Novel Application Of Federal Law To Scientific Fraud Worries Universities And Reinvigorates Whistleblowers

A federal law written with corrupt Department of Defense contractors in mind has become a serious concern for university administrators, while at the same time giving scientific-fraud whistleblowers new hope for success in pressing their charges. BREAKING NEW GROUND: Scientist-lawyer Eugene Dong first saw the scientific fraud aspects of the False Claims Act. The False Claims Act, also known as the Lincoln Law, was passed in 1863 and amended more than a century later, in 1986. Originally, the law was written to find and punish unscrupulous Union Army suppliers. As applied in scientific fraud cases, the law allows whistleblowers to sue universities and their scientists on behalf of the government for recovery of up to three times the amount of research grants they believe involve fraudulent claims, plus additional penalties. While several parties firmly support or oppose the act, some feel the problems of and solution to research fraud lie not in litigation but in the way academic institutions deal with it, and respond to whistleblowers' concerns. "The more a concerned individual feels that he or she is likely to get a fair and appropriate hearing within the institution, the more they will stay within institutional procedures," says C.K. Gunsalus, associate vice chancellor for academic affairs at the University of Illinois, which is not one of the small handful of universities targeted with a False Claims Act suit to date. "To the extent that their perception--for whatever reason--is that fair, objective, credible procedures are not available within the institution, they'll turn to this mechanism." At stake for academic institutions is the risk of severe financial repercussions. In two recent cases, whistleblowers used the courts to hold universities accountable for plagiarism and data falsification by their researchers, resulting in combined penalties of more than $3 million--with the whistleblowers receiving substantial percentages. "I'll be perfectly honest, this has scared all the universities," reports Amy Lawson, the University of Alabama attorney managing her institution's case with epidemiologist Pamela Berge. In May, a jury in United States District Court for the District of Maryland in Baltimore found that Alabama researchers had claimed Berge's dissertation work as theirs in winning grants from the National Institutes of Health. The judge ordered the university to pay more than $1.6 million to the government, of which Berge will receive 30 percent, and assessed fines against four researchers totaling $265,000. The university is planning an appeal, pending the judge's decision on post-trial motions. University representatives say that use of the False Claims Act to prosecute scientific fraud will make it more difficult for scientists and their institutions to effectively police themselves. Because cases brought under the law can result in large damage awards against universities, even when the schools conduct self-critical internal investigations or cooperate with government agencies, there are major disincentives for universities to uncover researcher wrongdoing, they argue. They add that the law places academic institutions into an untenable and potentially destructive relationship with scientists at their institutions. "The problem with the application of this statute to scientific research is that, for scientific research to flourish, a university cannot go around looking over researchers' shoulders, editing their grant applications, and making sure that their scientific conclusions are safe," contends Christopher Patti, an attorney with the University of California system. "That could be the lesson learned from this kind of litigation, but it would be a lesson that would have very negative consequences." COURT OF LAST RESORT: Dissatisfied with the institutional response to her concerns, Pamela Berge decided to sue the University of Alabama. Patti helped defend the university against false claims charges raised by senior laboratory technician J. Thomas Condie against immunologist John Ninnemann, alleging misrepresentation of burn research data performed under NIH grants in Ninnemann's lab at the University of Utah and, later, the University of California, San Diego. In January 1994, the two institutions reached a settlement with Condie and the Department of Justice, which had joined the case, filed in U.S. District Court for the Northern District of California in San Francisco. Utah agreed to pay $950,000 and UC-San Diego $625,000, with 15 percent going to Condie. Whistleblowers and their attorneys claim that there are inherent conflicts of interest invoked when an institution is asked to investigate its own scientists, conflicts obviated by arguing the case before an independent third party, the court. They note that universities rely heavily on the grants brought in by their researchers, a situation that undermines the credibility of local inquiries. The result can be unsatisfactory investigations conducted by the universities, they contend, and they see in the law a powerful corrective. Eugene Dong, a lawyer and an associate professor of cardiothoracic surgery at Stanford