The former dean of the University of Maryland School of Law has agreed to return more than $300,000 of a $350,000 bonus questioned in a state legislative audit earlier this year, the attorney general's office announced Wednesday.
The legislative audit, released in February, revealed that former dean Karen Rothenberg received $410,000 in "questionable" payments between fiscal 2007 and fiscal 2009. The audit embarrassed the state university system and hastened the retirement of Rothenberg's former boss, University of Maryland, Baltimore President David Ramsay.
Rothenberg had agreed to return $60,000 earlier in the year, and she agreed to return the rest, minus taxes she has already paid on it, as part of the settlement. She will repay $311,398 in two installments, due at the end of this year and next June. She cannot face state prosecution for her actions in accepting the payments.
Attorney General Douglas F. Gansler said the state determined that Ramsay was never authorized to give Rothenberg the money.
"In reaching this agreement, we took into account Professor Rothenberg's service to the School of Law and that there were good-faith misunderstandings relating to matters of compensation that resulted in these payments being made and accepted," Gansler said in a statement.
Chancellor William E. Kirwan, who referred the matter to the attorney general's office, said he was "pleased that agreement has been reached and that there has been resolution of the issues raised in the audit."
Kirwan praised Rothenberg's effectiveness as dean and said the system is looking forward to her return to full-time faculty responsibilities in January.
Neither Rothenberg nor her attorney responded to calls or e-mails seeking comment.
Del. John Bohanan, a St. Mary's County Democrat whose education subcommittee held hearings on the audit earlier this year, called the settlement "a good result both for the taxpayer and from a legislative point of view.
"I also think it's a good reminder of the value of the audit process," he said. "Without the audit, this would never have come to light."
The greatest of the questionable payments, $350,000, was an approved bonus from Ramsay, designed to keep Rothenberg in her job during an important fundraising campaign. The "retention package" nearly doubled Rothenberg's compensation for fiscal 2007.
University system leaders sharply criticized Rothenberg and Ramsay for agreeing to the payment without required approval from the Board of Regents. Facing questions from state legislators, they blamed the episode on bad judgment by two high-ranking employees rather than on wider problems in the system.
A few weeks after the audit was released, Rothenberg said she would return $60,000 in payments for summer research that were processed by a subordinate at the law school. The university system said Rothenberg asked the employee to process inaccurate paperwork allowing the payments. She said through her attorney that she was unaware the employee had filed inaccurate documents on her behalf until the audit was released.
She also said she was "deeply sorry over any negative impact" the audit's findings caused.
Rothenberg left her job as dean last year. She has remained a member of the law school faculty, though she has been on a sabbatical agreed to in her last contract. She will make an annual salary of $249,666, down from her dean's salary of $485,778.
Mike Millemann, a veteran professor at the law school, said Rothenberg would have had a strong legal case if she had fought to keep her bonus. "But she was obviously more concerned about the law school than she was about the money," he said. "I'm very appreciative of that, and we're all anxious to get her back."
Ramsay's replacement, Jay Perman, has emphasized following system rules since he took over the presidency in July. One of his first hires was a new vice president of accountability, and at a recent meeting, several regents praised the "substantive" changes Perman has made in the wake of the audit.
Perman deferred comment on the settlement to Kirwan. But Kathy Byington, his vice president for administration and finance, said the university has responded to the audit with monthly payroll reviews, training sessions for all employees who handle payroll and new requirements that all salary changes for senior employees be approved by her office.
"Dr. Perman has made this a priority from the most senior levels," she said. "We will be a compliant university."