In would could set a precedent for other universities, the chairman of the Senate Finance Committee announced plans last week to probe how the American University board of trustees’ handled the recent firing of university president Benjamin Ladner.
Sen. Chuck Grassley, R-Iowa, said in a Dec. 2 statement that the committee would look into “whether the current board members have performed their duties and responsibilities to the standard of what should be expected for such a major university.”
In his release, Grassley tied the authority of university boards to those of charitable operations, saying that it is crucial they understand the importance they play in overseeing financial matters.
“I’m looking at legislative reforms that will encourage and empower boards to have more oversight of their operations,” Grassley said in the statement.
“The best way to avoid problems like Benjamin Ladner’s excessive compensation and severance is for boards to know that the buck stops with them.”
Ladner was fired in October after more than a month of investigations into the president’s alleged misuse of more than a half million dollars in university funds. Auditors found that Ladner had used the money to pay for vacations, children’s birthday parties and other personal expenses.
Just over a week later, Ladner was offered a severance package of around $3.7 million. The deal outraged many students and faculty, who called for the president to be dismissed without compensation.
The finance committee first started looking into the matter on Oct. 28 when Grassley sent a letter to the AU board asking for every document relating to the president’s ouster. The senator wrote at the time that the AU board “could be a poster child for why review and reform are necessary.”
Last week, the board responded to Grassley’s request with a twelve-page letter explaining how the Ladner situation evolved. The document details the complexities involved in determining the former president’s severance package and tells of new policy reforms being considered since the incident took place.
Though the letter mostly defends the board of trustees’ handling of the matter, it acknowledges some deficiencies and expresses hope that the matter “may prompt other university and college governing boards to assure themselves that they are exercising proper oversight.”
Since Ladner’s dismissal, AU’s provost Cornelius Kerwin has presided over the university presidency. The school is actively seeking a full-time replacement.
This article appeared in the December 8, 2005 issue of the Hatchet.