Four former members of the AU board of trustees who resigned following the investigation into ex-President Benjamin Ladner's finances released a statement in response to last week's town hall forum that said trustees purposefully adjusted the total value of Ladner's severance package to offset the amount he would have to pay back to the university and to the IRS.
In an open letter to the AU community, former board chairs Leslie E. Bains and George J. Collins; former chair of the audit committee Leonard R. Jaskol and former trustee Paul Martin Wolff expressed their displeasure that the current members are still part of the board.
" ... Trustees said they feel no pressure to resign," the letter said. "Given the votes of no confidence by the students, Faculty, Deans, staff and other stakeholders of the University, how could they not feel pressure to resign?"
After a months-long investigation into Ladner's travel and entertainment expenses, the board found that Ladner had misused more than $500,000 of the university's money. The board ended Ladner's presidency and asked that he repay the school $134,000, and reported an additional $398,000 in income to the IRS, on which he would be taxed. To cut all ties with AU, Ladner was given a severance payment of $950,000, as well as a deferred compensation package totaling about $2.75 million, which outraged many students and faculty members.
The letter also examined the existence of an ad hoc committee within the board of trustees, which some trustees denied at the town hall meeting.
"The name ad hoc committee was created by its members," the letter said. "They sent e-mails to other board members under this title and identified in their mailings who made up the committee."
The letter said that members of the ad hoc committee met with President Ladner while he was suspended during negotiations, and that they attempted to reinstate both Ladner and his personal chef while creating a salary for his wife, Nancy Ladner, which would have exceeded the salaries of most AU professors.
The letter also stated there was tremendous opposition to the audit report, prepared by the board's audit committee, the first body to find that Ladner had misused university money for personal expenses. "The history of the audit committee's investigation is marked by repeated efforts by various board members to curtail and ultimately to dilute its conclusions - all in ways that only benefited Ben Ladner," the letter said.
According to Bains, those trustees who opposed the findings of the audit committee went on to form the ad hoc committee. "The members who so acted all became part of the ad hoc committee."
The former trustees said they felt attacked by the ad hoc members during the investigation the audit committee carried out. "Amendments were made by the ad hoc committee to change the proportion of reimbursements and imputed income, an action which would have benefited Ben Ladner at the university's expense," the letter said. "The amendment passed with all members of the ad hoc committee present voting in favor." The amendment was eventually voted down at the demand of Jaskol.
The letter also stated that the ad hoc committee played a great role in the negotiation of Ladner's severance package. "When the negotiators made their recommendation of a severance amount, it was amended upward by the ad hoc committee members," the former trustees said. "They raised the amount so that Ladner would come out 'whole' and not suffer any consequences of paying taxes on his improper behavior."
The former board members also said that they did not agree that the severance package would minimize legal costs. "To this day, [the ad hoc committee] asserts that the severance package would minimize the university's financial exposure," the letter said. "Just the opposite is true as litigation, if pursued by Ladner, would have cost approximately $400,000. The package totaled $3,750,000, a difference of $3,350,000. As they say, just do the math."
"We hope this information will be of assistance to you in assessing the current Board's statement to always put American University first," the letter concluded.
