September 13, 2016

Benz insists Ramsey and foundation chair must go

By Kyeland Jackson —

Board of trustees Chair Larry Benz is putting his foot down.

Benz penned a letter to University of Louisville Foundation Chair Bob Hughes saying former U of L president James Ramsey must leave to avoid suit by the university. On top of that, Hughes must step down as foundation chair and Kathleen Smith, Ramsey’s chief of staff, must be put on administrative leave.

In the letter, Benz laid out mandates the foundation must meet to avoid a suit by U of L and restore confidence.

“I realize we are addressing difficult issues, but the steps set forth above are required to restore confidence in the foundation and to allow the university to move forward and focus on the best interests of its students, faculty and the community at large,” Benz said in the email.

Hughes responded to Benz in a letter Tuesday. Hughes says the foundation board must convene to decide on mandates, and asks Benz to delay action until Friday’s annual meeting.

Mandates include a three-member nominating committee, documents on a $38 million loan to the foundation be handed over and university trustees choose the forensic auditor to review ULF records.

Hughes defended the current nominating committee, saying they were chosen to serve the interests of ULF and the university.

“You are free to disagree with my decision, but allowing you (or anyone else), acting in a capacity in which you owe no fiduciary duty to the foundation, to dictate the composition of the foundation’s nominating committee would undermine, not support, confidence in the foundation. I decline,” Hughes response letter to Benz said.

“As to any action regarding Foundation personnel (including Dr. Ramsey and Ms. Smith), please be assured I plan to defer consideration of and action upon these matters.”

Ramsey said he wanted to be remain on the foundation after a $690,000 buyout of his university contract. The foundation can terminate Ramsey because of his university resignation, but could vote to keep him. One foundation trustee asked the board to keep Ramsey months ago.

“Jim needs to stay on as president of the foundation,” foundation trustee Salem George said. “I’ve seen unbelievable accomplishments on this campus. No one can walk in his shoes.”

Foundation funding skyrocketed under Ramsey, jumping $115 million between 2002 and 2015, a 290 percent increase, according to foundation records. But a recent article by the Courier-Journal shows the foundation’s performance stalled 10 years ago, dropping in value by $131 million. The foundation attributed some losses to bad markets and university needs.

The foundation could buyout Ramsey’s contract, though rumors of offices being built for Ramsey and Smith remain unfounded.

Benz’s demands come shortly after plans for university trustees and ULF to meet stalled. The foundation is still being investigated by Kentucky’s auditor. It could lose two major donors. Those donors, accounting for more than $76 million in endowment assets, demanded the foundation hire an independent auditor to investigate its records. U of L’s board threatened to sue Sept. 9.

To move forward, Hughes said the litigation threats need to stop.

“This is what all who cherish the university as alumni, supporters, and donors want,” Hughes said.

The next regularly scheduled meeting for the foundation is Friday.

File Photo // The Louisville Cardinal

 

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