SALT LAKE CITY — After a public power struggle followed by months of negotiation, the University of Utah board of trustees voted 8-1 Thursday to approve a new memorandum of understanding between the U. and the Huntsman Cancer Foundation.
The agreement addresses the governance and finances of the Huntsman Cancer Institute moving forward, said University of Utah President David Pershing, and "supplements previous memorandums of understanding between the U. and the Huntsman Cancer Foundation."
It "ensures that we will continue to put the patient at the center of a variety of therapies that go beyond cancer treatment while safeguarding the role of basic research into finding cancer cures and preserving the resources the institute needs to fulfill its mission," Pershing said.
Phillip Clinger, U. board of trustees vice chairman, was the lone dissenting vote. Clinger didn't immediately return a request for comment on the reasoning behind his vote.
Dr. Lorris Betz, acting senior vice president of health sciences, said Huntsman Cancer Foundation CEO Peter Huntsman had approved the agreement earlier. Huntsman expressed “relief” that the MOU negotiations had been completed.
“I’m just relieved and feel very satisfied about where we are today,” he told the Deseret News.
Huntsman said he spent hundreds of hours the past few months negotiating with University of Utah officials, and he looks forward to being able to fully focus his energies on supporting the important work of the Huntsman Cancer Institute.
The new memorandum of understanding is more detailed than agreements of the past, he said, which should translate into greater transparency and enhanced communication moving forward — “all healthy things for any organization at the end of the day."
Betz agreed that the new agreement "creates clarity in a number of areas that probably weren’t described as clearly as they should have been in previous memorandums.
"That’s really what its function is, to create clarity there,” he said.
It addresses “how that money is handled and also how the margin generated by the Huntsman Cancer Hospital is used to support cancer research,” Betz said, and "includes provisions around fundraising" and "provisions around reporting relationships."
Simmering friction between the university and the foundation erupted in April when Pershing and Dr. Vivian Lee, former senior vice president of U. health sciences, fired Huntsman Cancer Institute CEO Mary Beckerle via email.
The firing ignited a media blitz from Jon Huntsman Sr., who called for both Pershing and Lee to be ousted from the U., publicly deriding Lee as "a very vicious, vitriolic woman" and saying, "I can't imagine anything worse than the University of Utah treating a donor the way they treated us."
Two protests on campus from institute faculty, students and cancer patients also followed the firing.
Beckerle was quickly reinstated and Lee resigned. In a parting email to faculty, Lee expressed sadness over the public divide between the U. and the Huntsman Cancer Institute that followed Beckerle's firing.
Pershing also moved up the timetable of his planned retirement as university president, but he has said he will remain in the position until the Utah State Board of Regents hires his successor.
A nationwide search for the next president is underway, to be followed by a search for Lee's successor.
According to a two-page newspaper ad benefactor Jon M. Huntsman Sr. took out in mid-May, the heart of the rift between the parties was a dispute involving tens of millions of dollars over how much the U. should pay toward the Huntsman Cancer Institute.
The advertisement, placed in both Salt Lake daily newspapers, alleged that the U. "instigated" the dispute.
The board of trustees approved the new agreement Thursday with no public discussion.
Following the vote, Pershing read from a prepared statement that said, in part: "As Jon Huntsman has always said, cancer moves fast and we must move faster. We are gratified to have emerged from several months of discussion better positioned to bring together our shared resources, world-class talent and experience to fight cancer and care for our patients."
Later Thursday, Jon Huntsman Sr., his wife, Karen, and son Peter Huntsman spoke at a public signing of the new agreement at the Huntsman Cancer Institute. They were accompanied by Pershing, U. board of trustees Chairman H. David Burton and Gov. Gary Herbert.
Herbert praised the two sides for overcoming their "differences in opinion" to compromise on a new agreement.
"I know it's been publicized about some of the challenges between some of our two great institutions and the fact that we are here today showing (we are) working together to come together on a resolution is impressive to me and should be to the people of Utah," the governor said.
Peter Huntsman touted the lasting nature of the work being done at the Huntsman Cancer Institute, saying future generations "will look at what we have done and thank us for these efforts."
"This is not a one-year project. This is not even a (one) decade project," he said. "This is a multigenerational project in which we are engaged. It's going to require a lot of diverse personalities coming together."
