In 2000, the U.S. Fish and Wildlife Service received an anonymoustip that a luxury apartment near the Dupont Circle neighborhood ofWashington, D.C., housed a private and possibly illegal collectionof tribal art. People who had visited the apartment whispered thatits walls showcased hundreds of artifacts, including manycontaining what appeared to be plumage from rare or endangeredbirds. There was no way to know for sure, since the collection'sowner had forgone plaques and scholarly labels and arranged theitems to complement his decor. An inquiry began, and the agency'squestions were quickly met with paperwork--import permits,contracts, receipts--from the owner and his lawyer. But, even afterthe investigation closed, the rumors persisted. Eventually,photographs of the controversial gallery published in magazineprofiles of the owner piqued wildlife officials' interest onceagain. Four months after the initial investigation, officialsreopened the case and asked him to allow another examination.

This was awkward in part because the owner, Lawrence Small, was headof the Smithsonian, one of the nation's premiere culturalinstitutions. And then there was the problem of his shiftingstories. In December 2000, Small told Architectural Digest that hehad legally purchased many of the artifacts while traveling throughSouth America in the 1980s. But, when wildlife officials questionedhim less than a year later, he claimed he had bought the bulk ofhis collection from an anthropologist in North Carolina in 1998 forabout $400,000. After months of sifting through over 1,000Amazonian artifacts, ornithologists and mammologists from theagency discovered that over 200 of the objets d'art containedfeathers from protected birds, including the crested caracara andthe roseate spoonbill. On January 5, 2004, a U.S. attorney inRaleigh, North Carolina, filed charges against Small for violatingthe Migratory Bird Treaty Act. Small pleaded out to a class Bmisdemeanor; a federal judge ordered that he serve two yearsprobation and 100 hours community service.

The modern museum was conceived as a byway connecting scholarshipwith the masses. It was meant to liberate knowledge and art andscience from the monopoly of rich dilettantes and stuffy academics.So it's odd to see the head of America's most important network ofmuseums hoarding cultural treasures for himself. And,unfortunately, Small has run the Smithsonian in the same vein. Hehas padded his own paycheck and those of his fellow executives whileslashing research funding. Instead of protecting this prizedcollection for the public, he has cut deals with the private sectorthat limit mass access to its trove. As Representative David Obeyput it, Small is as "crassly commercial as anybody in town." Hishighly corporate modus operandi has made him "the most reviled anddetested administrator in the institution's history," in the wordsof a Smithsonian scientist who, in 2001, wrote a letter ofcomplaint to the institute's regents. Worst of all, Small's pursuitof profit has largely failed. While donations are up, theinstitution has fallen short of its revenue goals and kept itsfunds far from researchers' pockets. In a few short years, Smallhas managed to turn good scholarship into bad business.

In the 161 years since James Smithson's half-million dollar bequestbecame the Smithsonian, the institution has amassed a collection ofover 130 million objects, from ancient fossils to modernistpaintings. But, among the Smithsonian's many holdings, the NationalMuseum of Natural History (nmnh) is perhaps where its originalbenefactor would have felt most at home. Smithson was a naturalist,and, in addition to his cash donation, he contributed thebeginnings of the museum's mineral collection. Housed in anenormous, green- domed building on the National Mall, today thenmnh is one of the most visited museums in the world.

Visitors might be forgiven, however, for imagining that the museumis more concerned with the diffusion of merchandise than ofknowledge. The nmnh boasts four gift shops, two restaurants, and animax theater. Dinosaurs are among the museum's most popularfeatures, and the foyer gift shop caters to this enthusiasm. Theextinct behemoths are everywhere--stuffed stegosauruses, tiny t-rexes inside water-soluble eggs, packets of plastic pterodactylbones. Kids gather around a machine that squashes a dinosaurimprint onto pennies.

Just in front of all this commerce is where I meet Igor Krupnik, aSmithsonian anthropologist with a bald head and pale, bushyeyebrows. "The Smithsonian is starving," he explains. "And, whenthat happens, so do all kinds of unknown commercial ventures." He'sreferring not to the gift shops but to a raft of controversialcorporate deals to which Small has committed theinstitution--usually with little or no input from below. On the dayI visited Krupnik, the Smithsonian had just announced a newpartnership with the digital media company Corbis, and theanthropologist was upset. Whereas in the past individual museums orresearchers had considerable latitude in determining whichSmithsonian images might be used by outsiders and on what terms,now Corbis will retain rights to sell images of the Smithsonian'scollection on its website. "This is the next storm," Krupnik says."Basically, everything is on sale now."

