<< ARI Watch
The Rupture of Biddle and Barney
Introduction · Biddle · Barney · Final Comments
Introduction
Craig Biddle and Carl Barney have known one another for over 20 years and have been close associates for at least the last ten. Both men were once connected with the Ayn Rand Institute. In 2006 Barney helped finance the start of Biddle’s journal The Objective Standard. In 2019 they both left ARI, for different reasons. Later that year Barney made Biddle executive director of his Prometheus Foundation. Then the same year Barney financed the start of Biddle's nonprofit organization Objective Standard Institute and afterwards donated to it regularly. [1]
And there things stood, the two men – Biddle in Laguna Hills and Barney in Laguna Beach, California – apparently getting along well promoting Objective Standard Institute. But Barney eventually became unhappy with Biddle, then suddenly very unhappy. In October 2025 he demanded that Biddle have OSI relinquish the unspent money he had transferred, plus interest. Biddle refused. The two men are now suing each other in California Superior Court of Orange County. Biddle alleges breach of contract and requests the court to affirm that OSI has a right to keep the unspent part of the money he had transferred plus accumulated interest, together some 9 million dollars. Barney alleges fraud and breach of contract, and requests the court to appoint a receiver for that money and award him punitive damages of 22.5 million dollars.
First Biddle filed a complaint against Barney. (A complaint is the initial pleading that starts a lawsuit and that sets forth the plaintiff’s allegations against the defendant.) As usual the parties to the lawsuit are listed in the order Plaintiff(s) vs. Defendant(s):
Objective Standard Institute vs. Carl Barney, Prometheus Foundation, and CEHE| Date filed: | January 12th 2026 |
| Case No.: | 30-2026-01539488-CU-MC-NJC |
A month later Barney filed a complaint against Biddle. Note that “Does” is legal jargon for yet to be named defendants, as in John Doe and Jane Doe:Carl Barney vs. Craig Biddle, Sarah Biddle, and 30 Does| Date filed: | February 10th 2026 |
| Case No.: | 30-2026-01546888-CU-FR-CJC |
A case management conference for Barney’s suit is scheduled for July 13th 2026 at which time an Orange County judge will examine the case and establish a schedule for the legal process.
It is unlikely the two cases will be tried together. Biddle’s is a question of determining legal status and asking for injunctive relief, which is typically decided by a judge. Barney’s is fact-based and, as his complaint specifies, will be tried before a jury.
In what follows we will need to know that Carl Barney controls Center for Excellence in Higher Education (CEHE), Prometheus Foundation, and Carl Barney Living Trust. The money Barney transferred to OSI came from these legal entities. For short we can say Barney transferred the money.
Craig Biddle controls Objective Standard Institute (OSI). He serves as its Chief Financial Officer and his wife as its President and Secretary. Biddle also controls The Objective Standard journal (TOS).
In each complaint we will focus on its main allegations and what it asks the court to do about them, abridging and translating the legalese into something easier for the reader to digest. The paragraphs of each complaint are numbered and on occasion I refer to a paragraph by its number. When I express my opinion it will be prefaced with “Comment.”
Each man will get to tell his side of the story.
Biddle vs. Barney
First we consider Biddle’s – or more correctly, OSI’s – complaint. The section “General Allegations” claims the following, and note Biddle’s version of the breakup in paragraphs 27 and 28:
• Barney helped fund OSI from the beginning. On October 31st 2019 his Prometheus Foundation gave $ 1,180,000 to OSI to launch its operations. He agreed to give more money in January of each year for the next four years, from 2020 to 2023.
• On December 1st 2020 CEHE gave $ 1,500,000 to OSI (“First Grant”).
• On January 11th 2021 Carl Barney Living Trust (“Trust”) gave $ 2,000,000 to OSI (“Second Grant”). On May 6th 2021 CEHE gave $ 2,000,000 to OSI (“Third Grant”).
• There was no written agreement concerning either the Second or Third Grant.
Comment: Not addressed is whether or not there was an oral agreement.
