After AU, Colleges Increase Scrutiny

"All these things have been swirling about," said Howard Ende, a lawyer in Princeton, N.J., who handles university presidents' contract negotiations.

Congressional scrutiny is just one part of the change in climate. Another is the risk of IRS penalties on both an institution and its trustees in the event an official is compensated excessively. And the higher salaries -- driven up by the increasing complexity of the job, emphasis on fundraising and competition-- have prompted a push for more accountability.

"I read the letter that Senator Grassley sent out," said James W. Dyke Jr., chairman of the University of the District of Columbia's board, which is working on a plan for regular reviews of spending by the president's office. "It's something we feel very strongly about. We want to make sure we're as vigilant as possible."

Trachtenberg said Sarbanes-Oxley prompted some changes in the nonprofit world, but after what happened at American University, "Any thoughtful institution is going to accelerate that and is going to try and make itself as bulletproof as possible from similar criticism."

In the Washington region, compensation in 2003-04, the most recent tax forms available, ranged from less than $200,000 to nearly $900,000 for school presidents. The perks were all over the map, too: GWU owns a mansion in Kalorama for its president; Trinity University's president drives to her own home in her own car. Her only special benefit, President Patricia McGuire wrote in an e-mail, is "a parking space out front and an orange parking cone to protect it (which has gone missing recently . . .)."

"I don't want to sound snarky or saintly, but I'm just disgusted by the whole situation," McGuire said by phone. "Thanks to the dysfunction at AU, now Grassley is up in arms." Most college and university boards are doing just fine, she said, without more rules.

And most presidents aren't in higher education for the money, she added.

But Anthony Knerr, a consultant to nonprofit organizations, said he believes more external scrutiny will make colleges stronger. "I think there's been too much informality, too much sloppiness . . . not having a really strong audit committee . . . not having tough-minded evaluations of their president" and of boards.

"When an event like the American University case hits the papers, it just generates more and more interest in the boards assuring themselves that they're acting in ways that can withstand any kind of scrutiny," Ende said. "No one likes bad publicity."