Controversial CEO to Leave Smithsonian Business Ventures

A spokeswoman for the Smithsonian, Linda St. Thomas, said the institution discourages but does not prohibit supervisors from having relationships with their direct subordinates. The policy does prohibit preferential treatment. St. Thomas said the Smithsonian's human resources department had received no formal complaints about Beer and Kim, who met at Sundance when Kim was a seasonal employee at the film festival.

Beer hired Kim as an executive assistant and gave her five promotions and four raises over the next six years. Kim, 39, now serves as a vice president and is one of the highest-paid employees in the business unit, earning more than $140,000 in 2006.

Kim did not return messages seeking comment. Beer declined to be interviewed, but provided The Post last week with a four-page letter in response to questions. He declined to address questions about his relationship with Kim. "Ms. Kim is an accomplished professional who has received promotions and raises based on merit," Beer said. "Ms. Kim was selected for that position at the request of Showtime as they were impressed by her performance."

Grassley and some members of the institution's board of regents had been quietly pressing for Beer to step down, according to sources familiar with the matter. Smithsonian executives had wanted to avoid forcing Beer out and being required to pay a full one-year severance package outlined in his contract, the sources said.

"A number of whistle-blowers have described problems from out-of-control spending to sweetheart promotions," Grassley said. "We need to have leadership at SBV that puts the Smithsonian first and high executive pay and perks in the rearview mirror. I don't know how you justify keeping someone with this record on the payroll until September."

Beer submitted his notice in a letter, dated Monday, to Samper.

In a statement to The Post yesterday, Beer defended his tenure.

"The fact is that SBV doubled revenue per museum visitor during my tenure," he wrote. "It is unfortunate that the focus is not on this financial success. The January 2007 IG report's mischaracterization of SBV's performance may lead to changes in the business model that will damage the Institution and the pocketbook of the American taxpayer. That is the real story."

Beer was hired seven years ago amid predictions that profits could be doubled through new initiatives and improved business practices. The new business unit was deemed vital to the Smithsonian's future as expenses, particularly a backlog of maintenance and repairs for the institution's vast 18-museum complex, continued to rise faster than federal funding, which accounts for three-quarters of the budget.

Instead, revenues have been flat and profits have dropped, prompting Samper this month to launch a top-to-bottom review of the business unit.

At the Smithsonian, Beer's biggest accomplishment was the deal he struck with Showtime, which granted the network virtually exclusive access to the institution's collections in exchange for a 30-year agreement expected to provide the Smithsonian with at least $99 million. The deal caused what Small called "a tremendous hullabaloo." Critics included librarians, historians and filmmakers, ranging from public television's Ken Burns to retired Lt. Col. Oliver North.

Beer negotiated the deal while he was an investor in a joint venture involving Showtime. He alerted Smithsonian ethics officials of his investment in March 2005. After a three-day review, the Smithsonian's general counsel determined there was no conflict of interest because Beer "did not have a general partnership interest" and was not involved in the venture's decision-making. The Government Accountability Office reviewed the issue and concurred. Beer currently has no ownership interest in the joint venture involving Showtime, he said in his statement.