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A blight at the museum.

In 2000, the U.S. Fish and Wildlife Service received an anonymous tip that a luxury apartment near the Dupont Circle neighborhood of Washington, D.C., housed a private and possibly illegal collection of tribal art. People who had visited the apartment whispered that its walls showcased hundreds of artifacts, including many containing what appeared to be plumage from rare or endangered birds. There was no way to know for sure, since the collection's owner had forgone plaques and scholarly labels and arranged the items to complement his d?cor. An inquiry began, and the agency's questions were quickly met with paperwork--import permits, contracts, receipts--from the owner and his lawyer. But, even after the investigation closed, the rumors persisted. Eventually, photographs of the controversial gallery published in magazine profiles of the owner piqued wildlife officials' interest once again. Four months after the initial investigation, officials reopened the case and asked him to allow another examination.

This was awkward in part because the owner, Lawrence Small, was head of the Smithsonian, one of the nation's premiere cultural institutions. And then there was the problem of his shifting stories. In December 2000, Small told Architectural Digest that he had legally purchased many of the artifacts while traveling through South America in the 1980s. But, when wildlife officials questioned him less than a year later, he claimed he had bought the bulk of his collection from an anthropologist in North Carolina in 1998 for about $400,000. After months of sifting through over 1,000 Amazonian artifacts, ornithologists and mammologists from the agency discovered that over 200 of the objets d'art contained feathers from protected birds, including the crested caracara and the roseate spoonbill. On January 5, 2004, a U.S. attorney in Raleigh, North Carolina, filed charges against Small for violating the Migratory Bird Treaty Act. Small pleaded out to a class B misdemeanor; a federal judge ordered that he serve two years probation and 100 hours community service.

The modern museum was conceived as a byway connecting scholarship with the masses. It was meant to liberate knowledge and art and science from the monopoly of rich dilettantes and stuffy academics. So it's odd to see the head of America's most important network of museums hoarding cultural treasures for himself. And, unfortunately, Small has run the Smithsonian in the same vein. He has padded his own paycheck and those of his fellow executives while slashing research funding. Instead of protecting this prized collection for the public, he has cut deals with the private sector that limit mass access to its trove. As Representative David Obey put it, Small is as "crassly commercial as anybody in town." His highly corporate modus operandi has made him "the most reviled and detested administrator in the institution's history," in the words of a Smithsonian scientist who, in 2001, wrote a letter of complaint to the institute's regents. Worst of all, Small's pursuit of profit has largely failed. While donations are up, the institution has fallen short of its revenue goals and kept its funds far from researchers' pockets. In a few short years, Small has managed to turn good scholarship into bad business.

In the 161 years since James Smithson's half-million dollar bequest became the Smithsonian, the institution has amassed a collection of over 130 million objects, from ancient fossils to modernist paintings. But, among the Smithsonian's many holdings, the National Museum of Natural History (NMNH) is perhaps where its original benefactor would have felt most at home. Smithson was a naturalist, and, in addition to his cash donation, he contributed the beginnings of the museum's mineral collection. Housed in an enormous, green-domed building on the National Mall, today the NMNH is one of the most visited museums in the world.

Visitors might be forgiven, however, for imagining that the museum is more concerned with the diffusion of merchandise than of knowledge. The NMNH boasts four gift shops, two restaurants, and an IMAX theater. Dinosaurs are among the museum's most popular features, and the foyer gift shop caters to this enthusiasm. The extinct behemoths are everywhere--stuffed stegosauruses, tiny T-rexes inside water-soluble eggs, packets of plastic pterodactyl bones. Kids gather around a machine that squashes a dinosaur imprint onto pennies.

