Kathleen Smith, who long served as chief of staff to embattled former University of Louisville president James Ramsey, was fired from a position she also held on the university’s nonprofit foundation on Thursday.
Smith, a U of L employee for 46 years, retired from the university last fall but was on administrative leave from the foundation.
Foundation interim director Keith Sherman confirmed the firing in an email and said he would have no further comment. The foundation’s board is meeting Thursday to discuss a damning audit that revealed excessive spending, lax oversight and other problems that left the school’s endowment diminished.
In a scathing response on Thursday, Smith’s attorney, Ann Oldfather, said the firing was a “breach of Kathleen’s contract” with the foundation. Oldfather claimed Smith’s pay — which she received from both the university and the foundation — was being questioned in part because she is a woman.
The audit and ongoing investigations into the university and foundation have explored bonuses, tax gross-ups and deferred compensation plans offered to Ramsey and his top deputies, including Smith.
Oldfather also challenged the audit by the firm Alvarez & Marsal, suggesting their investigation is unreliable and calling Smith a “fall girl.” And she hinted that Smith may sue over the firing. Oldfather was not available for further comment on Thursday.
Read the full response here:
STATEMENT ON BEHALF OF KATHLEEN SMITH, JUNE 22, 2017
by Ann Oldfather, OLDFATHER LAW FIRM
As counsel for Kathleen Smith, we have told the UofL Trustees and the Foundation Board of Directors that there are material errors and omissions in the Alvarez & Marsal “Information.” The records of both boards clearly establish that there was no “secret” deferred comp plan, and no “secret” salaries. What they call “disturbing” today was their directive at the time.
Instead of welcoming that transparency, the Foundation Board told Kathleen Smith late yesterday that her “current salary and benefits will cease effective June 22, 2017.”
This is a breach of Kathleen’s contract with the Foundation, but worse it is a cowardly failure to stand behind fully transparent salary and compensation decisions that would never be questioned were she one of the highly-compensated men on the these boards.
Kathleen never set her own salary, and she never let that salary limit the tasks she was willing to take on for UofL and the Foundation. That salary from all sources, never exceeded $300,000. Was she worth it?
In 2007, the Foundation Board, not Kathleen, included her in the Foundation’s Deferred Comp Plan with an award of $12,500 for each year of service. In recent years, four additional grants of $100,000 were made. With the inclusion of deferred bonuses (total $77,205) and a one-time $50,000 grant, her total contributions spanning forty-six years of service were $1,093,062. Did she deserve that?
Foundation Board directors and their lawyers decided the terms of the Foundation’s Deferred Comp Plan, not Kathleen. The Directors required gross-up for taxes for ALL members in the Plan, and when awards vested without liquidation, the Plan required interest paid on ALL accrued earnings—not just for Kathleen. Is any of that wrong-doing by her?
Look around this University and answer those questions. Consider the more than $235,000,000 in gifts and grants she brought to this University. Consider forty-six years of service to four UofL presidents. One thing is clear, many men are paid far more for far less. Many members of these Boards, whose work has been for private rather than public good, have benefitted far beyond the compensation earned by this phenomenally hard-working woman. There is no way it was a crime, or a breach of duty, to pay Kathleen what she was promised and what she so clearly deserved.
But now they need a “fall girl” with almost $2 million paid for the “you can’t rely on this” Alvarez & Marsal “Information,” and Kathleen, who never had a vote on any Foundation decision, is it. We will speak for Kathleen and a fully-informed jury can decide if she was worth it.
