The forensic audit of the University of Louisville Foundation released last week revealed an institution founded to further a good cause that became so swallowed up in money and self-dealing that it morphed into something secretive, twisted and ugly.
Money intended to help students, support professors and advance research was siphoned off for multi-million-dollar bonuses and special payments to top administrators, bowl game tickets, investments in risky start-ups, and loans that will never be repaid.
The sad saga is doubly disturbing because themes that run through it persist in other institutions and situations. The two most striking are a passion for secrecy and, closely related, intolerance of questions or dissent.
The U of L Foundation fought for seven years an ultimately unsuccessful court battle to shield the identities of donors to the McConnell Center for Political Leadership, arguing that it was a private entity, not subject to state open records laws.
Now the University of Kentucky’s Kentucky Medical Services Foundation is making the same argument. KMSF is also suing a former medical student who has tried to pry open information about its activities, calling his requests “an attempt to disrupt KMSF operations and harass and intimidate KMSF employees.”
There is no suggestion that KMSF, which chooses to release information about some of its dealings, is engaging in activity comparable to that at the U of L Foundation. But the combustible mix of secrecy and millions of dollars has too often produced disastrous results.
And, once established, a culture of information hoarding doesn’t die easily, even when courts have ruled it’s illegal. The audit revealed that U of L Foundation officers often kept board members in the dark about questionable transactions. Emails showed staff members consulted on how to circumvent reporters’ open records requests. Some computers and hard disks that had been used by key personnel were erased.
Likewise, the messengers who attempt to blow the whistle often receive nothing but grief for their efforts.
When in early 2016 some U of L trustees began questioning the management of the foundation and the actions of then-U of L President James Ramsey, who was also president of the foundation, they were dismissed as “elitists,” “the chardonnay crowd,” and accused of damaging the university in a spiteful effort to unseat Ramsey.
Gov. Matt Bevin bought into this flawed, self-serving narrative when, after meeting with Ramsey, he abolished the entire U of L board of trustees last June, saying it was “operationally dysfunctional.”
In overturning Bevin’s action (although later the General Assembly passed a new law validating Bevin’s overhaul), Franklin Circuit Judge Phillip Shepherd noted that disagreement within a board isn’t always a sign of dysfunction. “To the contrary, a board that always is in agreement and acts as a rubber stamp may be dysfunctional.”
We’ll go even further: Spirited debate is a sign of institutional health, as is transparency. When secrets thrive and dissent is demonized nothing good follows.