Somehow, the Smithsonian’s leadership keeps giving and giving and giving (startlingly good examples of how to manage badly). For readers who have followed our recent stories on the Smithsonian’s tribulations, The Washington Post’s crack investigative reporting team of James Grimaldi and Jacqueline Trescott provide us with yet further evidence that the Smithsonian is in need of an “extreme makeover.” Their December article detailed the lavish travel spending of the departed National Museum of the American Indian (NMAI) head plus the Smithsonian’s unusual policy of granting him unlimited leave for other professional pursuits. During his term at the museum, the NMAI leader traveled more than any other Smithsonian museum head and apparently earned more than his museum peers, not counting the income he earned during his unlimited leave times, practices which he defended that he scored three times as much in his private law practice prior to the museum. Shouldn’t we be ready to put to rest once and for all the hoary defense of “look how much I could be making in the private sector,” a strategem we have referenced in other cases (cf. Linda Chavez’s use of the same approach, in “Linda Chavez’s Nonprofit Family Affair” in the August 2007 CR).

Nonetheless, responses to the Grimaldi/Trescott critique suggested that the lavish travel spending of the NMAI director was to put the relatively new museum on the map, to make it a world class museum, to enhance its standing internationally—though the defenses of mixing private and public travel, the unlimited leave policy, and some expenditures (like thirty grand for a discomfiting goodbye video for the departing ED) were harder to find. The Smithsonian’s American Indian museum still gets its share of good press (see a glowing profile of the incoming NMAI ED in the January 21st New York Times, and the Grimaldi/Trescott investigation appears to have raised little concern on Capitol Hill.

The most discomfiting expenditure might have been the goodbye parties and trinkets given to the departing NMAI ED, particularly a somewhat embarrassing DVD about him (viewable on the Washington Post webpage). The WashPo article concluded with an entertaining piece about the DVD that is truly telling about the Smithsonian culture:

“Late this year, a series of Smithsonian-sponsored farewell events were held to honor West, including staff lunches in Washington and New York, cocktail receptions in Washington and Los Angeles and a gala dinner at the Indian Museum in September on the third anniversary of its opening. The total cost: $124,000, according to figures provided by the Smithsonian. [Smithsonian spokeswoman Linda] St. Thomas said about $50,000 was raised to defray those costs.

“It is totally appropriate to thank somebody for public service,” said Roger Sant, chairman of the Smithsonian regents’ executive committee, adding that he was unaware of how the dinner was funded. “We are trying to watch our expenditures.”

The costs raised some qualms inside the Smithsonian, according to sources and e-mails, including those between West and his assistant, Alena Chalan. One of those concerned was Angela Leipold, the museum’s assistant director for external affairs.

“Angela is worried about perceptions, given recent SI events,” Chalan wrote in an e-mail to West. Leipold recommended West use institution “trust funds,” rather than the institution’s federally appropriated funds, to avoid causing embarrassment. The trust funds consist of the institution’s privately raised money. Smithsonian rules permit the funds to be used with less restrictions. But the independent review committee issued a report that criticized the use of trust funds for lavish parties and travel.

“For West’s gala dinner, the trust funds paid for the $37,000 catering bill, which included medallions of prime beef tenderloin seasoned with habanero chiles, and quail glazed with wild plum jam. Federally appropriated funds, however, were used to pay $30,585 for an eight-minute DVD biography of West, which was shown during the dinner and presented to him as a going-away present.

“Chalan was apologetic in the e-mail to West and noted that Leipold was only trying to protect West from embarrassment: “Please note, that she is only trying to keep your life Washington Post free for your last two months. *smile*”

This object lesson in weak oversight, questionable spending, and poor communications should be a reminder to all nonprofits that a combination of inadequate systems and institutional hubris could land your nonprofit’s finances in the pages of your local newspaper. The Smithsonian may be big, national, with a Congressional and Supreme Court board, and questionably nonprofit, but its travails are worth the monitoring of nonprofits large and small.