St. Louis University to Pay $1M Lawsuit Settlement

St. Louis University agreed to pay $1 million to settle a whistleblower lawsuit claiming its School of Public Health tried to defraud the government by overstating faculty time spent on projects involving federal grants, officials said.

The government will dismiss the suit and the university will be subject to increased scrutiny in annual audits of federally funded research, U.S. Attorney David Nahmias said.

Nahmias said Dr. Andrew Balas, former dean of the School of Public Health, will receive $190,000 of the settlement for his role. Balas is now dean of the College of Health Sciences at Old Dominion University in Norfolk, Va.

Balas alleged in the initial lawsuit in May 2005 that supplemental income of certain School of Public Health faculty members was inflated by claims of time they spent on grants received from the U.S. Centers for Disease Control and Prevention in Atlanta.

An investigation revealed that grants from the National Institutes of Health and the Department of Housing and Urban Development also were involved, with similar inflation of hours worked, Nahmias said.

University spokesman Clayton Berry issued a statement denying that the school schemed to defraud the government, but said it agreed to settle in order to avoid legal costs. The $1 million was a fraction of the $298 million the university received in research funding during the period in question, he said.

“In all instances, the researchers completed the research work for which they were reimbursed,” the statement said. “The central dispute was the method for calculating reimbursement for extra time spent working on federal grants.”

Balas first tried to stop the improper billings within the university but was forced to resign for refusing to go along with them, said his attorney, Michael Sullivan.

“As a leader anywhere, particularly as an academic leader, you always work with people to resolve all kinds of problems and various challenges,” said Balas.

“When everything fails, you eventually run out of options, and to fix things you do what you have to do. You have to stand up and defend academic values,” Balas said in a telephone interview.

Sullivan said the university’s evaluation of Balas’ performance as dean was “100 percent positive” in 2003, one year after he was lured from another school.

“Only weeks later, after protests from university employees who were profiting from the unlawful payments and wanted more, the university made sure Dean Balas knew that he was no longer welcome,” Sullivan said.