The University of Louisville has agreed to pay Dr. David Dunn, the former vice president of health affairs, $1.15 million to leave the school.
He goes as "a tenured, full professor in good standing," despite a federal investigation into whether he and two others used federal grant money for non-university purposes, U of L spokesman John Karman said.
That ends a turbulent five-year tenure for Dunn leading U of L's health sciences campus. During that time, the school struck an ill-fated deal with KentuckyOne Health to run the University of Louisville Hospital and the James Graham Brown Cancer Center. The executive committee of U of L's board of trustees voted on Tuesday to terminate that management agreement on July 1 after a state inspection found that nursing shortages had endangered three patients at the hospital and after school administrators said that KentuckyOne was not fulfilling contractual obligations.
The health care company claimed that it was meeting its obligations.
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Dunn had been on paid leave for more than a year, since the Courier-Journal reported that the FBI was looking into allegations that he and two others had misspent federal grant money.
"The University of Louisville and Dr. David L. Dunn have reached an agreement related to his employment at the university. As of Dec. 12, 2016, Dr. Dunn is no longer an employee of the University of Louisville. Dr. Dunn leaves the university as a tenured, full professor in good standing. To compensate for his relinquishing his tenured position, Dr. Dunn will receive $1.15 million," Karman said in a statement.
He said the school did not negotiate a "clawback" provision that would allow U of L to take back the money in the event that Dunn is found to have violated the law during his tenure there.
Dr. Peter Hasselbacher, a professor emeritus at the U of L Medical School and the president of the Kentucky Health Policy Institute, said that he was concerned about the size of the buyout and the secretiveness surrounding it.
"The lack of transparency and exchange of large sums of money might make it seem to a reasonable person like this is just another sweet parachute deal at U of L," Hassellbacher said in a statement. "At a time when a new emphasis on transparency and accountability is being claimed by U of L ... this new departure of a senior administrator seems like more of the same."
While there may be legal reasons for structuring the buyout, he said, " 'Is a $1.15 Million buyout warranted?' In my personal opinion and based on what I know, of course not."
It's unclear where the federal investigation now stands. Last week, the U.S. Attorney's Office declined to comment on the status of the review or whether it has been enlarged to include other matters involving the school or the University of Louisville Foundation.
Stephanie Collins, a spokeswoman for the office, said that “thorough investigations of complex matters can take a considerable length of time.”
Dunn's lawyer, Larry Mackey, of Indianapolis, said Dunn provided the FBI and university police with a 200-page report documenting the “legitimate and transparent efforts he and others took to make U of L a leader in health care informatics, all of which was authorized in writing by the U of L office of the president.”
The school placed Dunn and Chief Information Officer Priscilla Hancock on paid leave on Dec. 10, 2015, one day after the CJ reported that the FBI was investigating them and Dr. Russell Bessette, associate vice president for health affairs, who had resigned.
The CJ reported last week that the university was paying Dunn his $809,024 annual salary and had paid Hancock $250,000 before she retired Oct. 1.
Reporter Joseph Gerth can be reached at (502) 582-4702 or firstname.lastname@example.org.