Just in front of all this commerce is where I meet Igor Krupnik, a Smithsonian anthropologist with a bald head and pale, bushy eyebrows. "The Smithsonian is starving," he explains. "And, when that happens, so do all kinds of unknown commercial ventures." He's referring not to the gift shops but to a raft of controversial corporate deals to which Small has committed the institution--usually with little or no input from below. On the day I visited Krupnik, the Smithsonian had just announced a new partnership with the digital media company Corbis, and the anthropologist was upset. Whereas in the past individual museums or researchers had considerable latitude in determining which Smithsonian images might be used by outsiders and on what terms, now Corbis will retain rights to sell images of the Smithsonian's collection 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 of scholars at the NMNH who meet periodically to discuss "bureau"--Smithsonian shorthand for an individual museum--and institutional business. He left Russia to join the NMNH's Arctic Studies department in 1991 and now occupies a large third-floor office just past the entomology department's glistening new specimen storage units. Throughout his career at the NMNH, Krupnik has been pleased with the intellectual support and camaraderie he has found among Smithsonian scientists. But he has grown increasingly concerned about the tension between the institute's academics and executives. "They are corporate people, and they behave like corporate people," Krupnik says of Small and his fellow Smithsonian executives. "It's a culture clash. We are scientists, we have peer review, we cannot do anything in secrecy. And they have to do a lot in secrecy."

That includes such deals as the Corbis venture and a still more controversial deal Small struck with Showtime last year. One comment I heard over and over again from Smithsonian scientists was that they were open to commercial partnerships; they just wanted to be consulted before the ink was dry on the contracts. And Small's wheeling and dealing has hardly resulted in a windfall of funding--or, at least, funding that researchers have been able to get their hands on. As Krupnik notes, the institution's finances are so strapped, and its fiscal bureaucracy so convoluted, that scientists often find it easier to fund their work with outside grants. Krupnik himself recently organized an exhibit at the NMNH called "Arctic: A Friend Acting Strangely," which was underwritten by the National Oceanic and Atmospheric Administration and a few other groups. None of the funding for the exhibit came from the Smithsonian.

It wasn't supposed to be this way. When the Smithsonian Regents--a prestigious board headed up by the chief justice of the U.S. Supreme Court and including the vice president and several members of Congress-- invited Small to replace outgoing Secretary Michael Heymann in 2000, he was careful to present himself as a bohemian rather than a businessman. Though he had spent his career in banking and finance, he emphasized his knowledge of European languages and his travels throughout Latin America. He even reminisced with a reporter about his college-age career ambition to become "the world's greatest flamenco guitarist." Just before he took the Smithsonian's reins, The New York Times declared the former bank executive "more nuanced than his net worth" and celebrated the Smithsonian's decision to "bring a new level of financial savvy and managerial panache to the world's biggest museum complex."

But the bonhomie didn't last long. Small ramped up to chief executive mode almost as soon as he took office. Among his first proposals was the division of the Smithsonian into two "worlds"--museums and science. The idea was widely reviled and quickly shelved, but it seemed to reveal the new secretary's fundamental understanding of the Smithsonian. Small thought of the Smithsonian as having two separate missions: the museums, which would provide entertainment and cash flow; and the research, which would, at best, try to break even. Small envisioned a future in which the two interacted very little, failing to grasp that most staffers saw these worlds as one, with the museums serving as outlets for the scholars to communicate their work with the public, and the scholars, in turn, ensuring that the museums boasted the best possible collections. From the beginning, Small's model of corporate efficiency was an ill fit for this kind of symbiotic co-existence.

One of Small's next moves was no better received. In 2001, he announced his intention to shutter the National Zoological Conservation and Research Center, a respected animal reserve in Northern Virginia. Small reasoned that the closing would save the institution $2.8 million per year but offered few other justifications. Scientists rebelled, as did Virginia's congressional delegation, and the plan was scrapped. But Smithsonian staffers were so distressed by the debacle that Congress ordered a blue-ribbon panel to investigate Small's actions. Soon after, the new secretary made yet another financial misstep when a donor insisted that her multimillion dollar gift be used for a schlocky "Hall of Achievers" featuring such luminaries as Martha Stewart and Oprah Winfrey. Eventually, the philanthropist withdrew all but a tiny fraction of the gift.

Mixing business and scholarship is, of course, a problem that has plagued museums long before Small came on the scene. "Over the years, public sector support has declined pretty steadily as a percentage of museums' income," says Jason Hall, director of government affairs for the American Association of Museums. "They have to make that up in order to survive and expand." And the Smithsonian's position is a particularly tricky one: Despite being nestled in the heart of the nation's capital, the institution collects only about 75 percent of its funding from the federal government and is often called a "quasi-federal" agency. That means roughly one-quarter of the Smithsonian's intake comes from private sources--donations and earned income. Since the Smithsonian does not charge admission-- "The idea," explains Helen James, a Smithsonian ornithologist, "is that the American taxpayer has already paid admission"--gift shops and restaurants must ring up tens of millions of dollars annually.

