VARI settles legal challenge for $5.5M

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The Van Andel Research Institute is paying $5.5 million to resolve allegations that it submitted federal grant applications and progress reports but failed to disclose Chinese government grants that funded two VARI researchers.

The settlement further resolves allegations that VARI made claims to the government with “deliberate ignorance or reckless disregard for the truth regarding the Chinese grants,” the Department of Justice said yesterday.

As part of its grants application process, National Institutes of Health requires recipient institutions to disclose all financial resources — including any other research grants — in support of their research endeavors.

Obtaining research funding from National Institutes of Health is a highly competitive process, with only a small portion of eligible applications receiving funding each year. Nondisclosures and false statements to granting agencies are “especially harmful because they distort competition, disadvantage applicants who play by the rules and undermine agencies’ decision-making on the use of their limited resources,” the Department of Justice said.

Between Jan. 1, 2012, and Aug. 31, 2019, VARI received NIH grants for two researchers.

The government alleged that while VARI had policies and procedures in place to address conflicts of interest, VARI did not take adequate additional steps to investigate the researchers’ foreign funding sources despite receiving specific information about their Chinese affiliations.

The government claimed, for example, that VARI learned about a professor’s Chinese grants in June 2018 while reviewing a press release. The government claimed that rather than confirming and disclosing the information, VARI removed references to those grants from the proposed funding attributions in its press release.

The government alleged that shortly thereafter, VARI received an Aug. 20, 2018, letter from the NIH reminding of the need for disclosure. The government alleged that VARI then received a Nov. 30, 2018, email from NIH that cited specific concerns about potential nondisclosures.

The government claimed that VARI did not disclose Chinese grants to NIH even after receiving this correspondence.

The government claimed that VARI instead followed a consulting firm’s advice to send a letter stating it was not required to disclose information about foreign grants because “there was no undisclosed overlap of any budgetary resources, commitment, or scientific endeavor” between the Chinese grants and the NIH grants. NIH, however, requires disclosure of all financial resources available in support of an individual’s research endeavors, the Department of Justice said.

The government further alleged that VARI, in representing to the agency that “there was no undisclosed overlap” between the Chinese grants and the NIH grants, did not know whether that statement was true.

The claims resolved by the settlements are allegations only. There has been no determination of liability.

“It’s unfair to other grant applicants and to the NIH for any institution to withhold requested information about whether the research that institution wants the NIH to support may be getting funding from outside sources, specifically including foreign governments,” Andrew Birge, U.S. Attorney for the Western District of Michigan, said in a statement.

“False Claims Act penalties are harsh by design. I sincerely hope the word gets out on the importance of full disclosure with the government.”

Jana Hall, VARI chief operations officer, said in a statement:

“We recently reached a settlement, which we believe is in the best interest of the Institute. VARI did not admit any liability, and this civil matter has no connection to the quality of the Institute’s science or the validity of our research findings.

“In addition, both professors referenced in this civil matter have resigned from VARI. We remain deeply committed to ensuring that our processes meet funding disclosures and NIH requirements.”

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