A report issued last week by the Inspector General's (IG's) office in the Department of Veterans Affairs (VA) charges that the department's former research chief, Nelda Wray, mishandled nearly $1.7 million in funds supplied by pharmaceutical companies for VA research. Wray, who left VA Headquarters in December after 11 tumultuous months, is now back on staff at the VA Medical Center in Houston, Texas, where she spent much of her career.
The fund that drew the IG's attention contains company donations for research projects and is administered for the VA by the Friends Research Institute, a nonprofit based in Baltimore, Maryland. Like other federal agencies, the VA cannot accept private money; it has relied on the institute for almost 30 years to manage such financial arrangements, although it retains authority over the money. The IG report found that in 2002, before Wray arrived, her predecessors misspent $537,000 from the fund.
The IG expressed concern over how money from the fund--which has ballooned over the years and is often earmarked for specific clinical trials--has been used. Had Wray handled the paperwork properly, the IG report finds, nearly all of the misspent $1.7 million might have been paid legitimately from VA sources. But it concludes that $79,650 should have been paid for personally by Wray and her staff.
According to the IG report, Wray sought frequent access to the fund. It alleges that she spent $23,000 on T-shirts for VA employees "for the purpose of creating collegiality" and improperly billed the agency for four personal trips to Houston that "appear to be a pretext for Dr. Wray to make weekend visits in Houston for personal reasons at Government expense." The report also cites several management lapses during her tenure. For example, it contends that she exhibited "unlawful preference to individuals she wanted promoted or hired" and violated ethics codes in approving $900,000 in grants to a close colleague in Houston.
Wray's attorneys wrote to VA Secretary Anthony Principi last week disputing many of its allegations. Of the Friends money, her lawyers argued that "Dr. Wray used these funds in exactly the same manner as her predecessor."
The VA, which has made no public comment on the report, is reviewing the IG's findings to determine whether to take action against Wray and whether to shift money out of the Friends Research Institute, as recommended by the IG, to more closely supervised accounts at VA medical centers or other VA nonprofits.