A.U. Board Ousts President

American University’s Ladner charged personal expenses to University

When Benjamin A. Ladner first took the reins of American University (A.U.) in 1994, the Washington, D.C.-based private school was awash in turmoil and tainted by controversy. Board members did not expect Ladner to add to the scandal.

The university was in the process of ameliorating its reputation as a second-rate party school when the president resigned, in 1990, after officials traced obscene phone calls to his office. The situation deteriorated as his successors quickly came and went without leaving much of a mark.

In April 1994, the governing Board of Trustees turned to Ladner—a former ethics professor and head of the nonprofit National Faculty of the Humanities, Arts, and Sciences—to bring stability to the top leadership position.

“I came to stay,” Ladner said during his inaugural address in November 1994, according to The Washington Post. “I’m not going.”

However, Ladner did leave, although involuntarily, when he was ousted from the presidency by the university’s board on Oct. 10.

A several-months-long investigation authorized by the trustees found expenditures deemed questionable—including French wine and dinners at upscale restaurants—that Ladner had charged to A.U. The board is currently seeking $125,000 in reimbursement from Ladner, and it plans to report an additional $398,000 in income to the Internal Revenue Service.

The allegations of the president’s lavish spending on the university’s tab prompted open dissent from students and faculty. The former held rallies demanding Ladner’s resignation, and the A.U. student government supported removal without a severance package.

On Sept. 26, the faculties of five of the six schools at A.U. voted “no confidence” in the president. The symbolic move was inspired by the Harvard Faculty of Arts and Sciences’ expression of no-confidence in University President Lawrence H. Summers in March, according to A.U. Associate Professor of International Economic Policy and Comparative Political Economy Stephen J. Silvia.

Ladner, who had been suspended by the board in August, maintained throughout the investigation that his actions were within the bounds of the employment contract he had negotiated with the trustees. He maintains a faction of supporters who emphasize the improvements to the university that occurred under his stewardship—including an increase in the endowment and higher academic standards.

Questions now center on the kind of severance package, if any, Ladner will receive from the board. And as the focus shifts from what Ladner did to what the trustees will do, the board as an institution has come under increasing criticism. Students and faculty have renewed calls for representation and transparency in board proceedings.

SUSPECT SPENDING

The probe into Ladner’s spending habits began when the Board of Trustees received an anonymous letter that accused Ladner and his wife, Nancy Bullard Ladner, of inappropriately billing the university for personal services and travel expenses. A similar letter sent to The Washington Post in late July provided examples of the alleged misuse of the university’s funds. According to the letter received by the Post, the Ladners charged the cost of their son’s engagement party, the services of a personal chef, vacations in Europe, and other various goods and services to the university.

The A.U. board hired a number of outside auditors and lawyers to look into Ladner’s expenses. On Aug. 24, the then-chairperson of the board, Leslie E. Bains, announced that Ladner had been placed on paid administrative leave pending the completion of the audit. Provost Cornelius Kerwin was installed as the interim president.

One month later, in an interview with the Post, Ladner admitted that he had made some mistakes. He also gave the university $21,000 as reimbursement for limousine rides and other services.

“Did I use some bad judgment? Sure. I’m the first one to say I’ve made mistakes,” Ladner said to the Post. He also hinted that he might take legal action if the board dismissed him.

RILING A REACTION

The defensive and even threatening stance that Ladner adopted caught some students and faculty members off-guard.

“Rather than refute the charges, the President has given credibility to them by insisting that he was legally entitled to a ‘first class level of living,’” writes Associate Professor of International Relations Randolph B. Persaud in an e-mail.

However, the students contacted for this article said that the allegations of overspending did not come as a shock. The president’s expenditures were criticized as early as 1995.

“I think the allegations were sort of long in coming,” says Kyle G. Taylor, a senior and president of the A.U. Student Government. “To the students, the allegations didn’t seem as a surprise, though they were still disconcerting.”

“We, the students, had always had concerns about his compensation, and his interaction with the University,” writes Peter W. Brusoe, a graduate student and member of the A.U. Graduate Leadership Council, in an e-mail.

He adds, “However, I do feel that some of the allegations have been exaggerated to vilify the President and that some of the excess he has been charged with will turn out to be unfounded.”

The Graduate Leadership Council nonetheless called for Ladner to resign early in the situation, Brusoe writes, and graduate students participated in campus protests and discussions with the board.

The undergraduate Student Government waited a month until it too urged Ladner’s removal, says Taylor.

“Slowly but surely it became clear [Ladner] did something very wrong,” he says.

But, while students and faculty condemned Ladner’s spending, some also acknowledged the strides that the university made during his 11-year tenure. For instance, figures cited by the Washington Post indicate that the university’s endowment increased from $29 million in 1994 to the current total of $262 million. The average SAT scores of entering freshmen have jumped from 1133 to 1285, and the average grade point average has risen from 3.2 to 3.5, according to The Post.

“Ben Ladner in many ways is the Richard Nixon of A.U. He has done a few great things, but in the end his tenure will be marred with scandal,” Brusoe writes.

Other members of the A.U. community were reluctant to credit Ladner for the university’s improvements.

“The growth of the endowment was partly due to the movement of great amounts of tuition money being moved into savings, not just donations,” Shane Mayer, who graduated from A.U. in 2005 and is now pursuing graduate studies there, writes in an e-mail.

Garrett B. Nagle, who received both his undergraduate and graduate degrees at A.U., says that many of the academic improvements had already begun under former President Richard E. Berendzen.

DISMISSED

Despite the calls for his resignation, Ladner repeatedly expressed his desire to return to the university. But the board did not give him the chance.

“The Board of Trustees of American University decided today that President Benjamin Ladner will not return to American University as its president,” Board Vice Chair Thomas A. Gottschalk wrote in a statement released the night of Oct. 10.

The statement also said that the board adopted the findings of the Audit Committee and would both seek the reimbursement from Ladner and report the additional income to the IRS. According to the statement, the board also formed three committees to look into reforms for the board, begin searching for a new president, and consider replacements for the former Board Chairperson Bains.

Bains suddenly stepped down on Oct. 9, writing in her resignation letter that “a very small, but mean-spirited group” had tried to stymie the investigation and reinstate Ladner.

A second board member, Paul M. Wolff, resigned on Oct. 12 because he did not support the idea of giving Ladner any severance, according to the resignation statement that he sent to the other trustees that was obtained by the Post.

“What is astounding is that despite all that has been made public, some [board] members want to find ways of ‘making it up’ to Ladner,” Persaud writes.

REFORM THE BOARD

The ongoing debate over a severance package has trained growing scrutiny on the Board of Trustees itself.

A.U. community members say that the board was too hands-off in its approach to Ladner, giving him too much power.

Both students and faculty say that they need to be represented on the board, and that the board cannot continue to conduct all its meetings in secret.

“We have a hermetically sealed Board,” writes Silvia in an e-mail. “The Board names its own successors. The alumni have no vote. There are no faculty or student representatives on the Board. This absence of accountability and the failure to serve the University well have undercut the credibility of the Board among students and faculty.”

Taylor says that transparency in the proceedings is important. Currently, the board often meets in “executive sessions,” which means the proceedings are secret, he says.

“So you can’t find out what happened, it’s all sealed, confidential, private,” Taylor says. “That’s very outdated. That’s what we’re looking to change.”

—Staff writer David Zhou can be reached at dzhou@fas.harvard.edu.