LOUISVILLE, KY (WAVE) - More than two hours of closed-door meetings have brought promises from the University of Louisville Foundation to open its books - perhaps even agreeing to an independent, forensic level audit.
But the price to dodge lawsuits from the University's Board of Trustees and some of its more generous and prolific donors: the resignations of Chairman Dr. Bob Hughes and of its President: former University President Dr. James Ramsey.
"In fairness to the University, in fairness to Dr. Ramsey, it was settled the right way," Trustees Chair Dr. Larry Benz said.
"We received (the resignation) at like 9 in the morning," Hughes said. "So it wasn't like we were sitting on it."
The Foundation did not ask Ramsey to resign.
"He left on his own," Hughes said. "Clean break."
Ramsey's contract as Foundation President ran through June 2020, the same tenure as his contract to serve as University President.
"I was aware that my contract hinged on my status as University President," Ramsey's letter reads, "(but) the Foundation indicated that it wished for me to continue as President and thus delayed giving me such notice."
Ramsey's resignation is immediate and unconditional, Hughes said. No buyout or payout, from the independent fundraising and development arm of the University that's paid him millions of dollars in performance and special bonuses the past four years, to raise hundreds of millions of dollars while the value of the Foundation's endowment investment portfolio has declined.
But Ramsey leaves with a parting shot to Benz, alleging that documents prove the Trustees' Chair made false allegations by claiming that the Foundation made as much as $38 million in "unauthorized transfers" from University accounts.
"The continued repetition of this false allegation has caused incalculable damage to the University," Ramsey's letter reads. "This is additional proof that the Foundation must maintain some degree of autonomy from the University's Board of Trustees...Indeed, the legitimacy of the entire University Board of Trustees remains in question at this time."
Ramsey was referring to a lawsuit from Attorney General Andy Beshear, challenging Gov. Matt Bevin's reorganization of Board of Trustees. Bevin removed all 17 of the 20 members a Governor appoints, replacing them with ten people of his own choosing.
Beshear claims Bevin violated separation-of-powers provisions of Kentucky's Constitution, and state statutes that provide for removal of University Trustees only for cause and only after due process hearings.
Judge Phillip Shepherd ordered the old Board reinstated pending a final ruling, on grounds that Courts were likely to rule Bevin's Executive Orders unconstitutional and illegal.
"I definitely feel we are in closer sync," Benz told reporters following the Foundation's meetings Friday.
The Foundation would appear to have met at least half of the Trustees' criteria to avoid a court battle: removing Ramsey and Hughes as officers, and electing new directors to fill vacancies and openings created through expiration of terms.
"The Board -Foundation Board - needs to have a healthy discussion about Bylaws changes," Benz said. "Significant Bylaw changes that update our Foundation to what is current 'best practices.'"
Such practices could include a Chief Executive Officer or Executive Director "hired in" as a chief fundraiser and answerable to the University President - rather than a voting member of the Foundation Board, Benz said.
Hughes had balked at the Trustees' demand for a forensic audit.
His successor as Chair, Brucie Moore, has no such qualms.
"I want to follow the law concerning all documents and transparency," Moore said. "My goal is to bring back the confidence of the Foundation for all the stakeholders."
Hughes remains a director of the Foundation Board. Prior to resigning as Chair, directors approved his motion to hire at least two staffers to manage the Open Records requests regarding Ramsey's compensation, that of his former Chief of Staff Kathleen Smith, and of its myriad of investments and partnerships.
"It's not that we're avoiding trying to provide that information," Hughes said. "It's just technically impossible with the staff that we have."
Smith retired from the University Thursday, capping 45 years of service. Foundation Board members named her an Assistant Secretary to aid in fundraising and development.
"I've brought more than $165 million to the University through the Foundation," Smith told WAVE 3 News. "I have several projects I would like to complete."
The Foundation's new Board members will define Smith's duties, Hughes said.
The change in leadership also is why the Foundation's Finance Committee declined to discuss donor's concerns or to put out a request-for-proposals from auditing firms.
"We also want to know what the state's audit has to say," Hughes said.
Moore told reporters she'd like to move quickly.
"I would be back here Monday if I could (get all the directors together)," she said. "Some of you may think I'm naive that we can overcome these mountains, but I am not."
Other new Foundation board members include:
- Ronnie Abrams, whose wife Marie Abrams is a UofL Trustee
- Paul Carrico, a retired business executive
- Diane Medley, Managing Partner of MCM CPA's and Advisors - she was one of Bevin's Trustee appointees
- Alice Houston, wife of former UofL Assistant Basketball Coach Wade Houston
- Dr. William Selvidge has been reappointed.