CAMBRIDGE, MASS.—Every summer, Eric Johnson plays Santa Claus to deserving faculty at the Massachusetts Institute of Technology. And the list that he checks before he hands out his gifts is laid out in a 3-inch-thick computer printout—an account of “points” accumulated by individual faculty members over the past year as the reward for having met with representatives of private industry to discuss their work and share their technical expertise. Those points are converted into cash that the faculty members can use for such research-related “extras” as lab equipment and professional travel.

Johnson is director of the university’s Industrial Liaison Program (ILP), a 41 -year-old program that charges firms an average of $50,000 for the chance to learn first-hand what is going on in the minds and labs of university scientists. Over the years, the program has won its share of high praise. Suddenly, it has come under fire.

The congressional...

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