On Monday, President Benjamin Ladner greeted new faculty arriving at American University for the school year. Today, Cornelius M. Kerwin will greet entering freshmen at the opening convocation in an outdoor amphitheater, speaking as acting president.
The university's announcement Wednesday that Ladner would be placed on administrative leave pending the outcome of an audit of his expenses is unusual, said Raymond D. Cotton, a lawyer and nationally known expert on presidential compensation. Some professors also questioned why the university would make such a dramatic disruption to the beginning of the school year.
It's unusual, too, for its publicity, said Sheldon Steinbach, general counsel of the American Council on Education: Private universities usually work these kinds of issues out behind closed doors.
David E. Taylor, Ladner's chief of staff, said: "We've got the institution to run. Attention needs to be devoted to that." The leave is not unusual, he said, and will give Ladner the time he needs to provide information for the audit.
The investigation of Ladner -- sparked by an anonymous letter criticizing lavish personal spending on wine, a personal chef and travel -- highlights the often-contentious and tricky issue of presidential spending, as fundraising becomes an ever-more critical and time-consuming part of a university president's job, and as presidential salaries continue to rise.
Ladner, now on paid administrative leave pending the outcome of the audit, earned a base salary of $633,000 last year. And he is credited by many with dramatically increasing the private donations to the university; one outside expert said the school seems to be in remarkably sound financial shape.
"There is a hard-to-define line between the purely personal and the purely institutional," said Ted Marchese of the Washington-based nonprofit Academic Search Consultation Service, "because the president is always the president."
Cyrus Katzen, a donor whose family name will be on the new arts center at American University, said he has heard allegations about the president's spending. He said he has been to Ladner's house for the fancy dinners with $100 bottles of wine. And he's seen the president raise $30 million for the university over dinner -- at least six times, he said.
Most colleges own the presidential home or pay a housing stipend because so much university business happens in presidential dining rooms. Some schools now pay the president's spouse a salary as well, and many pay for a spouse's travel to university events.
"Some things that can appear to the public as awkward or even inappropriate -- when investigated, it turns out they're neither," Cotton said. "Nevertheless, presidents need to be very, very careful in everything they do, in their appearance, in the car they drive . . . they are always under the magnifying glass."
Some administrators and higher-education experts said the inquiry is yet another sign of a cultural shift. The investigation comes at a time of increased frustration with, and scrutiny of, executive spending. In the past few years, high-profile cases of CEOs' expense accounts, the Sarbanes-Oxley Act of 2002 -- which imposed new responsibilities on chief executives and auditors -- and a push for more stringent rules for charity fundraising might be making boards more cautious, some administrators said.
As salaries rise, higher pay invites more judgment as well.
"I know presidents who have paid to fix leaky roofs out of their own pocket," Marchese said, "just so it wouldn't look like college money was spent on their so-called lavish lifestyle."
Then again, some say spending is not all that hard to figure out.
Patricia McGuire, president of Trinity University in Washington, said she's not familiar with the specifics of what happened at American, but in general, the lines are clear: "The president should be subjected to the same audit rules" as others at the university. She turns in her receipts to the chief financial officer -- and pays for some trips on her own because the small school can't afford them. She has her own house and her own car, she added, and sometimes takes potential donors not to elegant dinners but to cafes at Union Station. Good donors, she said, don't want the president to waste money wooing them. They can get good meals on their own dime.
"This idea that presidents should be minor potentates" and paid accordingly just hurts higher education, McGuire said. "Look at the trouble corporate CEOs are in, too! It's a bad model to emulate."
Dan Mote, president of the University of Maryland, sees nothing new in this. "I think basically every university president needs to think about the possibility that their expenses are going to be looked into," he said. "It's a constant issue -- anytime you spend a dollar of the university's money, you have to think, 'How would this look on the front page?' "
After his first day in his new role, longtime provost Kerwin said that he has no idea how long he will be acting president but that he will "stay the course."
Staff writer Valerie Strauss contributed to this report.