The suit filed in Jefferson Circuit Court claims that during the period from 2008 to 2016, Ramsey and others conspired to divert millions of dollars from the Foundation’s endowment into speculative and unauthorized ventures, putting the Foundation at risk. The suit further charges that these individuals depleted the endowment through complicated – and often unauthorized – transactions designed to avoid scrutiny and circumvent the Foundation’s approved rules and annual budget.

The suit also claims that Ramsey and his chief of staff, Kathleen McDaniel Smith, colluded to pay excessive compensation to themselves and others. It further states that they intentionally concealed the improper expenditures and compensation, and that their actions caused the Foundation to lose millions of dollars.

Also named in the suit are former finance officers Michael Curtin and Jason Tomlinson; former Foundation Chair Burt Deutsch; and law firm Stites & Harbison, which served as the Foundation’s legal counsel.

“Millions of dollars of donations originally intended for the benefit of the University and its students instead were used to pay excessive compensation,” said UofL Trustees Chair David Grissom. “Other funds were directed toward risky and inappropriate investments, and spending regularly exceeded the Foundation’s own policy.”

“We have implemented new controls at the Foundation to insure this never happens again,” said UofL Foundation Chair Earl Reed. “Now it is time to turn this mess over to the lawyers for clean-up, while the rest of us focus on turning a new page at UofL and the start of an exciting chapter of growth and excellence. We owe it to our students, the Cardinal Nation and our generous donors to hold these individuals accountable and to recover as much of the misspent funds as possible.”

Grissom updated the board on the presidential search at its meeting Thursday. He said 138 names had been submitted to Bill Funk, head of the firm that is helping with the search. Of those, 47 are considered active candidates, a number that Grissom expects to grow to at least 50.

Although applications are still being accepted, candidates were encouraged to submit their information by Thursday, Feb. 15.

After reviewing information on every candidate, Grissom is “very pleased” with the pool, which includes current interim President Greg Postel, he said. He did not elaborate on how many candidates are internal or whether there are candidates from Kentucky.

Grissom set a meeting for Thursday, March 8, at which the search committee, which includes all the trustees, will trim the list to eight to 10 names. Those candidates will be invited to meet with the board, after which the list will be cut to three or four.

The finalists and their spouses will be invited to campus to meet with the UofL community, Grissom said. Candidates who choose to remain anonymous will meet with the board, the Presidential Search Faculty Consultation Committee and a small group of faculty, staff, students and administrators.

The aggressive timeline could lead to selection of a president by late April or early May.

The trustees also heard an update on the university’s financial picture from interim CFO Susan Howarth. Howarth says UofL’s cost cutting efforts are working and there is “good news” in the numbers. UofL is meeting its budget targets and on pace to meet its goal of spending $10 million less than the 2016-17 fiscal year in each of three categories: compensation, procurement and other cost savings.

“We feel very comfortable about meeting these goals,” Howarth said.

Howarth says first quarter revenues are running ahead of last year’s and a slight drop in the size of the freshman class has been offset by an increase in enrollment at the Brandeis School of Law.

The board also took two actions designed to address the two remaining concerns of the Southern Association of Colleges and Schools, UofL’s accreditation agency:

• Approved memoranda of understanding between the university and both the UofL Real Estate Foundation and Pediatric Medical Office Building, Inc.
• Approved a resolution in support of administrators currently filling interim roles

Also, faculty members Susan Jarosi and Rob Keynton appeared before the full board expressing concerns about the board’s plan to conduct a closed search for the next UofL President. Jarosi and Keynton head the Presidential Search Faculty Consultation Committee and laid out reasons the board should conduct a more open search process, reveal the three finalists and bring them to campus for meetings with faculty, staff and students before a final decision is made. Due to time constraints there was no discussion following the presentation, but board chair David Grissom invited the faculty members to appear at the next meeting for a question and answer session.��

UofL officials provided the following statements about the audit:

J. David Grissom, Chairman, UofL Board of Trustees

“Today the Board of Trustees received the forensic investigation of the UofL Foundation. That report has now been released to the public. We appreciate the hard work and dedication of Alvarez and Marsal in conducting a thorough investigation of the Foundation.

“We asked for the forensic investigation in order to help uncover any activities that may not have been in the best interest of the Foundation, the University or the many supporters of the University. The report paints a disturbing picture.

“Let me be perfectly clear: The activities highlighted in this forensic investigation happened under previous university leadership and under a previous Foundation board. The new leadership and new board have committed to open and honest action and communication, and we already have taken steps to review our policies and procedures.

“The Board has not yet determined what legal actions, if any, should be taken as a result of the forensic investigation conclusions. However, I would anticipate that the Board, after consulting with counsel, will, within the next couple of weeks, make that determination.

“As the Board of Trustees has just seen this report for the first time and because the forensic investigation speaks for itself, we will refrain from further comment until we have had sufficient time to digest its findings. We will discuss the forensic investigation more fully at our regular Board meeting on June 15.

Greg Postel, MD, President, University of Louisville

“As Mr. Grissom has stated, this audit reflects activity that happened under a previous administration and a previous Foundation board. This report should answer many questions about the past and close the door on a sad chapter in the university’s history.

“As I have said since I took this position in January, I am committed to being transparent and to operating above board. I also am committed — and I think our recent actions confirm this — to returning this university to solid financial footing. The steps we are currently taking will position us well for the future.

“I think it’s important to note that, while this audit and media coverage over the past months has been a distraction, it has not taken away from the outstanding education our students are getting at the University of Louisville. This is a tribute to those students and to the hard-working faculty and staff who have made sure all of us are keeping our focus on the students.

“Our students, faculty and staff are looking forward. I’m asking all our alumni, donors and friends to do the same. Let’s work together to continue our mission to make the University of Louisville the best metropolitan university in the United States.”

A video of these statements is available below: