Report: Former President Owes UT Southwestern $21,000

Update, February 14: UT-Southwestern officials said they will reclassify as reimbursements nearly $15,000 that former President Kern Wildenthal originally gave to the university on checks marked as gifts. This brings the total he owes the institution to less than $6,200.

In a statement responding to the news of this figure, Kathleen Gibson, president of the Southwestern Medical Foundation, and Bill Solomon, the foundation's chairman, decried the lengthy investigation into Wildenthal's spending, which they claim "thanklessly, and in our view unjustifiably, besmirched the reputation of one of our city’s finest."

"Overlooked in all this is the far greater amount of outright financial donations which Dr. and Mrs. Wildenthal made to UT-Southwestern over the years," they wrote. "And largely overlooked is the extraordinary contribution which he made to UT-Southwestern, the UT System, the taxpayers of Texas, and the welfare of the North Texas region as professor, dean, and for 22 years, president of UT-Southwestern."

They said they hoped the latest reports would lay to rest "this tragic saga."

Original Story, February 13: Dr. Kern Wildenthal, the former president of UT Southwestern Medical Center in Dallas, owes the institution slightly more than $21,000, according to a review conducted by the University of Texas System and obtained by The Texas Tribune.

Wildenthal, who served as president from 1986 to 2008, resigned his position as special assistant to the president in April following the release of a report that questioned his decision-making with regard to discretionary spending.

The initial report, conducted by Paul Hastings LLP, was prompted by questions of impropriety raised by The Dallas Morning News. After its release, system officials indicated that Wildenthal would be expected to reimburse any expenses found to be inappropriate.

To further determine how much Wildenthal owed, the UT System hired Grant Thornton LLP to conduct an analysis of Wildenthal’s travel expenses. It concluded that Wildenthal received appropriate approval and submitted necessary documentation for his travels, but noted a handful of instances in which he was reimbursed for relatively minor personal expenses.

But system officials found that the Grant Thornton study “did not adequately address many of the travel-related questions raised by the Paul Hastings LLP investigative report.” Specifically, the review did not address the legitimacy of the stated business purposes of Wildenthal’s trips.

So, the system conducted another review on its own. It found $21,156.81 that the institution had paid for in expenses that were unsubstantiated, personal or in error. Wildenthal had previously written $14,980.77 worth of checks to the university, but most of them were marked as donations or gifts rather than reimbursements and were processed accordingly.

Because the investigators found no other example of UT Southwestern staff reimbursing the university for travel expenses with checks marked as “donations,” those contributions will not be subtracted from the total Wildenthal was found to owe.

On Tuesday, UT System Chancellor Francisco Cigarroa wrote to Wildenthal asking him to work with current UT Southwestern President Daniel Podolsky “to achieve this required restitution and bring this matter to its final close.”

“While the issuance of the final reports and your restitution to UT Southwestern do not answer every question or address every conceivable issue that has been raised,” Cigarroa wrote, the system "has completed an extraordinary amount of due diligence in an attempt to reach resolution with you.”

Also on Tuesday, Cigarroa wrote to Podolsky with a footnote that might delay final closure.

In May 2012, the system received an anonymous tip regarding a workers’ compensation claim made by a housekeeper provided to Wildenthal by UT Southwestern.

The institution paid all of the housekeeper’s wages and benefits. Half of the duties were considered institutional support and the other half was considered noncash compensation for Wildenthal.

Wildenthal had the housekeeper split the week between his residence and his daughter’s personal home. In 2002, the housekeeper was injured while working at the daughter’s home, and the UT System paid more than $33,000 in workers’ compensation.

The system has not requested reimbursement of any of that money. As Cigarroa wrote to Podolsky, the situation “presents complex legal issues beyond the scope” of the system’s review. In his letter, Cigarroa indicated that the matter has been turned over to outside legal experts and that he would provide their findings to Podolsky when they become available.

Texas Tribune donors or members may be quoted or mentioned in our stories, or may be the subject of them. For a complete list of contributors, click here.