AU: President Ousted, Two Board Members Resign

Paul M. Wolff
Former Member, Board of Trustees, American University
Friday, October 14, 2005; 12:30 PM

An American University trustee who had been openly critical of ousted president Benjamin Ladner resigned from the board on Wednesday, saying he could not support the effort underway to negotiate a severance deal with Ladner.

Paul M. Wolff's departure followed that of the chairman, Leslie E. Bains, who left the board just days ago criticizing Ladner's "imperial lifestyle" and his supporters on the board.

Read the story: Second Trustee Critical of Ladner Departs American University Board (Post, Oct. 13)

Wolff was online Friday, Oct. 14, at 12:30 p.m. ET to discuss his resignation, the ouster of Ladner and the future of the board and the university.

A transcript follows.


AU Senior: Why resign and relinquish decision making power rather than stay and use your position to stop Ladner from receiving a golden parachute? Seems illogical.

Paul Wolff: I resigned because I did not want to be party to any arrangement that gave Ben Ladner any severance other than that which was irrefutably owed to him by law. When the committee to negoiate with him was established, it became clear that no matter how much I respected the committee members, that there was going to be a severance arrangement. I simply could not be party to this.

When the deans and the faculty representatives came to the board meeting on Monday and stated to a person that they were opposed to any severance, I decided then that I would stand with them. That is why I resigned.


Rockville, Md.: Mr. Wolff,

AU's upper administration was largely put together during Ladner's tenure. To what extent do you see Ladner's behavior as indicative of a wider administrative culture? Also, how successful do you think the search for a new president will be, given the current climate at AU?

Paul Wolff: I think that there is no fallout among the faculty, the staff or key officer beyond Ben Ladner. I have noticed that the people at AU other than Ben have been most scrupulous in their use of their university assets. Absolutely 180 degrees different from Ben Ladner. My experience shows that these people have always aired on the side of being conservative and not charging university or if charging, doing everything to keep the cost as low as possible.

We have an outstanding faculty, group of deans and other officials who have been most scrupulous and have only the best interest of American University at heart.

If you had been there at the board meetings where the deans, the faculty and the students spoke out about Ben Ladner, you would have come away from those meetings as I did -- totally confident that below the office of the president we have nothing but outstanding, dedicated people.


Rockville, Md.: Do you have any plans to get involved with students, faculty, and alumni who are organizing opposition to severance for Ben Ladner?

Paul Wolff: Nobody's approached me.


Washington, D.C.: Do you foresee other trustees resigning as well? And can you shed light on how new trustees are chosen?

Paul Wolff: I don't know whether other trustees will resign. I haven't talked to any trustees about the issue. I've neither encouraged or discouraged any trustee to stay or to leave.

I don't know how new trustees will be chosen. I do hope that unlike the past, there will not be the president on the trustee nominating committee.

To clarify, in the past a trustee nominating committee presented the names of individuals for discussion among and approval by the full board. On that committee the last several years Ben Ladner was a member and heavily influenced the selection of trustees. I did not think at the time that was a good idea nor do I think so now. I hope that the next president will not be a member of the trusteeship committee.


Washington, D.C.: Mr. Wolff,

As an AU Alum, former staff member and current graduate student I want to thank you for taking on Ben Ladner. I am however, quite concerned that you and chairwoman Bains are leaving the board at this point. It seems clear that the pro-Ladner faction on the board is in the wrong. I think that Chairwoman Bains's fourteen-point proposal for board overhaul was appropriate, however with your departure and Ms. Bains departure it seems that the board may not have the strength of conscience to follow through with important reform. Do you feel your resignation will help or hurt efforts to rehabilitate the board and bring much needed executive transparency to the AU community?

Paul Wolff: I won't speculate. I hope so. I hope fervently that AU's board gets back on track and follows through on the 14 points that Ms. Bains set forth, but equally important, continues the path of transparency and openness that began under the chairmanship of George Collins. People forget that had George Collins not believed in openness and thoroughness that it is highly likely that the whistleblower's letter would have been swept under the rug. It was George Collins's commitment to openness that brought about the thorough audit and the results that were revealed.

