Western New Mexico University is looking to claw back $1.9 million in severance already paid to former president Joseph Shepard, who stepped down in January following a spending scandal.
Shepard, who led the university for nearly 14 years, resigned late last year in the aftermath of media reports that found he spent university funds to upgrade the president’s house with lavish furniture. Critics also raised questions about costly recruiting trips to Greece, Spain and Zambia that yielded very few enrollments from those countries. The Office of the State Auditor determined in November that Shepard “engaged in the waste of public funds” and found instances where his travel appeared to be “unrelated to official university business.”
But in December, after the damning details came to light, board members—some of whom had joined the president on international trips—gave Shepard nearly $2 million in severance, plus additional fringe benefits and a five-year faculty contract that required him to teach six credit hours a year, though he had the option to do so online. Shepard’s annual faculty salary is set at $200,000, down from the base salary of $365,000 he was making as president.
The agreement prompted outrage at WNMU, which is located in one of the nation’s poorest states and has many low-income students. Democratic governor Michelle Lujan Grisham subsequently demanded the resignation of the board, who complied, and has since appointed new members.
Last week, the new board voided Shepard’s separation agreement and terminated his teaching contract, arguing that the regents who struck the deal did so improperly and in violation of New Mexico’s Open Meetings Act. State officials have made similar arguments in a related lawsuit.
A Board Reversal
WNMU regents took up Shepard’s contract and separation agreement at a Thursday meeting.
John V. Wertheim, one of the new regents appointed by the governor in recent months, argued that the prior board failed to provide proper notice of the action items at the December meeting where they approved Shepard’s contract. Given the alleged failure of compliance with New Mexico’s Open Meetings Act, Wertheim argued that the board’s approval of the deal was invalid.
In two separate motions, the board unanimously agreed to invalidate the deal and terminate Shepard’s teaching contract. Board Chair Steven Neville said the agreement is now “in limbo.”
Wertheim noted that while WNMU’s board hired special counsel to advise them on the matter, there are outstanding questions, many of which he said regents would not be able to answer immediately due to both the legal complexity of the issue and because it is a personnel matter.
“I’m sure both the press and the public are going to have a lot of questions, and all I ask is that there be patience … because all of these detailed questions, we don’t necessarily have the answers today to give everyone, but we will, in due course,” Wertheim said at the meeting.
Following the vote, Shepard accused WNMU in an emailed statement to Inside Higher Ed of orchestrating a smear campaign against him.
“After serving 14 exemplary years of advancing the university, it’s troubling that this new, Governor-appointed Board has chosen this path. This is a matter before the courts. The Board’s desire to attempt to circumvent the legal process is telling in that they know they can’t win where facts matter and are doing all they can to prevent the truth from being shared,” Shepard wrote, calling the move an effort to destroy his reputation and career.
But the state’s governor praised the board’s decisions as the “right thing.”
“They recognized that public dollars must serve the public good, not pad executive pockets during difficult transitions,” Lujan Grisham wrote on social media. “This decision represents exactly the kind of fiscal responsibility and accountability New Mexicans deserve from their public institutions. Our students and their families work too hard and sacrifice too much to see their tuition dollars and taxpayer investments squandered on excessive golden parachutes.”
What’s Next?
WNMU declined to provide a comment to Inside Higher Ed, noting the situation was a personnel matter. But according to board members’ remarks, a legal fight with Shepard is expected and a settlement remains a possibility.
Complicating the matter are two lawsuits brought by the state.
New Mexico attorney general Raúl Torrez filed a lawsuit earlier this year in an effort to void the contract and recover severance payments. Torrez argued regents breached their fiduciary duty by approving the costly agreement and violated open meeting laws at December’s meeting.
Torrez brought the initial complaint in January and amended it in February. While he initially attempted to block the payment, that effort was unsuccessful, as the funds had already been disbursed. The legal fight in that case is ongoing.
Then, in late June, the New Mexico State Ethics Commission also sued Shepard, accusing him of violating the Governmental Conduct Act, which applies to state employees. In addition to the prior complaints of lavish spending, the commission accused him of diverting $177,404 intended for an ADA-compliant walkway and ramp to instead construct a walkway and patio “for the purpose of hosting events related to his daughter’s wedding” held on campus.
(Shepard has denied that university funds were used to help pay for his daughter’s wedding.)
The lawsuit also alleges that as president, “Shepard had a practice of authorizing university expenditures from which he benefited that were only loosely connected to university purposes.”
The commission is seeking financial penalties and for Shepard to reimburse WNMU for the construction of the originally planned ADA-compliant ramp and walkway, which were not built.
Back at the university, board members say they are open to some financial compensation for the former president. Had Shepard been fired for cause, he would have received no severance. Had he been fired without cause, he would have received less than $600,000, per the contract he previously negotiated with the board in 2022.
Wertheim indicated at Thursday’s meeting a desire to reach a settlement.
“The best resolution for everyone is to get this in front of a retired judge or justice of the New Mexico Supreme Court to hammer out a fair, negotiated settlement,” he said at the meeting.
Before Thursday’s vote, Shepard was reportedly scheduled to teach two online classes this fall, including one on business ethics. However, Interim president Chris Maples told The Silver City Daily Press that he and other officials plan to meet to determine what will happen with those courses. And with the semester starting Aug. 15, they’ll need to make a decision soon.
“Whatever we do, we’ll do the best job we possibly can for our students,” he told the newspaper.
