2 U of L trustees urge control over foundation

Following news reports about huge deferred compensation packages awarded by the University of Louisville Foundation to President James Ramsey and his top aides, two members of the university's board of trustees have called for the foundation to be folded into the university.

Trustees Steve Wilson and Craig Greenberg said the independently operating foundation needs to answer to the board of trustees to ensure transparency and better coordination of compensation.

Wilson also said in an interview that he wrote to Kentucky Auditor Adam Edelen on Tuesday asking for an audit of the foundation and the university.

Edelen's spokeswoman, Stephenie Hoelscher, said this week that "we are looking at the issue."

Ramsey did not immediately respond to questions left with university spokesman Mark Hebert.

Dr. Robert Hughes, a Murray physician who is chairman of the board of trustees and the foundation, said in an email that Wilson and Greenberg are relatively new members of the board and should have "made their case to the entire board instead of bypassing their fellow trustees, the chairman of the board, and the administration of the university."

He said their proposal, made through the press, "is very disrespectful of the process" and that they should have "obtained a lot more knowledge about the university and its foundation before embarking upon this path."

The Courier-Journal reported in February that the foundation paid deferred compensation in 2012-13 of $2.4 million to Ramsey, $1.8 million to Provost Shirley Willihnganz and $1.3 million to Chief of Staff Kathleen Smith.

WDRB reported this month that some of the deferred compensation had been backdated and credited with fictional investment returns, that Willihnganz and Smith also had been paid by a separate nonprofit created by the foundation, and that Ramsey had received $2.5 million from the foundation in 2008.

It also was reported that the foundation gave its former longtime finance committee chairman, Burt Deutsch, a no-bid consulting contract worth $120,000 a year shortly after he left the foundation's board in 2013.

Wilson and Greenberg said that it was a conflict of interest for the foundation to award the contract to Deutsch, who had been on its executive committee. They also said that the university and Deutsch should have disclosed that he was being paid by the foundation when he defended the deferred compensation packages in February to the news media.

Deutsch, president emeritus of the Corradino Group engineering firm in Louisville, could not be reached for comment. Defending the contract, Hughes said Deutsch has a "tremendous amount of knowledge both of the university and the foundation" and that "their complaints on him are just plain quibbling."

David Saffer, a lawyer for the foundation, told WDRB that Ramsey, who is also president of the foundation, offered Deutsch the paid position without advertising it or bids because his background and experience make him "uniquely qualified" to consult for the foundation. Saffer could not be reached Tuesday night for comment.

The foundation, which manages the university's $1.1 billion endowment, functioned in secret until 2008, when after a protracted legal battle, the newspaper won a ruling from the Kentucky Supreme Court that its records are public.

Greenberg, an attorney, said state law requires the board of trustees to oversee compensation of the president, faculty and staff, which he says is impossible with the foundation awarding payments independently.

"The board is advised on certain compensation, but there is other compensation that has not been fully disclosed," he said.

Wilson noted that some members of the foundation's own board "did not know of all the arrangements."

"It is definitely time for transparency," he said.

Wilson said the best practice would be for the endowment to be managed by the university, which he said is done at the University of Kentucky.

Wilson and Greenberg said they have not yet discussed their proposal with other trustees and don't know the prospects for change.

They said they still support Ramsey.

"The president has done a fantastic job at the university," Wilson said. "Nobody has been more successful in fundraising. I don't have a problem with how much he is being paid, but I have to know how much that is."

Greenberg said compensation needs to be centralized for officials such as Smith and Willihnganz.

WDRB reported that Ramsey signed a document Sept. 29, 2011, awarding Smith an extra $53,587 in pay from the university's foundation for exceptional performance, and that she qualified for the deferred money by remaining employed one more day.

The station also reported on its website that Ramsey signed a foundation employment extension for Willihnganz in December 2013, giving her an additional $300,000 that vested seven months later.

Reporter Andrew Wolfson can be reached at (502) 582-7189