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U. disputes Huntsman, says school doesn't owe money to cancer institute

Published May 8, 2017 11:43 am

Dispute • Agreement on future revenue sharing is key to talks on new arrangement, university spokesman says.
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The University of Utah has not withheld money from the Huntsman Cancer Institute, a school spokesman said Friday.

With talks underway on new funding agreements between the U. and the Huntsman Cancer Foundation, U. spokesman Chris Nelson pushed back on statements by foundation CEO Peter Huntsman that the institute has failed to receive its fair share of cancer hospital revenues.

"First off, the university and Huntsman Cancer Institute are the same entity," Nelson said. "I would dispute the way they phrase it. It's really university funds that flow back and forth."

Negotiations over that financial relationship stalled last month after the abrupt firing of institute CEO Mary Beckerle by Vivian Lee, then-CEO of U. Health Care and head of health sciences.

The termination, delivered via email, sparked protests by U. faculty and biting criticisms of U. administrators by members of the wealthy Huntsman family, whose philanthropic giving helped found the institute more than two decades ago.

Beckerle was reinstated a week later, followed by Lee's resignation and an announcement by U. President David Pershing that he would retire earlier than planned.

Lee will retain a $1.025 million salary over the next year, Nelson said, in keeping with the terms of her contract. Lee is also a tenured professor, and Nelson said her salary for that position will be renegotiated if she chooses to remain in that role.

No fixed date has been set for Pershing's departure.

Nelson said Friday the U. president was in the process of approaching faculty members about serving on the search committee for Lee's replacement.

A. Lorris Betz, who hired Lee and held her job before, has been lured out of retirement to serve as her interim replacement. Betz has not yet signed a formal agreement with the U., Nelson said, but will make a "percentage of the salary commensurate with what Dr. Lee was making based on the amount of time he will spend doing the job."

No reason has been given for Beckerle's firing, and Lee has repeatedly declined interview requests from The Salt Lake Tribune.

Details of future financial arrangements between the U. and the Huntsman Cancer Institute, meanwhile, are now being renegotiated, with the question of revenue sharing at the heart of a new memorandum of understanding, or MOU, between the two.

A 2014 agreement stipulates that revenue from the Huntsman Cancer Hospital be split three ways, with 25 percent retained by the hospital, 25 percent given to U. health sciences, and 50 percent distributed to the Huntsman Cancer Institute.

The 50 percent going to the institute is reinvested into cancer research programs, said Susan Sheehan, president and chief operating officer for the Huntsman Cancer Foundation.

But a draft MOU obtained by The Tribune shows the Huntsmans seeking a 75 percent share for the institute. Peter Huntsman said in an interview the shift in distribution would be temporary, with U. health sciences forgoing its payments for three years to mitigate an issue that has been "festering" for some time.

"The Huntsman Cancer Foundation believes that the University of Utah has not fulfilled its funding obligations," Huntsman said.

In the same 2014 document that established the revenue-sharing distributions, the U. assumed operational costs of the Huntsman Cancer Institute, listed at a minimum of $13.5 million annually. Before that, operational expenses were supported through a 10-year, $100 million commitment by the Huntsman Cancer Foundation.

After fulfilling its commitment, the foundation shifted its focus to program development, research and new facility construction, according to U. documents.

U. spokeswoman Kathy Wilets said the foundation's decision to withdraw its operational support did not come as a surprise to administrators.

"University leaders were aware the foundation intended to shift its focus from operational support to support of new buildings and programs prior to receiving the 2014 MOU," she said.

While the U. and the Huntsmans hold different interpretations of those financial arrangements, Nelson said he remained optimistic the issue would be sorted out in the new MOU.

"Reasonable people can look at the facts and the data and reach very reasonable, but different, conclusions," Nelson said. "I don't think there's any dishonesty. I don't think there's anything malicious going on."


Twitter: @bjaminwood

Editor's note: Paul Huntsman, a son of Jon Huntsman Sr., is the owner and publisher of The Salt Lake Tribune.






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