Question: In Tennessee, Dr. Shumaker has been cited for inappropriate use of the university’s plane, extensive travel and use of a university credit card for personal expenses that were not initially reimbursed. Has U of L looked into those issues during his tenure?

Answer: Yes. U of L does not own a plane, of course, and presidential travel was paid for by credit card or through reimbursement; all of these transactions since 1999 ¾ credit card receipt by credit card receipt ¾ were audited, and those prior to 1999 were sampled in previous audits. Recent audits by the university and the U of L Foundation found that the former president regularly reimbursed personal expenses with some exceptions caused by oversights, most of which have since been addressed. The auditors made several recommendations, including eliminating personal use of the foundation credit card and better recording the use of frequent flier miles. (So that there will be no confusion, President Ramsey has given up the credit card provided him by the University of Louisville Foundation.) Overall, the audits evaluated Dr. Shumaker’s business travel expenses against university policy and found them to be appropriate. The university has acknowledged that Dr. Shumaker traveled widely and that this travel was sometimes costly; we have also noted the growth of the university and its significant success as the result of the former president’s outreach.

Question: How could there be such serious problems in one state and not in another?

Answer: It’s important to understand that Kentucky and Tennessee are different states operating under different laws, that U of L and UT are different institutions operating under different policies and procedures, that different institutions may be operating with different sources of funds, and that U of L had existing processes to monitor presidential travel and entertainment expenses – processes that may or may not have been in place elsewhere. For example, Dr. Shumaker was required to submit quarterly reports of his travel to members of the university and foundation boards, and his credit card statements were reconciled monthly. In addition, many of the events in Tennessee appear to be unique to the president’s specific situation there. There are many legitimate reasons why events that happen at one institution may differ from those at another institution in another state.

Question: Kentucky’s state auditor has asked to review the documents and work papers associated with the two audits. What is U of L’s response?

Answer: The university has sent a letter to auditor Edward B. Hatchett Jr. welcoming his interest in reviewing the audits and indicating that the receipts and work papers of both audits will be made available to his staff. While the Foundation is an independent organization not subject to the auditor’s request, it has agreed to make its material available, just as it made its audit and the receipts upon which it was based available.

Question: Did U of L investigate when it learned of the Hyundai gift Dr. Shumaker received upon leaving Central Connecticut State University before coming to Louisville?

Answer: Yes, U of L immediately reviewed its records when the question of the gift arose. Connecticut specifically investigated a personal gift from a company with which that university had a business relationship; upon learning of the Hyundai gift, U of L immediately looked into any possible relationships with the company and found none. Since U of L has no business relationship with Hyundai, the gift would not have been a conflict of interest here and there would have been no requirements for Dr. Shumaker to report it to the university.

Question: Why didn’t U of L check to see if Dr. Shumaker received any other questionable personal gifts when he was here?

Answer: Currently, the university would have no way of knowing if an individual receives a personal gift and deposits it in a personal checking account, and there are no laws or policies that would give us the right to find out. The state’s Executive Branch Ethics Division is now considering proposals that may lead to legislation in the next session. Currently, for example, state executives are required to file annual Federal tax returns with the state’s ethics commission, but university presidents are not held to the same standards. President Ramsey has operated under the state’s guidelines for a number of years and has already volunteered to disclose his tax returns to trustees and to file the Executive Branch Ethics Disclosure. Subsequently, all university presidents have agreed to comply with executive branch ethics requirements.

Question: What policies currently govern the behavior of the president?

Answer: The university’s president must abide by the same policies that apply to all other employees, including U of L’s conflict of interest policy. In addition, the president’s contract outlines his obligations to the university and the board.

Question: Did U of L investigate when it learned of contracts in Tennessee that were awarded to Mr. Charles Fishman and Dr. Charles Gervase, both individuals Dr. Shumaker worked with in Connecticut?

Answer: Yes, U of L immediately reviewed its records in both cases. We identified no contracts from any source for Mr. Fishman, although he did visit Louisville, apparently to consult with Dr. Shumaker, and the University of Louisville Foundation paid for a $79.50 hotel bill. We identified three contracts between Dr. Gervase and the University of Louisville Research Foundation between 1999 and 2002 through which he received $69,205.88. We reviewed the contracts with Dr. Gervase and determined that they were considered appropriate at the time because they included justification based upon the expertise of the individual, were in compliance with the university’s procurement policies, and were reviewed by legal counsel. As a result of these contracts, U of L established faculty-led overseas training programs in intensive English, e-commerce and orthopedics; Dr. Gervase also assisted with arrangements for a student study-abroad trip in Italy. Dr. Gervase has no current contracts with U of L.

Question: Why hasn’t U of L done a cost-benefit analysis of each of Dr. Shumaker’s trips to determine the return on the investment?

Answer: University officials have spoken many times about its growth and success under Dr. Shumaker’s leadership: This growth is measured by the extraordinary increase in endowment, external research support, international programs and much more. For example, the U of L Foundation reports that it spent $203,000 in 42 months of Dr. Shumaker’s presidency on travel and entertainment directly related to fund raising; the return on this investment exceeded $215.9 million, or 26,299 percent. This is the true cost-benefit analysis.

It may take multiple contacts over several years to cultivate donors, discuss opportunities and build relationships that will pay off over time—and how does the university quantify the good will that is generated when a president travels to meet personally with alumni with no other agenda than to keep them connected with their alma mater? It would be unproductive to try to second-guess past decisions made about individual trips when some were exploratory and others were intended to start or build relationships. The benefit is best measured by the overall success of the president’s outreach over time. That success is clear.

Question: Repeated Courier-Journal editorials refer to the secrecy of the foundation. How does the university respond?

Answer: First, it’s important to note that the Courier-Journal has made no fewer than 35 requests for information under the state’s open records act (in addition to those filed by other media and agencies) for everything from all Shumaker credit card receipts and reimbursements (including those paid for by the foundation) to all personal services contracts to all expenses of the Institute for International Development since 1995 ¾ seven years of records. Most of these requests have been met, some with the cooperation of the U of L Foundation. These requests have placed an incredible burden on approximately a dozen university offices and many staff members, and we have been diverted from other pressing work, but we continue to respond in good faith as a public institution.

We have also fielded dozens of media requests through normal university processes outside of the open records process, many from the Courier. In addition, we understand that the newspaper has several thousand pages of documents from the Shumakers’ divorce trial, many of them relating to the university and the foundation, as well as the information obtained through normal university channels. Although the newspaper continues to promote the perception of secrecy, the paper has extensive information from a number of sources about the university as well as the foundation.

We must note that the Courier-Journal’s editorials and coverage of the Shumaker situation should be considered within the context of its own lawsuit against the foundation, its past investigation of the university’s McConnell Center for Political Leadership, and its on-going interest in the names of confidential donors. The university has clearly stated its position that, for development and fund-raising purposes, protecting the confidentiality of donors is crucial. The Western Kentucky University Foundation shares this position and has filed a legal brief supporting the position of the U of L Foundation.

Finally, President Ramsey has stated publicly that since the issue of the foundation’s nature as an independent organization is at question in court due to a lawsuit (filed well before he assumed the presidency), that’s where it must be resolved.

President Ramsey’s August 21 letter to the university community further addresses the history of the foundation and his position on the lawsuit.