UK’s Secretive Slush Fund: Time for Transparency at KMSF

As a proud alumnus of the University of Kentucky, with two undergraduate degrees and a medical degree earned on its storied campus, I carry a deep connection to this institution. My family’s ties to the UK stretch back to the 1970s, with many relatives walking the same halls as students. UK, one of Kentucky’s two land-grant universities, holds a special place in our state’s heart, particularly through its medical school and affiliated hospital, which have grown into vital pillars of healthcare delivery. Yet, beneath this legacy lies a troubling secret: the Kentucky Medical Services Foundation (KMSF), a shadowy entity that has operated for decades with minimal oversight, funneling public resources into private hands.

In the 1970s, UK faced a challenge. Its hospital, a cornerstone of the university, was expanding rapidly, but state procurement laws and government oversight constrained administrators’ ambitions to run it like a private corporation. Seeking greater flexibility in operations and physician compensation, UK’s leadership devised an unorthodox solution. In 1979, with seed capital from the university and offices on campus, KMSF was born. Department chairs of the hospital doubled as KMSF board directors—a practice that persists today. Over the past four decades, KMSF has grown into a financial juggernaut, generating over $300 million annually, owning substantial real estate, and operating from offices outside UK’s campus. Yet, despite its deep ties to a public university, UK administrators have long treated KMSF as a private entity, shielded from state oversight.

The veil of secrecy surrounding KMSF began to lift when my mentor, Dr. Paul Kearney, a distinguished trauma surgeon, dared to question its spending during faculty meetings. His inquiries came at a steep cost: his career. A whistleblower lawsuit filed by Dr. Kearney later exposed damning details. In an affidavit, KMSF’s former CEO, Darrell Griffith, revealed that the foundation had strayed far from its mission of supporting UK’s healthcare arm. Instead, millions of dollars funded private jet rides for UK administrators, memberships at Keeneland, and other lavish perks, painting a picture of a slush fund bankrolling a billionaire lifestyle for university elites.

My own efforts further exposed KMSF’s opacity. When I requested access to KMSF’s tax returns, I was denied, with the foundation citing its private status. Undeterred, I took my case to then-Kentucky Attorney General Andy Beshear, who issued a landmark decision declaring KMSF a public entity. Despite KMSF’s unsuccessful challenges in state courts, its public status is now firmly established. Yet, even today, KMSF operates in secrecy, seemingly noncompliant with state procurement laws and allegedly funneling benefits—such as scholarships for board directors’ children and other pet projects—to insiders.

KMSF’s actions betray the public trust. As an entity seeded with public funds and intertwined with a public university, it belongs to the citizens of Kentucky, not a select few administrators. The time for accountability is long overdue. The Kentucky Attorney General and other state entities must investigate KMSF’s operations, enforce compliance with procurement laws, and ensure its resources serve the public good, not private interests. UK’s legacy as a beacon of education and healthcare deserves transparency, not a secretive slush fund.