September 15, 2016

U of L Foundation finds itself staring down potential lawsuit

By Chris Acree –

It seems like everybody is just at each other’s throats recently, doesn’t it? You’ve got Trump vs. Clinton, Bevin vs. Beshear, UK vs. their student newspaper, me vs. my wife on who’s taking the garbage out – conflict is everywhere. It seems as if lately our hallowed halls on campus are no exception either. The University of Louisville has its own sectarian skirmishes going on in the highest echelons of the administration.

The university’s board/not board of trustees, led by Chair Larry Benz, has threatened the U of L Foundation with a lawsuit unless they comply with a list of demands.
These include a comprehensive audit by a forensic auditing firm chosen by the BOT (on top of the state audit it’s already under), and a release of all financial documents and filling positions that have been empty due to expired terms or other reasons.

Additional requests from the current board include the current U of L Foundation president and former U of L president James Ramsey stepping down, along with Foundation chairman and current U of L trustee Bob Hughes.  In response to the threats, more recently this past Friday, it was announced that both Ramsey and Hughes have since stepped down from their positions on the foundation.

Lastly, the board also wants to know about a roughly $40 million loan the school made to the foundation that was technically never even approved by the board.

In response to these threats, initially Hughes basically told Benz where to stick it. He said that any decisions on an auditing firm should be made by the foundation’s board, and that the two boards should be meeting together to reconcile their differences instead of threatening litigation.
In what has become an administrative flame war, Benz responded to Hughes’ by saying that maybe the best idea would be to just start a new foundation.
It could’ve definitely been argued that perhaps Hughes and the foundation were merely trying to wait the BOT out. After all, this is the old BOT, which Governor Matt Bevin had previously dissolved and replaced with a new board. But rightful trustee or not, Benz had a point. Ramsey, and Hughes needed to go.
Now I usually don’t like setting whole things aflame. But in this case, I might make an exception. To put it mildly, everything under Ramsey has gone in the gutter. From federal investigations, audits, and unfortunate pictures in culturally-insensitive outfits, Ramsey’s last few months as head of the university were a smorgasbord of controversy.
And on top of that, the foundation has seen better days. While the endowment it watches oversaw an increase of 290 percent after Ramsey became president, that progress has since stalled and the endowment has lost over $130 million in recent years. The foundation has since blamed market fluctuations and financial requirements of the school, but other state schools’ endowments have not seen nearly as much instability as we’ve seen here at U of L.
Reports also indicate than many high-profile donors have expressed doubts regarding any about any further donations unless change occurs in the foundation.  Hopefully with the recent resignation of both Ramsey and Hughes, the change they were looking for has been found.
The foundation’s board appeared to be the last bastion of Ramsey loyalists, and they still hold most, if not all of the purse strings, which means interim President Neville Pinto and the acting BOT may still have to grovel before some of Ramsey’s last sympathizers if they want anything to be done, which is no way to operate.
If all these parties truly have the best interests of U of L at heart, they’ll continue to find ways to restore the confidence in the administration of both organizations. And the only way that can effectively happen is if all trace of incompetence is purged from the foundation.  Let’s just hope were finally headed in the right direction.

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