Controversial CEO to Leave Smithsonian Business Ventures

Marcus Owens, a Washington attorney who previously ran the tax-exempt section of the Internal Revenue Service, told The Post that he would have advised against Beer's participation in the Showtime deal in order to avoid the appearance of a conflict.

In his statement to The Post, Beer defended the Showtime deal as a good one for the institution and said his expenses were justified. He said his expenses averaged $35,000 per year between 2000 and 2005, the period under review by the inspector general.

"All of these expenses were legitimate business expenses incurred in furtherance of the mission and operations of Smithsonian Business Ventures," he said. "During the course of the review, we learned that documentation for some expenses had been lost or misplaced."

A former Washington lobbyist, Beer in the 1980s joined Sundance, which Redford, the Oscar-winning director, founded to support independent films. Beer quickly became a controversial figure within Sundance for spending lavishly on his expense account, according to Peter Biskind, who wrote about Sundance in Premiere magazine and later in a book.

Eventually, Beer moved to the for-profit Sundance Group. He helped found the Sundance Catalog Co. and the Sundance Channel. He left in 1998 to develop his own private investments.

Beer began with the Smithsonian in August 1999, and the business unit was formally launched in August 2000. Beer was hired because he had been able to start a business unit at Sundance.

The Smithsonian's businesses -- two magazines, gift stores, restaurants, Imax theaters, mail-order catalogues, licensing deals and a travel service -- contribute less than 4 percent to its $1 billion budget. But Smithsonian leaders say the business cash is crucial because it is unrestricted -- not earmarked for specific uses.

However, the Smithsonian's inspector general found that profits fell from $27.9 million 1999 to $23.9 million in 2006.

Beer blamed the Sept. 11, 2001, attacks, a soft magazine-ad market and sinking catalogue sales. He said the inspector general's report omitted "market conditions and management's actions to address them."

Museum directors complained after profit-sharing from gift shops fell from $7.9 million in 2005 to $5.6 million last year. "Needless to say, we are shocked, disappointed and discouraged," Samper, then director of the Museum of Natural History, wrote in an e-mail to Beer.

Beer replied to Samper that the numbers were partly the result of changes in a new accounting system.

In a report released in January, Inspector General A. Sprightley Ryan found numerous accounting errors and questioned the accuracy of the business unit's financial statements. Ryan also urged that the business unit jettison "market-based pay" for base salaries and "pay for performance" for bonuses.

Ryan found that pay had increased while revenues remained flat and profits declined. In 2001, the business unit's payroll equaled its profits of $26.2 million. Last year, paychecks exceeded profits by $2 million. Beer earned $570,317 in 2005. The top 10 executives in the unit made a total of $2.7 million in 2006.

Smithsonian Deputy Secretary Sheila Burke, who sits on an internal institution board that oversees the unit, rejected Ryan's suggestion.

Documents obtained by The Post show that Beer approved in 2006 a bonus package of about $136,000 on top of the $325,000 salary for Steve Shaiken, the president of museum retail. That was in addition to Shaiken's $100,000 relocation package from Florida to Washington, which included $77,000 for the closing costs for a Ritz-Carlton condo and $22,000 to move household goods.

Shaiken left his job after one year and one day, and was allowed to keep all of his relocation expenses. Shaiken did not respond to messages seeking comment for this story.