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FAMU gift wasn't payola, donor insists

By David Damron
Sentinel Staff Writer

June 30, 2005

LEXINGTON, Ky. -- In his rise from farmer to successful class-action attorney, Shirley Cunningham Jr. parlayed legal victories into stakes in horse farms, a sports complex and other real estate, including a South Florida home.

Despite early struggles, the man who scrounged $300 to pay his first tuition bill has truly made it. And people in the world's horse capital know he's not shy in sharing it.

Giving $1 million to Florida A&M University's law school in Orlando was his most generous gift, an act that since has generated one of the most humiliating moments of his life: FAMU fired him in May for taking the endowed chair his donation created -- and the $100,000 salary he negotiated to go with it.

FAMU leaders meet today in Tallahassee to grapple with a series of financial and management scandals that Cunningham has come to symbolize.

"It's been an embarrassment to the school and an embarrassment to me," Cunningham said in his first wide-ranging interview since his firing, which also resulted in the ouster of law-school dean Percy Luney.

Many top FAMU officials, not just Luney, OK'd his salary deal to consult and raise money for the law school, Cunningham said. No one warned him it broke any rules.

"No one ever raised an ethical issue," the soft-spoken attorney said.

He stopped short of detailing the nature of his work for FAMU while the university was paying him, citing an ongoing probe of the arrangement by fraud investigators for Florida Chief Financial Officer Tom Gallagher. But Cunningham, 50, denies bilking the university.

"I did not need the $100,000 salary from Florida A&M to take care of my family and other financial needs," he said. "Absolutely not."

Mentor steered him to law

A product of four generations of Kentucky farmers, Cunningham wanted to play minor-league baseball after high school, then expected to move back home to farm corn and tobacco.

But the Vietnam War changed that. In 1972, a draft-board member told him to show up for a physical, explaining that agricultural exemptions would no longer keep family farmers out of military service.

"I stumbled around for a couple days," Cunningham said. "Then I said, 'Wait. What was this college option?' "

His mother, a teacher and graduate of historically black Tennessee State University, scrambled to help enroll him there. Pooling money from his mom and her two teacher sisters, he got in. Not wanting to strap his family like that again, he drove a Catholic Charities bus, swept floors in a factory and worked other jobs.

One job was in the office of TSU's new president, Frederick Humphries, who took a keen interest in Cunningham and remained close to him even after the student went on to study at the University of Missouri.

Humphries urged him to study law, and wrote key letters to help open doors at University of Kentucky law school, nudging along the ambitious student.

"I remember that he generally got what he wanted," said 77-year-old Homer Wheaton, a TSU vice president who was financial-aid director when Cunningham attended. "He convinced people. He got them to his way of thinking."

First politics, then law

After law school, Cunningham set his sights on political office. He won a Democratic primary for a Kentucky state house seat in 1984, but lost in the general election and in three more tries for office, even after a switch to the Republican Party.

Cunningham gradually refocused on the law. He took on an array of clients, from small drug cases to personal-injury lawsuits and, eventually, class-action product-liability claims involving hundreds of people.

His targets included Wal-Mart; drug, vehicle and tire makers; and, most profitably, American Home Products Corp., makers of the fen-phen diet-drug combination that was blamed for heart problems in users.

About the time Cunningham took his share of a reported $200 million settlement in the diet-drug case, he gave gifts totaling almost $500,000 to UK, the University of Louisville and TSU. He said he wanted to repay those who helped him.

Before he offered the $1 million gift to FAMU in 2001, he gave $100,000 there for scholarships.

He said he favored FAMU because Humphries had become its president, and he also backed the revival of its college of law, which had closed in 1968.

"Were it not for Dr. Humphries, I would not be a lawyer," Cunningham said.

Cunningham eventually headed TSU's ambitious $50 million capital campaign, which fell short last year at about $17 million.

Wheaton of TSU doubts Cunningham pressed FAMU for a faculty-salary rebate on his $1 million gift, and said he never sought such a deal at the Tennessee school.

"The truth of the matter is, the boy has got a lot of money," Wheaton said. "He was not searching for money. He was going to give it."

Fan of sports, horses

One of Cunningham's business partners is Steve Hatton, co-founder of the Kentucky Basketball Academy in Lexington. Cunningham bought half of that complex around 2002 and has never hinted at money troubles since, Hatton said.

Hatton described Cunningham, who has four children, as generous, regularly sponsoring youth teams at $1,000 to $2,000 a pop. The two men want to build a similar youth-sports facility in Ohio, a $2.5 million venture.

Cunningham also owns major interests in the 135-acre Hillcrest Farm horse farm, and part of nearby Echo Valley Horse Farm, which foaled the 1988 Kentucky Derby winner, Winning Colors. Combined, the properties are valued at $1.9 million, tax records show.

In a state where houses are starting to gobble up Kentucky's blue grass, the farms outside Lexington could be prime sites for development. Nearby Toyota and Lexmark plants are driving up housing demand, but Cunningham said he plans to continue raising horses.

In Florida, which Cunningham now mostly calls home, he also owns a 4,600-square-foot home assessed at $1.2 million in Parkland, north of Coral Springs, records show.

He handles lingering Lexington class-action suits mostly by e-mail from there. A young partner runs the firm from a strip-mall office nestled between a Golden Wok restaurant and a Perfect Tan shop.

One of Cunningham's most successful court victories has suddenly reopened. Winners in the fen-phen case sued Cunningham and the other lawyers for taking approximately $20 million of the settlement to set up a charitable foundation that paid each attorney $60,000 annually, The Courier-Journal in Louisville reported this year.

A judge has issued a gag order, so Cunningham and the other lawyers involved declined to discuss the matter. But one of them, J. Whitney Wallingford, said Cunningham is well-known for generosity and would not have squeezed FAMU for a salary he didn't need.

"There's a math problem there," he said.

Payroll audit led to firing

FAMU's interim president, Castell Bryant, said a payroll audit showed Cunningham listed as a faculty member, but no one ever saw him teach. Since booting Cunningham and putting Luney on leave, she has declined to comment further. Education experts say such donor deals are frowned on.

But Luney and Cunningham maintain that Humphries' successor, Fred Gainous, and FAMU trustee William Jennings agreed during a 2003 meeting that a teaching post wasn't a good fit, and that a $100,000 salary for advisory fund-raising would work best.

"We all left in one accord on where we were heading," Cunningham said of the meeting at Orlando International Airport, where Jennings is executive director of the Greater Orlando Aviation Authority. "I certainly did not insist to get paid. They decided that they would pay me for those services."

Gainous and Jennings have denied agreeing to such a deal.

Cunningham said he can't explain FAMU's current troubles, which include questions about how the historically black university has spent millions in tax and research dollars in recent years. He just wishes Bryant had talked to him before moving against him and the law school, especially since his occupying the endowed chair he created had been reported in the newspaper.

"There was nothing secretive or scandalous about this," he said.