University School of Medicine, is credited with first identifying the applicability of the False Claims Act to scientific fraud in bringing the Condie case initially. According to Dong, the law puts universities in the most appropriate relationship to campus-based researchers. "If you get down to the nitty-gritty, the grant is the product of the institution," Dong asserts. "The individual researcher is nothing more than a manager of the research university, a corporation. Therefore, always, the corporation should be held accountable for anything he or she does in his or her capacity as a manager. The responsible party is the board of trustees of the university." Some legal experts also fear that so-called bounty-hunter aspects of the law, in which whistleblowers can take home a substantial share of any cash returned to the government, may encourage unforeseen abuses that will injure science (see Opinion). Those filing complaints of scientific fraud under the law say that fairness is their primary aim and that they turned to the courts only as a last resort, when they felt that university procedures had failed them. The potential financial rewards of bringing a case under the law are minimal compensation for the traumatic experience of raising charges of misconduct against a colleague, especially in court, they claim. "I approached this from the very beginning as an academic problem that should be resolved within the academic institution," declares Berge, who initially filed her case without benefit of an attorney. "Being a plaintiff in a False Claims Act case is a nightmare. But what happened was totally wrong. Science in the United States is not advancing when junior people have their work misappropriated. They were taking the basis of a career from me." Under the provisions of the False Claims Act, defendants are liable for up to treble the amount of the money initially received from the government, if found guilty. If defendants are deemed cooperative, the damages for which they are liable may be held to double the original payment. Additional personal penalties of $5,000 to $10,000 may also be assessed for each false claim by an individual. After filing, the suit is kept under seal for 60 days while the Justice Department decides whether it will join in the civil suit. If the department chooses to do so, the whistleblower may receive 15 percent to 25 percent of any recovered money. If not, the whistleblower may still continue the case independently and, if the suit is successful, receive 25 percent to 30 percent of the cash penalties. INSTITUTION, HEAL THYSELF: Universities will increasingly find themselves in court defending themselves against science fraud claims unless they can create "fair, objective, credible" internal investigations, according to University of Illinois vice chancellor for academic affairs C.K. Gunsalus. In recent times, the law has been used primarily against Department of Defense (DoD) contractors making false claims, with more than $800 million recovered by the government since 1986, according to statistics from a nonprofit public interest group called Taxpayers Against Fraud (TAF), The False Claims Act Legal Center, in Washington, D.C. TAF acts as a clearinghouse for information concerning the law and supports itself by backing litigation of false claims cases in return for a share of any funds recovered. Nearly half of the 840 cases that have been filed since 1986 have been DoD-related, TAF reports. Almost a quarter have involved charges of fraud in Department of Health and Human Services programs, primarily Medicare and Medicaid. Only a few have taken aim at research fraud--charging plagiarism or data falsification on an NIH grant, for example--but the number is likely to increase. "The scientific research community is just now becoming aware of the possibility that cases can be brought under the False Claims Act," observes Lisa R. Hovelson, executive director and general counsel for TAF. "I've talked to attorneys who are getting a fair number of inquiries from people who have been involved in research that is funded by the federal government, and we've had people contact us. So, it wouldn't surprise me at all to see a growing number of cases." Only the Department of Justice knows how many cases are still under seal, Hovelson notes, and the department will not comment on cases under seal. One lawyer receiving calls from scientists is Berge's attorney, Alexander T. Bok of Dangel and Fine, a law firm in Boston. With Bok's counsel, a biomedical engineer named Erdem I. Cantekin has filed a False Claims Act case, now pending in U.S. District Court for the Western District of Pennsylvania in Pittsburgh, against his employer, the University of Pittsburgh, and several university researchers, including otolaryngologist Charles Bluestone. The case threatens to reopen a bitter dispute between Cantekin and Bluestone dating to the mid-1980s (D. Rennie, Journal of the American Medical Association, 266:3333-38, 1991). Several inquiries by the university and NIH--as well as a pair of congressional hearings--revealed that in the course of an NIH-funded study of the effectiveness of amoxicillin in treating otitis media, an ear infection in children, principal investigator Bluestone