Kathleen Smith, former assistant to James Ramsey during his tenure as president of the University of Louisville and its nonprofit foundation, is no longer employed by the foundation.
Smith’s contract was set to run through the end of July, but according to a lengthy statement released by her attorney, Ann Oldfather, the foundation board told Smith late Wednesday that her current salary and benefits will cease to be effective as of today.
In a statement Thursday morning, Keith Sherman, the foundation’s interim director, would only say that Smith “is no longer employed” by the foundation, which will have “no further comment on the matter.”
Smith has been on paid administrative leave from her position as assistant secretary of the foundation since Sept. 27 — two weeks after former UofL president Ramsey resigned from the top role at the foundation and Smith stepped down as Ramsey’s chief of staff at the university. Ramsey signed Smith’s new employment agreement with the foundation just one day after he was forced to resign as president of the university.
Last fall, Smith already had been under fire from university and foundation board members who criticized what they viewed as a lack of transparency. Critics were particularly concerned about annual deferred compensation packages — some exceeding $1 million — for Ramsey and top aides including Smith. In December, state Auditor Mike Harmon’s investigation of the foundation found that Ramsey appeared to violate foundation bylaws when he hired Smith for this position without any formal submission to or approval by the foundation board. The recently released forensic examination of the foundation by Alvarez & Marsal — which found the value UofL’s endowment was harmed by the foundation overspending on compensation and bad investments — included several emails or memos in which Smith appeared to suggest that various investments or deferred compensation be hidden from open records requests or the media.
However, Smith’s attorney, Ann Oldfather, has called the Alvarez & Marsal report “a one-sided smear campaign,” and her statement further criticized that report and accused the foundation of “cowardly failure” in breaching their contract with Smith because “now they need a fall girl.”
Oldfather stated that there were “material errors and omissions in the Alvarez & Marsal ‘Information,'” as the records for the boards of both the university and foundation show “there was no ‘secret’ deferred comp plan, and no ‘secret’ salaries. What they call ‘disturbing’ today was their directive at the time.”
“This is a breach of Kathleen’s contract with the Foundation, but worse it is a cowardly failure to stand behind fully transparent salary and compensation decisions that would never be questioned were she one of the highly-compensated men on these boards,” stated Oldfather.
Oldfather further claimed that Smith never set her own salary, which never exceeded $300,000 from all sources. She added that Smith’s “total contributions spanning forty-six years of service were $1,093,062,” arguing she deserved that salary — which was approved by “Foundation Board directors and their lawyers” — due to the “$235,000,000 in gifts and grants she brought to this University” in the service of four presidents. She said Smith accomplished more that certain unnamed “men.”
“One thing is clear, many men are paid far more for far less,” stated Oldfather. “Many members of these Boards, whose work has been for private rather than public good, have benefitted far beyond the compensation earned by this phenomenally hard-working woman. There is no way it was a crime, or a breach of duty, to pay Kathleen what she was promised and what she so clearly deserved.”
Oldfather added: “But now they need a ‘fall girl’ with almost $2 million paid for the ‘you can’t rely on this’ Alvarez & Marsal ‘Information,’ and Kathleen, who never had a vote on any Foundation decision, is it.”
According to the Alvarez & Marsal report, Smith received a total compensation of $4,382,636 from 2010 to 2016, with the large majority of that total — $2,627,005 — coming from deferred compensation payments in the final five years. Smith received a high of $1,314,469 from the deferred compensation account in 2012, and her lowest total annual compensation from that year onward was $421,611, which she received in 2013.
Both the foundation and the UofL board of trustees currently are weighing the option of a lawsuit in the wake of the audit report, with a new foundation committee conducting further investigation to bolster potential litigation and the trustees authorizing an additional $200,000 to Alvarez & Marsal to also refine information in its report. Attorney General Andy Beshear also has stated that his office is examining the audit and weighing whether or not to file criminal or civil charges in the matter.
While no final decision has been announced on whether UofL will file a lawsuit and who would be sued, Oldfather ended her statement by adding that “we will speak for Kathleen and a fully-informed jury can decide if she was worth it.”
The full statement released on Smith’s behalf can be read below: