Harbor Branch Foundation sues FAU

After a 10-year relationship, the foundation that supports Harbor Branch is suing the university to retain control.

FAU+Harbor+Branch+Johnson+Education+Center.+Photo+courtesy+of+Carin+Smith.

FAU Harbor Branch Johnson Education Center. Photo courtesy of Carin Smith.

Joe Pye, Editor in Chief

It started when FAU requested a $50,000 donation from a marine science foundation to help build its football stadium in 2012. It ended with the foundation’s request for $440,00 from the  university five years later.

Only this time, it was for a lawsuit.

Ten years ago, the Harbor Branch Oceanographic Institute became a part of FAU, with the Harbor Branch Foundation controlling the institute’s budget and helping to fund and support its ocean science education and research. 

But when then-FAU President Mary Jane Saunders asked the Fort Pierce based foundation to donate to the stadium 95 miles south, the foundation declined, saying that its mission wasn’t to support FAU football. At least that’s according to the foundation’s attorney, Joseph Galardi.

And that wasn’t the last in a string of disagreements between the university and the foundation.

Earlier this year, the foundation hit a breaking point and requested over $400,000 from FAU so it could sue the university for control of the foundation’s operations, FAU’s attorney Richard Mitchell and Galardi said respectively.

Aerial of the Harbor Branch campus. Photo courtesy of Carin Smith.

The foundation throws the first punch

When Harbor Branch Oceanographic Institute became a part of FAU in 2007, its foundation  signed a memorandum of understanding with FAU. The contract stated that the foundation will  maintain “sole discretion” of its budget, its staff, and its Board of Directors.

But at the end of 2016, the university wanted FAU Vice President of Research Daniel Flynn to  replace the current foundation president and CEO, Katha Kissman. Flynn would then be responsible for budgetary and funding power by “supervising  all aspects” of her job, an act the lawsuit referred to as a “brazen power play.”

“No foundation (or company for that matter) can operate successfully without a CEO dedicated to its mission,” Galardi wrote in an email.

In 2015, the university told the foundation that “it would use grant funds for purposes different  than those approved” by the foundation, Galardi said.

The foundation called this and Kissman’s proposed removal a “play for control over Harbor Branch’s grants and endowment,” valued at over $68 million, the lawsuit said.

The University Press reached out to Kissman  for comment, but she declined due to a Harbor  Branch Foundation policy on pending litigation.

FAU fights back

FAU President John Kelly said that by removing Kissman and replacing her with Flynn, the foundation would better meet FAU’s goals.

“I am making this change so that Dr. Flynn, who oversees research at FAU, can best align your [Kissman’s] activities as C.E.O with FAU’s ocean and environmental research priorities,” Kelly said in an email to Kissman.

FAU’s attorney Mitchell disagreed with Harbor Branch Foundation’s allegations because of the nature of their relationship.

The foundation is a “direct support organization,” which is a private, nonprofit that supports a public university and is funded by taxpayer dollars.

“As part of the overarching transition, that foundation became part of the university,” Mitchell said. “The state of Florida paid Harbor Branch $24.3 million on certain property and improvements. The [Florida] legislature gave a one-time appropriation of $44.6 million to renovate.”

Mitchell said because of this relationship, the university has a legal duty and obligation to oversee the foundation’s budget.

FAU’s attorney added that Harbor Branch Foundation’s legal counsel Bill Stewart acknowledged during a meeting with FAU’s Board of Trustees that funding for this lawsuit is taking away funding from the institute’s research and education.  

Mitchell said that Flynn looked into the foundation’s budget and found “redundant overhead expenses,” one of which is Kissman’s position as president/CEO. Kissman’s salary is over $181,000, according to its 2018 budget.

If Flynn replaced Kissman, her responsibilities would be transferred to his position as the FAU vice president of research, the lawsuit said.  

The University Press reached out to FAU President Kelly for comment, but has yet to hear back as of publication time.

The Circuit Court of the Nineteenth Judicial Circuit has ordered the foundation and FAU to “attend an early mediation” to resolve the dispute by Sept. 30.

What do these words mean?

Joe Pye is the editor in chief of the University Press. For information regarding this or other stories, email [email protected] or tweet him @jpeg3189.