October 2, 2008 CONGRESSIONAL RECORD — SENATE S10467 

their systems were modest, ranging 

from about $1.5 million to $3 million 

per State. 

The results have been extremely impressive. At the close of the pilot program, more than 9,000 applications had 

been disqualified—because a comprehensive check showed that the applicant had a serious criminal history 

or a record of substantiated abuse. As a 

result, thousands of individuals who 

could have harmed our parents, grandparents, and loved ones have not been 

allowed to do so. And all seniors in 

these States who are receiving longterm care services—in Alaska, Idaho, 

Illinois, Michigan, Nevada, New Mexico, and Wisconsin are now safer. 

We have a responsibility to build on 

this record of resounding success. If we 

help States to take these steps I have 

outlined, we can reduce the terrible 

toll of elder abuse. If we do nothing, experts tell us abuse rates will continue 

to rise. 

I am pleased to have Senator DOMENICI as a partner and many of my colleagues as cosponsors, including Senator LINCOLN of Arkansas and Senator 

COCHRAN of Mississippi. Thanks to the 

leadership of Senator BAUCUS and Senator GRASSLEY, the cost of this bill— 

$100 million over 3 years—is fully offset. With regard to all other Senators, 

the only offices that have expressed 

concerns are those of Senator COBURN

of Oklahoma and Senator DEMINT of 

South Carolina. I appreciate the willingness of their staffs to meet with my 

staff and trust that they will be able to 

reach agreement shortly. 

In closing, the Patient Safety and 

Abuse Prevention Act has made substantial progress during the 110th Congress. It is strongly endorsed by attorneys general across the country, by the 

business community, labor unions, and 

elder justice advocates. It has been 

thoroughly discussed in public hearings 

and also during a markup in the Senate 

Finance Committee, where it was 

unanimously approved. The administration has provided technical assistance on the bill. I hope that all Senators will recognize the wisdom of approving this measure. Failing to take 

action to protect our Nation’s frailest 

citizens should be unacceptable to all 

of us. 

f 

PAYMENTS TO PHYSICIANS 

Mr. GRASSLEY. Mr. President, I 

have been examining several doctors at 

universities across the country to see if 

they are complying with the financial 

disclosure policies of the National Institutes of Health. I ask unanimous 

consent to have printed in the RECORD

my latest letter to Emory University 

regarding Dr. Charles B. Nemeroff and 

the Emory-GlaxoSmithKline-National 

Institute of Mental Health Initiative. 

There being no objection, the material was ordered to be printed in the 

RECORD, as follows: 

U.S. SENATE, 

COMMITTEE ON FINANCE, 

Washington, DC, October 2, 2008. 

Hon. JAMES W. WAGNER, Ph.D., 

President, Emory University, Dowman Drive, 

Atlanta, GA. 

DEAR DR. WAGNER: The United States Senate Committee on Finance (Committee) has 

jurisdiction over the Medicare and Medicaid 

programs and, accordingly, a responsibility 

to the more than 80 million Americans who 

receive healthcare coverage under these programs. As Ranking Member of the Committee, I have a duty to protect the health of 

Medicare and Medicaid beneficiaries and 

safeguard taxpayer dollars appropriated for 

these programs. The actions taken by 

thought leaders, like those at Emory University (Emory), often have profound impact 

upon the decisions made by taxpayer funded 

programs like Medicare and Medicaid and 

the way that patients are treated and funds 

expended. 

I would like to expand on concerns I 

brought to your attention regarding problems with the disclosures of outside income 

filed with Emory by Dr. Charles Nemeroff, 

Chair of the Department of Psychiatry. I 

have previously cited discrepancies pertaining to Dr. Nemeroff’s disclosures filed 

with Emory and reports that I received by 

several companies regarding payments made 

to Dr. Nemeroff. I also raised concerns about 

Dr. Nemeroff’s conflicts of interest relating 

to several National Institutes of Health 

(NIH) grants. 

Federal regulations place numerous requirements on a university or hospital when 

its researchers apply for NIH grants. These 

regulations are intended to ensure a level of 

objectivity in publicly funded research, and 

state in pertinent part that NIH investigators must disclose to their institution any 

‘‘significant financial interest’’ that may appear to affect the results of a study. NIH interprets ‘‘significant financial interest’’ to 

mean at least $10,000 in value or five percent 

ownership in a single entity. 

From the summer of 2003 until the summer 

of 2008, Dr. Nemeroff was the primary investigator on a collaborative grant between 

Emory, GlaxoSmithKline (GSK) and the National Institute of Mental Health (NIMH)— 

the Emory-GSK-NIMH Collaborative Mood 

Disorders Initiative (Initiative). This Initiative examined five novel GSK antidepressant 

candidates. The NIH budgeted approximately 

$3.95 million over this grant’s five year period with about $1.35 million paid directly to 

Emory for overhead costs. Apparently, Dr. 

