Tuesday, June 28, 2016

Comment | UK's woes no different than UofL's

President Eli Capilouto with UK trustees
                                                 by Lachin Hatemi M.D.
Gov. Matt Bevin unilaterally dismissed all 17 appointed members of the University of Louisville Board of Trustees in an unprecedented maneuver. U of L’s president, James Ramsey, also pledged to resign while applauding Gov. Bevin’s actions.
House cleaning at UofL was long overdue; the university was mired with sex scandals and accounting mishaps. Both the UofL president and the Board of Trustees failed Kentuckians by failing to run the university in a transparent and efficient fashion.
These days, higher education in Kentucky tends to top the news headlines with dramatic changes happening among the top leadership at the state’s universities. Wayne Andrews of Morehead University and Gary Ransdell of Western Kentucky University both declared their plans to retire next year, and Kentucky State University President Raymond Burse also recently stepped down.
Kentucky’s flagship university, the University of Kentucky, is the last remaining institution of higher education that remains untouched by the governor. It is only a matter of time before Gov. Bevin starts to pay attention to UK’s leadership, however.
UK is not in any better situation than the UofL; indeed, it is just better at hiding its own scandals. UK’s president, Eli Capilouto, and his chief counsel, William Thro, had been tussling with Kentucky Attorney General’s office to hide vital documents that may reveal questionable dealings if published.
UK – just like U of L – also has its own secretive foundation, named Kentucky Medical Services Foundation (KMSF), which had been the middleman for countless questionable transactions where university administrators transferred public funds and public land to be used by private entities.
After the arrival of Dr. Michael Karpf to lead UK Healthcare, KMSF’s assets and revenue disappeared from the school's accounting books, and UK’s board of trustees ceased to oversee KMSF’s operations. How this dramatic change happened within UK’s balance sheets remains a mystery.
KMSF commands annual revenue of more than $200 million, which is generated by UK’s clinical faculty, all of whom are state employees. Only a handful of UK administrators, including President Capilouto and Karpf, really know what is happening within KMSF.
Kentucky Attorney General Andy Beshear recently decided to declare KMSF a public entity founded and controlled by UK administrators. Unsurprisingly, KMSF’s attorneys promptly appealed this decision in Fayette County Circuit Court.
Kentuckians may ask why UK’s foundation is not accountable anymore to the general public and to the UK’s board of trustees. What is happening at University of Kentucky is simply not much different than what the University of Louisville has been dealing with.
Dr. Lachin Hatemi, a graduate of the University of Kentucky College of Medicine, is an Indianapolis physician who has filed open-records requests about the Kentucky Medical Services Foundation.

Sunday, June 12, 2016

What is UK Healthcare hiding from the General Public?

UK's Chief Counsel William Bill Thro continues to defeat Open Record Laws

                                                      By Lachin Hatemi M.D.

Gov. Matt Bevin recently made a 2% mid-year budget cut to Kentucky’s public universities, which promptly led to a lawsuit filed by Attorney General Andy Beshear. That lawsuit is now about to be transferred to Kentucky Supreme Court after Franklin Circuit Court Judge Thomas Wingate issued his opinion stating that Bevin had the authority to make mid-year cuts to universities.

Universities across Kentucky all stated that such budgets cuts will lead to layoffs and tuition rate increases. While nobody will disagree that our universities deserve the best and even more resources, our two leading universities – the University of Kentucky and University of Louisville – were not always transparent about how they managed their finances.

During the last decade, both the University of Louisville and UK’s administrator ranks swelled and university administrators garnered Wall-Street style salaries despite working for public entities. University of Louisville President James Ramsey’s total compensation of $1,682,176 was three times that of the average compensation of presidents at 10 similar universities. The Kentucky State Auditor is now investigating the University of Louisville’s Foundation, which manages the university’s endowment, as President Ramsey received significant compensation from the Foundation.

The University of Kentucky’s President Eli Capilouto is little different than his counterpart at Louisville. The University of Kentucky also has its own secretive foundation named Kentucky Medical Services Foundation (KMSF), which commands a budget of more than $200 million a year. The Kentucky Attorney General recently ruled that KMSF is a public entity founded, managed and controlled by the University of Kentucky despite KMSF and UK’s  attorneys’ insistence that KMSF is a private entity and not subject to state open record laws.

“As a state agency, it would ill behoove us to ignore the opinion of the attorney general,” former UK General Counsel John Darsie has stated. At one time, that was the official position of the University of Kentucky.

That occasion, in 1991, seems like a very long time ago at a university far, far away. Today, UK President Capilouto’s General Counsel William Thro strikes a very different position on public access (or, rather, blocking public access) to the university’s budget-related records, especially records concerning the University’s HealthCare management.

During the past year, two successive Attorney Generals repeatedly have determined that the university has illegally withheld public access to records, including records concerning spending by the University’s Kentucky Medical Services Foundation (KMSF), agreements between KMSF and Coldstream Laboratories, Inc., and five years worth of requested minutes of a committee charged with, and relied upon by UK HealthCare for, advising on compensation policy.

Even more starkly illustrative is the University’s refusal to provide access by Kentucky’s own Attorney General to these “secret records.” The university wrote its position that the Attorney General (and public) must instead trust that the university’s mere “explanation is sufficient.”

What is the university administration hiding from the public? What other secrets about UK budget policy and practice remain, but which eventually must yield to the light of public view? When President Capilouto’s General Counsel speaks the above mindset for “the university.” Is the UK Board of Trustees also being spoken for? If not, then the Board needs to fix this before it has been lured so far out on the limb that there is no painless way back.  

Dr. Lachin Hatemi, a graduate of the University of Kentucky College of Medicine, is an Indianapolis physician who has filed open-records requests about the Kentucky Medical Services Foundation.