A former prosecutor is asking officials to change the name of Alabama’s visitors locker room, called “The Fail Room,” due to its ties to a financial executive with a troubled track record.

University of Alabama officials renamed the room in 2008 after receiving a “generous gift” from James Fail, a 1949 UA graduate who owned several banks and insurance companies across the country. Fail died in 2010 at the age of 83.

“I write to address past wrongs related to Fail, protect the university’s reputation, and avoid harming past, present and future Alabama students whose families have been adversely impacted by Fail’s insurance activities,” Attorney Phillip Stano, who prosecuted Fail in a 1984 case, wrote in a letter to the UA System Board of Trustees on Sept. 6.

“No one can change the past. But as university trustees, you can – and should – address Fail’s campus presence and its impact on the university’s students and its reputation.”

Court documents and news reports from the 1970s to early 2000s link Fail to numerous fraud charges and financial schemes, one of which impacted the lives of tens of thousands of Alabamians.

A 2008 press release announcing the renaming touted Fail’s “storied career in the investment, mortgage, banking, savings and loan, and insurance fields” and thanked him for his contribution to the Crimson Tide Foundation. Fail contributed at least $1 million to the foundation, according to a 2015 announcement.

“Over the years, we’ve developed a special relationship with Mr. Fail,” former Athletics Director Mal Moore said in the news release. “What a joy he has been to work with and get to know. We’ve all been energized by being around him, his approach to life, his generosity, and his excitement for life. Needless to say, his most recent gift – and the way he chose to use it – will be remembered for many years to come.”

Stano, in his letter to the board, noted that those initial announcements failed to mention a few details, including that Fail was banned from doing business in the state after a 1976 fraud indictment, and that his activities had left thousands without insurance.

“Continuing to have the locker room named after him glorifies a person who brought grave harm to those who were arguably most in need of help,” Stano wrote.

A UA System representative later told Stano that it’s up to the board of trustees whether “even to consider” his complaint. System officials declined to respond to a request for comment from AL.com.

Legal issues

In 1976, a Montgomery County Grand Jury indicted Fail, his associate Alvin Townsend, and several of his companies for securities fraud after they siphoned millions of dollars from Modern Home Life Insurance, an Alabama firm, in order to purchase another company. The activities caused the insurer to become insolvent, leaving approximately 140,000 low-income Alabamians without burial insurance, according to news reports.

Townsend pled guilty to felony charges. As part of a plea bargain, Fail’s personal charges were dropped, but he was forbidden from doing any future business in the state.

In his letter to UA officials, Stano recounted the story of a daughter who left her mother’s dead body on the couch for days because her insurer could not reimburse the funeral home for a casket and burial. Other Alabamians, he said, shared similar stories with him in the course of his investigation into Fail’s activities.

“We sacrificed greatly to pay for these policies and then were left with worthless insurance,” Mildred Drummond, a Fultondale resident, wrote to the court in 1983.

In 1984, after Fail violated the terms of his plea agreement, a judge upheld the ban on his doing business in the state.

Years later, Fail’s participation in a federal bailout program – and a yearslong legal dispute with federal regulators – drew additional fraud charges from state and federal agencies.

In 1992, the state of Arizona charged Fail with civil racketeering and fraud in connection with the collapse of one of his companies, which was later taken over by the state. Fail settled for $78.8 million.

In 1993, federal regulators also accused Fail of fraud, alleging he had concealed information and made false statements about his background to better his chances of participating in the bailout program. A judge later dismissed the claims.

The Board’s response

The University of Alabama has seen a handful of building renamings in recent years, usually in response to public concerns about a namesake’s past.

In 2019, officials voted to take the name of its largest donor, Hugh Culverhouse Jr., off the building of the law school – and return a $21.5 million gift – in response to an ongoing dispute.

But officials say it’s up to the board to decide which complaints to consider.

Board policy states that trustees have the “exclusive discretion to amend, remove or withdraw any naming at any time and for any reason.”

In a separate email to the Board of Trustees, Stano said he was informed by Trant, the UA System’s general counsel, that the board was “strongly inclined” to uphold the current naming – with or without an official vote.

In a phone conversation with Stano that was confirmed by AL.com, Trant gave gave several rationales for keeping the name, including:

• Deference to former Athletic Director Mal Moore, who was involved in the renaming. Moore died in 2013.
• Fail was never convicted in his personal capacity of a felony.
• Certain promises were made by the university to the Fail family which should be honored.
• Fail made significant financial contributions to the University of Alabama.

Neither Trant nor a UA system spokeswoman responded to questions from AL.com about the extent of the contributions or “promises” made by and to the Fail family, or whether the board would reconsider Stano’s request to revoke the name.

“I’m surprised that no Board rationale addressed the possible impact of Fail’s naming on the University’s students, as I understand the Board always aims to put the students first,” Stano wrote.

“Students look for and need examples of inspiration and strong leadership at their university like never before,” he added. “The last thing Alabama students need is the University revering the person who caused tragedy and trauma in their family. To be the best they can be, students need proof and assurances that their University stands for something beyond seeking ‘significant financial contributions.’”