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Thursday, June 18, 2009

Republican Senator Wades Into UCSF Financial Morass; Echoes Complaints of Fired Dean Profiled By SF Weekly

Posted By on Thu, Jun 18, 2009 at 10:45 AM

click to enlarge Dr. David Kessler
  • Dr. David Kessler
Our paper's regular readers may recall a gem penned in April of last year by Ron Russell, in which he profiled Dr. David Kessler, the former dean of U.C. San Francisco Medical School ousted after years of complaining about "alleged financial malfeasance at the institution he was hired to lead."

Is Sen. Charles Grassley (R-Iowa) one of our readers? Not likely. But, Either way, the Los Angeles Times reports that the senator sent a letter to UCSF demanding a proper accounting of how it spent federal dollars -- placing himself squarely in the middle of the dispute between UCSF and Kessler, who has since sued the school in a federal whistle-blower case (a possibility foreshadowed in Russell's article).

Again, you can see SF Weekly's piece here -- but for those who are into the whole brevity thing, here are some choice excerpts:

At its root, the breakup stemmed from a dispute about the level of resources Kessler says UCSF promised to the dean's office as an inducement for his taking the job -- money he and his supporters say is vital to keeping the medical school ranked among the nation's best. But Kessler's complaints involve more than allegedly unfulfilled promises. He contends that after he arrived in San Francisco, he discovered that the financial books of the dean's office were a mess, and that it was on a trajectory to run out of money within several years.

UCSF officials dispute that, saying that the materials provided to Kessler before he took the job were merely "pro forma" documents for internal planning purposes. They insist that the medical school's finances remain solid.


The manner in which Kessler was let go also caught many of his colleagues by surprise. In academia, deposed executives are typically accorded genteel treatment, not uncommonly finding new jobs elsewhere while leaving behind little public hint of dissatisfaction. In Kessler's case, things were different. "The university applied every sort of humiliation technique you would normally associate with a corporate firing," says one faculty member, who, like several others who were asked to comment for this article, spoke on condition of anonymity. "It was really kind of shocking."


The compensation package the university presented was never a sticking point. To get Kessler, the university offered a salary unprecedented for UCSF -- $510,000, plus perks, while allowing him to continue to serve on several for-profit and nonprofit boards that would enable him to earn several hundred thousand dollars beyond his UC pay. Still, Kessler hesitated while seeking assurances about the level of resources he would have, Birnbaum and others say.

In June 2003, Kessler got the answer he was waiting for. It came in a spreadsheet produced under the imprimatur of Jaclyne Boyden, UCSF's then-vice dean for administration and finance. It suggested that the prospective new dean could expect at least $48 million a year to spend at his discretion. Kessler was so pleased, associates say, that the only other item for which he negotiated, and to which UCSF's chancellor acquiesced, was that the dean's office retain the institution's full share of patent settlements emanating from medical school research.

But the rosy picture soon faded. In December 2004, after barely 16 months at the helm, Kessler received disturbing news from Boyden's successor, Jed Shivers, whom Kessler had hired away from Yale. Shivers had ordered an in-house analysis of the dean's office finances, and the numbers he got back were shocking. Instead of $48 million being available to the dean, the projected figure was closer to $28 million -- adding up to a whopping $100 million difference extrapolated over five years.

Worse, as Shivers soon confided, the financial books were in disarray, with the university inexplicably booking fund balances as income, making the dean's office appear to be flush when it wasn't. Moreover, the analysis showed that in four of the five years before Kessler arrived, the office had spent more than it was taking in. As internal e-mails and other correspondence from late 2004 and early 2005 show, Kessler shared the grim discovery with the chancellor and the university's finance office.


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About The Author

Joe Eskenazi

Joe Eskenazi

Joe Eskenazi was born in San Francisco, raised in the Bay Area, and attended U.C. Berkeley. He never left. "Your humble narrator" was a staff writer and columnist for SF Weekly from 2007 to 2015. He resides in the Excelsior with his wife, 4.3 miles from his birthplace and 5,474 from hers.


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