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Expense Account Hall of Shame

October 12, 2005

Students and faculty members (not to mention politicians and journalists) love to complain about the salaries of college presidents. At American University in recent weeks, the $633,000 salary of Benjamin Ladner -- who was ousted as president Monday night -- has been much discussed.

But Ladner's removal demonstrates that high salaries alone don't doom presidents. It's the expense accounts, and how (and on whom) they're spent, that end careers. Many of the presidents with the highest salaries stay in office year after year without any risk to their jobs. But those who spend a little too freely on themselves or their loved ones often end up out of the presidential suite -- even if those payments don't come close to the corporate-style salaries earned by some presidents these days.

"If you think about the president being the embodiment of the university, then any kind of abuse of university resources is considered a major offense," said Raymond D. Cotton, a Washington lawyer who specializes in presidential compensation in higher education.

As reports about Ladner's perquisites -- such as an engagement party for his son, and a personal chef, who sometimes needed training in Europe -- have been in the headlines, Cotton said that he's been fielding calls from board members and presidents asking about various contract provisions. Cotton said that there's another reason that perks -- not salaries -- do in presidents. "Boards approve salaries," he said, so even if some on campus think the pay is excessive, trustees have signed off on it. But while trustees may sign off on the size of an expense account, they don't pre-approve expenses, so a president who doesn't use good judgment may not find any support when the board gets together.

In losing his job Ladner joins a fraternity of ex-presidents whose tenures were marred by questions about expense accounts or presidential spending on family members or both. Inside Higher Ed introduces....

The Expense Account Hall of Shame

Institution and Ex-President Symbol of Excess What Happened
Adelphi U., Peter Diamandopoulos Million dollar Manhattan apartment New York State officials ousted the private university's board, saying it was too generous with Diamondopoulos while Adelphi's finances were shaky. The board paid for the apartment and offered Diamondopoulos the right to buy it at a huge discount. In 1997, a new board fired Diamandopoulos.
American U., Benjamin Ladner Personal chef Anonymous reports about Ladner's spending are sent to the university's board and The Washington Post in the summer of 2005. Ladner is first suspended and then fired.
Hillsdale College, George C. Roche III Alleged affair with daughter-in-law, who was on payroll Roche, who had made the college prominent in conservative circles, quit in 1999, following the suicide of his daughter-in-law, who (along with his son) was a college employee.
Stanford U., Donald Kennedy $7,000 sheets In the early 1990s, federal investigators looked at Stanford's overhead costs for U.S. research and found thousands spent on sheets, an Italian wooden commode, and an enlarged bed for the then-president. Kennedy announced his plans to resign shortly after a 1991 Congressional hearing where these expenses were mocked.
Towson U., Mark Perkins $860,000 house renovation Perkins quit as president in 2002, after less than a year on the job, amid criticism that renovations on his home cost more than the home itself. The renovations cost the university hundreds of thousands more than the budget plan.
U. of Central Florida, Steven Altman Massages while traveling on university business Altman quit as president of the University of Central Florida in 1991 amid a state investigation that he had used an escort service while traveling on university business. Altman said that he got massages to relieve stress, but had never to his knowledge used an escort service.
U. of Minnesota, Kenneth Keller $650,000 kitchen renovation Keller quit in 1988 amid an uproar over spending on his office and on Eastcliff, the president's home. The kitchen and dining room were a focal point of renovations that cost well over $1 million.
U. of Tennessee, John W. Shumaker Using university plane for personal visits. Shumaker had the university replace the presidential plane and used the new plane several times for visits with a woman who was the president of another university and with whom he had a personal relationship. While Shumaker reimbursed the university after the flights became public, he could not ride out the scandal and quit in 2003, a little more than a year after he arrived.

 

 

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