LOUISVILLE, Ky. — University of Louisville trustees threatened Friday to sue the school’s fundraising foundation if it doesn’t adopt transparency and accountability measures. The action stirred more turmoil on a campus where the longtime president resigned and dueling boards were formed amid a dispute over the governor’s power to replace trustees.
In the latest dispute, UofL Board of Trustees Chairman Larry Benz sharply criticized the “veil of secrecy and the shenanigans” at the school’s independent, nonprofit fund-raising arm.
Dozens of donors have signaled their intent to stop giving until the University of Louisville Foundation’s operations become more transparent, he said.
“Their message has been convincing and consistent — clean up the foundation,” Benz told reporters. “It is an eyesore for the community.”
The trustees agreed to sue if the foundation fails to meet several conditions needed for a “clean bill of health,” Benz said after their lengthy closed-door session.
— Trustees want a rigorous review of the foundation’s finances, done by an outside accounting firm with the expertise to drill down through extensive records, Benz said. For example, the trustees want a full accounting of a $38 million loan the foundation took from the university this year.
— The foundation board’s membership needs to change, after showing “questionable adherence” to bylaws governing the nomination process, Benz said.
— The foundation board also should reconsider using its accounting and law firms.
Acting UofL president Neville Pinto, who replaced James Ramsey after his resignation this summer, said he’s confident the foundation’s board will meet those objectives once they meet with the trustees to work out their differences.
Ramsey has continued to draw scrutiny for remaining as the foundation’s president despite stepping down as university president.
Benz said Friday that there is “no reason in the world” for both positions to be held by the same person, and Ramsey’s continued foundation role sends the wrong signal during the university’s search for a new president.
Trustee Bob Hughes, who also is the foundation chairman, abstained from voting on the resolution threatening the lawsuit, and said later that the two sides should be able to avoid becoming adversaries in what he said would be an expensive and wasteful legal fight.
“We’re not operating rogue. We’re trying to do what we think’s in the best interests of the university,” Hughes said.
The resolution was opposed by trustee Ron Butt, who said he intends to resign. He said the board operates in a “dysfunctional, accusatory” manner, and “the environment is toxic.”
Butts told reporters that the trustees are acting divisively, “much like a child filing a lawsuit against their parent.”
The trustees’ meeting Friday was their second since they were restored by a judge amid an unresolved dispute over the authority of Republican Gov. Matt Bevin. Bevin issued an executive order this year abolishing the UofL board, and replaced it with a new board. Democratic Attorney General Andy Beshear challenged the wholesale change as illegal.