June 20 (Bloomberg) -- Lawrence M. Small, as head of the Smithsonian Institution, received compensation that far exceeded that of his predecessors, had blank-check authority to reimburse himself for expenses and took 70 weeks of vacation in seven years, a review panel reported today.

A three-member Independent Review Committee concluded that Small's ``attitude and disposition were ill-suited to public service'' and that the 17-member Smithsonian Board of Regents was overly deferential to Small, ``allowing him to run and dominate the meetings, set the agendas and determine who would contact the regents and what information would be provided them.''

Small resigned on March 24 after questions were raised about his salary and expenses. His deputy, Sheila Burke, who also faces criticism in the report, submitted her resignation on Monday. The Smithsonian board on Monday adopted 25 recommendations from an internal committee to toughen its oversight of Smithsonian executives.

Small declined to meet with the committee while it conducted its review, according to the report. Efforts to reach Small today were unsuccessful.

Prevented Criticism

``Mr. Small's management style -- limiting his interaction to a small number of Smithsonian senior executives and discouraging those who disagreed with him -- was a significant factor in creating the problems faced by the Smithsonian today,'' the committee said in today's report. ``In addition, Mr. Small limited the flow of information so as to prevent the board from hearing criticism of his stewardship.''

Small's total compensation -- $915,658 by the time he left office -- included an annual payment ``styled as a housing allowance'' that in fact was simply a boost in salary, the report said. The payment -- which grew to $193,000 in 2007 -- was to reimburse Small for making his Washington home available for Smithsonian functions. But Small ``rarely used his house for entertaining Smithsonian donors or potential donors,'' the report said.

The committee also took issue with an area in which Small had been praised -- private fund-raising. Although members of the board have credited Small with bringing in more than $1 billion in donations during his seven-year tenure, the committee found that private giving peaked in 2000, the year that Small succeeded Michael Heyman as Smithsonian secretary. Business revenue also dropped during Small's tenure, the committee said.

Deficient Oversight

The Smithsonian's board formed the independent committee in March to review Small's compensation and expenses and the board's oversight of them. Today's report is the committee's final product.

The head of the independent committee is Charles Bowsher, a former U.S. comptroller general. Other members are Stephen Potts, a former chairman of the U.S. Office of Government Ethics, and A.W. ``Pete'' Smith Jr., former chief executive of human- resources consultant Watson Wyatt Worldwide.

The committee said the Smithsonian's board failed to review Small's spending. On several occasions, the board's executive committee agreed to Small's compensation requests ``without engaging in its own analysis of the reasonableness of those requests,'' the report said.

Roger Sant, chairman of the Smithsonian board's executive committee, said in a statement, ``The gravity of the conclusions highlighted a number of deficiencies in our oversight of the institution. We are sobered by the findings on executive compensation, financial controls and ineffective policies.''

`Disturbing Failure'

Among other steps approved Monday by the board, its internal governance review panel proposed that the board meet more often and prohibit Smithsonian executives from serving on corporate boards.

The independent committee said in today's report that the issue of corporate-board service by Small and Burke was ``one of the most disturbing failures of governance and oversight.''

Small served on the boards of the Chubb Group and Marriott International during his time at the Smithsonian, earning $642,925 in cash compensation, $3.5 million in stock and $1.8 million in stock options, the report said. His Smithsonian contract said he could serve on up to two outside boards and retain the income.

The committee estimated that Small was absent from the Smithsonian for 64 days because of his board service.

Burke, whose resignation takes effect at the end of September, serves on the boards of Chubb and health-benefits company WellPoint Inc., as well as on more than a dozen nonprofit boards and commissions, the report said. From 2000 through 2006, she earned $1.2 million in cash, $3.5 million in stock and $5.6 million in stock options. Her Smithsonian salary is $400,000.

Conflict of Interest

The Smithsonian renewed an insurance contract with Chubb while Small and Burke sat on its board. While not accusing either official of steering work to Chubb, the committee said the arrangement posed ``an obvious conflict of interest.''

The committee estimated that Burke spent more than 400 work days on non-Smithsonian activities. The report said Burke told the committee that ``she works 24 hours a day, seven days a week'' and is always available to Smithsonian staff by e-mail or cell phone, a claim supported by employees interviewed by the panel.

Burke's lawyer, William J. Kilberg, said in a letter to the committee that Burke ``accepted employment with the Smithsonian on the express understanding that she could engage in various outside activities.'' He also said Burke ``disclosed her outside activities and the compensation she received in her annual Smithsonian financial disclosure statement'' and ``was never asked to curtail those activities.''

To contact the reporter on this story: Laurence Arnold in Washington at larnold4@bloomberg.net.

Last Updated: June 20, 2007 11:45 EDT