Auditor must save U of L from itself

James Ramsey
James Ramsey

University of Louisville President James Ramsey and his top brass had a bad year in 2015, and seem determined to repeat.

The job of saving them from their worst impulses has been taken up by new State Auditor Mike Harmon. Harmon said recently that he will continue an investigation of the University of Louisville Foundation begun by Adam Edelen, whom he defeated in November.

Many of the problems plaguing U of L arise from the all-too-cozy relationship between management of the university and of the $1.1 billion foundation.

Ramsey is president of both institutions. At the foundation he is also a voting member of the board, on the executive committee and chair of the committee that nominates the board chair and evaluates most candidates for board seats.

One of the scandals that arose in 2015 involved huge salary supplements the foundation paid to Ramsey and his top aides. Ramsey’s total pay — $2.53 million a year — is almost twice that of presidents of similar universities and the highest among 26 schools surveyed for a report presented to the trustees last year.

As the stories about Ramsey’s pay unrolled, a U of L trustee asked the state auditor to investigate the foundation’s finances and management structure, which Edelen agreed to do. Last summer there was grumbling about auditors’ document requests and the scope of the investigation.

As a candidate Harmon, a Republican, questioned whether the office had the authority to carry out the audit. Now, as auditor, Harmon said he had yet to hire someone to oversee the audit and couldn’t comment on the scope, although clearly professional staff in the auditor’s office had been working on the U of L Foundation audit for months.

So, there’s that. But the U of L board is also in flux.

Just last week the board chair, Larry Benz, (who also serves on the foundation board — yes, this is complicated) suggested that power should be “decentralized,” at the foundation, meaning Ramsey, or any U of L president, should not have a stranglehold on its operations. Ramsey did not agree, saying that could hurt U of L’s finances.

Benz was reappointed last summer by then-Gov. Steve Beshear, whose three appointments left the U of L board with no black members. The Kentucky Justice Resource Center challenged the makeup of the board in court. The U of L board, which contends it is legally formed, moved unsuccessfully to have the suit dismissed.

Last fall, when the foundation was under sieg,e it hired RunSwitch, a public-relations firm founded by Republican operative and former Sen. Mitch McConnell campaign aide Scott Jennings.

Last week, as Benz was talking about decentralizing power, our new Republican Gov. Matt Bevin said he supports the suit challenging the U of L board’s makeup and asked the court to nullify the Beshear appointments. If he prevails, Bevin would get to fill three spots on the board, including that now occupied by Benz. Ramsey, who had had little to say publicly on the lawsuit or board composition, quickly issued a statement supporting Bevin’s move, contradicting the position taken by the U of L board.

Even more curious was a flurry of emails obtained by media outlets showing Jennings had drafted the statement for Ramsey and encouraged him to release it quickly on Twitter. Ramsey, who didn’t have a Twitter account, created one and released the statement within an hour of Bevin’s announcement.

Confused? Of course, but here’s a summary: Ramsey released a statement as president of the university that was drafted by a partisan PR executive representing the foundation. The statement contradicted the position of the university’s board of trustees and, in essence, supported removing three of its members including one who had just endorsed reducing Ramsey’s power over the foundation which pays a huge chunk of his salary.

Auditor Harmon has stepped into a controversy that’s not only extremely complex but also involves some of the most powerful players in his own party. He must assure this audit is unflinching, unbiased and thorough. It’s an essential step toward restoring credibility in the University of Louisville’s governance.