Edderd, more on Dr J. Oesterling:
Feom this Detroit paper (The Free Press }.
Embattled U-M chief urologist resigns
School pursues probe of outside income
July 17, 1997
BY PATRICIA ANSTETT
AND MARYANNE GEORGE
Free Press Staff Writers
The University of Michigan on Wednesday accepted the resignation of its chief urologist, Dr. Joseph Oesterling, after an investigation showed he failed to disclose hundreds of thousands of dollars in outside income and double- or triple-billed the university and others for expenses, according to documents obtained by the Free Press.
The documents -- hundreds of letters, expense-account forms and checks from outside companies -- show that Oesterling earned well beyond his $400,000 U-M salary with lucrative business contracts with more than a dozen companies and legal fees from testifying as an expert witness.
The arrangements raise ethical questions because Oesterling did research for many of the companies that paid him.
U-M is continuing its investigation and may seek repayment of possibly hundreds of thousands of dollars, according to people close to the investigation who requested anonymity.
"The conclusion I have reached is that Dr. Oesterling's conduct is so egregious and inconsistent with standards expected of faculty ...that termination proceedings must be implemented against him," Dr. Lorris Betz, U-M medical school dean, said in a letter to U-M President Lee Bollinger.
Faced with that prospect, Oesterling, 40, a nationally recognized prostate cancer surgeon who edits the top journal in his field, resigned.
"There are explanations for all of this," he said Wednesday by telephone from his Ann Arbor-area home.
"I've made mistakes here. I acknowledge those mistakes and I assume full responsibility. I would never have knowingly and willfully done anything to put my family in jeopardy and my career at risk."
He said he was not aware until December that he needed to disclose any business relationships to U-M. Told that the Free Press found no disclosure statements covering at least a dozen contracts with drug and medical-device companies, as well as dozens of paid appearances in 1996 alone as an expert witness, Oesterling did not take issue with the numbers, saying: "I was not aware of any such bylaws that disclosure was necessary and needed to be done."
Lisa Baker, U-M's associate vice president of university relations, said the alleged improprieties by Oesterling are "substantial and well beyond what's been reported" earlier.
Baker also said Oesterling received copies of U-M policies on conflict of interest and disclosure requirements when he came to the university from the Mayo Clinic in Rochester, Minn., in 1994.
"These policies are widely circulated and faculty must file disclosures each year," Baker said.
Oesterling will be sentenced Monday by Washtenaw County TrialJudge Melinda Morris on a felony charge of obtaining money under false pretenses, the only criminal charge to be filed in the investigation.
The charge pertains to billing both a San Diego attorney and U-M about $2,000 for the same trip. It carries a maximum fine of $5,000 and a possible 10-year prison sentence, but Oesterling is expected to receive probation because he has no criminal record. He pleaded no contest in June in a plea-bargain arrangement.
Washtenaw County prosecutors proceeded on the single felony charge because "that's what we could prove," Chief Assistant Prosecutor Joe Burke said Wednesday. "The mere fact that something is against university policy does not make it a crime."
Oesterling faces other problems. His license to practice medicine in Michigan is in jeopardy. He may be sued by U-M for repayment of hundreds of thousands of dollars.
Oesterling also is under investigation by the FBI for possible mail fraud and Medicare or Medicaid fraud, according to people close to the investigation.
Given his reputation as a surgeon skilled in a nerve-sparing type of prostate cancer surgery -- Oesterling is the protege of Dr. Patrick Walsh, the Johns Hopkins University urologist who developed the technique -- he may have no trouble landing a job. He said he has several job offers and looks forward to clearing his name and resuming patient care.
"I have learned a lifelong lesson and can assure everyone that these activities will never occur again," he said in his resignation letter.
Monitoring matters
The still-unfolding story raises questions about how public universities monitor prominent faculty and how pharmaceutical companies buy influence. It also could cast doubt on Oesterling's research, because he failed to disclose earnings with companies that have products he studied.
Oesterling said his research is "impeccable" and has passed reviews by federal agencies. Baker said the university is reviewing the entire situation regarding Oesterling.
Documents obtained by the Free Press show that:
Oesterling double- and triple-billed U-M, drug and medical device companies, urological associations and lawyers in at least five instances for such expenses as air fare, hotel bills or taxis.