• More than two months after the Third Grant, Barney sent OSI a document (“First Advisement”) declaring that any use of the First, Second, or Third Grant except amounts of $ 10,000 or less requires the unanimous approval of Barney, Biddle and Lenny Esmond (a CPA doing work for both Barney and OSI, independently). Nonetheless the Advisement said the funds were to be “unrestricted for financial and tax reporting purposes” (quoting the complaint).
• Barney presented the First Advisement as an agreement. It contained signature areas for Barney, Biddle, Esmond, and Biddle’s wife. OSI does not possess a signed copy of this document and is not sure if one exists.
• On December 31st 2021 Barney and Trust awarded another $ 2,000,000 to OSI (“Fourth Grant”). As with the Second and Third Grant, there was no written agreement connected with it.Comment: Not addressed is whether or not there was an oral agreement.
• Mid-February 2022 Barney delivered a “Second Advisement” with the same title as the first and updated to account for the Fourth Grant. On February 14th it was signed by the Biddles, Barney, and the next day by Esmond.
• OSI stored all the funds Barney donated in a separate investment account. These funds plus the interest generated are referred to as the “OSI Reserve Funds.” They have been used to pay OSI’s ongoing expenses. OSI considers its use of Barney’s donations as in the order they were given, with the interest not used until the principal (the donated money) is exhausted.
• In July 2022 Biddle spoke with Barney about plans to spend a million dollars of OSI Reserve Funds on OSI operations, conferences, and other programs. Barney approved verbally and Biddle transferred that amount from Reserve Funds to OSI’s checking account. In July of the following year, 2023, OSI wrote Barney about spending $ 600,000 more for the same purpose and Barney assented verbally. From complaint paragraph 18: “These expenditures exhausted the First Grant made to OSI by CEHE in December 2020. After these expenditures, approximately $ 5.9 million of the original OSI Reserve Funds remained in OSI bank accounts.”Comment: OSI spent an amount that was just over the amount of Barney’s First Grant, $ 1,500,000, allegedly the only grant of the four whose disposition Barney controlled.
• From 2021 onward OSI sponsored substantial work fulfilling its mission as a charity.
• In early 2024 OSI successfully applied to Prometheus for another grant of about $ 1,300,000 (“Bridge Grant”) to fund certain of its activities through July 2024. This was documented on March 19th 2024 in an agreement (“Bridge Grant Agreement”) between OSI and Prometheus signed by Biddle (OSI) and David Hardy (Prometheus). From complaint paragraph 21: “Use of the funds was limited to certain purposes that had been discussed among the parties. Unlike any of the earlier grants from Barney, the Trust or CEHE, the Bridge Grant Agreement not only required OSI to use the fund in a manner that had been specified, but it provided that any funds not used for those purposes would have to be repaid to Prometheus. The Bridge Grant Agreement also included express termination provisions, which allowed Prometheus to terminate the Bridge Grant in the event that OSI had engaged in any misrepresentations, used the granted funds for purposes other than the specified purposes, terminated the work for which the granted funds were intended, or else failed to maintain the records required by the Bridge Grant Agreement.”
• Paragraph 22: “The Bridge Grant was intended to help OSI continue its operations in the first half of 2024 until a more thorough arrangement could be reached between OSI and Prometheus through which Prometheus would again agree to fund OSI’s operations on a multiple year basis.”Comment: According to the complaint, a year before OSI held $ 5,900,000 in its Reserve Funds (plus accrued interest) plus about $ 600,000 that had recently been transferred to OSI’s checking account. Perhaps OSI was accumulating money so in future it could operate off the generated interest, but why it needed money at this point is a question.
• On July 16th 2024 OSI submitted a proposal to Prometheus for a grant of $ 4,750,000 to be paid out over a period of five years (“Proposal”). It was approved and on September 4th 2024 OSI and Prometheus entered into a grant agreement (“Second Installment Grant Agreement” or “SIGA”) that provided for five grants to OSI totaling the proposed amount, $ 4,750,000 (“Installment Grants”). There would be an initial payout of $ 700,000 on the signing of the SIGA. A second payout of $ 1,400,000 would be made on the first day of 2025. Then there would be annual payouts of declining amounts each year to January 1st 2028. The performance of OSI would be compared to the projections in the Proposal. Otherwise, the terms of the SIGA largely mirrored the terms of the Bridge Grant Agreement.
