April 5, 2007 | Read Time: 4 minutes
A committee that includes several nonprofit leaders has begun reviewing the Smithsonian Institution’s governance practices in the wake of the messy departure of the organization’s top executive, Lawrence M. Small.
Mr. Small, who had been Smithsonian secretary since 2000, resigned last week after members of Congress criticized his compensation package and spending on housing, travel, and office furnishings — and the Senate voted to freeze $17-million in new funds for the institution.
The Smithsonian board asked one of its members — Patty Stonesifer, president of the Bill & Melinda Gates Foundation — to head a new five-member governance committee that will examine comparable organizations to learn what governing procedures are most effective.
The committee includes three other Smithsonian board members — Walter Massey, president of Morehouse College, in Atlanta; Robert Kogod, an art collector and philanthropist; and Rep. Doris Matsui, Democrat of California; and one outsider — Diana Aviv, president of Independent Sector, a coalition of major charities and foundations in Washington. Independent Sector has been leading a drive to persuade charitable organizations to adopt a set of principles to govern ethical behavior.
Compensation Review
Under pressure from Sen. Charles E. Grassley, the senior Republican on the Senate Finance Committee — who railed against Mr. Small’s “champagne lifestyle at taxpayer expense” — the board also named a three-person independent committee to review an inspector general’s report on Mr. Small’s compensation and expenses. That committee is headed by Charles A. Bowsher, a former U.S. comptroller general.
The controversy over Mr. Small erupted after The Washington Post reported in February that the Smithsonian’s inspector general had uncovered almost $90,000 in unauthorized expenses from 2000 to 2005, including charges for chartered flights, Mr. Small’s wife’s trip to Cambodia, floral arrangements, luxury car service, and catered staff meals.
The inspector general’s report said other expenses were poorly documented and some “might be considered lavish or extravagant.”
Jill Gerber, a spokeswoman for Senator Grassley, said her boss plans to follow an approach similar to the one he took with the American Red Cross, where he worked with the organization on changes to the governance structure and introduced legislation that was needed to accomplish them.
The Smithsonian, a nonprofit organization that operates 19 museums and galleries as well as the National Zoo and six research facilities, receives 70 percent of its budget from the federal government — drawing about $715-million in appropriations, grants, and contracts in 2006, according to Mr. Grassley.
Mr. Small was set to earn more than $915,000 in salary, pension, and housing allowance this year. Senator Grassley harshly criticized the $193,000 housing allowance, noting that Mr. Small owned his home and produced little evidence that he used it for business purposes.
He also blasted the board and its audit committee for blessing Mr. Small’s unauthorized expenses retroactively after they were highlighted by the inspector general.
‘Baseless’ Accusations
The statement announcing Mr. Small’s resignation said the board considered Mr. Small’s expenses and compensation “reasonable for the leader of the world’s largest museum and research complex.” It also noted that during Mr. Small’s tenure, the institution raised more than $1-billion in private donations and opened three new facilities, including the National Museum of the American Indian.
Mr. Small, a former banking and finance executive, in his resignation letter called accusations against him “baseless” and expressed concern that Congress would soon erode “some meaningful degree of the Regents’ governing authority.”
Ms. Aviv, of Independent Sector, said she had told Smithsonian board members that in terms of public perception, the board’s defense of Mr. Small’s expenses was “not helpful” — especially its decision to approve some expenses retroactively.
“The public perception out there is that the board moved their goal post and in moving the goal post approved behaviors that would be widely regarded as unacceptable practices,” she said.
Asked whether the board would do anything differently in retrospect, Ms. Stonesifer, a member of its audit committee, said in e-mail message that she wanted to let the two new committees “do their work without comment.”
Among the issues Ms. Aviv says she plans to examine is the Smithsonian’s board structure, which was set up by Congress in 1846. The 17-member board, which meets four times a year, includes the chief justice of the Supreme Court, the vice president of the United States, three members each from the Senate and the House of Representatives, and nine “citizen members.”
The board named Cristián Samper, a biologist who has been director of the Smithsonian’s National Museum of Natural History since 2003, acting secretary while it searches for a successor to Mr. Small.
The inspector general’s report and other documents related to the Smithsonian controversy can be viewed at the inspector general’s Web site.
