The AU board of trustees is cooperating fully with the U.S. Senate investigation into its decision to award a $3.75 million severance package to former President Benjamin Ladner, and is turning over all documents related to the probe, according to recently elected AU board of trustees chair Gary Abramson said.
Chair of the Senate Finance Committee Charles Grassley, R-Iowa, sent a letter on Oct. 27 requesting all records concerning the investigation into Ladner's spending and his subsequent removal as university president. The AU case is part of a larger investigation into non-profit organizations that abuse or misuse their tax-exempt status.
"I don't know how actionable the information Senator Grassley requested is," she said, adding that it is "much more likely to help him in his long-term effort" to reform non-profit organizations.
In his letter to acting board Chair Thomas A. Gottschalk, Grassley indicated his intention to investigate whether it was appropriate to award such a large severance package to Ladner, "an individual who has reportedly failed to pay taxes on nearly $400,000 in income."
Gerber also said that Grassley is considering drafting specific legislation calling for an overhaul of non-profit organizations, including limits on how they could use their tax-exempt status. This would most likely not include a cap on severance packages, but "could require that they be what would be considered reasonable by a court," she said.
As far as the current status of the investigation, Gerber said that it was still in an information gathering phase, and that Grassley is waiting to see how well the board cooperates before making final decisions about what action to take, if any.