was also receiving funding from pharmaceutical companies, including the manufacturer of the drug. Bluestone found the drug effective and, with coauthors, submitted a paper to the New England Journal of Medicine reporting this (E.M. Mandel et al., 316:432-37, 1987). A month later, coinvestigator Cantekin submitted a second paper to the journal, based on the same data, that found no efficacy. After consulting with the university, the journal declined to publish Cantekin's dissenting paper, which later appeared in the Journal of the American Medical Association (E.I. Cantekin et al., 266:3309-17, 1991). During this process, a university board found Cantekin had engaged in "unethical practice, academic misconduct, and breach of research integrity" in the case, largely for neglecting to acknowledge the Bluestone paper in his first, unreviewed manuscript. An NIH panel called his actions "significant departures from the standards of collegiality, mutual respect, and honest debate," but also noted that Bluestone's drug-company funding presented the "appearance of a conflict of interest." Conditions were placed on Bluestone's future funding by the health agency. Like Berge and Condie, Cantekin has decided to press his case in the court system at least in part because he was angry with the results of university and NIH inquiries, Bok says. According to Bok, Bluestone and his institution should be required to return federal grant money. He suggests that, because of the substantial amounts of money involved, False Claims Act cases are likely to change the way universities deal with internal scientific fraud charges. "There's the potential that suddenly all the grant money that came in would have to go back, in treble," Bok notes. "That would certainly get any administrator's attention. I think that's the intention of the law, so that institutions have a reason to hold their own researchers accountable." "It's like taking a carrot and a stick," Dong explains. "This is the stick. You've got to get the university's attention. If they have to pay money, it gets their attention. If they want to stop being held responsible for this kind of thing, then they've got to get their academic senate to look at the problem and see how they can make sure that their people are not defrauding the government." MONEY TALKS: The possibility of losing substantial amounts of money in court cases may motivate university administrators to change the way they respond to internal scientific misconduct charges, according to whistle-blower Carolyn Phinney. Under a state law, research psychologist Carolyn Phinney won more than $1.2 from the University of Michigan in a 1993 decision in Washtenaw County Circuit Court, Ann Arbor. Phinney charged that a former supervisor, Marion Perlmutter, plagiarized her work in winning a grant of more than $300,000 from the National Science Foundation. The university has declared its support of Perlmutter and is appealing the decision. After hearing about the Berge case, Phinney's lawyer, Philip Green, wrote Michigan lawyers to advise them of the False Claims Act implications of Phinney's case and encouraged them to settle. Like Dong and others, Phinney believes that large cash awards penalizing universities for scientific misconduct by their researchers will result in behavioral changes at the administrative level. "They're following contingencies of reinforcement, to take a psychological approach, just like any animal," Phinney comments. "If the food pellets are to the right and electric shocks are to the left, they're going to go to the right. What this does is it introduces an electric shock along with the pellet. In other words, taking $1 million from the federal government is a pellet. But if you put a 100-volt electric shock in there--you have pay back $3 million if you're caught stealing--that's a pretty big disincentive to steal." University representatives report that some procedures for dealing with charges of scientific misconduct raised within their institutions have been changed following recent decisions. In the long run, however, they say the False Claims Act will undermine, rather than strengthen, academic science's capacity to police itself. "As a result of [the Ninnemann] case, the NIH did take a look at our investigatory process at [UC-San Diego] and did make some recommendations for changes in it," reports Patti. "And we did make some changes as a result of that. "But there are problems with having these kinds of cases litigated this way. Because the real money and the real penalty is going to come as a result of these whistleblower suits, it's very damaging to the process of internal university review. It creates this really perverse incentive. If you do a comprehensive report on charges of misconduct, that finding can be used against you, subsequently, in litigation--you might as well give up when the whistleblower comes and sues you. So, it creates a bad incentive structure for universities to do a thorough internal investigation." (The Scientist, Vol:9, #17, pg., 4-5 , September 4, 1995) (Copyright © The Scientist, Inc.)

Novel Application Of Federal Law To Scientific Fraud Worries Universities And Reinvigorates Whistleblowers

Interested in reading more?

Become a Member of