Also, we must all remember the hard work of Len Jaskol as chairman of the audit committee. Mr. Jaskol literally put in hundreds of hours making sure that the audit of Ben Ladner was totally professional and thorough.


D.C. Metro Area: Somewhat recent alumnus here -- I'm curious about two things. One, as a trustee, do you really believe that Ladner is responsible for improving AU beyond what naturally would have happened (more applications, for example ...) And two, does a majority of the board think he should get a golden parachute, or what if anything is he required to get by law/ his contract?

Paul Wolff: First of all, let me talk about the improvment at American University. I think a lot of people deserve credit for American University being a better school than it was in the past. I will not take away from Ben Ladner his contribution. Ben does deserve credit. How much, I won't speculate. But I will say that the credit for American University's improvement must be shared with the deans, the faculty, the administration and the students themselves. It does no good to quibble about what percentage any individual deserves. Let us just say that American University is a better university and let's let everybody there share in the credit.

I believe that there is no contract. Two law firms have given us legal opinions that the unauthorized contract signed by former chairman Bill Jacobs is invalid. This makes in legal terms, Ben Ladner an "employee at will." In such capacity, Ben Ladner can be discharged without any severance or golden parachute. He would be entitled to only those monies which have already been vested, meaning unless he has a legal entitlement to some monies, he can be discharged without getting a single cent more.


AU Alum: Should Ladner sue, as he promised to do if dismissed, would the board of trustees be financially responsible for any settlement or judgement in Ladner's favor? Is this the real reason you decided to resign?

Paul Wolff: No. I was never fearful about any lawsuit that Ben Ladner could bring. I never thought he had any legal claim against the university. I believe that the threat of litigation by Ben Ladner should not in any way deter the trustees. The trustees should not fear litigation.


Germantown, Md.: Mr. Wolff,

To what extent do you think current or former trustees are to blame for the recent situation with Ben Ladner? Doesn't the Board have the ultimate say in how the school is run? How did things get so out of control for so long?

Paul Wolff: First, before George Collins became chairman, the board was kept in the dark about many matters. The chairman of the board before Collins undertook many actions on behalf of the university without informing the board or informing it only obliquely. Nothing points up this problem more so than when the former chairman Bill Jacobs signed an employment contract with Ben Ladner that was neither authorized nor ratified by the board. Furthermore, I and other board members repeatedly asked John Petty, the chairman of the audit committee, whether the audit committee was auditing the president's expenses so that the board would know the full cost of maintaining the office of the presidency.

We were repeatedly assured by Mr. Petty that this was being done and we were told that the additional costs were quite small. Thus it came as a shock to me and other trustees that the university was incurring enormous charges made by Ben and Nancy Ladner.


D.C. Metro Area: I'll ask another question, since you're so gracious in being here today and the alumni office at AU has done as little as possible to encourage alumni interaction/participation on this matter... Without getting specific if you can't, how much of what we the public know about Ladner's expenses (most via the Wash Post) is true/selective? Ladner's big defense the other week in his Op-Ed was that we the AU Community (on campus) didn't know the full picture. Since you've seen the final audit report, can you at all speak to whether this was a witch hunt or whether what the public and the AU Community knows is generally correct?

Paul Wolff: This is not a witch hunt. It never was; it never has been. What has been published and revealed to the public is true and in no way distorts the picture. If anything, it is only a small part of the total picture. Ben Ladner has repeatedly said that the truth has not come out. I believe that we are still waiting for him to reveal the truth. In fact, the truth is that as the audit committee presented to the board, Ben Ladner spent almost $400,000 of university money on personal matters that should be declared as income to him and that he spent an additional almost $125,000 that he should repay to the university. These are no small amounts. That is why I say that what has been revealed to the public is only a small part of the picture.


Rockville, Md.: I will graduate from AU in May with an MA in Ethics and Peace in Global Affairs. In your opinion, what can I do, as a student, to ensure that my degree does not come out looking like a joke?

