “shocked — shocked — to find drinking or hazing in their establishment” and get any lawsuits against them dismissed. It’s one thing when you have to pay to have friends, it’s another when your Greek organization steals that money:

Besieged by lawsuits alleging negligent supervision, some of the biggest national fraternities have limited insurance coverage they provide to members, shielded funds in hard-to-tap foundations and cast blame on local chapters with few or no assets. Rather than intensify monitoring of branches, some fraternities have ceded daily supervision to undergraduates.

Such strategies are paying off. While at least 57 people have been killed or paralyzed since 2005 in incidents involving fraternities or their members, the low-profile national bodies have enjoyed increases of 13 percent in revenue and 29 percent in membership.

“It’s a curious business model,” said Peter Lake, a professor at Stetson University College of Law in Tampa, Florida, who specializes in higher-education law. “You’re establishing a national brand and franchising. And then when your core customers are in a pinch, you’re turning away.”

Curious indeed. This is, in many ways, the perfect business model: collect millions for selling a lifestyle and deny all liability for that lifestyle. Imagine any other company selling a product and walking away from responsibility when the product kills people.

And before anyone claims that these national organizations aren’t promoting Animal House, I’d invite you to get real. They publicly sell the world on their sober commitment to community service while profiting from students drawn to the organization by everything but sobriety. The typical calendar for a given chapter of a fraternal organization consists of beer busts, beer blasts, keggers, stein hoists, A.A. meetings, beer nights…. What’s not a primary selling point for a given pledge is “the commitment to community service.”

And I’m not capping on anyone for getting drunk. I mean, I’m drunk right now. My point is that these national organizations make bank off students through the implicit encouragement of massive drinking and vaguely homoerotic horseplay, and then walk away when someone gets hurt.

But fraternities go further than just walking away. They also express faux righteous indignation against local chapters, in the form of additional litigation:

James Ewbank, a lawyer who has represented at least 10 national fraternities, urged them at a conference last summer to deflect blame when they are sued by bringing cases against chapter members and colleges.

“Share the fun,” he said, according to an outline of his remarks posted online by the Fraternity Executives Association.

The comment was hyperbole, Ewbank said in an interview.

It was hyperbole because James Ewbank (who looks like the kind of party guy you’d expect to be representing fraternities) doesn’t want to encourage “sharing.” With national organizations so quick to toss local chapters under the bus, it puts the lie to the fraternal concept of “loyalty.”

For Greek readers, I’m not mocking your frat. It was probably a cool group of folks and you probably acted (reasonably) responsibly. When I suggest that an alcohol-fueled lifestyle can occasionally hurt someone, I don’t think that’s controversial. What I am mocking is your decision to buy into a system that milks you for cash, ostensibly offering you “insurance,” while really intending to cast the blame elsewhere if and when things go wrong. It’s time for fraternity members to stand up to their sanctioning bodies and demand that their dues pay for real insurance.

But that’s probably too much trouble. So continue converting that apple into a bong while your parents are bled to death by a corporation literally selling you letters.

Frats Worse Than Animal House Fail to Pay for Casualties [Bloomberg]


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