Recall this long 2009 New York Magazine article, which notes that
Ezra [Merkin] had served as chairman of Yeshiva [University’s] investment committee since about 1994. Not long after that, the committee directed $14.5 million of Yeshiva’s endowment to Ascot [Merkin’s fund], which Ezra passed along to [Bernard] Madoff, collecting his usual fee, initially one percent and later 1.5 percent, standard for all of Yeshiva’s money managers.
Yeshiva saw no conflict of interest or, if it did, didn’t mind. The university required nothing more than that those who served on the investment committee disclose that they were doing business with the university. The 2003 disclosure to the board, a copy of which was obtained by New York Magazine, reported that Ezra was managing about 10 percent of Yeshiva’s endowment through four different funds. For his efforts, he collected over $2 million in fees, almost $1 million for Ascot alone.
That 2003 memo stated that Madoff was Ascot’s “executing broker,” a term that means he was executing buy and sell orders, supposedly those dictated by Ascot. In fact, though Merkin looked at Madoff’s statements every month, and they were detailed and thorough, and questioned him about his accounts, he left the trading—or, as we now know, lack thereof—to Madoff. Some now wonder about the propriety of the chairman of the investment committee’s taking fees for simply passing along money to Bernie—especially since Bernie was elected to Yeshiva’s board of trustees in 1996 … Why not just give the money directly to Bernie and save Yeshiva the fee? To some, it seemed like Ezra was skimming profits, and from an institution he loved.
Whatever fudging there’d been in the disclosures, Ezra did well for Yeshiva—in fourteen years, the fund grew 9 percent a year, even after subtracting losses for Madoff and expenses. And he did well for himself; certainly, he made at least $10 million from Yeshiva over his tenure.
Which is to say that if you are going to have your hedgie trustees (and eventually all your trustees will be hedgies) invest for you – in their funds – you want to be very careful not to do a Yeshiva. Already Brown University has had to let one way big money trustee go, and now there’s the awkward matter of Steven A. Cohen himself on its board. So first of all you need to weigh, er, reputational issues against growing your endowment.
And then there’s Dartmouth’s ongoing problem.
In February 2012, a group sent an anonymous letter to the office of the New Hampshire attorney general. “Who really runs Dartmouth College and for whose benefit?” the letter asked. “For years, Dartmouth has been run by and has paid sky-high fees to a group of investment manager trustees, all Dartmouth graduates, who have then recycled some portion of the fees” back to the college “as generous ‘donations,’ ” often getting a building named for them in the process.
Teehee. They get these huge fees for doing something with the school’s money, and then they graciously give back some of the money the school gave them and call this money a donation.
In his year-end review of bogus research, Gary Marcus notes endemic cheating in scientific studies and lists six ways to fix the problem. Each approach makes sense – do something about publish or perish, establish an ethical code, encourage insiders to police the work in their field…
But for some reason, Marcus omits the biggest problem of all: pharma. The staggering financial incentives for colluding with corporations and their ghost writers make an incentive like tenure look paltry.
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UD thanks Dirk.
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UPDATE: And don’t forget this problem.
When the evidence – often ambiguous and often paid for by drug-makers – allows you to go pretty much anywhere, you’ll go where the money is.
Actually, the evidence about whether people grieving the loss of someone they loved are more susceptible to clinical depression and suicide seems to be… no.
[In] a major national survey, none of the bereaved who now could be subject to a diagnosis of depression had attempted suicide. Other data sets … showed similar results — indeed, such individuals are less likely to attempt suicide than someone in the general population.
Indeed now people who show up for their on-average seven minute visit to their primary doctor and who are overtly sad because someone important to them recently died may be subject to a depression diagnosis and all the anti-depressant pills thereto.
It’s all there in the latest Diagnostic and Statistical Manual, the big book your doctor thumbs through to treat your grief.
Treat your grief. How’s your grief treatment going? Something new enters the language.
UD’s friend Roy Poses at Health Care Renewal takes a look at Russell Portenoy, a professor at Yeshiva.
In the last few decades, Portenoy has been busy making the world safe for opioids, insisting that millions of Americans can take them with little to no risk of addiction. He has also been enriching himself through consulting and speaking for pain pill manufacturers.
