Ladner takes $3.7 million to sever all ties with AU
Former AU president Benjamin Ladner accepted a severance deal this week that will cost the university almost $3.8 million but will avoid a potential legal battle, university officials said.
On Oct. 24, Ladner accepted an offer from the board of trustees that gives him a $950,000 severance payment, $1.75 million in deferred income and a $1 million life insurance policy.
The Board made the offer on the condition that Ladner would resign and end all connection with AU if he accepted, said Leonard Jaskol, a former trustee and chairman of the audit committee. Had he refused, he would have been fired "for cause or dishonesty."
Jaskol, who served on the board for twelve years, recently resigned because he opposed offering Ladner money to leave.
"I believe he shouldn't have gotten that," Jaskol said. "The cost of litigation would be only a fraction of the package they offered him. [There's a time when] ethics outweigh a fear of litigation."
An anonymous letter sent last March triggered an investigation into Ladner's finances that revealed he had spent university money on gifts for his children, personal travel and a French-trained chef. Trustees announced on Oct. 10 that Ladner would not return as president, but until this week it was unclear whether he would be allowed to stay on as a tenured professor, or what the terms of his settlement package would be.
Former AU president Richard Berendzen returned to teach after he was forced to resign in 1990 when an investigation revealed he had made obscene phone calls from his office. Berendzen was initially offered a $1 million severance package by the university to buy out his contract and his right to return as a tenured professor. Faculty members signed letters condemning the size of the offer and students protested on the quad, according to an Eagle report on Nov. 2, 1990. In response to sustained opposition, the university changed the terms of the deal. It cut Berendzen's compensation in half and allowed him to return to teach in the Physics Department, The Eagle reported on Dec. 3, 1990.
Ladner's deal specifically bars him from returning to teach, said Jaskol. "[There's] a lot of ill will that's been created."
Ladner came to AU in 1994, after the university had been through three presidents in four years. His initial contract was to expire in 1997 but it was renegotiated without many board members' knowledge, Jaskol said. Ladner remained president and "we assumed we were proceeding under the terms of the '94 contract," he added.
Ladner's '97 contract would have entitled him to upwards of $6 million in severance pay, Jaskol explained. It remained a point of contention between the university and Ladner until the contract was ruled invalid by multiple outside lawyers hired by the board. In their Oct. 20 meeting, trustees determined Ladner was "employed at will" and could be fired without compensation, Jaskol said. The compensation package was drafted not only out a fear of litigation, he said, but out of "a sense of loyalty to Ben Ladner. A sense he should get something."
On Monday, the board announced Ladner had accepted its offer. In response, the deans of all five schools, as well as the law school and the university librarian, issued a joint written statement condemning the deal. They said they opposed both the decision to offer "the settlement package and the closed process by which that decision was reached."
David Taylor, the president's chief of staff, said firing Ladner without compensation would put the two parties at odds. "[It] would have resulted in litigation," Taylor said. The university, Taylor added, has improved since Ladner began his tenure. "It's no doubt a much better institution," he said.
In a replay of the Berendzen controversy, student groups have joined AU's academic leadership in opposing the compensation deal. Late Wednesday, the Graduate Leadership Council passed a unanimous resolution condemning the offer. The Student Government has started a petition to lobby Congress for greater oversight of university governance, said Joseph Vidulich, SG secretary.
Jaskol said Ladner's severance package caused him to rethink a substantial donation to AU. "I care deeply for American University," he said. But he'll only give money to scholarships in the future, he added, so "I know exactly where the money is going"