By Jim Hopkins
If there’s anything surprising about David A. Jones Sr. formally entering the high-stakes fray over the University of Louisville yesterday, it’s the fact it took this long to become public.
Nearly three months ago, when Gov. Matt Bevin shocked the community by seizing control of the school and dismissing the 20-member governing board he declared “dysfunctional,” the first person I thought of was Jones, the Louisville native, co-founder of Humana, and one of the state’s leading philanthropists.
That June 17, Bevin said his decision was the “culmination of all the conversations I’ve had with everybody on all fronts.” He didn’t reveal the names of those he’d spoken with, but it certainly would have included alumni whose opinion mattered. And few among that select group matters more than Jones.
“One of the university’s most influential and wealthiest graduates,” I wrote the day Bevin moved against the 22,000-student school, “is Humana co-founder David A. Jones Sr., who received a bachelor’s degree in business there in 1954.”
Jones and his wife, Betty Ashbury Jones, have long and extensive ties to UofL. She received a bachelor’s degree from the school in 1955, and the two went on to graduate school: David to Yale Law; and Betty, much later, to the French School at Vermont’s Middlebury College. (More on those two schools in a moment). Back in Louisville, Jones and a law partner, Wendell Cherry, launched the health-care company in 1961 that would become the Humana empire, starting with a single nursing home; they became millionaires after it went public in 1968.
A Depression-poor childhood
David served on the board of trustees for a time, and Betty taught French Conversation in the Continuing Education Department from 1993 to 2003. For their service to the school, the couple were among the first to be made members of the Arts and Sciences Hall of Honors, in 2007.
David didn’t come from money, and UofL — which he attended on a ROTC scholarship — played an important role in lifting him from his Depression-poor childhood in the West End to a multi-millionaire several hundred times over. Like many entrepreneurs before him — from Andrew Carnegie to Microsoft co-founder Bill Gates — Jones, 84, has made philanthropy a second career.
His first big focus was on parks, helping develop, with his son Dan Jones, the sprawling Parklands of Floyds Fork through the non-profit group they formed, 21st Century Parks. The string of four parks on 3,700 acres in eastern Jefferson County came after Jones Sr. helped raise $120 million for its development. His family contributed $15 million of that, plus another $25 million toward an endowment he and his son plan to increase to $60 million to maintain the parks indefinitely.
Yesterday, Jones raised the stakes for the community. One of his philanthropic vehicles, the C.E. & S. Foundation, joined the James Graham Brown Foundation in demanding a forensic examination of the UofL Foundation finances. In moving against the school, Jones noted that — like the Brown — his family has contributed substantial money to the university, both publicly and anonymously.
In a letter cited by The Courier-Journal’s Andrew Wolfson, Jones said his work on 21st Century Parks is nearly complete, and C.E. & S. has “refocused our philanthropy on the field of education,” with funding of such projects more than doubling between 2014 and 2015 and on track to continue at that level in 2016.
Big paychecks, and big sombreros
This is the first time Jones has gone public with his unhappiness over the scandals, both large and small, that have rocked his alma mater in recent years: controversies over former President James Ramsey‘s seven-figure paychecks; high-level exits of administrator walking away with fat severance deals, a Halloween party at Ramsey’s official residence where guests were photographed in sombreros, ponchos and fake mustaches — an embarrassing episode for a school advocating diversity that forced the school and Ramsey to apologize repeatedly, largely to no avail.
Privately, though, it’s likely Jones has been pressuring the school and foundation for reform. And I wouldn’t be at all surprised if he led and even initiated those “conversations on all fronts” Bevin cited three months ago when the governor swooped down on the school from his perch in Frankfort.
Jones’s influence is both brainy, and brawny — politically and financially. He has emerged as one of the most generous donors to Bevin’s state Republican party. In May, Jones contributed $250,000 to a PAC seeking to flip the Democrat-controlled state House of Representatives. That was on top of $325,000 he’d contributed earlier to the PAC, Kentuckians for Strong Leadership.
His family’s C.E. & S Foundation has about $77 million at its disposal, making it one of the biggest charitable foundations in the city. To be sure, the James Graham Brown Foundation is currently bigger, with $355 million. But Jones has other means: direct gifts; the Humana Foundation (his other son, David Jones Jr. sits on the board there), and the enormous Community Foundation of Louisville, where one of the donor-advised funds is the Jones Family Fund.
Donations to Yale and Middlebury
I don’t know for a fact that fund is his family’s. But this much is certain: over the years the Community Foundation has directed substantial gifts to Jones family interests. In the past three years alone, its tax returns show, the foundation gave:
- $5.5 million to 21st Century Parks.
- $1.9 million to Yale University (not including $250,000 to the Yale Polo Club).
- $905,000 to Middlebury College.
To be sure, other Yale and Middlebury graduates may also have donor-advised funds at the Community Foundation who’ve also directed money to the parks and schools, but few would be as well-heeled as the Jones couple.
And few will be as potentially rich in the future, given the likelihood they still have a huge stake in Humana. How big it may be, and its value under the proposed merger with Aetna, goes to the heart of Jones’s entering the UofL battle.
When he fully retired from Humana in 2005, Securities and Exchange Commission documents showed he owned 7.2 million shares of company stock, 4.4% of all. Until his departure, he was obligated under SEC rules to publicly disclose his holdings, no matter how small they were.
A potential $1.6 billion fortune
We don’t know exactly how many shares he owns today because he hasn’t had to make that information public. But at 7.2 million shares, his stake would be worth $1.6 billion in cash and Aetna stock under the tie-up if it were consummated under the terms first announced in July 2015. The cash portion alone would be worth nearly $900 million.
The Justice Department has sued to block that deal, and a trial is scheduled for December. Humana and Aetna could prevail — or not. But given the economics of the healthcare industry, it’s likely Humana would find another partner. A future deal might not be as rich as the one with Aetna, but it could nonetheless be lucrative enough to fund the educational initiatives Jones has dangled in front of the community. No one here wants to see the Joneses shift their educational philanthropy even further from the city and state than they already have.
The growing fight over UofL will no doubt draw even more wealthy players, a point I made Saturday when I wrote about the broader impact of the James Graham Brown Foundation’s lead in demanding an accounting of the UofL Foundation’s finances.
Other big philanthropic heavy hitters include the $141 million Gheens Foundation of Louisville, which gave $500,000 to UofL in the year ended Oct. 31, 2014, according to its public IRS tax return for the period. That was nearly 10% of the total $5.2 million it gave. The Speed Museum also got $500,000; no other recipients received that much. In its 2015 fiscal year, Gheens didn’t give anything to UofL, instead making its single-biggest gift, $1.3 million, to Louisville’s Simmons College of Kentucky. It looks like Gheens’s support may be up for grabs.
The James Graham Brown foundation’s CEO, Alex Rankin, appears to be no ordinary player in the UofL drama. He’s well-connected, sitting on the boards of Churchill Downs and Glenview Trust Co., where fellow directors have strong UofL ties. One of those other Glenview directors is — yes — David Jones Sr., an illustration of the overlap among the city’s tight-knit power brokers. Glenview Trust’s board in many ways constitutes a shadow government in Louisville.
As the saying goes, money talks and bullshit walks. And Jones doesn’t bullshit.
In the photo, top: A bronze cast of French sculptor Auguste Rodin’s “The Thinker” in front of UofL’s Grawemeyer Hall administration building.
Please read my disclosures.