Northwestern University: Cancer Research Grants and Personal Expenses

Northwestern University agreed to pay $2.93 million to settle allegations that its cancer research grants paid for personal expenses, including family travel and consulting fees for unqualified relatives. A former purchasing coordinator in hematology and oncology brought the whistleblower case. For someone handling research purchases, travel or consultant payments, the case turns on a familiar comparison: what the grant was funding and who the expense actually served.

The Justice Department announced the university settlement on July 30, 2013. The allegations concerned National Institutes of Health grants. The former physician whose expenses were at issue later reached a separate settlement. We find it remarkable that a university can settle claims over family trips and unqualified relatives’ fees without admitting responsibility.

Family Trips Billed to Cancer Research Grants

The government alleged that Northwestern submitted grant reimbursement claims for expenses benefiting a researcher, his friends and his family. The covered period ran from January 1, 2003, through August 31, 2010. The physician was the principal investigator on the grants involved.

The National Institutes of Health funded research projects involving adverse drug events, multiple myeloma drugs, a blood disorder called thrombotic thrombocytopenic purpura, and quality of care for cancer patients. The university’s Lurie Cancer Center in Chicago was the setting. The government alleged that money awarded for that work instead covered personal travel, meals, hotels and other improper charges.

The federal grant fraud allegations concerned what Northwestern charged to those research awards.

The government’s account included family trips and meals and hotels for the physician and friends. We have a hard time finding the research purpose in a family trip billed to a cancer grant. That is the personal-benefit allegation at the center of this case.

Consulting Fees and University Subcontracts

Consulting payments allegedly reached people chosen from the physician’s personal circle who lacked the qualifications for the work. The government identified unqualified friends and relatives, including a brother and cousin, among the recipients. Calling a payment a consulting fee supplied a professional description for what the government alleged was a personal benefit.

That distinction matters to someone who knows the consultant. The description of the service, the person’s qualifications and the work actually expected are different parts of the same charge. We examine how those parts fit the grant that paid it. An insider may know why a particular person was selected or what the research team expected that person to contribute.

The university’s alleged role also extended to subcontracts. According to the university settlement announcement, the government alleged that Northwestern improperly subcontracted with other universities for services paid from National Institutes of Health grants at the physician’s request. Professional services, consulting services and subcontracts all appeared among the reimbursement categories covered by the settlement.

That part of the allegation reaches beyond an expense report. It concerns an institutional purchasing decision: the university arranging services and charging the research award. For a person who handled that transaction, the requested work and the reason for assigning its cost to a particular grant belong together. We examine spending outside a grant’s purpose through that connection between the funded project, the service and the charge.

Why the Purchasing Role Matters

The whistleblower worked as a purchasing coordinator in hematology and oncology at Northwestern’s Feinberg School of Medicine during 2007 and 2008. She brought the civil False Claims Act case that led to the settlements. The government’s account connects her allegations to the direction and authorization of grant spending inside the university.

Purchasing is the useful perspective here. A person processing a travel request may know who traveled and why. A person arranging consultant payments may know what services were requested and who approved them. Someone working with subcontracts may know which project was supposed to receive the work. Those are different views of the spending the government described.

We connect that firsthand knowledge with the records behind a grant charge: the request, the approval, the service or trip, and the award asked to pay for it. For consulting, we examine the explanation for hiring the person alongside the work expected. For travel, we examine the research purpose alongside the people whose expenses were covered. The point is to understand the transaction as the people inside the operation understood it.

The allegations reached both the spending decisions and the claims submitted to the National Institutes of Health. That is why knowledge of who authorized an expense can matter alongside knowledge of who benefited. The university allegedly allowed the researcher to submit false claims, and the whistleblower alleged that grant funds paid for goods and services outside National Institutes of Health and government-grant guidelines.

The U.S. Department of Health and Human Services Office of Inspector General, the Federal Bureau of Investigation, the National Institutes of Health and the U.S. Attorney’s Office investigated.

The Researcher’s Separate Federal Grant Settlement

The former physician agreed to pay $475,000 in a separate settlement announced on October 30, 2014. It resolved the claims left against him after the university’s agreement. Northwestern’s settlement had released the university and its employees from the whistleblower claims except for that physician. The government then brought its own suit against him.

The later announcement described the same personal-benefit claims and included conference registration fees among the covered expenses. The allegations concerned charges the physician submitted for reimbursement under research grants on which he was the principal investigator.

When Research Spending Pays for Other Work

Other grant cases show how the same comparison reaches staff time: what work an award funded against what work its money actually paid for. At Northwestern, the alleged mismatch concerned personal-benefit spending and improper service charges. The Scripps and Columbia cases concerned effort reports that allegedly charged grants for unrelated work.

The Scripps Research Institute settlement concerned allegations that faculty time spent preparing new applications, teaching, doing committee work and handling administration was charged directly to existing National Institutes of Health projects without adequate effort accounting.

In the Columbia University grant settlement, the government alleged that effort reports were certified without verifying actual grant work, including proposal writing and time unrelated to the particular grant. Columbia admitted that certain reports were inaccurate and that one of its public health programs charged grants for work that did not belong to those agreements.

The approval itself is part of the story. In each comparison, we look past the expense category or certification to the work, the beneficiary and the decision to charge the award. A research account can carry a convincing description while someone inside the program knows what the payment actually bought.

The Purchasing Coordinator’s Whistleblower Reward

The purchasing coordinator received a share of the university settlement, and the government announced a separate share for her from the physician’s settlement.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know What the Grant Actually Paid For

If you handled the purchases, consultant payments or travel and know who benefited, talk with our whistleblower experts about the charges you saw. We build your grant fraud case around that knowledge and bring in federal research-grant whistleblower lawyers who understand university spending. We stay beside you as partners through the case, from the first conversation about an expense to the pursuit of a recovery.