Large research alliance with private corporations may allow administrators to put personal agendas and interests ahead of the best interests of the University.

Agenda

At the very least, the CNR-Novartis alliance represents a vision of the University of California held by a small but powerful group of University administrators. UC President Atkinson is a strong advocate of technology transfer to private firms. He founded the UC Industry - University Cooperative Research Program. Part of this is the Biotechnology Strategic Targets for Alliances in Research (alternate web site at Biotech Berkeley). This outreach program has led to strong relations between UC and private companies. For example, 1 in 5 California biotech companies was founded by UC scientists. Viewed another way, this is the public university doing research which could be undertaken by the private sector. We feel that this does not qualify as the public good research which should be performed by a public land grant university.

Atkinson was Chancellor of the UC San Diego campus (1980-1995) when research alliances were formed. In 1992, UCSD (actually in La Jolla, CA) and Ciba-Geigy formed a $20 million, 6 year research alliance. In 1992, Scripps Research Institute (non-profit, private, but affiliated with UCSD, also of La Jolla, CA) signed an exclusive research alliance with Sandoz. After much protest - including threats by the National Institutes of Health to withdraw its funding of Scripps - the alliance was significantly altered and approved in 1994.

In 1995 Atkinson became UC President, and by mid-1996 CNR Dean Rausser was pursuing research alliances with life sciences companies. After a year, he settled on Novartis, the Swiss-based life giant resulting from the merger of Ciba-Geigy and Sandoz. Technically, the contract is with a US subsidiary, Novartis Agricultural Discovery Institute, based in La Jolla, CA.

Interests

CNR Dean Gordon Rausser raised eyebrows a few years ago due to his $1.3 million annual income - about 10 times his salary as Dean - from his part time consulting job at the consulting firm that he founded with four other UC Berkeley economists (LECG) went public. This is despite the fact the off-campus employment is limited to 39 days per year. Thus his "hourly wage" was over 50 times greater as a consultant than as Dean.

LECG had an initial public offering on Dec 18, 1997. Dean Rausser received 1.5 million shares, and sold a quarter million of them at $12, making a quick $4 million. News articles on this:

In August of 1998, after peaking at $22 / share, LECG was acquired by the Metzler Group in a swap in which 1 LECG share = 0.6 Metzler share. Metzler recently peaked at over $43 / share (equal to $26 / LECG share). If the Dean still owns 1.5 million shares of LECG, then he may have 0.9 million shares of Metzler, or $23 million in stock assets. [Get stock info for LECG and Metzler. ]

Just what does Dean Rausser research and consult? His Berkeley research addresses intellectual property rights in agricultural biotechnology and how biotechnology-induced restructuring in private industry will affect input suppliers, producers, food distributors, and final consumers. His consulting at LECG is in antitrust, industrial organization, regulation, environmental damages, merger analysis, the economics of negotiations, asset evaluations, and the institutional design and economic evaluation of legal and regulatory infrastructures in various parts of the world. (LECG bio) Thus it came as no surprise that CNR Dean Rausser negotiated a "merger" between CNR and a huge agricultural biotechnology firm - especially considering that Sandoz and Ciba-Geigy were primary clients of LECG during the year they merged to form Novartis (SEC document - then do a word search for "Sandoz").  It is unclear if LECG consults for Novartis, and what Dean Rausser's exact role is. However, it is clear that Dean Rausser is a principal for and a primary stock holder of a firm with significant financial ties to Novartis.

Now that the CNR-Novartis alliance is sealed, Dean Rausser has announced that he is not renewing his term after January. Free from these regulations, he will be able to pursue a career using his experience as the Dean who negotiated a research alliance with between a Swiss life sciences giant and a state agricultural school.

Is this a conflict of interest for the Dean? Could personal financial interests have interfered with his judgment of what is better for UC and the state of California?

The Berkeley chancellor (presently Robert Berdahl) is responsible for establishing a review committee for the Dean after five years in office (i.e., October 1999), as outlined in the Academic Personnel Manual.