Duke and the $112.5 Mil Grant Fraud

An astonishing settlement by Duke University with the federal government received minimal coverage.Duke agreed to pay $112.5 million to settle claims that it knowingly submitted false data in federal grant work that brought in $200 million to the university for research. The false data, which resulted in the retraction of 17 of 38 research articles on the grant research, came to light as a result of a whistleblower, former Duke biologist, Joseph Thomas. Mr. Thomas will receive 30% of the #112.5 million, as provided under the False Claims Act and his qui tam claim. Mr. Thomas was a former lab analyst who reported the false data submitted to obtain and retain grants from the National Institutes of Health and the EPA. The false data were submitted over a seven-year period.

Erin Potts-Kant was the pulmonary researcher involved, and the Duke internal investigation into the false data issue began when she was arrested for embezzling $15,000 from Duke. Ms. Potts-Kant entered a guilty plea and has repaid the funds to Duke.

Interestingly, when Mr. Thomas raised the issue of the false data to the federal government, it declined to be involved in the suit. Mr. Thomas and his lawyers carried the suit through on their own with the Feds stepping in only at the last minute on settlement negotiations. There were over 300 motions and other court filings in the case, which began in 2013.

You better believe that universities around the country are now taking a hard look at federally funded research grants for irregularities. Duke has established a committee to develop new recommendations for research integrity and grant administration and oversight. The panel’s work is due June 30. Duke’s leadership is going about reform all wrong.

Duke might begin by looking at its culture of research. As Ms. Potts-Kant explained in her deposition, “Everyone needed a grant. Everyone needed money,” and that she falsified data “because researchers would be more happy if they could get a grant.” She also noted that the principal investigators on the research projects were “very vocal” about the pressure they felt to get and keep grants. One researcher explained in testimony before Duke’s Ad Hoc Investigation Committee, “if she (Potts-Kant) keeps brining good data, we get funded, she keeps her job, she gets a raise, everybody’s happy.”

Culture trumps integrity, ethics, and even federal regulations. Start there, not with new platitudes on research integrity.

About mmjdiary

Professor Marianne Jennings is an emeritus professor of legal and ethical studies from the W.P. Carey School of Business at Arizona State University, retiring in 2011 after 35 years of teaching undergraduate and graduate courses in ethics and the legal environment of business. During her tenure at ASU, she served as director of the Joan and David Lincoln Center for Applied Ethics from 1995-1999. In 2006, she was appointed faculty director for the W.P. Carey Executive MBA Program. She has done consulting work for businesses and professional groups including AICPA, Boeing, Dial Corporation, Edward Jones, Mattel, Motorola, CFA Institute, Southern California Edison, the Institute of Internal Auditors, AIMR, DuPont, AES, Blue Cross Blue Shield, Motorola, Hy-Vee Foods, IBM, Bell Helicopter, Amgen, Raytheon, and VIAD. The sixth edition of her textbook, Case Studies in Business Ethics, was published in February 2011. The ninth edition of her textbook, Business: lts Legal, Ethical and Global Environment was published in January 2011. The 23rd edition of her book, Business Law: Principles and Cases, will be published in January 2013. The tenth edition of her book, Real Estate Law, will also be published in January 2013. Her book, A Business Tale: A Story of Ethics, Choices, Success, and a Very Large Rabbit, a fable about business ethics, was chosen by Library Journal in 2004 as its business book of the year. A Business Tale was also a finalist for two other literary awards for 2004. In 2000 her book on corporate governance was published by the New York Times MBA Pocket Series. Her book on long-term success, Building a Business Through Good Times and Bad: Lessons from Fifteen Companies, Each With a Century of Dividends, was published in October 2002 and has been used by Booz, Allen, Hamilton for its work on business longevity. Her latest book, The Seven Signs of Ethical Collapse was published by St. Martin’s Press in July 2006 and has been a finalist for two book awards. Her weekly columns are syndicated around the country, and her work has appeared in the Wall Street Journal, the Chicago Tribune, the New York Times, Washington Post, and the Reader's Digest. A collection of her essays, Nobody Fixes Real Carrot Sticks Anymore, first published in 1994 is still being published. She has been a commentator on business issues on All Things Considered for National Public Radio. She has served on four boards of directors, including Arizona Public Service (1987-2000), Zealous Capital Corporation, and the Center for Children with Chronic Illness and Disability at the University of Minnesota. She was appointed to the board of advisors for the Institute of Nuclear Power Operators in 2004 and served on the board of trustees for Think Arizona, a public policy think tank. She has appeared on CNBC, CBS This Morning, the Today Show, and CBS Evening News. In 2010 she was named one of the Top 100 Thought Leaders in Business Ethics by Trust Across America. Her books have been translated into four different languages. She received the British Emerald award for authoring one of their top 50 articles in management publications, chosen from over 15,000 articles. Personal: Married since 1976 to Terry H. Jennings, Maricopa County Attorney’s Office Deputy County Attorney; five children: Sarah, Sam, and John, and the late Claire and Hannah Jennings.
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