On August 16, 2005, the Wall Street Journal reported that since 2003, Northwestern University, Harvard University, John Hopkins University, the Mayo Clinic and the University of Alabama at Birmingham have agreed to civil settlements. The Cornell Case exposes what some scientists call a dirty little secret of university medical research: the misuse of taxpayers’ funds. In each case, the government alleged that the universities or clinics misallocated their National Institute of Health (NIH) grants. Only Harvard first alerted authorities to potential problems. In the other cases, “whistle blowers” alerted the government.

 

I was disturbed that until now the government has essentially relied on the honor system to police its grants. A cynic could or should ask if our universities, theoretically role models, could engage in fraud, has widespread malfeasance infested our entire grant structure.

To support my growing cynicism, let me simply state the Kafkaesque case involving Cornell Medical School. Dr. Sarafaglou, a pediatric endocrinologist on the Cornell faculty, reported in writing on several occasions to the Cornell medical school hierarchy her findings of blatant misuse of $23 million of a NIH grant. Ultimately federal prosecutors corroborated Dr. Sarafaglou’s findings that Cornell enrolled some 65% adults in programs designed solely for kids, inflated their budget, used phantom nurses, double-billed the government, and unfairly allocated the funds to a handful of Cornell professors.

Despite several “internal” investigations, Cornell Medical School retaliated against Dr. Sarafaglou by excluding Dr. Sarafaglou from meetings, soliciting complaints about her, and recommending that Dr. Sarafaglou undergo a mandatory psychiatric exam!

 

Although Cornell subsequently paid $4.4 million dollars to settle the government’s charges, I would argue that crime certainly pays. That is, none of the wrongdoers were dismissed, Cornell netted some $19 million, and the university remains eligible for further grants. Moreover, Cornell officials never apologized for the transgression; instead their public relations release totally misrepresented the extent of Cornell’s culpability. Counsel representing Cornell stated “The challenge is to create an extra X-ray or a second blood sample and account for that correctly.”

 

About a month ago, I spoke with a Danish professor who spoke about the pluses and minuses of Danish fiscal policy. In essence, the highest tax brackets in Denmark are 62% and their sales’ tax approaches 15%. We both agreed that Danish taxes seemed confiscatory. On the other hand, he said most Danes accept the high taxation because the quality of governmental services is so high. I responded that while American taxes are too low given our mounting budget deficits, few Americans can praise the quality of our federal and state services. In fact, most of us are critical of our public services.

Let me conclude, my mentioning a play called Doubt that I recently attended. Doubt has a double meaning because on the one hand we cannot determine whether the accused priest was guilty of sexual transgressions. On the other hand, the sister who reported the offense is disappointed because the accused gets a promotion in the catholic hierarchy rather than a rebuke or dismissal. Unfortunately, Cornell and other medical schools also have promoted those professors who attracted grants rather than disciplining them for failure to implement the grant’s agenda.