Litany of Controversies Leads to Calls for Louisville’s President to Resign

Thomas Fougerousse

James R. Ramsey is about to give a tour of his campus. Although there are two other staff members along for the ride, it is Mr. Ramsey who gets behind the wheel of the golf cart.

Most presidents are content to let someone else drive in this situation. But Mr. Ramsey, who is 67, is not known for giving up the wheel. After 14 years as president of the University of Louisville, he is largely credited with transforming the institution from a commuter college into a residential haven by arranging public-private partnerships to build new student living spaces and buying up former industrial sites for research parks.

Remaking the campus is one of the keys, Mr. Ramsey said, to improving the academic performance and reputation of the institution.

But that reputation has taken some serious hits in recent years. The ranks of people on the campus who are calling for Mr. Ramsey to resign are growing. Recent surveys of faculty members and students suggest those groups could vote no confidence in the president in the coming weeks. A group on the university’s Board of Trustees is pushing to hold a no-confidence vote at the board’s April 20 meeting, after a failed attempt in March.

Among the controversies that have swirled: Three university officials are now under investigation by the FBI, and a whistle-blower lawsuit alleges that the president ignored warnings about possible misconduct. Two years ago, another university official pleaded guilty to tax fraud and embezzling nearly $3 million. And the NCAA is investigating charges that a former basketball coach paid for strippers and sex for players and recruits. In response to the basketball allegations, the university imposed sanctions on itself that, among other things, kept it from this year’s NCAA tournament.

The president asserted that much of the money reported stolen from the university in recent years has been recovered, and that the university has dealt with its problems openly. In addition, he said, the issues are not as troubling as the academic scandals or sexual assaults being reported at some other colleges.

“I’m glad those are not our problems,” Mr. Ramsey said during an interview in his office. “Our problems are sometimes self-inflicted but, I think, pale in comparison to those issues,” he said.

Others disagree, raising questions about the university’s oversight of its employees and its business arrangements. In addition, there are concerns about the president’s leadership and compensation from the university’s foundation, which he also leads and which paid him nearly $1.9 million in total compensation in the 2014 fiscal year, according to the foundation’s IRS filings. Mr. Ramsey earned an additional $600,000 from the university that year, according to The Chronicle’s figures.

While there are no allegations that Mr. Ramsey has engaged in unethical behavior, many say he has not set a good example by his own actions, including failing to file required financial-disclosure forms for several years and his insistence that he remain president of the foundation.

The state auditor is now examining the foundation’s compensation practices. And Mr. Ramsey’s position with the foundation has not sat well with the university’s trustees, who feel that his control of the group, along with the high compensation he receives from it, gives them less ability to ensure his accountability.

“Nobody wants to give up power,” said Larry Benz, chairman of the university’s Board of Trustees, “but you don’t see this centralization of power at our peer institutions.”

Emily Bingham, one of the trustees openly pushing for a no-confidence vote, said that despite some disagreements among board members about how much the president is responsible for the problems, he should step aside.

“While there are real difficulties on the board due to different interpretations of the president’s role, this president cannot lead us out of the mire,” she said in a telephone interview.

A Campus on the Rise

Louisville has long tried to distinguish itself in a state dominated by the flagship University of Kentucky, in Lexington.

Though it had a medical college, a law school, and several other professional programs and advanced degrees, the university struggled financially through much of the 20th century. As a lifeline, the state legislature incorporated it into the state system of higher education in 1970. Even then, it remained largely a commuter school serving the city and surrounding Jefferson County.

Its fortunes began to change in 1997. That’s when the state reorganized public higher education in Kentucky and gave Louisville a mandate to become a “pre-eminent urban research university” and, more important, some extra money. A state program that was part of those reforms fueled major growth in Louisville’s endowed faculty positions and its research grants.

Mr. Ramsey, a Louisville native, was the state budget director under the Democratic governor at the time, Paul E. Patton. In 2002, Mr. Ramsey was named president of the university.

Despite the state’s increased support, the university faced significant challenges when Mr. Ramsey took office. It had a six-year graduation rate of just 33 percent for first-time, full-time students.

F. King Alexander, a Louisville native who was president of Murray State University from 2001 to 2005, said a big part of the problem was “a run-down campus under the interstate where very few students would want to live.”

Mr. Ramsey has focused many of his efforts on making the university a destination. At least a half-dozen new dormitories have sprung up on the campus during his tenure.

And with the university better able to recruit students, its graduation rate has improved. For the cohort of students who entered the university in 2008, 53 percent graduated within six years, while 10 percent more transferred and graduated from a different college, according to figures from the Student Achievement Measure.