Portenoy isn’t alone. Here’s another advocate:
[In 1998, one doctor] said he understood that a patient would simply ‘go to sleep’ before stopping breathing. While asleep, he said, the patient ‘can’t take a dangerous dose. It sounds scary, but as far as I know, nobody anywhere is getting burned by doing it this way.’
This is the functional equivalent of John Willke on rape.
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Plenty of academic doctors continue to exploit the legitimacy their academic positions give them to shill for pain pill pharma, but what’s intriguing here is that Portenoy now expresses some regrets:
‘I gave innumerable lectures in the late 1980s and ’90s about addiction that weren’t true,’ Dr. Portenoy said in a 2010 videotaped interview with a fellow doctor.
Not just not true. They helped create the stupendous pain pill addiction epidemic in this country.
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It seems obvious that we should, as Roy says, be skeptical of “people paid by narcotics manufacturers advocating increased use of these drugs, no matter how distinguished, scholarly, or influential these people appear to be.” But in the equally destructive matter of anti-psychotics for children, Joseph Biederman, who continues on the Harvard faculty, seems to have met with no skepticism at all – at least none that could stop him as he almost singlehandedly caused a 40-fold increase in the use of these dangerous drugs.
While he appeared a grandfatherly academic, Dr. [Sidney] Gilman, 80, was living a parallel life, one in which he regularly advised a wide network of Wall Street traders through a professional matchmaking system. Those relationships afforded him payments of $100,000 or more a year — on top of his $258,000 pay from the University of Michigan — and travels with limousines, luxury hotels and private jets. … Dr. Gilman made a sharp shift in his late 60s, from a life dedicated to academic research to one in which he accumulated a growing list of financial firms willing to pay him $1,000 an hour for his medical expertise, while he was overseeing drug trials for various pharmaceutical makers. … Colleagues now say Dr. Gilman’s story is a reminder of the corrupting influence of money. The University of Michigan, where he was a professor for decades, has erased any trace of him on its Web sites, and is now reviewing its consulting policy for employees, a spokesman said.
[Gilman] has been ostracized by the university, and the consequences are broader still as a debate over the propriety of professors’ receiving payments from financial firms has been rekindled.
“What is the argument for sanctioning your full-time faculty, using your brand name, to advise the financial sector?” said Dr. Garret A. FitzGerald, a cardiovascular researcher at the University of Pennsylvania, who has been outspoken about conflicts of interest. “What’s the public good there?”
Oh pish posh. What’s the public good of Michigan’s president, Mary Sue Coleman, collecting huge sums from corporate boards for doing little other than attending meetings that cut into the time she can devote to the university? Was she distracted by her corporate boarding when she insisted on the catastrophic hiring of Rich Rodriguez?
Colleagues can nod their heads sagely about the corrupting influence of money, but really. When the president of Gilman’s university is as subject to greed as Goldman Sachs executive compensation rubber-stamper Ruth Simmons was, why should Gilman have felt uneasy about his own acquisitiveness?
… for insider trading (“Among researchers, physicians, government officials and corporate executives, the lure of easy money in health-care insider trading has become epidemic.”), you might want to pay attention to the sort of people likely to get arrested and embarrass you the way Sid Gilman has embarrassed the University of Michigan. I hate to be the one to tell you, but the endless futzing you’ve been doing with your conflict of interest forms for professors ain’t gonna cut it. You need to be able to see these guys coming.
The Gilman/Martoma story, and the related Benhamou/Skowron story, reveal, for those who wish to see, “the deeply compromised, fundamentally flawed research system in which academic figureheads serve as puppets for industry interests.” Of course, these two are just the really big money stories – hundreds of millions in profit, or avoidance of loss; Gilman’s $1,000 an hour fee for the care and feeding of his hedgie. If you want to be reminded of the zillions of smaller stories (these aren’t always about insider trading; they’re about mercenary professors as other sorts of corporate puppets), click on this blog’s conflict of interest category.
So – how do you see ’em coming?
First: Here’s what you shouldn’t do. Don’t do this retrospectively. Don’t think that by reviewing the traumatic life stories, and the pleading-for-mercy-in-front-of-a-judge statements, of people already in jail you can detect who among your faculty is, even as we speak, breaking insider trading laws. They all say the same thing. They have no idea how they lost their moral compass but they’re sure it’s around here somewhere. They thought they were dealing pretty well with their mother’s death but actually it turned them into bitter twisted nihilists. Don’t bother with this.
