At a little American University coffee shop, someone has posted a sign by the menu with wads of fake money taped to it: Drink of the FY '05, the Ben Ladner. With one shot of espresso $462. Cold milk $6,007. Steamed milk $72,986. Flavoring $544. And finally: "Our gratitude $700,000."
The campus has been simmering since the board agreed to a $3.75 million departure deal with Benjamin Ladner, who was forced out of the presidency last month after an investigation questioned his spending, and signs of bitterness are everywhere.
Yesterday, the Faculty Senate passed a resolution condemning the settlement as grossly excessive, voicing a lack of confidence in the board and asking for a thorough reform before any presidential search is begun.
That followed statements by faculty at AU's six schools and a denunciation of the settlement by the deans. Student groups had called for an overhaul of the board; just around the corner from that coffee shop in the School of International Service this week, a growing group met to plot strategies and coordinate responses.
The Faculty Senate talked about calling for resignations of trustees and a halt to the severance but quickly dropped the ideas as impractical. "I think the discontentment is very broad and very deep," said Lesley Gill, a member of the Faculty Senate, "but I think the ideas people have about what to do next are quite varied."
Trustees have launched an unprecedented outreach to the campus community, starting with a letter of apology late last week and a series of closed-door meetings with campus leaders this week. Some students are hopeful that trustees will go even further, holding a campuswide, open town hall meeting soon.
Acting Chairman Thomas A. Gottschalk said trustees understand campus sentiment about the settlement and have tried to explain why they believe it was appropriate. They have also heard from many on campus who prefer that the board not rush into a presidential search until it has resolved its own governance issues.
"That's an open question," Gottschalk said, and one that trustees will be discussing actively.
Controversy began this spring when trustees decided to audit Benjamin and Nancy Ladner's spending after an anonymous letter accused the couple of extravagant personal and travel expenses billed to the private university. He was suspended in August and removed from the presidency Oct. 10.
Trustees have asked the couple to reimburse American $134,000, report nearly $400,000 in additional taxable income for benefits received from the school and pay the university the money it would have withheld for taxes on that imputed income.
Ladner has maintained that most of the spending was allowed under his contract.
Last week, Ladner and the board agreed to a one-time severance payment of $950,000 and about $2.75 million in deferred compensation and benefits. The agreement, which Gottschalk said is final and binding, cuts all of Ladner's ties to American. By the time the deal was final, five trustees had resigned, changing the balance of power on the board: Some firm supporters of the Ladners remained, and some of the harshest critics stepped down.
The Senate Finance Committee asked American last week for documents as part of an ongoing review of nonprofit institutions.
Some on campus say the severance payment was necessary and infinitely better than risking a costly lawsuit. Some just wish the whole issue would go away so AU can return to being AU.
But others are too angry to let the issue fade. Some parents are furious, and alumni have also weighed in. Edward C. Bou, a 1958 Washington College of Law graduate who has donated substantial sums to the school, said he was disgusted with the severance package, "especially since we have so many deserving and impoverished students who are having great trouble staying in school."
Students for a New AU started when three seniors became angry about the investigation of Ladner and wondered when someone would organize a protest. "Finally we were just like, somebody is going to have to do something. It's going to have to be us," said senior Maeve Reed. Now they're talking about a long-term strategy, coordinated with student government and other leaders, that includes messages to send to Congress and revised bylaws to present to the board.
The Student Bar Association led a group drafting a plan that, among other things, calls for regular audits, a new process for appointing trustees and more information for students. The Graduate Leadership Council denounced the board and called on it to halt any presidential search until the panel is reconstituted. And the undergraduate student government not only decried the settlement but encouraged everyone to petition Congress for change at American.
Megan Linehan, one of the founders of New AU, said student leaders' meeting with incoming board Chairman Gary M. Abramson on Tuesday was a good first step. They thanked Abramson and asked him to back his words with actions, such as town hall meetings. They plan to talk with trustee Matthew S. Pittinsky on campus today.
The Faculty Senate resolution ended by saying that members are encouraged by the board's letter of apology to the campus, confident of the strength of the university and looking forward to working with a reorganized board. Gottschalk said the board will continue to talk with faculty and students and others on issues ahead. "This is just the beginning," he said.