• Per the SIGA, Prometheus gave $ 700,000 to OSI in September 2024 and $ 1,400,000 in January 2025.
• In 2024 and 2025 OSI’s work progressed and OSI met many of the quantitative projections set forth in the Proposal.Comment: The complaint doesn’t mention the quantitative projections for the next year, 2025. It doesn’t mention that the website of Barney’s Prometheus Foundation listed OSI’s achievements each year from 2022 to 2025, or that Barney had written an article for TOS in 2024 and again in 2025 doing the same.
• Paragraph 27: “The personal relationship between Craig Biddle and Barney began to break down in October 2025 due largely to a series of miscommunications and other interpersonal issues. With the deterioration of this core personal relationship came a concomitant breakdown in the relationship between OSI, on one hand, and Barney, Prometheus and CEHE on the other.”Comment: The word “largely” suggests there were other reasons for the beginning of the break but no other reasons are given.
• Paragraph 28: “The deteriorating relationship between Barney and OSI culminated on January 6, 2026 with an email from Barney to Craig Biddle that purported to instruct OSI to immediately transfer all of the OSI Reserve Funds to Prometheus. With approximately $ 3 million of interest generated on those funds over the years, the amount of OSI Reserve Funds that Barney demanded OSI transfer to Prometheus is currently about $ 9 million. Barney repeated this demand in a second email on January 7, 2026. Two days later, Barney sent Mr. Biddle a third email, demanding a complete accounting for the monies making up the OSI Reserve Funds as well as confirmation of the status of OSI wiring the funds to Prometheus.”
• Paragraph 29: “Barney has no legal basis to demand an accounting or the return of the roughly $ 9 million in OSI Reserve Funds. With the funds from the First Grant exhausted in 2023 or shortly thereafter, all remaining monies and interest in the OSI Reserve Funds result from the Second Grant, Third Grant, or Fourth Grant. Each of those grants lacked any application, award or award letter issued by or to OSI.”
• From paragraph 31: “OSI is ... informed and believes, that [Barney, CEHE or Prometheus] will continue to try to prevent OSI from making any use of the OSI Reserve Funds, putting OSI’s nonprofit tax status in jeopardy.”Comment: Obviously relinquishing the funds would put the existence of OSI in jeopardy, but how it would cause OSI to lose its 501(3)(c) status is a question.
• Paragraph 32: “The First Advisement and Second Advisement (together, the “Advisements”) constitute unenforceable statements of intention and policy by OSI. They do not restrict OSI’s ability to utilize the OSI Reserve Funds to pursue its charitable missions, either with or without the consent of Barney.”
• Under federal and state law anyone who seeks to make a tax-deductible donation to a charity must have “a clear and unmistakable intention ... to absolutely and irrevocably divest himself of the title, dominion, and control of the subject matter of the gift” and make “the irrevocable transfer of the present legal title and of the dominion and control of the entire gift to the donee, so that the donor can exercise no further act of dominion or control over it.” (From complaint paragraph 33 quoting a legal reference.)
• Barney, his Trust, or CEHE claimed tax deductions for the grants that make up the OSI Reserve Funds. Thus the Defendants gave up control of those funds. From complaint paragraph 35: “As the Second Grant, Third Grant and Fourth Grant to OSI had no written documentation accompanying the grants, those transfers of funds were free of conditions.”
• The grants are neither “gift instruments” nor “trusts.”
• The SIGA required Prometheus to give the third installment – $ 1,250,000 – to OSI on January 1st 2026. Instead, on January 6th Prometheus gave only $ 104,166.70, or 1/12 of it (one month’s worth) yet OSI never agreed to alter the SIGA’s payment schedule. Prometheus was obligated to give OSI $ 1,250,000 on January 1st 2026 because the SIGA between OSI and Prometheus was an enforceable contract. From complaint paragraph 55: “The SIGA required Prometheus to make a series of five payments, starting with the date the SIGA was executed, and then an annual payment on January 1 of each subsequent year from 2025 to 2028.”