Krupnik is the current head of the senate of scientists, a body ofscholars at the nmnh who meet periodically to discuss"bureau"--Smithsonian shorthand for an individual museum--andinstitutional business. He left Russia to join the nmnh's ArcticStudies department in 1991 and now occupies a large third- flooroffice just past the entomology department's glistening newspecimen storage units. Throughout his career at the nmnh, Krupnikhas been pleased with the intellectual support and camaraderie hehas found among Smithsonian scientists. But he has grownincreasingly concerned about the tension between the institute'sacademics and executives. "They are corporate people, and theybehave like corporate people," Krupnik says of Small and his fellowSmithsonian executives. "It's a culture clash. We are scientists,we have peer review, we cannot do anything in secrecy. And theyhave to do a lot in secrecy."

That includes such deals as the Corbis venture and a still morecontroversial deal Small struck with Showtime last year. One commentI heard over and over again from Smithsonian scientists was thatthey were open to commercial partnerships; they just wanted to beconsulted before the ink was dry on the contracts. And Small'swheeling and dealing has hardly resulted in a windfall offunding--or, at least, funding that researchers have been able toget their hands on. As Krupnik notes, the institution's finances areso strapped, and its fiscal bureaucracy so convoluted, thatscientists often find it easier to fund their work with outsidegrants. Krupnik himself recently organized an exhibit at the nmnhcalled "Arctic: A Friend Acting Strangely," which was underwrittenby the National Oceanic and Atmospheric Administration and a fewother groups. None of the funding for the exhibit came from theSmithsonian.

It wasn't supposed to be this way. When the Smithsonian Regents--aprestigious board headed up by the chief justice of the U.S. SupremeCourt and including the vice president and several members ofCongress--invited Small to replace outgoing Secretary MichaelHeymann in 2000, he was careful to present himself as a bohemianrather than a businessman. Though he had spent his career inbanking and finance, he emphasized his knowledge of Europeanlanguages and his travels throughout Latin America. He evenreminisced with a reporter about his college-age career ambition tobecome "the world's greatest flamenco guitarist." Just before hetook the Smithsonian's reins, The New York Times declared theformer bank executive "more nuanced than his net worth" andcelebrated the Smithsonian's decision to "bring a new level offinancial savvy and managerial panache to the world's biggestmuseum complex."

But the bonhomie didn't last long. Small ramped up to chiefexecutive mode almost as soon as he took office. Among his firstproposals was the division of the Smithsonian into two"worlds"--museums and science. The idea was widely reviled andquickly shelved, but it seemed to reveal the new secretary'sfundamental understanding of the Smithsonian. Small thought of theSmithsonian as having two separate missions: the museums, whichwould provide entertainment and cash flow; and the research, whichwould, at best, try to break even. Small envisioned a future inwhich the two interacted very little, failing to grasp that moststaffers saw these worlds as one, with the museums serving asoutlets for the scholars to communicate their work with the public,and the scholars, in turn, ensuring that the museums boasted thebest possible collections. From the beginning, Small's model ofcorporate efficiency was an ill fit for this kind of symbioticco-existence.

One of Small's next moves was no better received. In 2001, heannounced his intention to shutter the National ZoologicalConservation and Research Center, a respected animal reserve inNorthern Virginia. Small reasoned that the closing would save theinstitution $2.8 million per year but offered few otherjustifications. Scientists rebelled, as did Virginia's congressionaldelegation, and the plan was scrapped. But Smithsonian stafferswere so distressed by the debacle that Congress ordered ablue-ribbon panel to investigate Small's actions. Soon after, thenew secretary made yet another financial misstep when a donorinsisted that her multimillion dollar gift be used for a schlocky"Hall of Achievers" featuring such luminaries as Martha Stewart andOprah Winfrey. Eventually, the philanthropist withdrew all but atiny fraction of the gift.

Mixing business and scholarship is, of course, a problem that hasplagued museums long before Small came on the scene. "Over theyears, public sector support has declined pretty steadily as apercentage of museums' income," says Jason Hall, director ofgovernment affairs for the American Association of Museums. "Theyhave to make that up in order to survive and expand." And theSmithsonian's position is a particularly tricky one: Despite beingnestled in the heart of the nation's capital, the institutioncollects only about 75 percent of its funding from the federalgovernment and is often called a "quasi- federal" agency. Thatmeans roughly one-quarter of the Smithsonian's intake comes fromprivate sources--donations and earned income. Since the Smithsoniandoes not charge admission--"The idea," explains Helen James, aSmithsonian ornithologist, "is that the American taxpayer hasalready paid admission"--gift shops and restaurants must ring uptens of millions of dollars annually.