Nemeroff also received some payment for his 

salary from this grant, although the exact 

amount has not yet been made available to 

the Committee. 

On several occasions during the life of this 

grant, it appears that Dr. Nemeroff failed to 

report to Emory that he was participating 

actively on the speaker’s bureau for GSK. 

For instance, in an email regarding his outside activities dated October 1, 2003, Dr. 

Nemeroff wrote: . . . I have to dig up the 

agreement and send it to you, GSK no standing contract, I chair their ad board 2–3 times 

per year and I am paid per board meeting at 

a standard rate of $5K per weekend. 

However, and based upon information in 

our possession, in 2003 GSK paid Dr. 

Nemeroff about $119,000 in speaking fees and 

expenses. Based upon information provided 

from Emory, Dr. Nemeroff did not report 

that he was giving promotional talks for 

GSK on Paxil and Lamictal. 

On March 19, 2004, Dr. Nemeroff again addressed his relationship with GSK in response to questions from Emory’s Conflicts 

of Interest (COI) Committee. Again, it appears that Dr. Nemeroff did not mention the 

fees he was receiving for promotional speaking on behalf of GSK. In a letter to the Assistant Dean for Administration, Dr. 

Nemeroff wrote: Apart from speaking at national symposia, such as the American Psychiatric Association, for which GSK might 

serve as a sponsor, my consultation to the 

company is limited to chairing their 

Paroxetine Advisory board and for that, I am 

remunerated $15,000 per year. 

However, on March 16, 2004, three days 

prior to signing this letter, GSK paid Dr. 

Nemeroff $3,500 for a talk he gave on Paxil at 

the Citrus Club, a members only business establishment in Orlando, Florida. On March 

17, 2004, he gave another $3,500 talk about 

Paxil in Kissimmee, Florida. The week after 

he signed this letter, Dr. Nemeroff gave 

three talks on Paxil, for $3,500 each, at various venues in New York State. 

In June 2004, Emory’s COI Committee released a report on Dr. Nemeroff’s company 

sponsored grants and outside activities. Dr. 

Nemeroff was provided a copy of the report 

which stated in pertinent part: 

The Committee concluded that you did not 

follow procedures and policies regarding the 

review of your consulting agreements and 

that you failed to disclose your potential 

conflicts of interest in research in your Annual Disclosure Form for 2002–2003, your 

Sponsored Projects Approval Forms, and 

your IRB and IACUC forms. 

In response to this report, Dr. Nemeroff 

wrote a memorandum to the executive associate dean on July 6, 2004, explaining how he 

would manage his conflicts in the future. He 

included the last page of the COI Committee’s report with his signature to indicate 

‘‘that I will follow the management plans for 

my conflicts of interest.’’ As part of this 

management plan, Dr. Nemeroff wrote, ‘‘In 

view of the NIMH/Emory/GSK grant, I shall 

limit my consulting to GSK to under $10,000/ 

year and I have informed GSK of this policy.’’ 

Barely a week after this promise, on July 

12, 2004, GSK paid Dr. Nemeroff $3,500 in fees 

and $505.40 in expenses for a talk he gave regarding Paxil at the Larkspur Restaurant 

and Grill in Las Vegas, Nevada. The following day, Dr. Nemeroff gave two more 

talks in exchange for $7,000 from GSK ($3,500 

per talk). 

On July 19, 2004, Dr. Nemeroff received an 

invitation from the marketing team of 

Lamictal to attend their national advisory 

board meeting on November 15–16. Dr. 

Nemeroff responded by email: I cannot attend this meeting, unfortunately for two reasons. First I have a prior commitment presenting grand rounds at St. Louis University 

on the 16th and a chairs meeting at Emory 

on the 15th. Secondly because I serve as the 

Principal Investigator of the Emory/GSK/ 

NIMH grant from NIH on Antidepressant 

Drug Discovery, I am very limited in my 

ability to consult with GSK as this is viewed 

as a conflict of interest. 

Records supplied from GSK show that Dr. 

Nemeroff was most likely in St. Louis on the 

16th of November. On November 17th, GSK 

paid Dr. Nemeroff $7,000 for two clinical 

roundtables at two physicians’ offices in St. 

Louis, and $3,500 for a lecture he gave at 

Kemoll’s Italian Restaurant. 

On July 15, 2004, Emory’s Office of the 

Dean sent Dr. Nemeroff a letter regarding 

the Emory-GSK-NIMH Collaborative Moods 

Disorders Initiative grant. The letter concerned the COI Committee’s review of his relationship with GSK. The letter stated: The 

[COI] Committee understands that you serve 

on the GlaxoSmithKline Paroxetine Advisory Board and provide advice to GSK on 

their products that are already on the market. For these services, you receive approximately $15,000 annually. You do not have any 

stock options or equity interests in GSK. 


