By James McNair
Kentucky Center for Investigative Reporting
Declines in state appropriations and negative financial trends have made American universities rely more on alumni and wealthy benefactors for cash donations. So as the University of Louisville tries to rebound from three straight years of financial deficits and slumping net worth, a proposed $6 million infusion from the Charles Koch Foundation and Papa John’s International CEO John Schnatter would appear to be a very welcome gift.
A university spokesman wouldn’t talk about the gift, but the Kentucky Center for Investigative Reporting has learned that Koch would give $1.5 million, Schnatter $4.5 million. The three parties are said to be negotiating, with Schnatter deferring to Koch on contract terms. Neither the Koch Foundation nor Schnatter would comment on the gift.
But the university’s own record-keepers, in turning down a request for copies of draft contracts, e-mails and other documents, confirmed that a deal is in the works.
“These documents contain preliminary recommendations and opinions,” wrote senior compliance officer Sherri Pawson. “None were intended as the final action in the matter.”
Said Kenyatta Martin, records custodian for the University of Louisville Foundation, which serves as a receptacle for charitable contributions: “At this point, I know it’s still in draft form because there are aspects of the contract that haven’t been finalized.”
Already, though, the proposed gift — and its accompanying conditions — from one of the controversial Koch brothers has rattled some faculty members and university supporters who have knowledge of it. Billionaire businessmen from Kansas, the Kochs give extensively to charity but are perhaps best known as mega-backers of conservative causes and politicians who favor less government regulation.
According to three sources familiar with the proposed contract, the $6 million would go not to the university endowment but to the College of Business over five years. It calls for the creation of a “center for free enterprise” to be led by U of L economics professor Stephan Gohmann, who would have authority to approve anyone hired with the grant money.