Correction to This Article
Earlier versions of this article transposed the number of workdays that former Smithsonian secretary Lawrence M. Small and former deputy secretary Sheila P. Burke were absent between 2000-2007. Small missed 400 days while Burke missed 550. This version has been corrected.
Report Slams Small's Tenure
Smithsonian Had 'Ill-Suited' Leader

By James V. Grimaldi
Washington Post Staff Writer
Wednesday, June 20, 2007 4:58 PM

Former Smithsonian secretary Lawrence M. Small took nearly 10 weeks of vacation a year during seven years running the vast museum complex and was absent from his job 400 workdays while earning $5.7 million on outside work, according to an independent commission report to be released today.

The Smithsonian's second-ranking official, Sheila P. Burke, was absent from her job as deputy secretary for 550 days while earning $10 million over six years on non-museum work.

The report, obtained yesterday by The Washington Post, concluded that Small "created an imperialistic and insular culture" that discouraged dissent, kept secrets and limited the flow of information to the Board of Regents, whose job it was to hire and oversee Small.

"Mr. Small's management style -- limiting his interaction to a small number of Smithsonian senior executives and discouraging those who disagreed with him -- was a significant factor in creating the problems faced by the Smithsonian today," the report concluded. "His attitude and disposition were ill-suited to public service and to an institution that relies so heavily, as the Smithsonian does, on federal government support."

The report also found that Small's fundraising ability, which earlier had been used to justify his salary and housing allowance, was less effective than that of his predecessor, I. Michael Heyman, who raised more money his last year on the job than Small did in 2006. The report found that fundraising declined and business revenues dropped during Small's tenure, "making the Smithsonian more reliant on federal appropriations and grants."

The 108-page executive report to be released today was prepared by an independent panel led by former U.S. comptroller general Charles A. Bowsher with the assistance of the Williams & Connolly and Arnold & Porter law firms. The panel investigated lavish spending and management at the nationally revered 160-year-old institution, which encompasses 18 museums and the National Zoo.

Roger Sant, chairman of the regents' executive committee, said in a statement last night that the regents were "sobered by the findings on executive compensation, financial controls and ineffective policies. We take all the findings very seriously. . . . We have identified and are learning from our mistakes. We are now turning the corner."

The review committee was formed by the regents following reports about unauthorized expenditures, including charges for chartered jet travel, Small's wife's trip to Cambodia, luxury car service, hotel rooms and expensive gifts. On Monday, in anticipation of the report, the regents announced management reforms.

Small, while taking substantial time off, earned his full salary -- $915,568 his last year on the job -- because he was permitted unlimited leave. Burke, who also had no restrictions on leave, earned $400,000 in her last year on the job. The terms of Burke's employment were known in most instances only to Small and Burke. Information about Burke's outside employment and activities on more than a dozen nonprofit boards and commissions was not shared with the Board of Regents, the report found.

Small resigned in March and Burke announced her resignation on Monday on the eve of the independent review report.

The investigators found that "Mr. Small placed too much emphasis on his compensation and expenses." Small's compensation far exceeded that of prior Smithsonian secretaries -- 42 percent higher than his predecessor's when he began in 2000 and 250 percent higher when he left seven years later.

Small "aggressively guarded each and every element of what he viewed as his rightful compensation package," including his $150,000-a-year housing allowance. Small's contract stated that the allowance was meant to compensate Small for his use of his home for job-related entertainment, but the review board determined that it was "simply additional salary."

Earlier this year, the Smithsonian inspector general wrote a confidential report, later obtained by The Post, finding that Small had $90,000 in unauthorized expenses. When two top institution officials attempted to modify the terms of his contract, Small objected.

"I'm not willing to discuss giving up one iota of what the institution agreed to provide me before I came to work," Small wrote in an e-mail. "It would represent the highest form of naiveté to think . . . I would entertain some form of 'give up.' "

Small further demanded that the Smithsonian pay his attorney's fees if he needed legal counsel and suggested that if he lost his first-class travel he would demand an increase in his housing allowance. He also insisted that the two officials, James Hobbins, his executive secretary, and John Huerta, the general counsel of the Smithsonian, not disclose the discussions to the Board of Regents or to Sant, who also chairs the board's audit committee.

"I do not want any of my comments passed along to Roger," Small wrote in an e-mail. "We shouldn't go to Roger until we are completely comfortable that any proposed amendment is good for the institution, good for me, is economically equivalent to the existing arrangement and . . . protects everyone from adverse consequences."

The independent committee criticized Small's hiring by "a very small group of regents." That group included Chief Justice William Rehnquist, former senator Howard Baker (R-Tenn.), Rep. Barber B. Conable Jr. (R-N.Y.) and Wesley S. Williams Jr., a former partner at Covington & Burling law firm.

The report stated that there was little review of Small's salary demands or of his subsequent increases. In 2001, for example, Small requested that his salary be placed at the 75th percentile of what Smithsonian management had chosen as comparable institutions, while other senior staff received salaries at the 50th percentile.

The independent committee also called on the Smithsonian to audit all expenditures by Small. The report said that "Mr. Small and his staff exercised sole discretion in determining which expenses would be charged to the Smithsonian."

Smithsonian officials had defended Small's salary and housing allowance earlier this year by saying that Small had been a prolific fundraiser, "personally" raising about $1 billion. However, the independent review committee found that many of the largest gifts in Small's tenure had been initiated by predecessor Heyman.

While Small helped bring in three large donations totaling $155 million, "those donations originated from the work of others," the report stated.

The committee found that Small, who received a $1.1 million housing allowance for making his home available for institution fundraising, rarely did so. Small entertained 47 donors at 18 fundraising events at his home from 2000 to 2007, mostly in the early years of his tenure.

"Calculated as a per person venue fee for fund-raising, this works out to be over $25,000 per potential donor or almost $70,000 per fund-raising event," the report said.

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