UCCSN Board of Regents' Meeting Minutes
June 11-12, 1968


Pages 518-521



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

of Regents.

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

contract negotiations.

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.