Beshear right to investigate foundation

Attorney General Andy Beshear
Attorney General Andy Beshear Herald-Leader file photo

At the University of Louisville Foundation, according to an audit released last month, tens of millions of dollars intended to support the school’s academic mission, its students and teachers, were instead squandered on huge compensation packages for a few insiders, investments in questionable start-up companies, risky loans, questionable real-estate purchases and subsidies for the athletics department.

The university is contemplating suing former President James Ramsey and others to recoup some of the funds and whether it can make a claim on a $20-million insurance policy taken out against management mistakes and misdeeds.

But the only law-enforcement officer who has publicly shown any interest in investigating this mess is Attorney General Andy Beshear. After the audit, which found “gross mismanagement,” Beshear said his office would look into the foundation’s operations and requested more information from the university.

Good for him. Investigating possible public corruption, misuse of public funds or violations of the rules that govern nonprofits is his job.

The Kentucky Republican Party has assailed Beshear, saying he has a conflict of interest because in private practice he represented U of L and his former firm, Stites & Harbison, has represented the foundation. Beshear has not been a partner in the firm since the end of 2012, working there as a contract attorney after that, scaling back his involvement in 2015 as his campaign for AG geared up. He was elected that November.

Republican Party spokesman Tres Watson said Beshear should hand the matter to a special prosecutor. In Kentucky, that would have to be either a county or commonwealth’s attorney.

Easier said than done. Any investigation must look at how, over several years, the foundation managed its $800-million endowment, including examining real-estate purchases, loans to or investments in a range of businesses, special compensation packages and more. The forensic audit released last month took six months and cost $1.7 million, and the foundation board has set aside more money to pay for additional work by the auditors.

In other words: This is a huge, costly, specialized and complex matter, beyond the resources of county and commonwealth attorneys’ offices.

There could be federal interest in the foundation’s activities, as well, but there has not been any indication that the FBI is looking into the matter.

Certainly, the U.S. Attorney’s Office in Louisville, which would likely prosecute any federal charges, could look into the foundation’s murky operations. But it’s awaiting new leadership as President Donald Trump only announced his choice for the top post there late last month and the U.S. Senate has not had time to act on the nomination.

It is appropriate, and essential, that the AG’s criminal staff — with experience and specialized skills — take a hard look at this important and complex case.