Instead, gaze about you at your medical faculty and ask the following question: Who’s the greediest of them all? The very greediest? I’m not talking about people who want to live well. Everyone wants to live well, and long may we prosper. I’m talking about faculty members whose acquisitiveness, ostentation, and status anxiety are notorious — the subject of jokes and stories and general incredulity. These guys are liable to be deeply in debt as they buy more and more and more and more. You want to have them in for a chat about their corporate ties.
… (close to 900 million dollars in fines of one sort or another; placed under a monitor’s oversight; executives indicted for securities violations, various lawsuits, etc., etc.), so we know Laurie Glimcher really works for the hundreds of thousands in compensation she gets from the corporation. Keeps a good eye on its extensive anti-competitive practices.
Or, you know, I mean, I’m being ironic. Glimcher seems to know how to be a good soldier, and which of us wouldn’t be a good soldier, collecting that sort of compensation for doing very little? Indeed for apparently inquiring very little into the actual operations you’re supposed to be directing?
Now that she’s dean of Weill Cornell Medical College, Cornell defends her directorship against suggestions of conflict of interest by insisting on the importance of such university/corporate partnerships.
But what is the nature of the partnership here? Under her watch, Bristol-Myers Squibb was for years was one of the most law-breaking anti-competitive corporations around. Under her watch, one executive after another quit in disgrace.
… says Sid Gilman on his University of Michigan medical school page.
You said it. Ever since his insider trading charge, Sid’s been too busy with lawyers to make time for students:
Dr. Sidney Gilman, a neurology professor at the University of Michigan Medical School … was chairman of the safety monitoring committee overseeing the clinical trials of the Alzheimer’s drug.
[Hedge fund manager Mathew Martoma, also charged,] met Gilman some time between 2006 and 2008 through paid consultations, the SEC complaint says. “During these consultations, Gilman provided Martoma with material, nonpublic information about the ongoing trial,” the SEC complaint said.
In mid-July 2008, “Gilman provided Martoma with the actual, detailed results of the clinical trial” before an official announcement on July 29, 2008, the SEC said.
And wow did these guys make a lot of money. Most lucrative insider trading scheme ever.
Details, in case you want to try this yourself.
Martoma allegedly found out from Sidney Gilman, a leading Alzheimer’s investigator at the University of Michigan, that bapineuzumab–then owned by Wyeth and Elan–had failed a key study. Not only did the hedge fund sell all of its shares in the two companies, they shorted the developers as well. And they made a killing when the share price for both cratered on the news. Gilman, who reportedly was connected to Martoma through an expert networking firm that paid him $100,000, is now cooperating with the feds.
Here’s Sid in happier days, sleeping and perchance dreaming of making a killing and then having to try to save his ass by cooperating with the feds.
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Update: A fellow University of Michigan professor comments.
Gilman’s conduct raises fresh questions about firms that match investors with experts in subjects that could move stock prices, said Erik Gordon, a University of Michigan business professor who follows the pharmaceutical industry.
“If the allegations are true, it’s reprehensible conduct for someone who has misused a position of trust,” said Gordon, who added that he doesn’t know Gilman. “This is crookery of really the lowest possible ethical standards. It doesn’t get much lower.”
One does wonder… Here’s a much-venerated man with, you figure, oodles of income. Why do it? Why be so greedy as to risk ruining your life — when you don’t need the money?
… or they’ll never disclose.
And that’s what Rose Hackman, a Columbia University student, has done with regard to tight-lipped Business School professor Glenn Hubbard, star of the film Inside Job.
Columbia Business School dean Glenn Hubbard is … featured in [the film] “Inside Job.” In interviews in the film, Dean Hubbard is asked about his extensive ties to the financial service industry, including a 2004 paper written with the then-Goldman Sachs chief economist, William C. Dudley (now president of the Federal Reserve Bank of New York), in which Hubbard praised credit derivatives as enhancing economic stability, reducing volatility, and making recessions less frequent and severe. According to the New York Times, Warren Buffett has called these same practices “financial weapons of mass destruction” that are widely acknowledged by many economists as having helped trigger the crisis.