Three days after receiving a $25,000 check from Hoechst Marion Roussel, maker of Nilandron, a new drug for advanced prostate cancer, Oesterling wrote the pharmacies at U-M and the Veterans Administration Hospital in Ann Arbor, asking to add Nilandron for preferential prescribing practices.
Oesterling and a Florida tax-shelter accountant set up three companies, two of which are domestic nonprofit firms that failed to file annual reports, as required by Florida law. Neither is recognized by the Internal Revenue Service as a tax-exempt entity, and as a result, the public has no way of knowing how much income they received or how much compensation Oesterling and other officers received from the companies.
In September and October 1996, five drug companies mailed checks totaling $94,108 to one of Oesterling's companies, the National Prostate Research Foundation, to Oesterling at his home, where he asked most of his checks to be mailed. But as U-M began its investigation, he wrote the five companies and told them to reissue the checks to U-M.
Oesterling wrote VidaMed Inc. officials last year stating that he hoped his "positive presentations" would help sales of TUNA, a new technique to treat enlarged prostate conditions that was developed by VidaMed. Oesterling served on the board of directors of VidaMed and held nearly 10,000 shares of its stock until resigning last year after American Urological Association officials asked him about his relationship with the Menlo Park, Calif., company.
Oesterling said he relied on his Florida tax accountant to apprise him of state requirements. He said he asked companies to resubmit the checks to U-M after the university told him in September 1996 that he couldn't set up a research foundation without its approval.
"Every penny that came into the National Prostate Research Foundation was sent back to the industries and individuals that contributed to these funds," he said.
Oesterling said he wrote the pharmacies letters about Nilandron because it is a good drug that's cheaper than competitors, with fewer unwanted side effects.
He said he used his home as the mailing address for his outside dealings because it was easier for him to keep track of the work. His new house, a 9,000-square-foot, plantation-style mansion is valued at $1.4-million and sits on a 10-acre site on Meadowcrest Drive in Superior Township.
Litany of charges
U-M's termination proceedings outline the case against Oesterling.
In a letter to U-M President Bollinger, medical school dean Betz listed four categories of ethics violations and financial improprieties that led to the actions to terminate Oesterling:
Unapproved and excessive outside employment, in violation of written university and medical school requirements.
Undisclosed conflicts of interest resulting from dealings with pharmaceutical companies and other non-university entities.
Personal profits derived from university resources or efforts.
Multiple billing of expenses and falsification of related records.
"The evidence uncovered to date strongly indicates that Dr. Oesterling has engaged in a pattern of misconduct that the university simply will not tolerate," U-M's Baker said.
U-M documented its case in an eight-month investigation.
Oesterling earned nearly $400,000 a year from U-M, including a base salary of $182,228 and the rest in surgery fees. He remained on the U-M payroll after he was abruptly suspended March 19.
Oesterling said he sought the outside business relationships as part of his goal to educate people about prostate cancer and disease. He denied that greed or the desire to build a million-dollar home fueled his outside contracts.
U-M has a strict policy on consulting arrangements, limiting time on such work to two days a month. It also restricts outside earnings from any single corporation to 15 percent of a person's annual salary and 25 percent from all corporations unless prior approval is granted.
Documents obtained by the Free Press through the Freedom of Information Act show that Oesterling reported none of the income to U-M.
Officials at four drug companies contacted this week defended the contracts with Oesterling and said they appreciated the advice of a top doctor.
"He's an excellent doctor," James Heisch, president and chief executive officer of VidaMed Inc., said Wednesday. Consulting fees such as ones Oesterling was given are needed because "we need to get the very best medical advice we can."
Julie O'Dell, manager of external communications for Hoechst Marion Roussel, manufacturer of Nilandron, said Oesterling's fees are typical of those in the drug industry for speaking fees, media interviews andconsulting. Such costs are only a fraction of the cost of researching and developing a drug, she said.
The company paid Oesterling, or his prostate foundation, $35,000 between March and August 1996, and spent another $60,000 to buy copies of a new prostate cancer book he edited.
Staff writer Alison Young and coordinator of library research Shelley Lavey contributed to this report.
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NOTE: for more info on this case just plug Josepj Oeasterling on your search window and browse the web!!! theres more out there.
TA
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