washingtonpost.com
Small's House Rarely Used For Business
Ex-Official Got Allowance But Entertained at Museums

By James V. Grimaldi and Jacqueline Trescott
Washington Post Staff Writers
Thursday, April 19, 2007

Lawrence M. Small, the former secretary of the Smithsonian, rarely used his Northwest Washington mansion for institution-related entertaining in the past four years, despite receiving a housing allowance totaling $1.1 million since 2000 to make his residence available for official functions, institution records released yesterday show.

Small used his property for Smithsonian events only four times in the past four years and had not used it since 2005.

The new details emerged in a 13-page letter from Roger Sant, chairman of the Smithsonian Board of Regents executive committee, to Sen. Charles E. Grassley (R-Iowa), whose office has been investigating abuses at nonprofits such as the Smithsonian. Inquiries into Small's controversial compensation and expenses resulted in Small's resignation last month.

Grassley expressed dismay that in 2005, when Small was paid $179,322 in housing allowance, the secretary hosted one Smithsonian-related catered dinner for 10 people. "The American taxpayers will be pleased to hear on the day after filing their taxes that they helped underwrite a dinner that cost over $18,000 a plate," Grassley said. "There clearly needs to be a big broom to sweep out the problems at the Smithsonian and the 'anything goes' culture."

Small responded yesterday to questions from The Post about the use of his home via e-mail: "Given the exciting new museums and modernized exhibits which opened over the last several years, it became overwhelmingly clear it was far more compelling and cost-effective to entertain donors and potential supporters in the Smithsonian's unique settings than in a private home."

The regents also revealed in the letter to Grassley that Small's controversial first-class travel was something he insisted upon when he was negotiating for the job, which he got in 2000. "Mr. Small made this provision in his contract a 'deal breaker,' " Sant said.

Small's employment agreement permitted the former president of the Federal National Mortgage Association to fly first-class on official trips and "to expense spousal travel when her presence is appropriate."

Records obtained by The Post yesterday show that Small's wife, Sandra Small, a translator, accumulated more than $90,000 in travel expenses charged to the Smithsonian, including for trips to Hawaii, Las Vegas, Miami, San Francisco, New York, Panama, Chile and India. The trip to New Delhi cost more than $14,000.

"All of Mrs. Small's travel was related to activities having to do with Smithsonian business such as fundraising events, Smithsonian National Board overseas trips, and openings of Smithsonian facilities and exhibits," Small said in his e-mail.

Other Smithsonian employees were required to obtain permission in advance to take a spouse on a trip and, after Small resigned, acting Secretary Cristián Samper immediately said he would follow that institution rule.

Details about Small's expenditures were first revealed in what was labeled a confidential letter to the Board of Regents by the Smithsonian inspector general and in an investigation by The Washington Post. Lawmakers raised questions about the salary and spending of Small, the chief executive of a public museum complex that has a budget of $1.1 billion, 70 percent of which comes from the federal government.

In February and March, The Post reported on $2 million in housing and office expenditures by Small, as well as $90,000 in unauthorized expenses.

For his housing allowance Small received up to $150,000 a year, with some annual increases, from 2000 to 2006. But he did most of his entertaining at home in 2000, records show. Small entertained 26 times that year at his house and his privately owned gallery where he kept a collection that authorities later said contained illegally imported feathers from endangered birds. Records show that the Smithsonian-related events dwindled to two in 2004.

"We were surprised to find that Mr. Small used his home and gallery on a number of occasions during the first years of his tenure, but that after 2003 there were very few events, and no events from 2005 to the time of his resignation," Sant said in his letter to Grassley.

Grassley said the regents' surprise was "very troubling" because "they were paying Secretary Small hundreds of thousands of dollars to entertain in his own home."

The housing allowance was based on an estimate of the value of his home, as well as an apartment-gallery he owned on Calvert Street NW, about a mile from his Woodley Park residence. Small estimated his house and gallery were worth $4 million. There is no record that they were independently assessed. Small owned the house free and clear, so there was no mortgage. But Small figured that if he had had a mortgage, he would have paid interest of $340,000 a year, calculated at 8.5 percent. He submitted 50 percent of that amount, which exceeded the agreed-to housing allowance and "therefore he should simply receive the full $150,000/year payment in equal monthly installments," Sant wrote. "It was apparently on this basis that fixed monthly housing payments were made to Mr. Small without further substantiation or production of records."

The regents also responded to Grassley's questions about inaccurate information provided to The Post regarding Small's unauthorized, $14,509 round-trip Learjet charter flight to San Antonio in May 2001.

The inspector general found that Small's chartered-jet travel was "excessive" and breached Smithsonian policy. After attending "Smithsonian-related social functions" in Texas, Small returned to Washington for a Board of Regents meeting on the Learjet. Also on board was Sen. Bill Frist (R-Tenn.), a regent at the time.

The inspector general noted that in 2001, a Smithsonian spokesman told The Post that Small had paid for the trip using a discretionary account funded with his own money.

"That characterization is inaccurate," the inspector general said. "The trip was paid for with Smithsonian funds."

Small had given the institution almost $430,000, primarily in securities, making him eligible for a tax deduction. But there was no separate discretionary fund, the inspector general said. Inspector General A. Sprightley Ryan noted that any donations become the property of the institution and are subject to its guidelines, which require "reasonableness."

Sant said that Small "had the impression at the time that it was to create a slush fund to use for things, and that was ultimately incorrect."

In his letter, Sant suggested the inaccuracy was the result of reporting for the 2001 news story. "Accordingly, we do not believe that the board should have considered or taken disciplinary action concerning that incident in 2001," Sant wrote.

However, Ryan said she does not know how the inaccuracy occurred or how the false information ended up in The Post. The Smithsonian never asked for a correction.

Yesterday, a retired employee of the Smithsonian Office of the Comptroller said for the first time that extraordinary efforts were undertaken regarding the Learjet expenditure.

Ann Ruttle, a Smithsonian financial specialist and institution employee for 35 years who retired in 2006, said that some months after the Post article appeared she was ordered to amend Small's travel voucher and remove the expenditure from the Smithsonian trust fund account for Small's office. Ruttle said she understood the expense was then added to a different account that matched a fund of Small donations.

Ruttle, repeating comments she previously had made to The Post off-the-record over the course of three years, said her direct supervisor was on vacation when superiors "came to my cubicle and said, 'We're not asking you to do anything illegal,' and immediately I knew it was.

"I said I would like to see something from the secretary [Small], and they said, 'Just do it,' " Ruttle said. "I was asked to remove it from the secretary's fund to match his statements" to the media about paying for the flight out of his own account.

"I thought it was absolutely wrong and unethical," Ruttle said.

View all comments that have been posted about this article.

© 2007 The Washington Post Company