That concludes the high points of Biddle / OSI’s allegations. The gist is that OSI spent Barney’s first grant and has a right to hold fast to his subsequent grants plus interest, totaling some nine million dollars. Furthermore, Barney has an agreement he must honor to give OSI further grants over the next three years totaling over two million dollars.
The following is the gist of the complaint’s “Prayer for Relief,” that is, what Biddle wants from the judge:
1. A declaration from the court that:
OSI is the sole owner of OSI Reserve Funds.
The Defendants have no right to an accounting, or to OSI Reserve Funds or any interest generated by them.
There are no restrictions on OSI’s ability to use OSI Reserve Funds that relate to the Defendants.
The Advisements are not “gift instruments.”
Prometheus does not have a right under the SIGA to make monthly distributions or to otherwise alter the payment schedule set forth in the SIGA.
Prometheus has no right to terminate the SIGA or to repayment of any funds that it has previously distributed to OSI per the SIGA.
2. A declaration from the court that the provisions in the Advisement, purporting to require Defendant Barney’s approval before any use of the OSI Reserve Funds is permitted, are either voided or else modified to only require OSI to notify Barney of the intended uses of the OSI Reserve Funds and not to obtain his approval.
3. Monetary damages to OSI.
4. Interest for amounts owed.
5. Costs of suit, including attorneys’ fees and interest.
Barney vs. Biddle
Now we come to Barney’s complaint. The following are among the claims in the sections “Parties and Jurisdiction,” “Aiding and Abetting Conspirators,” and “Background Facts and Allegations.” For some of the claims only extensive quoting can do them justice. (Paragraphs 29 to 37 describe Barney’s version of the breakup.)
• Does 1 through 30 are sued under fictitious names because their true names are unknown to Barney. The Defendants, including Does 1 through 30, are all of a piece. From complaint paragraph 7: “Whenever this Complaint makes reference to ‘Defendant’, ‘Defendants’, or a specifically named defendant, such allegations shall be deemed to mean the acts of the defendants acting individually, jointly, and/or severally.” From complaint paragraph 8: “each Defendant was acting as the agent, alter ego, servant, employee, and/or representative of the other Defendants, and was acting within the course and scope of their agency ... .” From complaint paragraph 9: “each of the Defendants ... have acted in concert and/or conspired with one another in furtherance of the improper acts and transactions that are the subject of this Complaint.”
• From paragraph 10: “Each of the Defendants’ agents ... acted in a knowing conspiracy to defraud Plaintiff. ... each Defendant, including each of the Doe Defendants, acted with knowledge of the primary wrongdoing, substantially assisted in the accomplishment of that wrongdoing, and was aware of their role in furthering the wrongful conduct and resulting harm to Plaintiff.”
• Barney has financially supported the Defendants and their enterprises for over 20 years. Until a short time ago Barney believed that his patronage was “rooted in a shared vision ... and in a genuine friendship based on mutual respect and trust.” (Quoting complaint paragraph 11.)
• Paragraph 12: “During the 20-year history, Mr. Biddle has repeatedly failed in his professional efforts, but despite this Plaintiff has personally funded him and bailed him out of financial mismanagement – including significant credit card debt – to the tune of hundreds of thousands of dollars. Plaintiff provided this significant financial support in secret, to allow Mr. Biddle to maintain the illusion of self-sufficiency so that his financial failures would not destroy his efforts to advance the educational vision. Plaintiff is now well informed and believes that because the Biddles became financially dependent on him as their personal piggy bank, they engaged in a long-term scheme to feign friendship while secretly resenting and reviling Plaintiff. Every act of kindness by Plaintiff was another reminder of Mr. Biddle’s lack of business acumen.”
Comments: (1) The last part might be true but it is hard to understand how anyone other than Biddle could know that it is true. (2) It seems that Plaintiff (Barney) himself didn’t show much business acumen in his dealings with Biddle.
• On December 1st 2020, at the urging of the Biddle Defendants, who said the money would be used for charitable purposes and only with Barney’s agreement, Barney had CEHE transfer $ 1.5 million to OSI for the Biddle Defendants to hold in trust (“First Transfer”).
