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Time and again we\u2019re told how we need more money for higher education, and tuition does nothing but rise. In addition to state funding and tuition, there\u2019s another sweet source of revenue for our \u201cleaders\u201d in higher education to plunder: gifts from alumni.<\/p>\n
Every school I\u2019ve ever attended sends me requests for money. I\u2019m not miserly, but knowing as I do what goes on in the administrative halls makes me pretty reluctant to give those guys more money. Most people don\u2019t have any idea of the thievery here, because quirks in our laws make this kind of money hard to follow.<\/p>\n
The recent plundering at University of Louisville-Kentucky provides a rare insight into how endowments are looted. As is so often the case, improprieties by the Poo Bah led to the revelations, so first some backstory<\/a>:<\/p>\n Ramsey’s resignation, effective immediately, was accepted at a special Board of Trustees meeting that stretched roughly seven hours and included extensive negotiations,\u00a0<\/em>according to\u00a0<\/em>The Courier-Journal<\/em><\/a>\u00a0<\/em>in Louisville\u2026The two sides reached a deal that will pay Ramsey $690,000\u2026<\/em><\/p>\n –being Poo Bah is so cool. Either you steal and get away with it, or you steal and get caught, in which case you get even more money\u2026<\/em><\/p>\n It always disturbs me when a Poo Bah gets a golden parachute for improper behavior. I\u2019ve seen so many faculty perform their jobs with integrity, only to be fired for being trying to do an honest job and yet, at the top, it seems these guys get bonuses no matter how vile they are.<\/p>\n Why don\u2019t their contracts include a \u201cno bonus parachute if you\u2019re caught stealing\u201d clause? I thought of that clause all by myself, and I\u2019m not particularly bright, so surely after years of misbehavior by Poo Bahs, someone else could have thought of it by now?<\/p>\n Now, that $690,000 parachute only represents a year or so of his pay\u2026peanuts for Poo Bahs nowadays. Why did he accept such meager pay? Because he was double dipping, with a much bigger dipper in another till:<\/p>\n But Ramsey plans to continue at the University of Louisville Foundation\u2026.Ramsey is the foundation\u2019s president, earning about $8\u00a0million between 2012 and 2014 in the role.<\/em><\/p>\n –the Foundation is one of many fiefdoms to deal with the free money from generous suckers<\/span> alumni.\u00a0<\/em><\/p>\n Holy cow! He gets 4 million bucks a year to handle the gifts. I want to really emphasize: despite this regal pay, he still had the balls to shakedown the university for another half million to leave his \u201cother\u201d job.<\/p>\n Lots of admin double dip like this. Why do these guys get paid so much when they clearly have time to work another full time job as well?<\/p>\n Anyway, the Poo Bah hoped to continue with this \u201cjob,\u201d but the university wanted to be quite rid of him, so no deal. Now, he was getting this plunder, ostensibly, because he\u2019s so brilliant with handing money, supposedly.<\/p>\n The foundation\u2019s Board of Directors in many cases did not approve foundation activities or were not aware of them, according to the 135-page\u00a0<\/em>report<\/em><\/a>, which was produced by an independent investigating firm and released Thursday.<\/em><\/p>\n –sadly, the report seems to no longer be available, so I\u2019ll have to quote secondhand from it. It all jives true, however.<\/em><\/p>\n Now this particular foundation handles an endowment of around $700 million (keep in mind, the Poo Bah alone, looted over 1% of this as salary\u2026there are loads of other admin to pay).<\/p>\n It is made up of 13 wholly owned subsidiaries and several joint-venture partnerships.<\/em><\/p>\n Each one of the above subsidiaries\/partnerships probably has half a dozen or more Vice Presidents of Looting and Diversity raking it in. So, the Poo Bah gets his huge pay from his investment acumen. How\u2019s that working out?<\/p>\n Investments in high-risk start-up companies are also examined. The foundation invested $9.9\u00a0million from its endowment pool into companies now valued at less than $2\u00a0million.<\/em><\/p>\n Wow, a\u00a0 -80% loss, that\u2019s pretty amazing considering the stock market has been booming the last few years. Maybe he could give back some of that salary? Not a chance, I know.<\/p>\n He\u2019s bad with stocks. Maybe he\u2019s a real estate whiz?<\/p>\n The foundation purchased properties at prices above appraised value. It paid $10.3\u00a0million above value for eight properties.<\/em><\/p>\n Any chance we\u2019ll look into kickbacks here? It\u2019s not like we don\u2019t see this sort of real estate shenanigans every other month in higher ed. Either we\u2019re consistently hiring Poo Bahs that can\u2019t make a decent real estate deal to save their lives, or there\u2019s plundering going on here. Gee, tough to decide, eh?