WASHINGTON—Behind Donald Fredrickson's forced resignation June 2 as president and lifetime trustee of the Howard Hughes Medical Institute lies a tale of budget overruns and unorthodox purchasing procedures that HHMI trustees and officials say stem from his wife's active and inappropriate role at the institute.

"It's big and it's bad," said HHMI chairman George Thorn about the results of the six-month review conducted by the New York law firm of Paul, Weiss, Rifkind, Wharton & Garrison, about which he declined to provide details. Thorn is serving as acting chief executive officer while a search continues for a new president.

Fredrickson, a former NIH director, has a sharply different view of the events that led to his departure from the $5 billion institute that he had headed since 1984. An investigation into "rumors" that his wife, Henrietta, had too large a role in HHMI activities soon mushroomed into brutal personal questioning...

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