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S10468 CONGRESSIONAL RECORD — SENATE October 2, 2008 

Please correct the record if this is not correct. . . . The [COI] Committee found that 

you have a significant financial interest in 

GSK because your consulting fees are more 

than the de minimis amount established by 

Emory’s University Policy, the AAMC guidelines, and PHS regulations, which is currently $10,000 annually. . . . In order to manage this conflict of interest, the [COI] Committee requires that you keep your consulting fees from GSK to an amount equal to 

or less than $10,000 on an annual basis 

throughout the grant period, its renewals, 

and final collection of data. 

In response, Dr. Nemeroff sent a letter to 

the executive associate dean on August 4, 

2004. Dr. Nemeroff wrote: However, to reiterate, I have already taken the necessary 

steps to be in compliance with the recommendations of the COI Committee, namely my consulting fees from GSK will be less 

than $10,000 per year throughout the period 

of this NIH grant, its renewals and final collections of data. GSK has been informed of 

this change and certainly understand the 

reasons for this decision and is supportive of 

my compliance with the university recommendations. 

According to GSK reports, Dr. Nemeroff 

exceeded the $10,000 limit within that very 

same month. On August 23, 2004, Dr. 

Nemeroff was paid $3,500 for a teleconference 

with the Louisiana State University Psychiatry Department. GSK reports that this was 

a ‘‘non product’’ talk. However, Dr. Nemeroff 

gave talks on the 25th and 26th at two restaurants in New York regarding Paxil—one 

at Passion Fish Restaurant in Woodbury and 

the second at Burton and Doyles in Great 

Neck. For each talk, GSK paid Dr. Nemeroff 

a $3,500 speaking honorarium. On August 31, 

2004, Dr. Nemeroff held a ‘‘non product’’ teleconference for an additional $3,500. 

On October 29, 2004, the assistant dean for 

administration sent Dr. Nemeroff a letter 

concerning his grants. Relying on Dr. 

Nemeroff’s promise to maintain his consulting fees from GSK below $10,000, Emory 

informed him that he did not have a conflict 

with the Emory-GSK–NIH Collaborative 

Mood Disorders Institute. 

However, GSK reports that Dr. Nemeroff’s 

final lecture on Paxil was given on January 

26, 2006. That day he gave two talks in 

Springfield, Missouri. He gave one lecture at 

the Burrel Behavioral Health and the second 

at Mille’s Turn of the Century Cafe ́. GSK 

paid Dr. Nemeroff $7,000 for the lectures 

along with $174.98 in expenses. 

Based upon information provided to me, it 

appears that Dr. Nemeroff denied giving 

these lectures. For instance in a letter on 

November 20, 2006, Dr. Nemeroff wrote the 

following to the Emory dean about his outside activities: 

‘‘I was somewhat surprised by the suggestion that I serve as [primary investigator] or 

co-PI in any research protocols funded by a 

company with which I have a financial relationship. This is absolutely untrue. Quite 

some time ago, I made that decision based on 

the 2004 letter from Dr. Adkison and have 

stuck to it. Thus, this is not an issue.’’ 

However, during the years that Dr. 

Nemeroff served as the primary investigator 

of the Emory/GSK/NIMH Initiative it seems 

he failed to report approximately half a million dollars in fees and expenses from GSK. 

These fees covered dozens of talks given to 

promote drugs sold by the company. 

Accordingly, I request that your institution respond to the following questions and 

requests for information. For each response, 

please repeat the enumerated request and 

follow with the appropriate answer. 

(1) For each year that the Emory/GSK/ 

NIMH grant was active, please provide the 

following: 

a. Total amount of grant; 

b. Amount provided to Emory for overhead; and 

c. Amount of grant provided as salary to 

Dr. Nemeroff. 

(2) Please provide all communications regarding this investigation and/or Dr. 

Nemeroff’s outside consulting. This information may be held by Dr. Nemeroff and/or his 

assistant and/or supervisors to Dr. Nemeroff. 

The time span of this request covers November 2007 to the present. 

(3) According to documents provided to us 

by Emory, Dr. Nemeroff wrote a memo to 

himself on the letterhead of the journal Depression and Anxiety, stating that he was 

paying himself $3,000 to write a supplement 

for that journal. Dr. Nemeroff then filled out 

an Emory form for payment, with the money 

being withdrawn from Emory account 9– 

30410–2170. Please provide documents and explanation for the source of funds that were 

placed in this account. 

Thank you again for your continued cooperation and assistance in this matter. As 

you know, in cooperating with the Committee’s review, no documents, records, data or 

information related to these matters shall be 

destroyed, modified, removed or otherwise 

made inaccessible to the Committee. 