• On January 11th 2021, at the urging of the Biddle Defendants, who said the money would be used for charitable purposes and only with Barney’s agreement, Barney directly transferred $ 2 million to OSI for the Biddle Defendants to hold in trust (“Second Transfer”).
• On May 6th 2021, at the urging etc. as before, Barney had CEHE transfer $ 2 million to OSI (“Third Transfer”).
• On December 31st 2021, at the urging etc. as before, Barney directly transferred $ 2 million to OSI (“Fourth Transfer”). This together with the First, Second, Third, and Fourth Transfers will be called “Financial Transfers.”
• The total amount of the Financial Transfers when they were made was $ 7.5 million. Barney believes the Financial Transfers were transferred to an investment account in the name of OSI, and that wherever they went they have generated interest income, the principal plus interest now totaling well over $ 9 million (“Money In Trust”). The transactions and precise balance will be established through an accounting and discovery.
• Before the First Transfer, the Biddle Defendants, Barney, and Barney’s accountant understood that Money In Trust was being parked temporarily while Barney decided to which charities he wanted some or all of the money to go.
• Before the First Transfer the parties orally agreed that the Biddle Defendants controlled OSI and that through OSI they desired a formal written procedure for the charitable use and disbursement of the Financial Transfers and resulting Money In Trust. In early 2022 Biddle drafted an agreement (“Trust Agreement”) that documented those oral agreements.
• The Trust Agreement says that OSI’s use of the Money In Trust, except amounts of $ 10,000 or less (“Discretionary Transactions”), required the unanimous approval of Barney, Biddle, and Lenny Esmond. And that the parties understand that the Biddle Defendants would provide an annual report setting forth all payments made from Money In Trust including any Discretionary Transactions.
• In Spring 2023 Barney loaned Biddle $ 600,000 to cover expenses related to a conference sponsored by OSI (“Loan”). Before Barney made the Loan, Biddle told him that the full $ 600,000 would be repaid shortly after the conference ended. To date the Biddle Defendants have not repaid any of the Loan.
• The Biddle Defendants concealed from Barney that the OSI funds under their control were more than enough to repay the Loan. In January 2024 Barney discovered that the Biddle Defendants had awarded themselves salary increases of more than 40% within two years.
• Paragraph 29: “Upon being called to account, the Biddle Defendants decided to further their scheme to maintain control over, and eventually to abscond with, the Money In Trust by agreeing to informal mediation regarding their unauthorized salary increases with a third party that Mr. Barney knew and trusted. In order to lull Mr. Barney into a false sense of trust in them, on May 4, 2024, the Biddle Defendants agreed to pay back to OSI the difference between their new salaries and their prior salaries, plus 6%. Mr. Biddle also verbally and in writing pretended to profusely apologize – not only to Plaintiff but also to third parties – for the duplicitous attempt to enrich themselves at the expense of OSI and Plaintiff. They did so with full knowledge that during the next two years they, through OSI and other Doe Defendants, would immorally and unethically assert sole control over the Money In Trust to enrich themselves, in breach of the trust Mr. Barney had placed in them and to Mr. Barney’s detriment.”
• Paragraph 30: “Undaunted in pursuing their devious scheme, shortly after they agreed to return their salary increases, the Biddle Defendants caused OSI to increase Mr. Biddle’s salary by nearly 90% (from $ 58,000 to $ 109,000) without disclosure. The Biddle Defendants did this with full knowledge that the result of such an increase would be to have resources necessary to abscond with the Money In Trust.”
• From November 29th through December 6th of 2025 Barney funded a week-long visit for himself and the Biddle Defendants at Canyon Ranch Wellness Resort (“2025 Retreat”).
• Paragraph 32: “During the 2025 Retreat, Mr. Biddle completely blindsided Mr. Barney by informing him that the personal relationship and friendship that Mr. Barney thought they had was a farce.”Comment: “Blindside” means to surprise unpleasantly, like hitting someone who is facing away, attacking their “blind side.”
• Paragraph 33: “Mr. Barney subsequently learned that far from a friend, Mr. Biddle had considered Mr. Barney as someone to ‘train’ for the purpose of extracting money.”Comment: Had? Why did the friend not warn Barney?
