Dr. John W. Shumaker was a Phi Beta Kappa graduate of the University of Pittsburgh, where he majored in ancient Greek. He then received the master’s and doctoral degrees in classical studies from the University of Pennsylvania. He joined the faculty of Ohio State University in 1969 and became associate dean of the College of Humanities in 1975. From 1977 to 1987, he held several positions at the University of New York at Albany, including dean of the College of Humanities and Fine Arts, acting vice president for research and educational development, and vice president for academic planning and development. He served as president of Central Connecticut College from 1987 to 1995 and as president of the University of Louisville from 1995 to 2002. He was elected president of the University of Tennessee by the board of trustees in June 2002.
His salary at UT was $365,000 a year, plus a $20,000 expense account, and his contract provided for a bonus of 27 percent ($98,550) per year as an annual performance incentive award, as determined by the board of trustees. In addition, the relatively new UT Foundation provided additional benefits: life insurance, disability insurance, long-term care insurance, a deferred annuity, target bonuses, executive option grants, an allowance for attorney and financial planning fees, and an expense allowance. The foundation also provided a one-time payment of $92,000 in executive option grants, which Shumaker had forfeited at the University of Louisville to accept the UT presidency.
His presidency at UT was marked by widespread reports of lavish spending, failure to follow university policies and procedures, and inappropriate record keeping. The UT Division of Audit and Consulting Services prepared a “Special Report” on the Office of the President, which it issued August 15, 2003. The report detailed four principal areas of concern: noncompetitive contracts, costs for renovation of the president’s residence, use of the UT credit card for personal purchases, and use of the UT plane for personal business. Governor Phil Bredesen personally negotiated Shumaker’s resignation, which Shumaker tendered August 8, 2003, and Bredesen recommended to the board of trustees that it approve severance pay of $422,956.84 ($249,800 from UT and $173,156.84 from the UT Foundation), provided that Shumaker sign a release relieving all state and university employees of any liability that could result from his resignation. Absent the severance agreement, Shumaker could have been entitled to up to $1.7 million, the amount left on his contract. Shumaker was instructed to vacate the president’s residence within 60 days.
Shortly after Shumaker’s resignation, Governor Bredesen appointed a Task Force on Institutional Governance composed of board of trustees and external business members to examine the policies and role of the board of trustees and to strengthen board of trustees’ and institutional controls.
The State of Tennessee Comptroller of the Treasury’s State Audit Division issued a Special Audit Report reviewing the issues related to the presidency of John Shumaker on October 9, 2003, initially arising from Shumaker’s request on July 2 for an audit into use of the UT plane. The state audit was critical of the UT administration, as well as of Dr. Shumaker; reiterated and expanded the findings of the internal audit performed by UT; raised serious questions about the role of the UT Foundation; and levied criticism at the board of trustees. The state audit explicitly stated that Shumaker had falsified records and misrepresented his actions. The state audit also pointed to two areas that occurred prior to Shumaker’s accepting the UT presidency, derived from his divorce proceedings. First, he approved a training contract with a South Korean company while president of Central Connecticut State University and subsequently accepted a $10,000 cash gift (paid in two $5,000 checks) from the company. Second, he applied for a marriage license with a Chinese woman in 1995 in Oldham County, Kentucky, to help her remain in the United States.
In light of the additional revelations of possible misconduct set forth in the state audit, Governor Phil Bredesen recommended to the board of trustees at its October 10, 2003, meeting that the severance package offered to Shumaker be rescinded, since it had been negotiated based on Shumaker’s assurances that there were no additional areas of potential misconduct, and the board of trustees rescinded the offer. Shumaker then sued to attempt to collect the severance amount or the total of the remainder of his five-year contract.
On January 16, 2004, Knox County District Attorney General Randy Nichols wrote to State Comptroller John Morgan, saying that Shumaker would not face criminal charges. Nichols indicated that his investigation provided no evidence that Shumaker intentionally or knowingly violated any law related to his employment. In March 2004 a Kentucky state audit of spending by the University of Louisville’s Foundation found that former President John Shumaker did not use the foundation’s money for personal gain and worked within guidelines he had been given.
In August 2004 Shumaker filed a claim against the State of Tennessee in an attempt to collect. In February 2008 State Commissioner William O. Shults decided to allow Shumaker to present his case against the state, seeking upwards of $1.7 million in back and severance pay from UT, citing the fact that there were disputed facts in the matter, including Shumaker’s failure to return a signed copy of the release required to trigger the payment of the severance pay and whether the severance package was set at a “stated” or a “special” meeting of the board of trustees.