The University of Louisville Foundation has fired Kathleen Smith, an aide to former university president James Ramsey, who named her acting chief administrative officer of the foundation before he resigned last year.
The sacking comes just weeks after an audit commissioned by the university accused Lousiville’s foundation of siphoning funds from the university’s endowment to pay secret salaries and unbudgeted spending. Smith had been on administrative leave from the foundation since September, but continued to receive a salary until last week.
However, Smith isn’t going down without a fight, and lashed out at the foundation through her lawyer, who said the firing was in breach of Smith’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 the these boards,” said Smith’s lawyer Ann Oldfather in a statement.
“The records of both boards clearly establish that there was no secret deferred comp plan, and no secret salaries,” said Oldfather. “What they call disturbing today was their directive at the time.”
Oldfather said Smith was a “fall girl” for the foundation, and said the information from auditor Alvarez & Marsal was unreliable and contained “material errors and omissions.”
According to Oldfather, Smith “never set her own salary,” and never exceeded $300,000. She also said that in 2007, it was the foundation board that included her in its deferred compensation plan, with an award of $12,500 for each year of service. In recent years, four additional grants of $100,000 were made.
The audit accused the foundation of widespread mismanagement by its officers, including unauthorized spending on executive compensation, football bowl game trips, and basketball tickets. It also said the foundation invested in risky startups, questionable real estate acquisitions, and attempted to keep certain information from being made public.
The report included excerpts of emails written by Smith to the Louisville Foundation’s lawyer, in which she asked, “how can we move our LLCs into something more obscure that would be difficult to find through ORRs,” referring to open records requests. She also wrote “I would like to make the paper trail to our holdings as obscure as possible.”
Smith, a graduate of the University of Louisville, had worked at the university for more than 45 years before being placed on administrative leave last year.
Tags: Endowment, Foundation, Louisville Foundation, University of Louisville