- Associated Press - Friday, July 14, 2017

LOUISVILLE, Ky. (AP) - The Kentucky attorney general’s office has launched an investigation of the University of Louisville’s foundation, which has been beset by financial turmoil.

In a statement Thursday, the university said it is fully cooperating with the investigation, The Courier-Journal reported . The university also released a June 30 letter from the attorney general’s office asking for copies of emails between former president James Ramsey, former foundation secretary Kathleen Smith and chief financial officer Jason Tomlinson.

The attorney general’s department of criminal investigations also asked for documents related to compensation and a $38 million loan to the real estate unit, as well as permission to meet with investigators from Alvarez & Marsal.

Alvarez & Marsal’s June 8 forensic audit said the foundation burned through its endowment with overspending, bad investments and excessive compensation.

Meanwhile, the state Republican Party called Friday on the Democratic attorney general to step aside and appoint a special investigator to scrutinize the foundation.

The GOP noted that the law firm where Beshear worked before his election represented the foundation for years. Republicans also noted that Beshear’s father, former Gov. Steve Beshear, appointed UofL trustees whose terms coincided with the foundation activity being investigated.

“Whether or not there is an actual conflict, the attorney general must recognize there is an obvious appearance of impropriety,” said state GOP spokesman Tres Watson.

Beshear spokesman Terry Sebastian said Republicans were attacking Beshear for doing his job.

“The (attorney general’s) office has not seen anything yet that would merit recusal but is always willing to re-evaluate if that changes,” Sebastian said.

Ramsey was forced to resign as university president last year, and Smith was terminated last month. Foundation chair Diane Medley said Tomlinson was placed on paid administrative leave.

Ramsey’s lawyer Steve Pence questioned if the June 8 reports were a proper audit. Smith’s attorney Ann Oldfather said Smith had done nothing wrong and raised more than $100 million for the university. Tomlinson has not issued comments.

The foundation, which has a new set of directors and a new interim executive director, has adopted several reforms, including its first line-item budget and a bylaw barring the university president from also serving as president of the foundation. Ramsey’s role in the foundation had been criticized as a conflict of interest.


Information from: The Courier-Journal, https://www.courier-journal.com

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