Jon Huntsman Sr. said the fact that the sides have reached an agreement means "we've moved a great mountain." He thanked Pershing and Burton for their role in overseeing the success of the Huntsman Cancer Institute.
"I'm not an easy guy sometimes to live with," he said. "Yet at the same time, my heart and my soul and my emotions run very deep for this university."
The job now is to focus on the main goal at hand, he said: Conquering cancer.
"Our No. 1 job is to eradicate cancer from the face of the earth," Jon Huntsman Sr. said. "That's our only goal."
As a tribute of gratitude for the "wonderful treatment I've received and our family's received from the U.," Huntsman also announced a donation paving the way for the endowment of 12 additional presidential chairs at the University of Utah School of Medicine to be instituted over the next two years.
$68 million transfer
The text of the new memorandum of understanding says "disputes have arisen between the parties regarding the obligation of the university to assume and replace funding for operating costs of (the institute) previously provided by the foundation."
The agreement then details $68 million that the U. will transfer to the Huntsman Cancer Institute "to fully resolve these disputes," and that those funds will go toward cancer research and clinical care as determined by Beckerle and approved by Pershing.
That money will be given in three $16 million increments at the beginning of 2018, 2019 and 2020, then four $5 million increments annually from 2021 through 2024.
The agreement is set to run through the end of 2025 and automatically renew at that point if there is no further action to stop it from doing so.
The agreement additionally states that faculty appointments at the university, including Huntsman Cancer Institute positions, "shall be made by the relevant departmental chair in accordance with normal university policy."
However, it goes on to add, "in making cancer-related faculty appointments involving HCI resources, department chairs will collaborate with and secure the approval of the chief executive director of HCI and the (University of Utah Hospitals and Clinics) chief medical officer and/or the (Huntsman Cancer Hospital) executive director, as appropriate."
The document also goes into detail about how to define "adjusted net income" at Huntsman Cancer Hospital and states 25 percent of that figure will be retained by the Huntsman Cancer Hospital, 50 percent will be transferred to the Huntsman Cancer Institute, and 25 percent will be transferred to University of Utah Hospitals and Clinics. Those levels are the same as the current funding distribution levels.
How to most accurately calculate the total figure to be divvied up was a subject of the U.'s thorough review of its financial relationship with Huntsman Cancer Foundation in recent months.
The new memorandum of understanding also outlines the details of a $120 million donation from the Huntsman Cancer Foundation for the institute to be provided through the end of 2025. That donation was formally announced by Jon Huntsman Sr. in June at the opening of the institute's Primary Children's and Families' Cancer Research Center.
It also establishes a new Joint Oversight Committee, to include the president of the U., the CEO of the Huntsman Cancer Foundation, one person each specially appointed by both the university and the foundation, and "a prominent cancer specialist who is not directly associated with either of the parties or (the cancer institute)."
The oversight committee will replace the "executive committee" as organized under previous agreements and will meet at least twice a year to "review the clinical care and the research performance of HCI, to consider measures to strengthen the relationship between the parties (and) to resolve all disputes between the parties," according to the agreement.
The five-member body will also have the power to "discuss and approve any change in the chief executive officer of HCI in advance," referring to Beckerle's position.
A memorandum of understanding that was signed by Jon Huntsman Sr. and Peter Huntsman in March would have changed the distribution of the cancer hospital's "net income" from 2017 to 2019 to ensure 75 percent of it went toward the institute and 25 percent stayed with the hospital. The arrangement would have cut out a 25 percent share that University of Utah Hospitals and Clinics had been receiving until 2020, when it would have received that 25 percent figure again.
Multiple sources at the U. told the Deseret News in the spring that such a proposed change in the revenue distribution, the level of Beckerle's power in making academic appointments, and the question of to whom she would directly report were all points of friction in the memorandum of understanding put up for Pershing's consideration in March.
That previous memorandum also included language that would have allowed Beckerle to "recruit critical faculty for the cancer program, both in partnership with academic departments and independently."
Pershing did not sign the agreement put up for his consideration in March, leading to tension between the various sides in the negotiations that grew public when he and Lee fired Beckerle by email several weeks later on April 17.
The U. announced when Beckerle was reinstated that she would officially report directly to Pershing rather than to the senior vice president of health sciences.