Education Investigations

In an effort to clean up a “culture of secrecy,” the University of Louisville Board of Trustees voted Friday to potentially sue its own foundation.

Trustees authorized Chairman Larry Benz to work with outside lawyers to prepare and initiate a lawsuit against the University of Louisville Foundation if they don’t follow a “pathway toward restored confidence” Benz laid out after the meeting. With numerous members of the board and acting President Neville Pinto standing behind him, Benz said upwards of 70 donors have contacted the university to demand drastic change before giving another dime to the foundation.

“Their message has been convincing and consistent: Clean up the Foundation,” Benz said. “It is an eyesore for the community.”

Trustee Bob Hughes, who is also chairman of the Foundation, abstained from voting. The only vote against the measure was from Ron Butt, who called it divisive and said he would resign his seat, effective Friday.

Among the steps laid out by Benz were a public recomposition of the Foundation board, turning over accounting records and participating fully with various audits and reviews underway. He also said he intends to issue a request for proposals for a forensic audit at the Foundation next week that the Foundation board is fighting to oversee itself.

A public relations firm sent out a letter from Hughes at the same time of Friday’s meeting saying that the Foundation is working to comply with Benz’s request for six years of financial records. Hughes said he has authorized the hiring of four extra staffers to expedite the process. The letter also said that Hughes believes the Foundation’s board should be the one to choose and direct an auditing firm.

“I will propose that the firm be selected, and its work directed, by a committee of the Foundation composed equally of members of the Foundation’s board who also serve as trustees of the university and two members of the board who are not currently trustees of the university,” Hughes said in the letter.

But Benz — and a coalition of other board members, who stood behind him during the press conference — also expressed concern over the makeup of the Foundation board itself. He said six seats on that board could be potentially turned over for new members.

“This is such a strong community, we have had stellar members come forward and say we want to be the change agents added to that board,” Benz said.

The Foundation board also needs to respond appropriately to the ongoing state audit and turn over the records Benz is seeking related to a $38 million loan the university made to the Foundation.

“I don’t need to tell you, the press, the horrific reputation that our Foundation has for complying with open records,” Benz said. “You all have experienced it.”

Larry Benz and supporters address the media after the U of L trustees meeting.Kate Howard | wfpl.org

Larry Benz and supporters address the media after the U of L trustees meeting.

The state attorney general’s office has ruled three times since August that the University of Louisville Foundation violated Kentucky’s Open Records Act by refusing to release documents sought by WFPL’s Kentucky Center for Investigative Reporting.

Former university President James Ramsey continues to lead the Foundation. He was not in attendance at Friday’s meeting.

The Foundation’s board is scheduled to meet next Friday.

Kate Howard is a veteran investigative reporter specializing in government accountability and higher education issues.