The Smithsonian Institution may be heading down the same path of governance reform as the American Red Cross (ARC), another Congressionally-chartered nonprofit organization, after the resignation of Smithsonian’s top official.
Sen. Chuck Grassley (R-Iowa) might end up offering legislation to reduce the size of the museum’s 17-member Board of Regents and other reforms. The move is similar to what he sought with the ARC after it performed its governance review, according to Jill Gerber, press secretary for Grassley, the ranking member of the Senate Finance Committee. Legislation regarding the ARC is expected later this month.
In the week leading up to the resignation, the museum’s Board of Regents created a permanent Committee on Governance and a three-person independent review committee to examine Lawrence M. Small’s compensation, expenses and donations as well as the board’s responses and actions. But apparently it was a budget amendment passed by the Senate that was the tipping point.
"While I recognize the Board has tried to respond to the winds blowing through the halls of Congress by forming two committees related to governance issues, it is instructive that the Senate has chosen to pass its resolution without even hearing the outcome of those committees’ deliberations," Small wrote in his March 24 resignation letter to Chief Justice John G. Roberts, Jr. Roberts is chancellor of the Smithsonian’s Board of Regents, which also includes Vice President Dick Cheney and six members of Congress.
"My sense is the probability of the Congress eroding some meaningful degree of the Regents’ governing authority in the near future is quite significant and unlikely to diminish," wrote Small, who joined the Smithsonian in January 2000 after being president of Fannie Mae and an executive at Citicorp. About 70 percent of the Smithsonian’s budget is from the federal government.
Grassley pushed through an amendment to freeze the museum’s $17-million increase for FY 2008 until ethics and accountability reforms, including capping the salary of any museum employee at $400,000, the same salary as the U.S. president. He is expected to withdraw the amendment now that Small has resigned.
"Making the Smithsonian more bureaucratic and political, however, is not, in my view, conducive to sustaining the momentum the Smithsonian enjoys today and, therefore, I’m very troubled about what I see happening," said Small, whose salary rose from $333,000 in 2000 to $915,698 this year. He is largely credited with raising more than $1 billion in private donations for massive capital projects throughout the 19-museum complex.
Cristián Samper, director of the Smithsonian’s National Museum of Natural History, will be acting secretary while the board searches for a permanent replacement.
Grassley issued a statement following Small’s resignation: "New leadership brings new opportunity for this American institution. It’s a positive step to have a leadership change. The secretary is only part of the Smithsonian’s leadership. The other part is the board of regents. The board needs to continue to recognize its responsibility and take action."
The Washington Post had obtained copies of confidential findings by a Smithsonian inspector general that indicated many transactions by Small were not properly documented while some were considered "lavish or extravagant." The report detailed almost $90,000 in unauthorized expenses from 2000 to 2005, including chartered jets and hotel rooms, car service and catered meals and gifts for staff.
Other expenditures by Small have stirred criticism, including $160,000 to redecorate his office, more than $1 million in housing allowances for the past six years for agreeing to use his home for museum functions, and billing the Smithsonian for household expenses of more than $600,000, among others.