June 11-12, 1968
BOARD OF REGENTS
UNIVERSITY OF NEVADA
June 11, 1968
The Board of Regents met in Special Session called by the
Chairman of the Board to discuss the Hughes Gift Contract.
Members present: Dr. Fred M. Anderson, Chairman
Mr. Archie Grant
Mr. Procter Hug, Jr.
Mr. Harold Jacobsen
Mrs. Molly Knudtsen
Mr. Albert Seeliger
Members absent: Mr. Thomas Bell
Dr. Louis Lombardi
Mr. Paul Mc Dermott
Mr. R. J. Ronzone
Dr. Juanita White
Others present: Chancellor Neil D. Humphrey
President N. Edd Miller
President Donald C. Moyer
Dr. Patrick Squires
Dean George T. Smith
Mr. Edward Olsen
Mrs. Mimi La Plante
Mrs. Linda Cooper
The meeting was called to order by Chairman Anderson at 2:30
1. Motion by Mr. Grant, seconded by Mr. Jacobsen, carried
without dissent that the Regents dispense with the
reading of the minutes of the previous meeting.
2. Hughes Contract
Mr. Humphrey distributed copies of a 3-page agreement
executed by Mr. Howard Hughes and Dr. Fred Anderson,
noting that the control signature would be that of the
Attorney General. (Copy of agreement filed with permanent
Mr. Humphrey noted that Dr. Anderson had signed the
agreement upon his recommendation with the assurance that
the contract would be held in the control of the Univer-
sity until such time as there was agreement by the Board
Mr. Humphrey requested that President Miller proceed with
the explanation concerning the contract.
President Miller stated that contract was substantially
the same as drawn by Dan Walsh, providing up to $300,000
a year for 20 years; however, two items in the contract
need additional clarification from the Hughes organization.
He noted that on page 2, the first paragraph speaks of the
first payment "commencing the date the Medical School has
been constructed and opened for academic session." Presi-
dent Miller stated that this appears to impose a time
limit since the contract further stated that the agreement
will "remain valid for a period not to exceed three years
(3) years from the date hereof." If the School must have
opened for academic session within three years from May
31, 1968, it would, in effect, require the School to accept
its first students in the Spring of 1971. He also express-
ed concern over the term "constructed" suggesting that it
needed clarification as to whether it meant to build a
permanent building or whether it would permit the Univer-
sity to begin with present buildings.
Chancellor Humphrey requested comments from Mr. Dan Walsh,
who, he noted, had been involved from the beginning in the
Mr. Walsh noted that he has reviewed all the negotiations
up to this point and the original contract and this con-
tract are similar except for the conditions outlined by
President Miller. Mr. Walsh stated that his main concern
is with the possibility of these being impossible condi-
tions for the University to comply with. As it stands
now, there are funds that could be received from various
foundations and the Federal government; however, the
receipt of these funds would be dependent upon the Uni-
versity having operating monies. It had been the hope
that the Hughes pledge would qualify the University for
construction funds. The conditions which have been in-
serted cause concern because there are so many "mights".
Clarification is necessary before the University could
seek resolution of the contract.
Mr. Walsh stated that as the University's Counsel, he
felt it important that the Regents be fully advised on
their legal position. There is presently, he said, a
possibility that the people who signed the contract could
say that a full Medical School must be constructed to
satisfy conditions of the agreement. This possibility
could be eliminated by striking the words, "construction"
or "constructed". Mr. Walsh also pointed out that prior
to this time funds have been expended in reliance of the
pledge that money would be forthcoming for the operation
of the Medical School. In granting money for construction,
the Federal agencies and foundation people would consider
two things to be legally binding: (1) a written contract,
and (2) an interpretation of that contract by a court of
Mr. Walsh said that if a court should conclude that there
was an offer for the operation of a Medical School, one
could imply from that that you have a reasonable time to
construct the facilities. Once the document is fully
executed this possibility would be waived. He also stated
that the University must determine whether or not it can
comply with the terms as they appear to exist; i. e., that
the School must open for academic session in approximately
2 1/4 years.
President Miller noted that the target date for the first
class has always been 1972.
Dr. Anderson pointed out that very few Medical Schools
start out in new buildings and suggested clarification
of the terms "constructed" or "construction" might be
based on whether facilities were considered acceptable to
the Committee on Accreditation.
Mrs. Knudtsen asked whether there had been any kind of
discussion between the Attorney General's Office and
members of the Hughes organization concerning the reasons
for the wording of the contract. Mr. Walsh stated that
the second contract had not contained the restrictions.
Mr. Humphrey stated that the purpose for this Special
Meeting of the Board was to involve the Board concerning
what the discussion with the Hughes people would include.
Mr. Hug noted that at no point was a time limitation ever
mentioned and it placed a tremendous burden on the Uni-
versity to work within this time limit. He stated that
it would appear impossible to be in a position to accept
students in 2 1/4 years as required by the present wording
of the contract. He suggested the University attempt to
find out why this restriction had been introduced.
Mr. Grant suggested that Mr. Hughes be requested to amend
the contract to allow for 5 years following acceptance of
the feasibility study by the State Legislature. Mr.
Seeliger stated it was most important not to assume that
any road blocks were intended.
Mr. Humphrey agreed and added that both he and President
Miller recommend proceeding on the assumption that no
one gives a major gift to the University without having
the University's best interests at heart. He said that
he was confident that the donor would wish to understand
the problems and work with the University to resolve
them. He requested that the Board authorize the Adminis-
tration to contact Mr. Gray, or other representatives of
Mr. Hughes, explain the problems which appear in the pro-
posed contract and request that the changes be made. Mr.
Humphrey further recommended that in the event that amend-
ment of the contract is not acceptable to Mr. Hughes, the
contract be executed without amendment and the University's
ability to comply with its terms be determined within one
Mr. Grant suggested that the negotiations with Hughes in-
clude the request for a 5-year period following acceptance
of the feasibility study.
Mr. Hug pointed out that the University has been proceed-
ing on the basis of a previous announcement which con-
tained no time limitation and has expended money which
might have been spent otherwise.
Mr. Humphrey noted that Mr. Ronzone had telephoned to say
that he would not be present for the meeting and expressed
himself as being in favor of authorizing the Administration
to negotiate with Hughes.
Mr. Hug suggested that the University request that time
restriction be eliminated. Mr. Grant asked what opposi-
tion there was to asking Hughes to specify a 5-year time
program. Chancellor Humphrey advised that some discretion
be left to the Administration during the negotiations.
Mr. Jacobsen asked if the offer could be withdrawn if the
contract were not immediately completed or if the contract
could be accepted as it is and then amendments requested.
Mr. Walsh stated that we would not be in a good position
to request amendment once the contract had been fully
Motion by Mr. Grant, seconded by Mr. Jacobsen, carried
without dissent that the Board authorize Chancellor
Humphrey, President Miller and Dan Walsh to proceed with
negotiations with Mr. Hughes and his representatives to
the end that the suggested changes might be made in the
Chancellor Humphrey stated that if the negotiations were
successful the contract would be brought back to the next
meeting of the Board of Regents.
President Miller stated that for the record it should be
made clear that if the feasibility study is accepted and
the Medical School authorized, it will have one of the
best financial starts of any Medical School in the country,
all through the generosity of Mr. Hughes, Mr. Manville and
the Hancock Foundation who have together pledged more than
$7 million for this purpose.
The meeting adjourned at 3:15 P.M.