<\/p>\n It\u2019s amazing how admin screws over faculty time and again, and told \u201cit\u2019s policy, nothing we can do about it.\u201d Policy never seems to apply to admin, though. Let\u2019s see if this guy\u2019s pay is justified because he can control costs:<\/p>\n Its policy is to spend 7.48\u00a0percent of its endowment\u2019s three-year average market value annually. But the report finds effective spending rates as high as 15.14\u00a0percent in 2014, 10.99\u00a0percent in 2015 and 14.64\u00a0percent in 2016.<\/em><\/p>\n Gosh, I sure wish I could get a job paying millions a year where I can do whatever I want and still get bonuses on top of the excessive pay. The kind of money that was poured into sportsball here is amazing:<\/p>\n The foundation spent $15.1\u00a0million for the athletic association, including $4\u00a0million for former football coach Steven Kragthorpe, as part of a coaching staff reorganization.<\/em><\/p>\n The foundation funded $4.9\u00a0million in compensation for a group of athletic association employees between 2010 and 2016. That included $1.8\u00a0million in compensation to Athletic Director Tom Jurich under an employment agreement with the foundation.<\/em><\/p>\n The foundation funded $800,000 in season tickets every fiscal year for the Office of the President.<\/em><\/p>\n Naturally, I couldn\u2019t find any of the gift money being spent even remotely on education. The big-big money just went to admin:<\/p>\n From 2005 to 2016, the deferred compensation plan cost the foundation $21.8\u00a0million — $8.4\u00a0million in vested contributions, $4.1\u00a0million in accrued earnings and $9.2\u00a0million in tax gross-ups, which are reimbursements for taxes paid on income. Foundation officers worked to conceal the compensation from open-records requests. Contributions and earnings of $12.5\u00a0million went to just nine employees.<\/em><\/p>\n Deferred compensation is yet another shell game played with all the money pouring into higher education, these golden parachutes don\u2019t show up in the budget, and yet still end up in administrative pockets.<\/p>\n I should point out that this is just the tip of the iceberg here when it comes to looting. Much as Wikileaks e-mails only give a strong suggestion of skullduggery, there are hints of some big things going on that weren\u2019t put down completely in writing. A few snippets from strange e-mails:<\/p>\n \u201cThis note is between you, Tom [Jurich], Dr. Ramsey and me. I do not want it on the email where we have very little control. Please destroy your earlier note to me. I have done same here.\u201d<\/em><\/p>\n \u201c\u2026Thought taking the vowels out of Minerva could work too,\u201d the email said. \u201cI\u2019m fine with either but needs to be difficult to figure out for media.\u201d<\/em><\/p>\n \u201c\u2026It found the Office of the President directed the foundation to not include deferred compensation from the foundation budget.\u201d<\/em><\/p>\n I grant that the Poo Bah lost his job here (not that it cut into his pay), but with this kind of money being stolen, wouldn\u2019t it be worthwhile to get it back? Isn\u2019t it obvious that the Poo Bah wasn\u2019t doing it all single-handedly? I know how hard your typical administrator works, there\u2019s no way he filled out all those checks to himself, by himself (it would require working more than 2 hours a day, which just isn’t possible for leaders of this stature). There had to have been more people involved.<\/p>\n Note to trustees: it takes two to exchange e-mails, so more than just the Poo Bah should get fired (and please reconsider the stupid-huge golden parachute rewards for this sort of behavior). You\u2019re welcome for that insight which nobody on the Board could provide. Can I get a couple hundred thousand bucks now?<\/p>\n Considering the huge payout and the lack of even the basic investigation into how many people it takes to send\/receive an e-mail, isn’t more likely the Board is in on the looting? I guess I’m just paranoid…<\/p>\n Anyway, all this looting eventual caused money problems, and so they had to curtail it a bit:<\/p>\n The foundation has also\u00a0<\/em>killed<\/em><\/a>\u00a0<\/em>its controversial deferred compensation program, which provided about $20\u00a0million to a small group of administrators.<\/em><\/p>\n I\u2019ve just gone lightly over the details, it\u2019s quite thoroughly disgusting what these people are, successfully, getting away with. There\u2019s been no talk of clawing even a nickel back.<\/p>\n The takeaway here isn\u2019t just the plundering at this one school. This is how many state universities operate. Please, gentle reader, think long and hard before donating to these places. The administrative takeover of higher ed means the same people who corrupted and debased education now have control over your gifts. There is no reason to expect they\u2019ll treat the gifts responsibly, much less with integrity.<\/p>\n <\/p>\n www.professorconfess.blogspot.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"