October 10, 2005
Breaking News: Ladner Fired, Severance in Question
Addressing students who had waited patiently for almost 12 hours, members of American University's Board of Trustees tonight stated that troubled president Benjamin Ladner's tenure had come to an end, though questions concerning his severance package remained unanswered.
Facing weary students and members of the local media, board chairman Thomas Gottschalk and university vice-president Cornelius Kerwin announced that Ladner -- who was suspended in August in the wake of allegations that he charged almost $500,000 to the university for personal expenses -- would also be forced to pay the university $125,000 for certain expenses and report $398,000 in additional taxable income to the IRS. When asked what the board had decided concerning Ladner's severance package -- whose $1 million price tag and other generous concessions angered students and faculty -- Gottschalk claimed it was a "confidential personal matter" that would be dealt with at a future meeting, possibly in November.
Student organizers quickly took to the podium as trustees and university administrators filed out, declaring that they were pleased that Ladner had been dismissed but surprised that no decision had been made on his severance package.
The board also announced it had called for the formation of three committees, one to lead the search for a new president, one charged with nominating a new board chair, and one to deal with governance issues. Students had demanded that the board add new seats for students and faculty, though no specific mention of this was made by trustees.
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Dear Students: Keep Trustees' feet to the fire.
Kudos to those who organized and stood up to say something about what the university's priorities should be. Maybe the adults might learn a thing or two from the youngins 1/3 their age.
Ironically -- after some criticized the students for not being credible -- it's the decision by the university to fire Ladner that was necessary to stem what is sure to be serious revenue and perhaps talent losses for the university.
As for the board chair's claim of severance being a confidential personnel matter, I've heard that self-serving song before. It's probably a load of crock, frankly.
Sure, there may well indeed be sensitivities to the issue in that there are probably ongoing negotiations. But make no mistake about it: any severance package awarded to Ladner will require approval by the Board as a financial expenditure, and the accompany receipt better go beyond, "golden parachute" as an explanation.
I recently heard of an adage that is so appropo here: "they tell you it's too early, until it's too late."
The Board will say they can't discuss the details. Then, they'll approve the deal, and the details will eke out, and students and alumni will be outraged. That's why what must happen now, if anyone gives a damn about priorities and accountability at American U., is students and alumni and faculty must hold the trustees' feet to the fire for: 1) Openness; 2) Exercising of fidicuciary responsibilities; and 3) Budget priorities.
Why is the Board reportedly allowing as much as $400,000 in expenses to be legitimately reimbursed by Ladner?
Remember, the severance will be on top of that.
The question's got to be asked: is it justifiable to give Ladner both a "pass" on $400,000 in expenses (taxable nonetheless) and a severance package on top of that?
I'm skeptical that the severance package for the university's president is a confidential personnel matter. It might, but I'm skeptical. My gut is their hiding behind the ever-expansive cloak of "it's a confidential, personnel matter."
Some public interest-minded legal precedence citation is in order.
Bye-bye Ben
As much as I am happy that Ladner is gone, (I was one of the students in the protest who ended up at the doors of the Board of Trustees), I'm not so sure that the school should refuse to pay him anything. What will eventually happen is the board will get some lawyers and ask them if it be more expensive to pay Ladner off, or to get sued by Ladner. This is what's going to drive their decision.
I almost feel like it would be worth a few thousand extra dollars just to make sure that Ladner doesn't get anything out of this. But if the lawyers come back and tell the board that the choice is between a $100,000 golden parachute or $1,000,000 in legal fees for a case that they will probably end up losing, I guess I'd have to opt for the parachute.
I think that the board should try to get as much legal advice as possible before they come forward with a plan to get Ladner out of the university for good.
The whole thing should be vigerously debated by the entire AU community, and I'm not sure that's happening
I am going to miss Ben Ladner. I am going to miss seeing the perfect shine of his chauffeured black car drive by as I waited interminably long periods in the rain and the cold for an AU Shuttle to the metro. His license plate said AU One. I thought about the AU one I had, as my middle finger tried to rise out of my coat pocket as I saw my tuition dollars drive down his driveway with my broken dreams.
I am going to miss the Where’s Waldo aspect of spotting him on campus. I once saw him in 2000 on the stairwell next to experimental theater. He didn’t say anything, but his eyes said, “You caught me!” When I graduated in 2002 and he spoke to my class, I swear to God I think it was the first time I saw him in person without him running the other way.
I am going to miss the 15-point-plan. The plan where point fifteen I believe was for every member of the campus community to lose weight. I found this ironic cause Ladner’s the guy who opened up campus to McDonalds, Chic-fil-A and Subway.