Paul Wolff: I don't think your degree will look like a joke. Remember, your degree came from taking courses from and being taught by the outstanding faculty that AU has. Your degree is also, in part, a product of your interaction with your fellow students. During the last few weeks I have seen the students and the faculty in action as they have mobilized against Ladner's retention and against any severance. I cannot overstate the pride I have in the faculty and the students. I always believed that they both were outstanding. I now know that if anything, I underestimated their honesty, integrity and devotion to American University. Thus, you should be proud to leave with an AU degree.


Bethesda, Md.: Who wrote the anonymous letter that started the investigation against Dr. Benjamin Ladner? Why were most of the trustees informed about his suspension only hours before the information went public? Who leaked confidential materials to the Washington Post? I bet that if Dr. Ladner brought a libel suit against certain trustees committee, he would have no problem winning his case.

Paul Wolff: I do not know who wrote the anonymous letter nor is there any need to know so. I do say that the trustees and the university owe the whistleblower a great deal. Without this individual the behavior that has gone unchecked for years may have continued.

I believe the trustees were timely informed of the suspension. I believe the suspension was appropriate. The trustees have been told on two occasions by the executive committe why it chose to suspend Ben Ladner. To this day, not a single trustee has challenged or offered any criticism of the executive committee's explanation for the suspension.

I don't know how The Post obtained its materials. As has been made clear by the fact that I allowed any statement I made to be attributed, I did speak with reporters at The Post. As you may recall from The Post articles, various other trustees on both sides of the issue spoke to The Post but without attribution. '

As to a libel suit by Dr. Ladner, I will not attempt to rejudge any chance of success that it may have but I must point out that I have yet to see Ben Ladner or anyone speaking on his behalf correct a single statement of fact that has appeared in the media. I recognize that he and his lawyers have said that the truth has yet to come out. I have yet to see either Dr. Ladner or his lawyers present what they consider to be the truth.


Another Alum --0 Capitol Hill: Does it look like Ladner is in danger of being prosecuted by someone like the IRS? Has he put AU at risk for federal legal actoin? Will Ladner ever be accepted in the acadmic administration world again, or does he have a lucrative private sector job lined up already? What do you think?

Paul Wolff: I wouldn't even begin to speculate whether the IRS or any other government agency would come after him.

I don't know whether Ladner has put AU at risk for any further action. I assume that the board's lawyers are looking into that matter.

Whether he will be accepted or not is not something I could even speculate on. That's for the academic world, for the trustess of other universities and for the faculties and presidents of other universities to decide.

I wish him well. Before this all began I considered Ben Ladner a friend. I liked him, I found him charming, bright and effective. Sadly, these most recent events have forced me to another view.


Washington, D.C.: Besides the obvious spending problems with Ladner, it appears that there are other problems with administration at AU, i.e., the Finance Department (they were the gatekeepers) for letting this go on for years. Where's the accountability there, will someone be held responsible?

Paul Wolff: I think under the leadership of Leslie Bains while she was chairman and Len Jaskol as audit committee chairman, the problems in the finance office have been corrected. I believe that under their leadership, the university now has the checks and balances necessary to make sure that these events do not ever occur again.


AU senior, Washington, D.C.: Would you ever consider a post as president of AU?

Paul Wolff: If you're offering, you're overly kind but I have to believe that there are literally hundreds of better qualifed people out there, including many now at American University.


Alexandria, Va.: If you oppose a golden parachute for Ben Ladner, wouldn't it have been better to stay on the board and vote against it, even if your side loses? I assume board members won't be replaced before the vote, so resignations seem to make it more likely Ladner will get what he wants.

Paul Wolff: You raise an excellent point. One that I labored over for along time before making my decision. You are correct, I could have stayed on the board and voted "no" on any severance. On the other hand, my conscience told me not to stay on a board that would even consider the issue of severance. It was not an easy decision. The choices you laid out are the right ones. I simply did not want to be on the board at the time that Ben Ladner got any severance.


Paul Wolff: In closing, I want to say that I enjoyed my years as a trustee. I wish American University nothing but the best. I will cherish memories of working with such outstanding trustees as George Collins, Leslie Bains, Len Jaskol and Gary Cohn. Even more so will I carry with me forever the greatest of respect for the faculty, the deans and the students.


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