Following the film’s release, along with other single-school initiatives, Columbia Business School nominally addressed critics by establishing a committee headed by Hubbard’s vice dean, Christopher Mayer. The result was a pledge by the committee to go beyond University transparency requirements. The pledge asked Business School faculty to declare all outside activities on an online CV, linked to each faculty member’s individual website.
But Hubbard’s position as economic advisor to the former presidential hopeful Mitt Romney still remains absent from his online Columbia profile. His ties to the Analysis Group, a consultancy firm which has placed him as an expert defending financial industry players, also remains absent.
The University of Wisconsin has endured the taptaptap of bad news about one of its faculty for years, and for years it has closed its ears to it.
It’s our old friend Thomas Zdeblick, object of a federal investigation into his remarkably lucrative relationship with Medtronic.
Investigators … found that two papers Zdeblick co-authored were among 11 in which Medtronic employees, including those in the company’s marketing department, were secretly involved in drafting and editing, a practice known as ghostwriting.
Both papers were published in the Journal of Spinal Disorders & Techniques where Zdeblick has served as editor-in-chief since 2002. That role was the subject of a 2009 Journal Sentinel/MedPage Today investigation that found the journal frequently published favorable articles about Medtronic products under Zdeblick’s watch. The story noted that Zdeblick’s financial relationship with Medtronic was not disclosed by the journal.
Many more gory details here. The picture the investigation draws is one of rampant conflict of interest destructive of patient health and research integrity. An Emory professor to whom Medtronic gave $25.5 million protests that the money had absolutely no effect on the articles he wrote about its products.
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The Zdeblick scandal jumps to Reuters. Perhaps now, with the release of the Senate’s definitive report, this story will get the attention it deserves. The University of Wisconsin will no more respond to it than Donna Shalala’s University of Miami will face up to what it has in Charles Nemeroff. It will take international coverage of practices at schools like Wisconsin for the conflict of interest that corrupts academic medicine in the United States to change.
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Two of the featured Medtronic beneficiaries are at the University of Louisville.
… discover what we already know; but it’s important to get this confirmation. Makers of anti-psychotic drugs (scroll down for all posts) target Medicaid psychiatrists in DC.
Medicaid psychiatrists …received a disproportionate, share of industry largesse, receiving two-thirds (66%) of gifts and payments. In 2008 (the most recent data available), antipsychotic use by Medicaid recipients was especially high in the nation’s capitol, with approximately 1 in 10 recipients receiving a prescription — a rate five times higher than the total national population.
A large proportion of Medicaid recipients are children under the age of 18. Antipsychotics can cause sedation, weight gain, diabetes, and other adverse effects.
It’s an absolutely perfect storm from the manufacturer’s point of view. A large vulnerable population. Doctors who may not be among the most highly trained.
“Antipsychotics are clearly being used in patients who are not psychotic,” said Adriane Fugh-Berman, MD.
The clouds are gathering at the University of Texas medical school, as its new corporate acquisition, Ronald DePinho, president of the cancer center, produces yet more bad publicity.
DePinho, the very model of the modern money man, does not see why conflict of interest should apply to him (since it would mean temporarily giving up certain income flows), or why his wife – hired on his faculty – shouldn’t get special treatment…
This chick, Kristen Juras, a law professor at the University of Montana, came down hard on the campus newspaper when it inaugurated a sex column. Said it had to be stopped because it was ’embarrassingly unprofessional’ and reflected badly upon her as a faculty member.
That was a couple of years ago.
You really want unprofessional? Unprofessional is setting yourself up as a private consultant to write articles favoring your clients, and then using the cover of your university appointment to give your hackwork legitimacy. It’s failing to disclose that your work is paid independent work for a client – tailor-made to promote that client’s legislative interests – and has nothing to do with the university which has you on its faculty.
When Montana’s governor complained to the university’s president that one of his faculty was misbehaving in this way, it irritated the president. He was caught off guard. You could say he was embarrassed.
Juras’ written study contained no disclosure saying her conclusions were her own and not the university’s views, nor did she seek prior consent from her dean to use the university name in working as a consultant, [the president] said.
Now of course Juras is screaming about free speech… A confused woman.