• Paragraph 34: “Mr. Barney also subsequently learned that Mr. Biddle had no compunction about manipulating, defrauding, and stealing from Mr. Barney because of an underlying disdain. In fact, Mr. Biddle confessed to a third party ‘I utterly dislike Carl’ and that when Mr. Biddle informed Mr. Barney that the Biddle Defendants’ ‘friendship’ had only been pretense to obtain the trust necessary to take his money, Mr. Barney ‘looked mortified, because I don’t think he saw that coming’.”
• Paragraph 35: “Finally, Mr. Barney learned that prior to the 2025 Retreat, the Biddle Defendants had been conspiring with attorneys and others to seize the Money In Trust for their own control, and even made a call in furtherance of that conspiracy during the 2025 Retreat itself.”
• Paragraph 36. “After having the scales fall from his eyes regarding the long-term deception of him by the Biddle Defendants, Mr. Barney realized that the Money In Trust needed to immediately be accounted for and transferred to a trustworthy charity to prevent further damage by the Biddle Defendants and to ensure the money was utilized consistent with the parties’ understanding that occurred prior to, and was later partially reflected in, the Trust Agreement. To that end, on January 6, 2026, Mr. Barney sent an email to Mr. Biddle and Mr. Esmond stating that funds currently being held in OSI in trust for later determination should be transferred immediately from OSI to a third-party charitable foundation immediately [sic].”
• After receiving no response, on January 9th 2026 Barney sent another email to Biddle and Esmond requesting an accounting of the Money, including the identification of the amount that would be transferred to the third-party charitable foundation.Comment: Barney doesn’t say what third-party charitable foundation.
• After again receiving no response, on January 13th 2026 Barney sent formal notice to the Biddle Defendants stating that any use of the Money In Trust made without his written authorization would be improper and could only be understood as a personal misappropriation by the Biddle Defendants. From complaint paragraph 38: “The Biddle Defendants implicitly acknowledged that they had, were in the process of, and/or fully intend to personally misappropriate the Money In Trust with their complete silence.”
That concludes the high points of Barney’s allegations. In a nutshell: Barney transferred money to OSI with the understanding that he would control where it went. He now thinks Biddle defrauded him and wants the unspent part of the money, plus interest, sent to another (unnamed) charity.
In the complaint there follow ten “Cause of Action” sections for (quoting the subheadings) “fraud,” “breach of contract,” “breach of fiduciary duty,” “aiding and abetting breach of fiduciary duty,” “financial elder abuse,” “fraudulent transfer,” “unfair business practices,” “appointment of receiver,” “accounting,” and “violation of penal code section 496.”
The last paragraph of “violation of penal code section 496” reads as follows: “As a direct and proximate result of the Biddle Defendants’ misrepresentations and concealments, as herein described, the Biddle Defendants have violated Penal Code § 496 and Plaintiff is entitled to recover three times the amount of the $ 7.5 million Financial Transfers they stole for a total of $ 22.5 million, costs of suit, and reasonable attorneys’ fees.”
The following is the gist of the complaint’s “Prayer for Relief.” Barney seeks judgement for:
1. Damages.
2. An accounting of the Money In Trust.3. Exemplary and punitive damages.4. Costs of suit incurred.5. Punitive damages and treble damages.6. Interest.7. The Court to appoint a receiver to take possession of and manage the Money In Trust.8. Other remedies, including injunctive relief, disgorgement, restitution, and constructive trust over the funds wrongfully taken or received by Defendants.9. Reasonable attorneys’ fees.
Final Comments
Who is right? Who knows, indeed, does it matter? I had a dim view of both Biddle and Barney before learning of their bust-up, and reading the amazing allegations in their complaints only reinforces it. The lawsuits are a squabble between two self-righteous phonies. [2]
What does concern us is that this affair could bring down the Objective Standard Institute and perhaps its associated The Objective Standard. It would be a good thing. On the issues of immigration, the Ukraine War, Iran, Israel, anti-white neurosis, Lincoln (they love him), Ron Paul (they hate him), Trump (they hate him unreservedly), and others, they are as noxious as the Ayn Rand Institute. Like ARI, they are cultural leftists. They sully the fine people and ideas they praise, the praise being a show to attract followers. (OSI honoring the composer Leroy Anderson was like the Yahoo hugging Gulliver in the Jonathan Swift story.) What they say might be true but I’d rather hear it from someone who deserves to admire greatness.