I am going to miss the guy who killed the old tavern and put those crayola death chairs in there instead.
I am going to miss Ben, the guy who screwed AU with its pants on and didn’t have the sack to give the campus a reach around.
Getting back to that license plate, I think it also said “No Taxation without representation,” I guess Ben didn’t get the memo on that one either. DC’s about universally getting screwed, paying a premium for the privilege of being here. That’s what they tell us every time they jack up tuition or when they charge us Georgetown rates for Spring Valley parking. AU’s got representation now, finally. It’s time for Ben to pay up.
** Quickly organize "American University's First Annual Symposium on Academic Ethics."
Mike B., and AU's Law Professors like Jamin Raskin etal.,
Request -- and if at first unsuccessful, then demand -- a copy of the Naked Emperor's contract. I'm knowledgeable in public school law as opposed to private school law, but I can't imagine the last contract between him and the U., which was approved in a public vote by the Trustees, not being a public document.
There's a section on expenses, I bet.
Sure, you might have enough boring literature to read, I grant, but what you got to look up -- if you haven't already -- is the binding language specifying just what the U. told Bin Ladner he'd be entitled to for expenses. That's the homework ya gotta do. (Assuming there's some clarity in the language.)
Or maybe there's university policy spelling out the kind of expenses that employees like Ladner in the very, very, very ivory tower he created for himself with your tuition dollars, are entitled to -- and whether any documentation on his part was required, before or after the acts he consummated.
The basis upon which the U. trustees should decide how much tuition money from you they should be quickly willing to fork over to academia's Michael Milken lies in what's in the contract, and what your piggish, former standard bearer expensed legitimately or not legimitately.
If it's argued credibly (I can't remember what's been written on this) that he broke any laws, such as federal tax law, then the U. trustees would be morally derelict and strategically incompetent, not to mention violative of their fiduciary responsibility, to "pay up now to avoid legal fees."
Yuch! That'd be merely giving in to Ladner's strategy! The question is whether or not the U. has a strong set of legal legs to stand on. It lies in the contract/U. policy on expenses. And if the U. doesn't have a strong set of legal legs here, then they wrote up a lousy contract -- and then you should blast their freakin' counsel who wrote it up if they're will with the U., and maybe call for their replacement.
Lastly, some effective satire can go a long way. If the language in the contract/U. policy appears to argue persuasively that Ben's been improperly Ladling some soup of gold, and/or if new Board Chairman Gottschalk pushes to give Benjamin a golden parachute, consider:
* Hoisting up a banner by the A.U. School of Law, rechristening it, "The Ladner-Gottschalk School of Law."
* Or perhaps, "The Gott Gutts? School of Law." I'd suggest another word there, but it'd probably be counterproductively sophomoric. Witt is effective. Cheap humor ain't.
** Quickly organize "American University's First Annual Symposium on Academic Ethics." I'm sure you got some quoted experts in your midst.
Fifteen years ago as an elected school board trustee for my regional high school, I brought 300 citizens to a board of education meeting in the heat of the night in August to protest the golden parachute the (rest of the) board was expected to soon approve for its then superintendent. In advance, I revealed enough details to get the public agitated enough to show up -- while abiding by my legal responsibilities as a member of the board. The board gave me a public political spanking. The buy-out was called off. A year later, a less costly buy-out, which I voted against, was approved.
This is nothing compared to the stealing going on over at Georgetown University (aka Gorgetown)by most of the managers there. Kickbacks are absolutely routine from vendors at all managerial levels and the pension plan donates $3.50 for every $1.00 that a manager puts in. It's amazing, basically, an organized criminal enterprise.
Curiously, I saw no mention in the coverage of this story, in the Post and on the blogs, about the publication that scrutinized Ladner first. In 2002 Ben Wetmore, an AU student, launched a website, benladner.com, to report on the outragious stories of Ladner's corruption. Had it not been for Wetmore and his boldly-named website, Ladner's act would have gone on much longer.
I'm pretty sure we've made mention of Mr. Wetmore's site in the way back, but you're absolutely right, Rich -- some due attention deserves to be paid to BenLadner.com, where this matter has been pursued and documented with exceeding tenacity. Curious readers who would like to check it out will find the site on our sidebar...scroll down the "LINKS" section--it's near the bottom.
the [Georgetown] pension plan donates $3.50 for every $1.00 that a manager puts in . . .
This isn't criminal behavior, it's just a generous retirement benefit that the University is providing for its employees. I'd be really surprised if it was only available for "managers," and it probably applies to all of their salaried employees. Taking kickbacks is another matter, but I wouldn't look at an organization offering generous retirement benefits and automatically conclude that some sort of corruption must be afoot.