American U. Board Split On Keeping President

"The contract's very clear," Ladner said.

He said he has gotten assurances from some supporters at AU's overseas campuses that they will pick up the tab for his travel there; the report noted that more than $100,000 already has been paid to AU.

AU's credit card policy allows purchases for university-related business only, with anything costing more than $500 requiring pre-approval. Only full-time employees can have cards -- an issue for Nancy Ladner, because she is not an employee but volunteers time for the school. Jewelry and alcohol purchases are not allowed, though both are included in the report of her credit card charges. And the policy requires receipts and documentation of spending.

The report concluded that there is no indication in the 1997 agreement or anywhere else that this credit card policy does not apply to the Ladners.

The Ladners' social secretary, who has been reassigned at the university, told auditors that their receipts were kept for one year and then destroyed.

Attorneys for the president argued that Nancy Ladner's "full-time work managing the residence" would be "rendered hollow" if she could not be reimbursed for personal purchases by the university.

Some trustees said it doesn't matter what Ladner was allowed to do -- that as president of a school without a large endowment, reliant mostly on students for its operating expenses, he should have the judgment and restraint to avoid excesses.

"Sixty percent of our students receive financial aid," Paul Wolff wrote in a letter to fellow trustees. "Many work one or two jobs so that they may attend American University. . . . We have held our faculty to small, single digit salary increases . . ." Yet, he went on, the Ladners' personal chef had average raises of 11 percent over the past five years, and their social secretary got a 26 percent raise in her first year on the job.

Ladner was so pleased with his chef that he encouraged him to take his wife to dinner at the Ritz in Virginia one night, according to the report. The bill, charged to an AU credit card, was more than $500.

The chef's position was eliminated this summer.

Ladner has agreed to pay the university more than $21,000 for expenses including family parties, a luncheon for friends, and meals and groceries taken to their vacation home on Gibson Island.

Ladner is reimbursing the university for his son's engagement dinner, but legally, he said, it's a school expense: "My contract says yes . . . it covers all meals in the residence."

Since his private and business lives are so intertwined, he said, it doesn't make sense to separate out every single personal expense. It's not, "You ate breakfast in the residence -- and you have the nerve not to send us a check for the cereal you ate," he said.

The chef paid by the university routinely prepared lunch and a two- to four-course dinner for the Ladners, whether or not they were entertaining, according to the report, and sometimes packed up meals for them to take to their weekend home on Gibson Island.

Ladner said his wife thought he had paid for such personal events as the birthday parties they had for one another, some costing well over $300 a person, with such things as hand-shucked Maine scallops and vintage Champagne. "I never thought about it," he said. "We don't go downstairs and look through the records."