OSI is a 501(c)(3) corporation, a charity that takes in tax-exempt donations and is supposed to spend the money to promote its published mission. It seems odd to me that OSI allowed over nine million dollars to accumulate (due to Barney’s grants alone), and spent – if I understand the complaints – only about two and a half million dollars, and most of that during its first year. However I have no experience in the charity business. Perhaps this is normal, say to build up an endowment on which to earn ongoing interest.
Biddle’s account of the rupture is vague, lacking in detail. He says (paragraph 27) that it was “due largely to a series of miscommunications and other interpersonal issues.” What could those have been to cause such an extreme breakdown? And what does “largely” leave out? Barney’s account, on the other hand, provides a wealth of detail (paragraphs 29 to 37) – though in my opinion some of those details provoke skepticism, for example paragraph 34.
If Biddle and the 30 Does are as corrupt as Barney makes them out to be, suing them as conspirators might make them turn on one another (paragraphs 7 to 10).
Barney’s use of melodramatic language – “Undaunted in pursuing their devious scheme,” “having the scales fall from his eyes,” etc. – seems inappropriate in a legal document, though if what he alleges is true he would have good reason to feel strongly about it. He gets no sympathy from me considering his history.
Likewise, I see no benevolence on Barney’s part in giving money to Biddle / OSI (even discounting the fact that Biddle’s OSI undermines Objectivism) considering how he acquired that money. [3] But we are concerned with how Biddle sees, or should see, Barney giving money to Biddle / OSI. Biddle wrote and published article after article in TOS defending Barney’s career running Scientology missions and then trade school colleges. He approved of Barney’s methods of getting rich. Thus Biddle, from his perspective – and assuming he meant what he wrote – should have regarded Barney’s grants as generous. What I mean below by the various forms of the word “generous” is what ought to have been Biddle’s view of Barney’s grants; it is not mine.
Before Biddle formally opened OSI Barney made a generous launch donation then generous repeated operational grants over the next five years until the rupture. The question is, who controls the money now? If I understand Biddle’s complaint, he claims that Barney has no control over the money beyond the first grant, $ 1.5 M. And because OSI has spent $ 1.6 M, any control Barney had has been eliminated. On the other hand Barney claims that before he transferred the money to OSI, Biddle told him that it would be used for charitable purposes and only with his agreement.
Biddle claims there was no written agreement. It sounds as if Biddle believes, though he doesn’t come right out and say it, either that there was no oral agreement or that oral agreements are immaterial.
Now set aside the legal aspect of the case and consider the human aspect. Barney generously gave Biddle all the money he asked for. If Biddle / OSI were to give back what hasn’t been spent, Biddle would lose nothing he had had before Barney’s largesse. As is, judging from the complaints, Biddle doesn’t seem to be giving back even gratitude.
Barney alleges (paragraph 12) that for the 20 years he has known Biddle he:
“has repeatedly failed in his professional efforts, but despite this Plaintiff [Barney] has personally funded him and bailed him out of financial mismanagement ... to the tune of hundreds of thousands of dollars. Plaintiff provided this significant financial support in secret, to allow Biddle to maintain the illusion of self-sufficiency ...”
Thus Barney maintained the illusion of Biddle’s self-sufficiency for people moving in Objectivist circles, including the followers of TOS and OSI. Barney did this, his complaint continues,“so that [Biddle’s] financial failures would not destroy his efforts to advance the educational vision.”
That is, the mission of OSI. Barney’s deception here is reminiscent of his deception about his Scientology past.
We can only conjecture how this case will play out in court. Barney is suing Biddle personally (not to mention his wife and Does), not OSI, Inc. Barney has the deeper pockets and can afford to lose, and if he wins totally it looks like Biddle would face bankruptcy.
