OPENLDAP Clear-Text Password in Debug Mode

Hi All:

I'm not sure if this issue results from my ignorance of OpenLdap, or it's not capable of resolving. Regardless, any direction you can provide would be greatly appreciated:

I have a basic OpenLdap installation with TLS encryption. Passwords are hashed in the ldap directory. The user password travels from client to server encrypted as it should, then gets unencrypted by slapd, and IF IN DEBUG MODE gets displayed in clear-text. Theoretically, the password should be hashed on the client, sent across the network, to be compared against the hashed passwords in the database.

What am I missing??

Thank you,
Rich