A small, exclusive group of University of Louisville trustees will decide whether to sue, settle, or take no action to recover money misspent at the U of L Foundation.
The board of trustees on Thursday created a special litigation committee empowered to “take any and all actions it deems appropriate” to recover an estimated $40-$100 million in endowment funds allegedly overspent by former officials.
University board chair J. David Grissom, an attorney and chairman of The Glenview Trust Company, will lead the committee. Grissom was the board’s point person on the scathing $2.2 million forensic investigation that detailed excessive and often secret spending on investments, real estate and lavish pay that left the school’s endowment depleted.
While interim university president Greg Postel will serve on the committee, he isn’t allowed to vote on its decisions.
U of L officials began discussing potential lawsuits to recoup some money from former leaders after the forensic investigation was released in June. The university has already spent millions on investigating possible wrongdoing and paying outside attorneys. The potentially costly decision to pursue litigation now rests with the small group of trustees.
Other members are new trustee Raymond Burse, an attorney and former president of Kentucky State University; James Rogers, retired former executive vice president and chief operating officer of Louisville-based investment firm J.J.B. Hilliard, W.L. Lyons Inc.; and Sandra Frazier, CEO of Tandem Public Relations.
University of Louisville President James Ramsey during a 2014 Board of Trustees meeting. Brucie Moore sits to his right.
Credit WFPL
Frazier’s company is one of two public relations firms under contract with the nonprofit U of L Foundation. When she first joined the university board, Frazier said she didn’t personally handle any of the foundation’s PR needs and that she would recuse herself from voting on items tied to foundation business. She couldn’t be reached for comment Thursday afternoon.
Grissom said the committee is needed to make tough decisions after both the state auditor’s investigation and the private investigation pointed to serious problems at the foundation, which was led by former university president James Ramsey.
“It’s a little bit like a dog that chases the car, catches the car, and now says what are we going to do with it,” Grissom said. “This board has to decide what is an appropriate action, if any, to be taken as a result of these two audits.”
Vishnu Tirumala, the university board’s student representative, and Enid Trucios-Haynes, the faculty representative, voted against the resolution to create the legislative committee. Staff representative Will Armstrong abstained. Rogers was out of the room at the time the vote was taken.
Grissom said the full board will be fully informed of the committee’s work. The resolution, however, commits the exclusive group only to advising the board “from time to time on actions it has taken or may take.”
The investigations have scrutinized actions under Ramsey, who was forced out as university president last July via a $690,000 buyout. He resigned from the foundation in September.
Ramsey’s attorney, Steve Pence, called Thursday’s action “more distraction that hurts the university.”
“From what I can see, no money is missing,” Pence said. “It’s not been alleged that any money was spent except on behalf of the university. But the board is going to do what it’s going to do.”
Ramsey’s chief of staff, Kathleen Smith, retired from the university last year and was fired by the foundation in June. Her attorney, Ann Oldfather, couldn’t be reached for comment.
Kate Howard can be reached at khoward@kycir.org and (502) 814.6546.
Disclosures: In 2015, the University of Louisville, which for years has donated to Louisville Public Media, earmarked $3,000 to KyCIR as part of a larger LPM donation. University board member Sandra Frazier and former member Stephen Campbell have donated.
