WASHINGTON, D.C.—Smithsonian Institution secretary Lawrence M. Small resigned on March 26, following harsh congressional criticism of his spending habits and a series of probes into what one senator called Small’s “Dom Pérignon” lifestyle.
The resignation was announced days after an unrelated report by seven outside museum officials faulted key areas of the institution’s art museums, including fundraising efforts and building maintenance—two areas that were widely considered to be Small’s fortes. (About 70 percent of the Smithsonian’s annual funding—$715 million—comes from U.S. taxpayers.)
Scrutiny of Small’s leadership began in earnest when an investigation conducted by Smithsonian inspector general A. Sprightley Ryan found that the secretary had run up $87,065 in unauthorized expenses between 2000, when he took office, and 2005. Further inquiry uncovered more questionable expenses, such as nearly $160,000 for redecorating offices at the institution’s administrative headquarters.
In a report released in January, Ryan stated that she had found no evidence of fraud or abuse by Small, whose salary this year would have reached $915,698. However, she questioned some expenses—such as $14,509 to rent a corporate jet to fly the secretary to San Antonio, which Ryan called “excessive” and unauthorized; and a junket to Cambodia for Small’s wife and Smithsonian board members that had been charged to the institution without prior authorization. Small also received $1.15 million in housing allowances while owning and living in a mortgage-free home in Washington, claiming he used the house for official functions. Small could not be reached for comment.
The inspector general’s findings elicited a vehement response from Congress, particularly from Sen. Charles Grassley (R-Iowa). Fanning the flames were a congressional inquiry into Small’s spending habits and what Grassley called a lack of oversight by the Smithsonian’s 17-member board of regents. Current members of the board of regents include Supreme Court Chief Justice John G. Roberts and Vice President Dick Cheney.
Grassley, the top Republican on the Senate Finance Committee and its former chairman, has led aggressive probes into potential abuses of tax-exempt status at nonprofit organizations, including the Museum of Modern Art (MoMA), New York (ANL, 3/20/07).
At the same time, criticism of Small deepened when Ryan’s predecessor as inspector general, Debra Ritt, told the Washington Post that Small had called her last year to ask that she drop an inquiry into Smithsonian Business Ventures, a division of the institution. Ritt said Small had suggested that she investigate the Smithsonian’s construction spending instead.
Board Looks, Then Looks Again
An audit committee established by the board of regents, which hires and supervises the secretary, initially found Small’s expenses to be “reasonable.” The board has since created a three-member external board to take another look at Small’s salary agreement and spending habits. A Smithsonian statement said the committee, consisting of former U.S. comptroller general Charles Bowsher, former U.S. Office of Government Ethics chief Stephen D. Potts and A.W. Smith Jr., a retired business executive, would continue its probe, regardless of Small’s departure. The committee is expected to work through May.
The board has also created a permanent committee on governance that will compare the Smithsonian administration’s activities with the best practices of comparable organizations.
Grassley had initially proposed to freeze a planned $17 million increase for the Smithsonian’s 2008 budget until the institution capped salaries for its top executives at $400,000—the current compensation for a U.S. President. In light of Small’s resignation, the senator will wait to review the committee’s findings “before proposing legislative changes, including a possible salary cap for the secretary,” according to the senator’s spokeswoman Jill Gerber.
In a press statement, Grassley called Small’s resignation “a positive step” and said he was confident the next secretary would “restore the institution’s status as a point of national pride.” The board named Cristián Samper, director of the Smithsonian’s National Museum of Natural History, as acting secretary and formed a search committee to find a permanent replacement.
A Dismal Picture
Small stepped down in the wake of a highly critical report on the Smithsonian art museums, commissioned by Ned Rifkin, head of the Smithsonian’s art division, which painted a picture of cash-starved art museums with inferior collections, leaky roofs, complacent leadership and “insular attitudes” that have blocked cooperation.
The report, completed in January but made public in March, was drafted by a committee including Glenn Lowry, director of MoMA; James N. Wood, president and CEO of the J. Paul Getty Trust, Los Angeles; Michael Shapiro, director of the High Museum of Art, Atlanta; Susana Torruella Leval, director emerita of El Museo del Barrio, New York; Vishakha Desai, president and CEO of the Asia Society, New York; and
Michael Conforti of the Sterling and Francine Clark Art Institute, Williamstown, Mass.
“The Smithsonian’s art institutions have reached a critical point,” the report stated. “Drastically underfunded, they are unable to lead the nation during a time when their creativity and high visibility give them vast potential to affect the lives of our citizens.” All seven Smithsonian art museums were found wanting.
The committee’s conclusions regarding the Smithsonian’s lack of funding were a particular rebuke to Small, who was esteemed by the board of regents for his effectiveness as a fundraiser, surpassing the $1 billion mark during his tenure.
Small reportedly kept the institution’s staff under constant pressure to trim costs. In an oft-cited memo last year, employees were urged to use “task lighting instead of general lighting whenever possible” and to “turn off decorative or accent lighting.”
Formerly an executive at the mortgage giant Fannie Mae, Small also incensed Smithsonian researchers and curators by trying to trim research budgets and aggressively courting rich donors with offers of naming rights over buildings and galleries. In 2003 he drew embarrassing press by pleading guilty in federal court to a violation of the Migratory Bird Treaty Act after purchasing a collection of Amazonian headdresses made with the feathers of threatened species.
Former and current Smithsonian officials say that Small drastically changed the culture at the institution by focusing more on raising money—with incentives to big donors—while offering generous pay packages with the stated aim of attracting talent. Some view his resignation as the product of a model running offtrack.