"I think we all understand that we've got to sacrifice our integrityto some degree," says Brian Huber, a paleobiologist who has beenwith the Smithsonian for nearly two decades. "Twenty years ago, wewouldn't have expected to have stores all over the place." TheSmithsonian's shops--which include 26 on-site stores as well as acatalogue and an online ordering service--are crucial components ofSmithsonian Business Ventures (SBV), a division of the institutionformed in 1998 to centralize sales revenue. Officials at the timepredicted that the SBV would return $55 million a year to thegeneral fund (that is, profit shares that do not go directly to themuseum where the money is earned) within 5 years. But, by 2006, itwas earning just $23.9 million.

Last spring, this lag prompted the Smithsonian's inspector generalto launch an investigation of SBV's accounting and compensationpractices. Around the same time, the House Appropriations Committeetook note of the enormous salaries (and extravagant bonuses) ofSmithsonian executives, including Small himself. Records showed thesecretary took home compensation equal to $813,000 in 2003. (Forcomparison's sake, the top salary for a federal bureaucrat is$152,000, or about one-fifth as much.) Twenty-eight Smithsonianexecutives, the panel pointed out, earn more than Cabinetsecretaries. Huber says this fact hasn't escaped Smithsonianstaffers. "I think what has people most frustrated," he sighs, "isthat our trust fund is going to pay these enormous salaries. Youhave to sell a lot of t-shirts and a lot of pizza to cover thosekinds of salaries."

And it's not just the salaries. Small has also been reluctant togive up other perks of his former corporate life. He has been knownto charter private jets to shuttle him around. And he's rumored tohave an especially cozy relationship with his board. Little wonderhe's expected to remain secretary until 2011.

Small's latest ongoing gaffe began in March 2006, when he announcedthe creation of Smithsonian Networks, a new 30-year joint venturewith the cable network Showtime. The deal created an ondemand cablechannel, set to debut next month, that will show originalprogramming based on Smithsonian materials. Though Small and SBVexecutives toasted the partnership in the press, not everyonejoined in the celebration. In particular, the deal'ssemi-exclusivity troubled many independent documentarians.According to the terms of the deal, which was brokered by Small andSBV chief Gary Beer, filmmakers will be restricted to "incidental"use of the museums' archives and staff unless they are affiliatedwith Showtime or apply for special approval. Effectively, thismeans that a private company will have a near-monopoly over a publicresource, depending on how strictly the term "incidental" isinterpreted. Last April, more than 200 filmmakers and historians,including Ken Burns and Michael Moore, signed a protest letter andasked that further details of the deal be disclosed. Small refused,citing a "confidentiality provision." "It's anti-democratic," saysBurns, who has worked with the Smithsonian for over 30 years. "Andit's symptomatic of the outsourcing of our common wealth."

The Smithsonian-Showtime flap did not escape the eyes of Congress.In May, a House Administration Committee hearing convened, andSmall initially provided a heavily expurgated copy of the Showtimecontract. (Later, he relented and submitted the full text.) "Weapologize," Small said, "for the hullabaloo this has causedCongress." After chastising Small for his lack of transparency,Congress issued its punishment: a $20 million cut from theSmithsonian's federal budget and a Government Accountability Office(GAO) investigation of the affair.

In December 2006, the GAO released its findings, agreeing in partwith the protesters: "[F]ilmmakers and other interested partiesremain uncertain about what factors the Smithsonian will use in itsdecision-making process regarding filming requests and in generalabout the impact of the contract." Small's defense of the deal, thereport concludes, "was unreliable because it was based onincomplete data and oversimplified criteria." Still, the partnershipwas allowed to remain in place, with unknown consequences forindependent film and Smithsonian staffers alike. "The scholars verypassionately feel that, having been given the opportunity to be thecustodians of the collections and to develop this expertise ... andcommunicate it to the public, they should be freely accessible tothe public," says James. "This is probably the largest issue: Willit hamper not just access to the collections but access to ourexpertise as federal employees?"

And, even as controversy swirls around Small's current employer, ithas arisen anew at his old one. In 2004, Fannie Mae becameembroiled in an accounting scandal that brought about the ouster oftwo of the secretary's former colleagues. Nonetheless, Smallhimself remained relatively unscathed until May 2006, when agovernment report on the fiasco appeared, finding that the formerCEO had fostered a corporate culture in which his underlings wererunning amok of generally accepted accounting rules and misleadinginvestors.

Small has not commented on the Fannie Mae accusations, perhapsbecause he has his hands full with the seemingly unlimited supplyof bad news coming out of the Smithsonian. (Through a spokesperson,he also declined to be interviewed for this piece.) Last year,attendance at the museums declined roughly 5 percent, bucking anoverall gain in tourist dollars spent in Washington. And, with theNational Museum of American History closed for a two-yearface-lift, it's unlikely that 2007 will be better. Oh well. Atleast Small still has his private collection.