May 19,2006

Grassley on American University’s Announced Governance Reforms

M E M O R A N D U M

To: Reporters and Editors
Re: American University’s reforms
Da: Friday, May 19, 2006

Sen. Chuck Grassley, chairman of the Committee on Finance, has been asking questions
about American University’s board governance as part of his review of tax-exempt organizations’
practices. He made the following comment on the reforms announced at American University today.

“I’m interested in hearing from students, faculty and university supporters on what they think
of the reforms. Adding students and faculty to the board could be a very positive step. But it’s
important that their representation is meaningful and not just window-dressing. For example, will
they be made to leave the room when important issues are being discussed? On the board’s
withholding of documents I requested, attorney-client privilege can be overused. I don’t expect
anyone to divulge the university’s legal strategy. But I do expect the release of information that
would answer basic questions, such as the basis for decisions by the board of a congressionally
chartered university for being so generous with university funds to an outgoing president who
appeared to have abused his position. Attorney-client privilege shouldn’t be an all-purpose shield
against transparency.”