Once-Friendly AU Board Splintered Into Factions

It is unclear exactly how the board lines up, but nearly all executive committee members are believed to be supporting Ladner's departure, according to trustees who asked not to be named because of the ongoing probe. The committee is composed of investment banker and board Chairwoman Leslie E. Bains, former chairman and corporate leader George J. Collins, investment banker Gary D. Cohn, retired real estate developer Edward R. Carr and retired corporate executive Leonard R. Jaskol.

After several years of harmony, the unity on the board began to fray in 2004 over how much Ladner should be paid by the private Northwest Washington school, which emphasizes public service. The cohesion exploded when the board pursued an audit of his spending over the past three years after an anonymous letter questioned his spending, including first-class travel and use of a full-time chef.

Thirteen trustees, including lobbyist David M. Carmen and lawyer Pamela M. Deese, are on the self-named "ad-hoc committee" that hired Holder, but Holder said he could not say if all 13 support Ladner's continuation as president. Carmen and Deese declined to comment yesterday.

His supporters say that Ladner has helped raise the academic standing of American and only spent what his 1997 contract allowed. They say his past spending is being judged unfairly by standards that have become more rigorous in the wake of corporate scandals and think the best way to handle it is to ensure that guidelines are clear in the future.

"Looking back as Ladner was raising AU funding and doing very well overall, trustees didn't nickel-and-dime him," said trustee John Petty. "The Audit Committee admired the lift Ladner gave to the university and looked at bigger financial issues, rather than individual expenses. We relied on internal procedures for that."

Ladner critics say that he far exceeded the bounds of propriety, as well as his contract, and that his management style, spending and behavior make him unfit to continue as president.

But some of his supporters take issue with board leadership. Some said Bains should have consulted more trustees in recent months, and some were upset that it was the six-person executive committee that placed Ladner on leave without full consultation of the board.

Bains did not return phone calls.

The primary responsibility of a board is oversight, including hiring the president, keeping track of finances, academic programs, buildings and fundraising and managing risk, said Susan Whealler Johnston, of the Association of Governing Boards of Universities and Colleges.

American's board has a trusteeship committee, which worked very closely with Ladner, several trustees said.

Trustees on both sides say they are saddened by what has happened. Some say that at the next full board meeting, it is likely that some trustees will quit.