By Professor
Doom
Time and again we’re told how we need more
money for higher education, and tuition does nothing but rise. In addition to
state funding and tuition, there’s another sweet source of revenue for our
“leaders” in higher education to plunder: gifts from alumni.
Every school I’ve ever attended sends me
requests for money. I’m 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’t have any idea of the thievery here, because quirks in our
laws make this kind of money hard to follow.
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:
Ramsey's resignation, effective immediately, was
accepted at a special Board of Trustees meeting that stretched roughly seven
hours and included extensive negotiations, according to The Courier-Journal in Louisville…The two sides reached a deal that
will pay Ramsey $690,000…
--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…
It always disturbs me when a Poo Bah gets
a golden parachute for improper behavior. I’ve 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.
Why don’t their contracts include a “no
bonus parachute if you’re caught stealing” clause? I thought of that clause all
by myself, and I’m not particularly bright, so surely after years of
misbehavior by Poo Bahs, someone else could have thought of it by now?
Now, that $690,000 parachute only
represents a year or so of his pay…peanuts for Poo Bahs nowadays. Why did he
accept such meager pay? Because he was double dipping, with a much bigger
dipper in another till:
But Ramsey plans to continue at the University of
Louisville Foundation….Ramsey is the foundation’s president, earning about
$8 million between 2012 and 2014 in the role.
--the Foundation is one of many fiefdoms to deal
with the free money from generous suckers alumni.
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 “other” job.
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?
Anyway, the Poo
Bah hoped to continue with this “job,” but the university wanted to be quite
rid of him, so no deal. Now, he was getting this plunder, ostensibly, because
he’s so brilliant with handing money, supposedly.
The foundation’s Board of Directors in many cases
did not approve foundation activities or were not aware of them, according to
the 135-page report, which was
produced by an independent investigating firm and released Thursday.
--sadly, the report seems to no longer be
available, so I’ll have to quote secondhand from it. It all jives true,
however.
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…there are loads of
other admin to pay).
It is made up of 13 wholly owned subsidiaries and
several joint-venture partnerships.
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’s that working out?
Investments in high-risk start-up companies are
also examined. The foundation invested $9.9 million from its endowment
pool into companies now valued at less than $2 million.
Wow, a
-80% loss, that’s 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.
He’s bad with stocks. Maybe he’s a real
estate whiz?
The foundation purchased properties at prices
above appraised value. It paid $10.3 million above value for eight
properties.
Any chance we’ll look into kickbacks
here? It’s not like we don’t see this sort of real estate shenanigans every
other month in higher ed. Either we’re consistently hiring Poo Bahs that can’t
make a decent real estate deal to save their lives, or there’s plundering going
on here. Gee, tough to decide, eh?
It’s amazing how admin screws over
faculty time and again, and told “it’s policy, nothing we can do about it.”
Policy never seems to apply to admin, though. Let’s see if this guy’s pay is
justified because he can control costs:
Its policy is to spend 7.48 percent of its
endowment’s three-year average market value annually. But the report finds
effective spending rates as high as 15.14 percent in 2014,
10.99 percent in 2015 and 14.64 percent in 2016.
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:
The foundation spent $15.1 million for the
athletic association, including $4 million for former football coach
Steven Kragthorpe, as part of a coaching staff reorganization.
The foundation funded $4.9 million in
compensation for a group of athletic association employees between 2010 and
2016. That included $1.8 million in compensation to Athletic Director Tom
Jurich under an employment agreement with the foundation.
The foundation funded $800,000 in season tickets
every fiscal year for the Office of the President.
Naturally, I couldn’t find any of the
gift money being spent even remotely on education. The big-big money just went
to admin:
From 2005 to 2016, the deferred compensation plan
cost the foundation $21.8 million -- $8.4 million in vested
contributions, $4.1 million in accrued earnings and $9.2 million 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 million went to just nine employees.
Deferred compensation is yet another shell
game played with all the money pouring into higher education, these golden
parachutes don’t show up in the budget, and yet still end up in administrative
pockets.
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’t put down completely in writing. A few snippets from
strange e-mails:
“This 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.”
“…Thought taking the vowels out of Minerva could
work too,” the email said. “I’m fine with either but needs to be difficult to
figure out for media.”
“…It found the Office of the President directed
the foundation to not include deferred compensation from the foundation
budget.”
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’t it be worthwhile to get it back? Isn’t it obvious that the Poo Bah
wasn’t doing it all single-handedly? I know how hard your typical administrator
works, there’s 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.
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’re welcome for that insight which nobody on the Board could
provide. Can I get a couple hundred thousand bucks now?
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...
Anyway, all this looting eventual caused
money problems, and so they had to curtail it a bit:
The foundation has also killed its controversial deferred compensation program,
which provided about $20 million to a small group of administrators.
I’ve just gone lightly over the details,
it’s quite thoroughly disgusting what these people are, successfully, getting
away with. There’s been no talk of clawing even a nickel back.
The takeaway here isn’t 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’ll treat the gifts responsibly, much less with integrity.
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