Members of American University’s Board of Trustees ignored damaging audit findings on lavish spending by the university’s former president, Benjamin Ladner, disregarded possible Internal Revenue Service sanctions, and proposed retribution against a whistle-blower, according to a letter released today by Sen. Charles E. Grassley, an Iowa Republican and chairman of the Senate Finance Committee.

In the letter, Mr. Grassley gave the university’s trustees two weeks to respond to his request for improved transparency on the board, noting that Congress is now considering tax provisions that could affect universities. He said he was also looking at legislation that would change the structure and governance of American’s board, describing in particular a possible law to give the board the authority to fire its own members. As a Congressionally chartered institution, American is subject to such legislative changes in its structure.

The Finance Committee has conducted an extensive investigation of the board’s actions on the spending scandal since Mr. Ladner resigned, in October (The Chronicle, October 25, 2005, and October 31, 2005). American’s board is scheduled to meet on Thursday and Friday, and the trustees plan to discuss an internal report recommending changes in board governance.

A longer article about Senator Grassley’s letter, and its possible implications for American, will appear tomorrow on this Web site.