The U.S. Senate has requested all documents related to the investigation into former President Benjamin Ladner's expenses, as well as information about the $3.75 million severance package the AU board of trustees awarded Ladner following his resignation.
Chair of the Senate Finance Committee Charles E. Grassley, R-Iowa, sent a letter to board chairman Thomas A. Gottschalk questioning whether it was "proper to provide nearly $3.75 million in payments to an individual who has reportedly failed to pay taxes on nearly $400,000 in income ... after the board terminated his employment.
"Such actions raise significant questions about what other things a charity that has such a cavalier attitude towards the tax laws might be doing, especially in light of escalating tuition expenses," Grassley wrote in his letter.
Because AU is considered a non-profit organization, it is subject to special tax exemptions, including exemption from income tax and the ability to receive tax-deductible donations. The Finance Committee has been reviewing charities and reform of charities since April.
"It appears the AU board could be a poster child for why review and reform are necessary," Grassley wrote.
In a Student Government statement released last week, the SG condemned the board of trustees and said that it did not agree with or accept the compensation the board gave former President Ladner.
"The Board of Trustees has failed to live up to American University's standard of moral, academic, and professional integrity," the statement said.
SG President Kyle Taylor launched an online petition last week which allows students to lobby members of Congress about the issue.
"It's tough to say how this all got started, but the letter may have brought the issue to the forefront," Taylor said. "It's unfortunate it came to this but in the long term, I think it's what needed to happen."
Taylor is seeking action from lawmakers to restructure the board and reduce Ladner's severance package.
"We must take action," Taylor wrote in a letter to the AU community. "It is time that we petition Congress, who chartered the university and still has direct control over AU and the Board of Trustees."
The SG statement is calling for a complete restructuring of the board, including the addition of student representation in the body.
"A new Board must include the voice and vote of the AU student body," the SG statement said. "American University students are responsible for 90% of the University's operating budget, and we deserve insight and input into how this institution is managed."
The petition is available online through the SG website at http://www.ausg.org.
Read Sen. Grassley's letter at http://finance.senate.gov/press/Gpress/2005/prg102805.pdf.
