Leslie E. Bains, chairwoman of American University's board of trustees, resigned abruptly yesterday, a day before she was to lead the panel in a vote about the future of suspended President Benjamin Ladner. Her resignation statement blasted Ladner for "an imperial lifestyle" and called on those trustees who have shown him "blind allegiance" to resign.
Bains said in a statement issued late yesterday that a small group of "mean-spirited" trustees who had "disregarded their fiduciary obligations" had called for her resignation and that she had decided to step down so her tenure would not become a distraction to the board.
"That now is not an issue," she said.
Thomas A. Gottschalk, who had been vice chairman of the board, will become interim chairman until a new leader is elected. The General Motors Corp. executive and general counsel said in an e-mail yesterday: "Bains deserves the appreciation of the trustees and the entire University community for her tireless devotion and complete dedication to serving the best interests of the University during this very difficult period. She has my complete respect."
The resignation, which shocked some board members on all sides of the controversy, was not expected to change any vote at today's board meeting about Ladner's continued tenure, several trustees said. Trustee A. Robyn Mathias said there is consensus on the board that Ladner should not return as president, but disagreement about severance remains.
Bains's resignation signaled just how divisive the investigation has become since it began in the spring when an anonymous letter alleged excessive travel and personal spending by Ladner and his wife, Nancy, at the 11,000-student university in Northwest Washington.
"This board is a dysfunctional board right now," said businessman George J. Collins, who was chairman of the panel when the anonymous letter arrived and who led the board into launching the probe of Ladner. "We need to come out of this somehow with a win-win. We owe it to the university."
Bains, an investment banker, became chairwoman in May even though Ladner had worked against her ascension from the position of vice chairwoman, in which she had served for four years, according to several trustees. Ladner has publicly accused Bains of waging a retaliatory campaign against him.
Today's meeting was called last month to vote on whether and how much Ladner should reimburse the school, how much he should have reported in taxable income to the Internal Revenue Service and whether he should be discharged or reinstated.
Lawyers hired by the executive committee of American University's board of trustees have concluded that Ladner should reimburse the university more than $115,000 for personal expenses and that he should have reported more than $350,000 in additional taxable income over three years, according to sources knowledgeable about the probe. The Justice Department also is investigating.
Ladner and his attorneys have said the expenses in question were appropriate under his 1997 employment contract, have offered to pay back about $21,000 and offered to add $32,000 to his taxable income for the three years.
Acknowledging that the board's "tortured deliberations" had "taken an inappropriately long time," Bains, in her statement, accused Ladner of fighting "every aspect" of the probe. She said he failed to produce documents and he claimed "that the University is contractually required to pay for every limousine ride to his gym to work out and every item of food and drink that he consumes, with no tax consequences to him."
"In addition," she said, "a vocal minority of my colleagues on the Board have consistently parroted the Ladner line, and introduced irrelevant issues aimed at distracting a majority of the Board from what I and many others believe are serious failings by Dr. Ladner: an indefensible diversion of funds from the main mission of our University -- educating the students -- and into an imperial lifestyle to which he had become accustomed."
She did not name the colleagues, but sources familiar with her thinking said she was referring, in part, to David M. Carmen and Pamela M. Deese, who have been vocal in group meetings in criticizing Bains. Carmen and Deese said they could not comment yesterday on the statement because they had not seen it.
John R. Petty, a member of the self-named Ad Hoc Committee of 13, which united and hired an attorney last week, said he was taken aback by Bains's resignation. But, he said, she had been a divisive element and lacked support of a clear majority of the board, not a small clique.
Trustees heard about Ladner's suspension an hour or two before the public did, he said, and the documents behind the decision didn't come until quite a bit later. "That's what gave rise to people asking, 'What is this? Is this an imperial chairmanship?' " he said. "A board is a group that talks among itself. . . . We were disappointed that she wasn't fostering that."
Some students said they were unhappy about the move.
"That's deeply unsettling, especially with what's going on tomorrow," senior Megan Linehan said yesterday. She helped organize a student protest of Ladner that ended with students demanding to talk with trustees in the board room.
"She was the one who gave the okay for us to come in -- I think a couple [trustees] were reluctant, the others ambivalent." But Bains welcomed them in, answered their questions directly and made sure others answered them as well, Linehan said.
Bains recently proposed a plan that included annual audits of senior officers, student and faculty representatives on the board, more oversight and zero tolerance for financial and ethical lapses.