"I think we all understand that we've got to sacrifice our integrity to some degree," says Brian Huber, a paleobiologist who has been with the Smithsonian for nearly two decades. "Twenty years ago, we wouldn't have expected to have stores all over the place." The Smithsonian's shops-- which include 26 on-site stores as well as a catalogue and an online ordering service--are crucial components of Smithsonian Business Ventures (SBV), a division of the institution formed in 1998 to centralize sales revenue. Officials at the time predicted that the SBV would return $55 million a year to the general fund (that is, profit shares that do not go directly to the museum where the money is earned) within 5 years. But, by 2006, it was earning just $23.9 million.

Last spring, this lag prompted the Smithsonian's inspector general to launch an investigation of SBV's accounting and compensation practices. Around the same time, the House Appropriations Committee took note of the enormous salaries (and extravagant bonuses) of Smithsonian executives, including Small himself. Records showed the secretary took home compensation equal to $813,000 in 2003. (For comparison's sake, the top salary for a federal bureaucrat is $152,000, or about one-fifth as much.) Twenty-eight Smithsonian executives, the panel pointed out, earn more than Cabinet secretaries. Huber says this fact hasn't escaped Smithsonian staffers. "I think what has people most frustrated," he sighs, "is that our trust fund is going to pay these enormous salaries. You have to sell a lot of T-shirts and a lot of pizza to cover those kinds of salaries."

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

Small's latest ongoing gaffe began in March 2006, when he announced the creation of Smithsonian Networks, a new 30-year joint venture with the cable network Showtime. The deal created an on-demand cable channel, set to debut next month, that will show original programming based on Smithsonian materials. Though Small and SBV executives toasted the partnership in the press, not everyone joined in the celebration. In particular, the deal's semi-exclusivity troubled many independent documentarians. According to the terms of the deal, which was brokered by Small and SBV chief Gary Beer, filmmakers will be restricted to "incidental" use of the museums' archives and staff unless they are affiliated with Showtime or apply for special approval. Effectively, this means that a private company will have a near-monopoly over a public resource, depending on how strictly the term "incidental" is interpreted. Last April, more than 200 filmmakers and historians, including Ken Burns and Michael Moore, signed a protest letter and asked that further details of the deal be disclosed. Small refused, citing a "confidentiality provision." "It's anti-democratic," says Burns, who has worked with the Smithsonian for over 30 years. "And it'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, and Small initially provided a heavily expurgated copy of the Showtime contract. (Later, he relented and submitted the full text.) "We apologize," Small said, "for the hullabaloo this has caused Congress." After chastising Small for his lack of transparency, Congress issued its punishment: a $20 million cut from the Smithsonian's federal budget and a Government Accountability Office (GAO) investigation of the affair.

In December 2006, the GAO released its findings, agreeing in part with the protesters: "[F]ilmmakers and other interested parties remain uncertain about what factors the Smithsonian will use in its decision-making process regarding filming requests and in general about the impact of the contract." Small's defense of the deal, the report concludes, "was unreliable because it was based on incomplete data and oversimplified criteria." Still, the partnership was allowed to remain in place, with unknown consequences for independent film and Smithsonian staffers alike. "The scholars very passionately feel that, having been given the opportunity to be the custodians of the collections and to develop this expertise . . . and communicate it to the public, they should be freely accessible to the public," says James. "This is probably the largest issue: Will it hamper not just access to the collections but access to our expertise as federal employees?"

And, even as controversy swirls around Small's current employer, it has arisen anew at his old one. In 2004, Fannie Mae became embroiled in an accounting scandal that brought about the ouster of two of the secretary's former colleagues. Nonetheless, Small himself remained relatively unscathed until May 2006, when a government report on the fiasco appeared, finding that the former CEO had fostered a corporate culture in which his underlings were running amok of generally accepted accounting rules and misleading investors.

Small has not commented on the Fannie Mae accusations, perhaps because he has his hands full with the seemingly unlimited supply of 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 an overall gain in tourist dollars spent in Washington. And, with the National Museum of American History closed for a two-year face-lift, it's unlikely that 2007 will be better. Oh well. At least Small still has his private collection.

Keelin McDonell is a writer for The New Republic.