I look forward to hearing from you by no 

later than October 16, 2008. All documents responsive to this request should be sent electronically in PDF format to 

BrianlDowney@finance-rep.senate.gov. If 

you have any questions, please do not hesitate to contact Paul Thacker at (202) 224– 

4515. 

Sincerely, 

CHARLES E. GRASSLEY, 

Ranking Member. 

Attachment. 

DR. CHARLES NEMEROFF’S DISCLOSURES ON 

GLAXOSMITHKLINE 

Year Company Disclosure filed in 

March 2008 

Amount 

company 

reported 

2000 ..... GlaxoSmithKline .......... No amount provided 1 $190,918 

2001 ..... GlaxoSmithKline .......... No amount provided 1 135,460 

2002 ..... GlaxoSmithKline .......... $15,000 ....................... 232,248 

2003 ..... GlaxoSmithKline .......... Not reported ................ 119,756 

2004 ..... GlaxoSmithKline .......... $9,999 ......................... 171,031 

2005 ..... GlaxoSmithKline .......... $9,999 ......................... 78,097 

2006 ..... GlaxoSmithKline .......... No amount provided 2 32,978 

1 Consulting agreement for two weekends a year. 

2 Speaker’s Bureau, $3,500 per talk; $5,250 for rotating speakers series. 

Note 1: When a Physician named a company in a disclosure but did not 

provide an amount, the text reads ‘‘no amount reported.’’ When a Physician 

did not list the company in the disclosure, the column read ‘‘not reported.’’ 

f 

REPORT OF THE SBA INSPECTOR 

GENERAL 

Mr. KERRY. Mr. President, on behalf 

of Senator SNOWE and myself, I rise 

today to express our concern that the 

Small Business Administration has 

taken steps to hide from public view 

the details of one of the largest lending 

scandals in that agency’s history. As 

chairman and ranking member of the 

Senate Committee on Small Business 

and Entrepreneurship, we take our 

oversight role of the SBA seriously, 

and we believe that transparency is 

vital to a well-functioning government. 

On July 11, 2007, the SBA’s Office of 

Inspector General issued a report on 

the agency’s oversight of Business 

Loan Center, LLC, otherwise known as 

BLX. That report was not made publicly available until October of the 

same year, in a heavily redacted form. 

BLX was one of SBA’s largest 7(a) lenders when the $76 million in fraudulent 

loans it made was exposed in January 

2007. An OIG investigation regarding 

allegations of the fraudulent loans 

helped lead to the arrest of a BLX executive vice president and 18 other individuals, who were not BLX employees. 

OIG followed up the investigation by 

releasing the report on SBA’s oversight 

of BLX. Despite the obvious need for 

more, not less, transparency of SBA’s 

oversight activities, when the report 

was made publicly available in October 

of that year, it was heavily redacted 

and virtually useless to the public in 

trying to determine what the SBA is 

doing to address the multimillion dollar loan fraud that took place under its 

watch. 

To further underscore the damage 

that took place, it is important to note 

that, in the time that has elapsed since 

the report was issued, BLX—now called 

Ciena Capital has declared bankruptcy. 

According to the company, it will continue to manage its assets as a ‘‘debtor 

in possession’’ under the jurisdiction of 

the bankruptcy court. However, we are 

still concerned that the former BLX 

will not fulfill its obligations to the 

SBA and the American taxpayer, in 

turn. 

Even so, as detailed in hearings on 

SBA lender oversight, our committee 

remains very concerned by the number 

and breadth of the redactions of the 

BLX report. At the lender oversight 

hearing on November 13, 2007, then SBA 

Administrator Steven Preston promised to work with the committee to 

make more of the report publicly available. To date, there has been no agreement on a meaningful release of redacted material. 

In the context of conducting oversight, it has become apparent to the 

committee that the OIG did not exercise independent authority on what 

was redacted and instead let the agency it was investigating dictate that 

large sections of the report be redacted. This is contrary to the usual 

process that occurs with SBA OIG reports. Of the 15 reports that the OIG 

has released this year, there have been 

none with a volume of redactions even 

close to those in the BLX report. Of the 

30 reports OIG issued in 2007, only 3 reports have a comparable amount of 

text redacted and those are all reports 

regarding agency information security. 

In this statement, I will bring to 

light the OIG’s first three recommendations to the SBA and a summary of the SBA’s comments on the 

recommendations, which were redacted 

in the publicly released report. There is 

nothing in this material that should 

have been withheld. In fact, on August 

3, 2008, the New York Times reported in 

an article that revealed the substance 

of the three redacted recommendations 

that ‘‘With the American taxpayer assuming responsibility for all manner of 

bad loans made by reckless lenders, it’s 

puzzling that a scathing 2007 audit of 

the Small Business Administration’s 


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