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Following Scrutiny, Papa John Revises U of L Ethics Disclosures

Students on the University of Louisville's main campus.
Eleanor Hasken
Students on the University of Louisville's main campus.

Papa John’s CEO John Schnatter filed a revised conflict of interest disclosure with the University of Louisville this week, following questions about his business ties with the school.

The latest conflict of interest form has significantly more detail than the form he filed in March, when Schnatter cited multiple business ties and a loan with the university -- but didn’t specify what they were.

Schnatter filed his revised disclosure on Wednesday, two days after a Kentucky Center for Investigative Reporting article raised questions about his conflicts.

He now says he doesn’t have a loan with U of L, or serve as a partner or shareholder of an entity that conducts business with U of L. That contradicts his previous disclosure, but the university called the report of a loan “an oversight” on Schnatter’s part.

The new form also includes more details on Schnatter’s naming rights agreement with the school.

The longtime donor became a decision-maker at the university when he was appointed to its governing board in January. In a recent trustees meeting, Schnatter called Papa John’s Cardinal Stadium — where U of L plays football — “my stadium.”

He also made waves last month with criticism of the athletic department’s leadership, and subsequently resigned from his seat on the U of L Athletic Association board.

KyCIR reached out to spokesmen at both Papa John's corporate office and Schnatter's real estate company. Neither responded to requests for comment.

Leaders at U of L declined to answer questions last week. But this week, leaders at U of L, its athletic association and its foundation said there are no loans between the university and Schnatter.

On the new form, Schnatter noted that Papa John’s International -- the publicly traded company he founded and serves as CEO -- has “made various payments” to U of L in conjunction with its naming rights. Schnatter also paid U of L nearly $50,000 in rent last year for an on-campus restaurant he operates, according to the form.

Schnatter also said he still owes a $400,000 installment on a donation agreement he first signed in 1996.

This is Schnatter’s second time on the U of L Board of Trustees. He was on a short-lived board Gov. Matt Bevin created last summer as part of an ill-fated move to replace the whole board. In January, once the legislature cleared the decks for a new board of trustees, Schnatter was reappointed.

Conflict of interest forms are a mechanism for trustees and key employees at the university to disclose any outside interests, investments or family relationships that could pose a problem for U of L. School bylaws require the conflicts be disclosed, and that a trustee abstains from voting on anything tied to his or her own interests.

The board upheaval last year contributed to confusion with the forms, according to U of L spokesman John Karman. Schnatter filled out the form the first time he was appointed, Karman said, but didn’t elaborate the second time because they were questions he had already answered.

Schnatter’s claim of a loan with the university was “simply an oversight,” Karman said in an emailed statement.

“Because he still owed one payment to the university under his 1996 stadium sponsorship agreement, he checked ‘yes’ to the question, ‘Do you have any loans to or from U of L?’” Karman said.

If Schnatter considers that unpaid promise a loan, he didn’t describe it that way in any other paperwork. Instead, he cited the unpaid pledge as a business transaction.

Kate Howard can be reached at  khoward@kycir.org and (502) 814.6546.

Disclosures: In 2015, the University of Louisville, which for years has donated to Louisville Public Media, earmarked $3,000 to KyCIR as part of a larger LPM donation. University board member Sandra Frazier and former member Stephen Campbell have donated. 

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