Stanford Threatened With Criminal Action Over Audit
Federal investigators are threatening Stanford University with criminal obstruction charges if the school doesn’t cooperate more with an audit of its controversial billings to the government for research overhead costs. The university says it intends to comply with that demand as much as possible.
In a letter sent this week to Stanford President Donald Kennedy, an official of the Defense Contract Audit Agency (DCAA) complained that the university has been slow to hand over records and is not allowing auditors enough access to Stanford employees. The official listed details of a federal law that makes it a crime, punishable by fines and prison terms, to obstruct a federal audit.
“The conduct of Stanford University . . . comes within this statute. Should you not rectify the impediments DCAA is experiencing, and take action to assure they do not reoccur, I plan to bring this matter to the attention of the Department of Justice for their determination as to whether to open a criminal investigation,†wrote Joseph P. Riden, a regional manager for DCAA.
The agency is reviewing about $600 million in overhead charges, such as utility bills and administration salaries, that Stanford billed to the government over the last 10 years to support federally funded research projects. A congressional hearing on the matter is scheduled for next week. Over the last few months, Stanford has withdrawn about $690,000 in charges for such embarrassing items as a yacht, and a piano in Kennedy’s house.
Larry Horton, Stanford’s associate vice president for public affairs, said the school had not yet received Riden’s letter, which was mailed Monday and a copy of which was obtained by The Times on Tuesday. But in response to previous and less threatening letters from DCAA, the university this week sent the agency a response promising cooperation, Horton said Tuesday. The correspondence may have crossed in the mail, he suggested.
“We have indicated it is our full intention to be fully cooperative,†Horton said from Washington, where he was helping prepare for the hearings. “This is a misunderstanding that disturbs us.â€
Horton provided The Times with a copy of a letter, also dated Monday, from Debra L. Zumwalt, a Stanford attorney, to Riden. In it, Zumwalt apologized for any difficulties and wrote: “It is inevitable that miscommunications, delays and inconveniences will take place when so many different agencies are making simultaneous requests for the same materials from the same individuals within Stanford.â€
Zumwalt was referring to probes by the General Accounting Office and the Inspector General of the Office of Naval Research.
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