OT:Probe Finds NIH Official Violated Government Regulations

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Probe Finds NIH Official Violated Government Regulations

By Rick Weiss*

Washington Post Staff Writer

Wednesday, June 27, 2007; Page A03

http://www.washingtonpost.com/wp-

dyn/content/article/2007/06/26/AR2007062601964.html

A high-powered institute director at the National Institutes of

Health disregarded conflict-of-interest guidelines by making

decisions affecting the university where he was a faculty member,

broke government spending rules, and raised concerns with his

growing involvement as an expert witness in legal cases, according

to sources within NIH and Congress and hundreds of pages of

confidential documents.

Schwartz, a physician and researcher recruited from Duke

University to great fanfare in 2005 as chief of the National

Institute of Environmental Health Sciences, was found to have spent

modest amounts of institute money for personal purposes but was

cleared of other allegations of wrongdoing in a recent internal NIH

ethics review obtained by The Washington Post.

In a telephone interview yesterday, Schwartz said he made mistakes,

which he blamed on " misunderstandings " about institute rules

and " poor communication, " for which he said he takes " full

responsibility. "

Schwartz denied any deception on his part, however, and said he has

taken corrective actions to prevent future problems.

But several members of Congress have demanded more details, saying

they have evidence that the NIH report is incomplete. And scores of

e-mails reviewed by The Post confirm that ethics officials in NIH

and in the Health and Human Services secretary's office have grown

increasingly frustrated with Schwartz's repeated insensitivity to

conflict-of-interest rules.

In one exchange, when officials learned that Schwartz had not fully

divested all his biotechnology and drug company stocks as required,

Schwartz wrote to the NIH ethics office that the divestiture " seems

totally unreasonable. . . . I'm simply not willing to limit my

investments in this way. "

The ethics officer, who later complained that she had " lost

patience . . . a long time ago " with Schwartz, responded, " It may

appear to be unreasonable, but it is the law. "

He subsequently sold the stocks.

Also raising alarms were Schwartz's growing commitments to give

expert testimony in multimillion-dollar asbestos injury cases -- of

concern because he might be perceived as profiting personally from

his status as head of the nation's premier environmental toxicology

program.

Schwartz brought more than a dozen Duke researchers to his federal

lab, despite a requirement that he recuse himself from matters

involving Duke. He also overspent his lab budget by millions of

dollars. Those actions led agency officials to take the extremely

unusual step of banning Schwartz from his own lab for nearly three

months, putting it into receivership and sending the researchers

back to Duke in what one official called a " de-Duking " process.

Raynard S. Kington, NIH's deputy administrator and top ethics

officer, attributed the problems to a " misunderstanding " when

Schwartz was hired as to the limits he would have in his new job.

The lab was recently placed under the budgetary control of another

NIH institute to prevent further problems, Kington said.

And in March, Schwartz -- who had retained his faculty status at

Duke, a few miles from the institute's headquarters in Research

Triangle Park, N.C. -- separated himself from the university.

" There is now a clear, bright line " between Schwartz's outside

activities, lab responsibilities and responsibilities as NIEHS

director, Kington said

Schwartz said he earned about $150,000 from asbestos-related expert

testimony and clinical exams from mid-2005 through fiscal 2006. But

Schwartz emphasized that he had contracted with the law firm before

coming to NIH.

Government ethics officials, however, were clearly concerned that

lawyers could exploit the clout that came with Schwartz's new

position at NIH.

" More than any other type of outside activity (writing, speaking,

even consulting), the expert witness can lead to trading on the

reputation of the NIH . . . it's almost inevitable, " an ethics

adviser wrote in an e-mail regarding Schwartz.

Kington e-mailed Schwartz that lawyers in HHS Secretary

Leavitt's office " had major concerns about your doing these

activities. " He continued, " I pushed back, and they eventually

deferred to my call. "

The internal NIH review found that Schwartz wrongly used almost

$2,000 in government funds to frame his high school diploma and

various photographs for his office, and for expenses relating to a

limousine service. The report did acknowledge that his staff gave

him bad advice on those matters.

Schwartz said he reimbursed the government, has stopped giving

expert testimony and is committed to strengthening the institute.

" I really have the best interests of people who are being exposed

and who are at risk of environmental diseases, " he said, mentioning

several landmark public health projects the institute is sponsoring,

including one involving asthma in residents of New Orleans.

But congressional distrust remains strong. Last Thursday, Sen. Chuck

E. Grassley (R-Iowa), ranking minority member of the Finance

Committee, which has been investigating Schwartz for months, sent an

eight-page letter to NIH Director Elias A. Zerhouni with a host of

new questions to be answered by July 10.

" The National Institutes of Health conducts important research for

the public good, and individuals who hold high-level positions there

ought to understand that they hold the public trust and demonstrate

respect for it with their actions, " Grassley said.

In the House, Oversight and Government Reform Committee Chairman

Henry A. Waxman (D-Calif.) and Rep. Dennis J. Kucinich (D-Ohio) have

asked Schwartz for documents, citing " multiple sources [who] have

contacted the Committee to raise additional questions about your

conduct as Director of NIEHS. "

Schwartz, an expert in environmentally related lung diseases, was

hired in 2005 just three months after Zerhouni imposed strict new

conflict-of-interest rules in the aftermath of a scandal involving

agency scientists who failed to disclose lucrative consulting deals

with pharmaceutical companies.

In interviews this week, various current and former NIEHS employees

called Schwartz " brilliant " and an " excellent scientist " but

also " patriarchal, " and " footloose and fancy-free with the rules. "

Since his arrival, three top institute officials have left, and many

employees have expressed dismay at Schwartz's leadership.

" Morale is just horrible, " one said speaking on the condition of

anonymity for fear of retribution.