Mr. Ramsey counts several other measures as evidence of his successful leadership, including a nearly $100 million increase in spending from National Science Foundation grants and a rise in annual fund-raising gifts, from $54 million to $238 million.

Top that off with the university’s move from the Big East athletic conference to the Atlantic Coast Conference in 2014, and you get a university that students and parents both within and outside Kentucky can take seriously, say many of Mr. Ramsey’s supporters.

“Outside the community, the University of Louisville is perceived as a top-flight university,” said A. Keith Inman, vice president for university advancement.

Growth and Challenges

The university’s rapid rise has been an economic boon for the city, but it has also brought challenges. Local business leaders assert its dealings kept the city of Louisville alive during the recession. But some say it has also invited misdeeds due to a deeper problem at both the institution and the foundation: a lack of attention to ethical and legal safeguards that would prevent at least the appearance of conflicts of interest.

Ms. Bingham is one of several board members who say the trustees are discouraged by the president and others from pursuing best practices in governance and financial oversight.

Mr. Benz, chairman of the Board of Trustees, said some problems had arisen because the university’s business interests have grown so quickly but the administrative oversight has not kept pace.

In response to the embezzlement scandal, for example, the university hired a consulting firm to suggest steps it could take to strengthen such oversight. The firm’s recommendations included basic measures such as hiring a chief financial officer with experience in designing internal financial controls, verifying that vendors to the institution actually exist, and prohibiting nonuniversity bank accounts that use the institution’s name.

But even with all of those policies in place, Mr. Ramsey said, things are occasionally going to go awry. The university employs more than 6,000 people, he said, “and they’re humans and some of them are going to commit crimes,” he said. “We catch them, and we make it public,” he said.

Some of the foundation’s numerous real-estate deals have also raised concerns. The foundation and its related organizations have purchased and developed scores of properties across Louisville, including two branch campuses and several other planned sites dedicated to the sciences.

In 2014 a local real-estate developer, J.D. Nichols, pledged a $10-million gift to the foundation, which he fulfilled in part by donating a Bed, Bath & Beyond retail store, which was valued at $7 million.

Subsequently, the university named a new research park for Mr. Nichols, and the foundation named his company its development partner for that site and two other building projects.

Mr. Nichols, an alumnus of the university’s law school, said the development partnership with the foundation was the result of an open bidding process. The university’s news release says that one other company submitted a bid for the projects and that Mr. Nichols’s company had already helped in the construction of three other university buildings.

Despite his close business ties, Mr. Nichols also offered last year to pay a portion of Mr. Ramsey’s compensation with the money he has donated to the foundation.

Citing his previous experience on the Board of Trustees and other groups associated with the university, Mr. Nichols said he felt “totally qualified to evaluate the performance of the president.”

‘Discord, Anger, and Tension’

As the board and faculty and student groups consider no-confidence votes in Mr. Ramsey’s leadership, there are deep divisions on the campus over how much responsibility he should bear for the controversies that have arisen during his tenure.

The president and his supporters blame a host of other actors, including the local news media and board members who were appointed by the state’s previous Democratic governor and who want a more liberal president at the university’s helm.

Kevin M. Walsh, a professor of electrical and computer engineering, said the university has a target on its back in a medium-size city like Louisville. “In Boston,” he said, the university’s problems “wouldn’t even register.”

Mr. Ramsey, too, has come out swinging against the trustees. Last month he wrote an open letter to the campus blasting the board for “discord, anger, and tension” at the March meeting, where critics of the president tried but failed to introduce a no-confidence motion. “I am disappointed,” he wrote, “that our university has been defined by the friction among those entrusted with running it.”

The university’s foundation has also recently paid for full-page ads promoting Mr. Ramsey in a local newspaper, The Courier-Journal.

It’s not clear if the questions about Mr. Ramsey, whose contract extends to 2020, will be enough to spur a no-confidence vote by a majority of the board members. Mr. Benz doesn’t support that move, though he is also not opposed to Mr. Ramsey’s resigning on his own: “Dr. Ramsey has to drive his own decision,” he said.

Even without the board’s actions, however, many are urging the president to leave with his reputation intact and before the results of the several investigations now under way are released. And some worry that the university’s progress will stagnate or reverse without new leadership.

“In most organizations, there’s a time when the institution needs to be refreshed with new ideas,” said R. Charles Moyer, a former dean of the university’s College of Business. He said the university should “celebrate” Mr. Ramsey’s accomplishments, “and move on to the next level.”

Eric Kelderman writes about money and accountability in higher education, including such areas as state policy, accreditation, and legal affairs. You can find him on Twitter @etkeld, or email him at eric.kelderman@chronicle.com.