In an email to state Auditor Adam Edelen Tuesday morning, University of Louisville trustee Steve Wilson said he is concerned about the oversight body’s ability to do its job under its current management arrangement and asked the state’s oversight office to formally investigate the U of L Foundation, after a series of media reports about the multimillion-dollar payments it has doled out to top executives.
In response, Robert Hughes — who chairs both the board of trustees and the Foundation — accused Wilson and other trustees who have sought to examine ways to strengthen the board’s role of missing meetings and being unaware of the oversight and governance process.
Wilson’s email came as the auditor’s office is already considering whether to launch a formal investigation into the U of L Foundation, which IL reported first on Tuesday.
The Courier-Journal reported Wilson’s request in an article Wednesday morning, and IL obtained his email (copied below) this afternoon. In that story, Wilson and fellow trustee Craig Greenberg also said they wanted the Foundation — which is currently managed by a 16-member board and is separate from the university — to be folded into regular U of L functions and oversight.
In the email, Wilson, the well-known businessman and hotelier behind 21c, said the trustees were unaware of the multimillion-dollar compensation packages the U of L Foundation — a separate nonprofit that manages $1.1 billion in funds — gave to three top executives at the university. As IL reported in February, U of L President James Ramsey and his chief of staff, Kathleen Smith, as well as Provost Shirley Willihnganz, received more than $5.6 million in deferred compensation from the Foundation last year.
WDRB expounded on that reporting in a story earlier this month, revealing quick vesting and backdating of investments to improve returns in some of those incentives packages.
“To really understand the relationship between the University and Foundation — as well as the administration of each — I believe we need a complete and truly independent accounting of the finances of both the University and the Foundation,” Wilson wrote.
In an email to IL, Hughes accused Wilson of skipping board meetings and being unaware of the implications of the university managing the Foundation. Wilson has publicly criticized the board in the past.
“First, in order to receive information from the board, its chairman, or the administration, it is very important to be actively involved by first being in attendance, being attentive during the meetings, and reading all materials both in advance and at the meetings,” he wrote. “All trustees are invited to attend all meetings, including Mr. Wilson.”
Hughes went on to say folding the Foundation into the university would limit its ability to raise and invest money.
“To unravel this and put this under a predominantly political board which the Board of Trustees is would jeopardize a lot of new job creation for Louisville and Kentucky,” he wrote.
Through a spokesperson, Wilson did not respond to an interview request.
Here’s Wilson’s letter to Edelen:
Dear Auditor Edelen:
As you know, I serve on the Board of Trustees of the University of Louisville, by appointment of the Governor. I have for some time been troubled by the lack of information that the Board of Trustees receives from the Administration and Chairman of the Board. Various events — too numerous to list — have led me to be concerned about fulfilling my fiduciary and statutory responsibilities as a Board member.
Complicating governance issues for the Board of Trustees is the different leadership and separate operation of the University of Louisville Foundation. As you, too, may have read in the press, the Board of Trustees has been unaware of certain compensation arrangements from the Foundation to certain University Administration members. These arrangements, I believe, should have been provided to the Board of Trustees in order for us to meet our fiduciary and statutory responsibilities.
To really understand the relationship between the University and Foundation — as well as the administration of each — I believe we need a complete and truly independent accounting of the finances of both the University and the Foundation.
I hereby request you conduct an official Audit to provide the Board of Trustees and the public the information we all deserve.