Benjamin Ladner is gone as president of American University -- but, paradoxically, so are his harshest critics on the board of trustees.
Many on campus are trying to make sense of that new reality as the AU community attempts to move past the scandal that led to the abrupt end of Ladner's presidency. A cluster of trustee resignations last month shifted the balance of power on the board and changed the terms of the debate -- just as the board settled on a $3.75 million departure deal with Ladner and began talks about hiring a new president and evaluating its own effectiveness.
Tonight trustees have scheduled an unusual open forum on campus, and tomorrow the board plans to regroup with new leadership and talk about moving forward.
But campus leaders and others who have resoundingly denounced the board and the settlement deal -- some are considering lawsuits -- are skeptical about whether the people they blame for the breakdown can be trusted to bring about solutions.
"The bottom line is that this board has been deemed not competent by the faculty and the students," said Kyle Taylor, president of the Student Government Association. "We don't have faith the trustees can restructure with better governance, and we don't think they have the competence to pick a new president."
What happens next at American will have implications far beyond the campus in Northwest Washington, as other governing boards watch the outcome, several experts said. With increased scrutiny on tax-exempt institutions from Congress, "it's important to the nonprofit community that AU handle this right," said Deborah S. Hechinger, president and chief executive of BoardSource, a nonprofit organization that offers governance consulting.
Ladner was asked by a deeply divided board to step down as president of the private university Oct. 10 after an investigation of his and his wife's spending. The board asked him to reimburse the school more than $100,000 and pay taxes on hundreds of thousands of dollars in additional income for the three years audited. On Oct. 24, Ladner agreed to cut ties to American in exchange for a one-time $950,000 severance payment and about $2.75 million in deferred compensation and benefits.
By the end of October, five of the 25 trustees had resigned.
Since then, board members have been talking to the AU community and governance consultants. "There is still tremendous potential at AU," said Gary M. Abramson, the incoming chairman, "and maybe I can help turn this debacle into an opportunity."
Things haven't quieted down. Charles E. Grassley, chairman of the Senate Finance Committee, demanded in a sharply worded letter recently that documents be provided as part of a review of nonprofit organizations. In addition, all the deans, student government groups and the Faculty Senate denounced the severance package and voiced a lack of confidence in trustees.
Many on campus and off are working to overturn the deal and the board.
The entire panel should be "removed and replaced, either by resignation or by force," and students, faculty and alumni should appoint new members, has written Robert F. Pence, a former trustee who has been a major donor to the school. According to his letter, millions more dollars could be owed to American from the settlement and the money paid out under a disputed employment contract.
People continue to ask why the trustees who left did not stay to carry on the fight.
The board began to split last year over a dispute, led by trustee George J. Collins, to limit Ladner's pay. As the audit of his spending dragged on this summer, some trustees complained that board leaders were heavy-handed and secretive -- especially when they suspended Ladner in August without talking to the full board.
Animosity worsened after reporters wrote about confidential board documents. Opposition to the executive committee, led by then-board Chairman Leslie E. Bains, grew to the point that 13 trustees banded together, calling themselves the ad hoc committee, and hired an attorney.
Bains announced that she was stepping down Oct. 9, the day before the vote to remove Ladner, saying she did not want to be the issue.
Michael D. Capellas, chief executive of MCI, stepped down in mid-October citing the demands of his job. Three other trustees -- lawyer Paul M. Wolff, retired businessman Leonard R. Jaskol and Collins -- quit, criticizing the severance talks.
Many on campus were startled and disappointed. "They were really on our side," said senior Will Mount, head of the Residence Hall Association. "They should have stuck it out, even if they were the minority, and play a part in the process."
Students, faculty and some trustees speculated that those who left may have wanted to limit their liability -- the Internal Revenue Service can impose sanctions on nonprofit boards for overcompensation and other issues, federal agencies had been asking questions and senators were watching.
Bains denied that: "This is not an issue of potential litigation. It is an issue of integrity and doing what's right."
Wolff said that he had been worried for more than a year about sanctions being imposed, and had even warned the board, but that he left because the increasingly mean-spirited majority wanted to help Ladner, not the university.
Now the board looks very different, with Acting President Cornelius M. Kerwin in Ladner's seat and the ad hoc committee accounting for 13 of the other 19 members.
Some of those committee members said the campus community mistakenly views the ad hoc committee as a pro-Ladner group, when nearly all voted that he had to leave.
Abramson said that board members are "hurt" by calls for them to resign and that most people on campus want to move on.
Staff writer Allan Lengel contributed to this report.