Barney once battled a lawsuit, brought against one of his schools by the state of Colorado, for twelve years. [4] Now he believes that Biddle and others have taken him for a sucker, and as a plaintiff he may be equally tenacious.
Of the two men, is one worth rooting for compared to the other? Considering Barney’s past career, perhaps with Biddle he got what he deserves. But root for Biddle? We should place a high value on gratitude and it seems to me that in this affair Biddle is remarkably deficient in that quality. Dislikable as Barney might be, may he win over Biddle, totally.
That outcome would likely signal the end of OSI. It might also lead to the end of the associated TOS journal. Though they are separate legal entities, many of the same Does of Barney’s complaint are probably involved in each. (OSI was an outgrowth of TOS.) [5]
Barney seems attracted to Objectivist organizations. Having been burned at ARI and now at OSI / TOS, where might he go next? There are only three incorporated Objectivist (alleged anyway) organizations, and the remaining one is The Atlas Society. That organization is again as noxious as ARI though at a lower volume. Barney and the president of TAS have something in common: they both were chummy with the late Richard Minns, a self-described Objectivist and, objectively-described, psychopath. [6]
It is disheartening to contemplate some of the people attracted to Objectivism. To repeat an aphorism from the ARI Watch article referenced in “Who Is Richard Minns?” (footnote 5 again): Don’t judge something by its alleged admirers.
1 A bit more detail for those new to this website:
Craig Biddle, with help from Sidney Gunst and the Ayn Rand Institute, founded The Objective Standard, a quarterly journal, in 2006. Carl Barney, then on the board of ARI, donated money to the enterprise. Yaron Brook, head of ARI, was on the journal’s editorial staff and people at ARI contributed some of its content. Biddle spoke at ARI events and did yeoman service insinuating that ARI had opposed the Iraq War instead of assiduously promoting it. In 2010 ARI severed relations with Biddle and TOS due to his public criticism of Leonard Peikoff concerning the McCaskey Affair. In November 2019 Barney made Biddle executive director of his Prometheus Foundation (a position he held for five years). The same year, Biddle began setting up Objective Standard Institute, a nonprofit organization whose mission statement is similar to ARI’s, with the help of Carl Barney who then made ongoing donations to it.
Carl Barney is a businessman of sorts who eventually accumulated several hundred million dollars. He began acquiring wealth in the late 1960s by running Church of Scientology franchises, or “missions,” until L. Ron Hubbard confiscated them in 1979. Then, or partly overlapping, by investing in real estate. Finally, and most lucratively, by running several trade school colleges that profited from the federal guaranteed student loan program. That last career ended in 2022 when the U.S. Department of Education, following an investigation, denied further loans to students attending his schools. He donated to the Ayn Rand Institute from its beginning in 1985. ARI placed him on its board of directors in 1995. He stopped donating to ARI in mid-2018 and the board voted to remove him early the following year. To repeat, he helped launch Craig Biddle’s Objective Standard Institute and afterwards donated to it regularly.
2 Their concern for the truth can be gauged, for example, by reading Biddle’s three part article “Regarding Carl Barney and Scientology” that he published on the website of The Objective Standard seven years before, starting July 15th 2019. (Four months later Barney made Biddle executive director of his Prometheus Foundation.)
archive.theobjectivestandard.com/2019/07/regarding-carl-barney-and-scientology
As the parts came out they were reviewed here on ARI Watch, beginning with Barney Tells His Story. Both Biddle and Barney praise Scientology of yesteryear. They don’t mention that its doctrine taught a novel understanding of the expediency of deceit.
3 See Who Is Carl Barney?
4 See The End of Barney’s Second Career. The reason for his tenacity might not have been so much the money involved – 3 million dollars – as the word “fraud” in the verdict as reported. He ultimately lost his appeal.
5 See footnote #10 of OSI vs. ARI. (After the lawsuits described here the title is unfortunate. OSI competes with ARI, it never sued it.)
6 See “A Wonderful Tribute to Carl Barney” by Craig Biddle in The Objective Standard, June 6th 2019
archive.theobjectivestandard.com/2019/06/a-wonderful-tribute-to-carl-barney
and Who Is Richard Minns?