KANSAS CITY, Mo. (CN) – Its former president and CEO countersued the Kansas City University of Medicine and Biosciences, claiming it fired her to scapegoat her for the school’s tax problems. The school claimed Karen Pletz defrauded it of millions of dollars through excessive travel and expenses and by reimbursing herself for philanthropic donations made in her name.
Both complaints were filed on the same day in Jackson County Court.
the school filed sued her in the same court. In its suit,
Pletz claims she led the school through a 180-degree turnaround, and that her firing on Dec. 18, 2009, stemmed from an IRS investigation that claimed the school had excessive entertainment and travel budgets – which Pletz says were approved by the board of trustees.
“KCUMB did not have cause to terminate Karen Pletz,” she says. “The termination was a transparent and ill-advised attempt by the Board of Trustees to avoid IRS penalties and make Karen Pletz the scapegoat for KCUMB’s and their own potential tax problems.”
Pletz called her own performance exemplary. She claims that when she took over as president and CEO in 1995, the school had medical board pass rates well below the national average, received donations from just 2 percent of alumni, that 75 percent its med school graduates were matched to residencies, and the school had no endowment.
Today, Pletz says, the school’s enrollment is up by 40 percent, graduates have a 100 percent medical board pass rate, 33 percent of the school’s alumni donate, 100 percent of graduates are matched to residencies, and the school’s endowment has grown to $70 million. In 2008, Pletz said the Board of Trustees extended her employment agreement until 2013 and raised her salary by 37 percent, to $577,201 a year.
Pletz says she ruffled the feathers of certain school administrators by pushing for the school to become duly accredited, meaning it would offer degrees in osteopathic medicine and medical degrees. Dual accreditation would make the school the only one in the country to offer both degrees, giving it a competitive advantage, Pletz says.
But she says some administrators balked, claiming the need for osteopathic medicine would diminish if those colleges started offering medical degrees. Pletz said those administrators started a campaign to remove her as president and CEO.
“Upon information and belief, in furtherance of the campaign to discredit President Pletz and ultimately remove her from office, certain KCUMB staff created false travel and entertainment expense documentation, altered expense documentation submitted by President Pletz (including receipts), and destroyed expense documentation (including reimbursement checks written by President Pletz to KCUMB),” according to her complaint.
Pletz says her detractors trumped up a special committee to fire her under the guise that it was investigating the IRS concerns.
“The Board, including the special committee members, had an obvious and incurable conflict of interest,” her complaint states. “If the IRS Audit ultimately concludes that KCUMB conferred an ‘excess benefit’ on President Pletz, the IRS may impose money penalties on the individual Trustees of the Board. Thus, the Board of Trustees, including the special committee members, had a built-in and very personal incentive to find a scapegoat for the ‘excess benefit’ tax problems facing KCUMB. Even though the Board of Trustees’ actions in approving compensation and travel/entertainment budgets had already occurred and cannot be undone, they hoped to bolster a defendant to any IRS changes (sic) by firing President Pletz and feigning a lack of prior knowledge.”
Pletz claims the school breached its employment agreement with her because it did not have just cause to fire her. She seeks more than $2 million in actual damages and punitive damages. She is represented by Charles German with Rouse Hendricks German.
Courthouse News reported the school’s claim against Pletz on Wednesday.