A key Senate Republican has asked the Bush administration whether Smithsonian Secretary Lawrence M. Small should continue to head the national museum complex.
In a letter this week to the director of the Office of Management and Budget, Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) asked: "Does the Administration believe Secretary Small is the appropriate steward of the Smithsonian?"
The letter is the latest in a series of clashes between Congress and the Smithsonian. Grassley cited "Small's involvement in the extensive financial fraud" reported by federal regulators at Fannie Mae (the Federal National Mortgage Association), where Small worked before moving to the Smithsonian in 2000. Grassley also noted that the museum's finances and executive compensation packages are being scrutinized by the Smithsonian's Office of the Inspector General.
Debra S. Ritt, who as inspector general was overseeing the probe, resigned last week to take a post at the Small Business Administration.
In his letter to OMB Director Rob Portman, Grassley asked that the Smithsonian's Board of Regents, its governing body, appoint the new inspector general. In the past, the Smithsonian's secretary has chosen the inspector general.
"I am concerned that there is an inherent conflict of interest with Secretary Small nominating the IG who will be responsible for continuing the ongoing investigations regarding his salary and the contracts he entered into on the Smithsonian's behalf," Grassley wrote.
Responding to questions, Grassley said in an e-mail: "There's a fox-guarding-the-henhouse dynamic here. It's wrong to let the head of this institution hand-pick the inspector general who critiques his agency."
Smithsonian spokeswoman Linda St. Thomas said yesterday the Smithsonian had not yet received the letter. But she added that Grassley's fears that Small would have total control over the choice of Ritt's replacement are unfounded. She said that a search committee of high-ranking Smithsonian executives would produce a list of candidates, who would be interviewed by Small as well as the audit and review committee of the Board of Regents.
In addition, she stressed that candidates for the job can request a session with members of the Board of Regents without the presence of the secretary.
"The secretary doesn't have the final authority," she said.
Since his tenure began in January 2000, Small has been controversial.
In 2004, he pleaded guilty to importing feathers from endangered birds in 1998; they had been purchased for his private collection of Latin American art, a violation of the Migratory Bird Treaty Act.
Small also made waves when he approved a secret agreement to sell special access to the museum's vast public archives to Showtime Networks. Hundreds of filmmakers, librarians and historians protested, and members of the House Appropriations Committee also expressed outrage over the contract.
The House committee has slashed the museum's proposed 2007 budget by $20 million, and amended the appropriations bill to say that no compensation package at the museum should be more than the $400,000 annual salary the president of the United States is paid. According to public records, Small's compensation, including salary, housing allowance and other benefits, was $813,000 in 2003, the latest year for which records are available.
Before sending his letter, Grassley met with Ritt, at which time, Ritt said, Grassley suggested extending IG audits to investigate executive compensation.
Ritt also said she had discussed the appointment process for the next inspector with Roger W. Sant, chairman of the executive committee of the Board of Regents. Sant could not be reached for comment.
In an interview yesterday, Ritt agreed with Grassley that her replacement should be hired by the regents. "Most IGs who have a board report to the board," she said. "If there's any disagreement from the head of the agency to the IG, I think it provides greater independence."
"The Smithsonian is an American treasure, holding billions of dollars' worth of assets, as well as priceless assets," Grassley said. "And it needs scrutiny from a strong inspector general to function well."
Portman's OMB office responded that it had received Grassley's letter and would review it.
The Office of Federal Housing Enterprise Oversight has been looking at Small's role at Fannie Mae during the late '90s in connection with allegations that top executives inflated earnings to garner larger bonuses.