USF President Judy Genshaft and USF Board of Trustees member Lee Arnold Jr. will be two of several founding directors for the new American Commerce Bank in Tampa. The bank will be getting off the ground with a record-breaking total of $100 million in initial capital raised by all of the founding members of the board of directors of the new bank.
According to the St. Petersburg Times, of the $100 million, Genshaft contributed $135,000. Arnold put in $1 million. The bulk of the startup money, $91 million, came from lead investor Donald A. Adam, who will be chairman and CEO of the bank. Eventually, the bank plans to expand into several major cities throughout the state, including Miami and Jacksonville.
Genshaft’s involvement in the bank has caused concern among some, who say it may lead to potential conflicts of interest.
USF spokeswoman Michelle Carlyon expressed no concern over the bank and said, “It’s not really tied to the University.”
“As the president of the University, it’s her job to notify the University if there is a conflict of interest, and we rely on her to do that,” Carlyon said.
Some faculty members, who wished to remain anonymous, have specifically expressed concerns over Genshaft embarking on this venture with Arnold, a trustee. They said that it seems as though Genshaft may feel pressured to favor the bank over USF due to Arnold’s and Genshaft’s positions at each institution. As a USF trustee, Arnold votes on various issues relating to Genshaft, including pay increases and contract renewal. Genshaft’s contract expires on Nov. 30, 2007.
Arnold brushed aside the idea that the bank could lead to malfeasance down the road.
“It really is divorced from the reality of how large organizations work,” Arnold said. “I would tell (concerned individuals) to talk to me, and I would show them how that is really inconsistent with how you run a large bank.”
Most faculty members queried about the arrangement said they wanted to find out more about it before making an educated comment either way.
Faculty Union President Roy Weatherford said the union did not discuss the bank at its meeting Friday and thus has no official position. He did add that the issue could be discussed at the next meeting if a concerned faculty member steps forward.
Arnold also touted the benefits that Genshaft’s new position might have for USF.
“I think it’s a great opportunity for Judy Genshaft to get exposure in the business community in ways that help USF,” Arnold said.
Genshaft’s contract states, in Section 2.5, that in order to seek outside employment, she must first inform her supervisor and ask for permission, as would all other University employees. Genshaft adhered to this rule, sending BOT Chairman Dick Beard a letter dated Oct. 31, 2005.
In the letter, she told Beard her position will not diminish her duties as president and will take up “one half day per month” plus time for “telephonic or other meetings.”
She also wrote that she and other board members will not see earnings from the bank for three years.
According to her letter, the bank does not deal with USF and she does not know of any future plans for it to do so. If the bank were to deal with USF, she wrote that she would either inform Beard as soon as possible or remove herself from the bank’s board of directors.
Arnold said it was “highly unlikely” that the bank will be dealing with USF in the future.Genshaft was unavailable for personal comment, as according to Carlyon she is out of the country.
The bank will be located immediately south of the Westshore Plaza Mall at 4830 W. Kennedy Blvd.