University of Louisville’s interim president said he won’t allow “current events and distractions” to keep the school from moving forward as it navigates the latest scandal in a series of troubles.
Interim President Gregory Postel said the school is cooperating with federal prosecutors and the FBI as they investigate what he called a “dramatic story”— allegations that the school’s basketball program was involved in a bribery scandal that funneled money to the families of top basketball recruits.
“This is in the early stages of understanding, we’ve just had a day or two to digest material that has been submitted,” Postel told a panel of lawmakers on Thursday.
“There is an ongoing investigation that we understand is going to continue in Louisville, and in other states as well, regarding widespread concerns about recruiting policies.”
Louisville men's basketball coach Rick Pitino and athletic director Tom Jurich were placed on administrative leaveWednesday after federal prosecutors in New York announced the investigation.
The complaint alleges that apparel company Adidas funneled money to the family of a basketball recruit sought by U of L at the request of “Coach-2”— a pseudonym that several news outlets reported refers to Pitino.
In all, four college basketball coaches, three sports managers and three Adidas employees have been charged in the bribery probe.
Rep. Kelly Flood, a Democrat from Lexington, said she wanted to know more about the school’s contract with Adidas and the University of Kentucky's contract with Nike.
“I do believe those contracts and the setup of those contracts played a role to get us in the kind of trouble we’re in right now, where we have vulnerable employees making corrupting decisions,” Flood said.
U of L is also fighting sanctions imposed by the NCAA in the wake of allegations that a former assistant coach hired strippers and prostitutes for players and recruits over a nearly four-year period, though Postel said the school isn’t challenging the NCAA’s findings.
“We’re disgusted by what happened,” he said.
Postel also addressed the school’s efforts to have its accreditation removed from probationary status with the Southern Association of Colleges and Schools.
The accrediting agency placed U of L on probation in the wake of Gov. Matt Bevin’s overhaul of the Louisville’s trustee board last year, citing “undue political influence” in the school’s governance.
The Republican-led legislature passed bills effectively codifying Bevin’s actions and giving him more power to remove board members, a move that Postel said addressed SACS’ concerns.
“I have to tell you, at the end of the day it worked,” Postel said. “The organization was extraordinarily appreciative of these efforts and made it clear that resolved their concerns around the University of Louisville board of trustees so I think that issue has been put to rest.”
The Kentucky Supreme Court dismissed a lawsuit against Bevin’s move on Thursday, saying that the legislature’s actions had rendered the challenge moot.
U of L Foundation Looks Forward
Postel said Thursday that a recent audit of the U of L Foundation had helped the nonprofit that manages the school’s endowment get back on track. The scathing review showed the institution made questionable loans, padded executive salaries with secretive bonus plans and hid financial transactions from members of its own board.
“It’s changed the way the governance board is structured, it’s changed the executive leadership of the foundation, it’s put in place a governance committee, put in place a spending policy that defines limits of authority for individuals to spend unbudgeted money without board approval,” Postel said.
“These are things that should have been in place all along, but they are now.”
During a meeting Thursday, the U of L Foundation board released a detailed financial spending report that showed Postel's office had already spent more than half of its planned budget.
The foundation had projected that the president's office would spend $162,000 of its $867,000 operating budget by August. Instead, it spent three times that, using nearly 60 percent of its allotted budget, according to the report.
U of L spokesman John Karman did not immediately respond to a request for comment on the matter.
In a statement, the foundation said it would monitor the budget alongside the president’s office going forward.
Former university and foundation president James Ramsey was criticized for excessive spending on sporting events during his tenure, before exiting the university under a $690,000 settlement.
Interim Executive Director Keith Sherman said the foundation has addressed many of the concerns raised in recent financial audits, and is primed for investors.
“This foundation is unrecognizable as compared to the past, and that is a good thing," Sherman said in a statement. Our task was to fully reform and change an organization that had lost its way and entered into a series of decisions and actions that left the Foundation financially weakened."
Sherman went on to say that board was "on the right path" and that it had "changed for the better.”
