State Republican Party wants Attorney General Beshear to recuse himself in U of L Foundation inquiry

07/15/2017 02:51 PM

The Republican Party of Kentucky is calling on Attorney General Andy Beshear to recuse himself from any investigations into the University of Louisville Foundation due to conflicts of interest, which Beshear’s office dismissed as the latest political attack against the first-term Democrat.

The GOP’s request Friday came a day after media reported that the attorney general’s office requested additional information from U of L, including former university President James Ramsey’s hard drive; emails among foundation officials from June 1, 2016, through September 30; justification for bonuses granted Ramsey and other officials by the foundation; and a $38 million loan to the U of L Real Estate Foundation.

A forensic audit conducted by Alvarez & Marsal revealed between $40 million to $100 million in losses, U of L attorney Craig Dilger told lawmakers on Tuesday, hinting that legal action may be taken by the school to recoup those dollars.

But the state Republican Party said Beshear’s former employment by the law firm Stites & Harbison, which represented the U of L Foundation, and political contributions from former members of the U of L board of trustees necessitated external counsel in any criminal investigation by his office.

“Whether or not there is an actual conflict, the Attorney General must recognize there is an obvious appearance of impropriety,” RPK spokesman Tres Watson said in a statement.

“There are clearly issues at the University of Louisville Foundation that need to be explored, however, if the AG wants the people of Kentucky to have any confidence in the investigation, he needs to appoint a special investigator. That is the only way to give the public assurance that it will be a fair and thorough inquiry.”

Beshear spokesman Terry Sebastian noted that Beshear has previously said he provided no legal work for the U of L Foundation, which oversees the school’s endowment, during his time in private practice.

Sebastian called Republicans’ request for outside counsel “another attack” by the GOP “for this office doing its job.”

“General Beshear addressed this issue on June 12 at the Galt House to a group of reporters, saying that he didn’t provide legal work for the foundation,” Sebastian said in a statement. “The office has not seen anything yet that would merit recusal but is always willing to re-evaluate if that changes. The general believes in doing his job.”

In response, Watson pointed to Beshear’s 2014 financial disclosure form, in which the then-candidate wrote that he “provided limited advice to the University of Louisville on a matter where the Attorney General is a party, though I have not appeared before or communicated with the office.”

Watson said the filing “shows a clear relationship with both the University of Louisville as well as the University’s Board of Overseers.”

“Regardless the extent of that relationship, an appearance of conflict is undeniably present,” he said in a statement. “Attorney General Beshear also initially claimed there was no conflict of interest when announcing an investigation into his now imprisoned former deputy Tim Longmeyer, so it’s no surprise he fails to recognize it now.”

Sebastian countered that Beshear “has been transparent about any and all ties to the University of Louisville.”

“More than two years ago, he disclosed that in 2014 he had performed legal work for the university,” Sebastian said in a statement. “That work was for the hospital and is totally unrelated to the foundation. And even Gov. Bevin should denounce the RPK’s hyperbole given the governor appointed a current partner from the same law firm as part of his new U of L Board of Trustees earlier this year.”

That’s a reference to Brian Cromer, who was appointed to the board last year. Cromer told WDRB-TV at the time that he did not perform any legal work for the university’s foundation and that Stites & Harbison “will adhere to all applicable conflict of interest principles pertaining to my service as a trustee, should any circumstances present themselves.”


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