The SRA Symposium - College of Medicine

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Similarly, the OGE audit indicated that the stringent limits on the outside activities of NIH senior
management (the NIH Director, deputy directors and associate directors, as well as institute and
center directors and deputy directors) were not in compliance with OGE regulations affecting all
executive branch agencies. (Working Group 2004, at 46 – 47.) Those limits, too, had to go.
Thus, several prohibitions on NIH employees that had been in place fell in compliance with the
OGE review. Stones of this tumbled Jericho wall had prohibited NIH employees from:
• engaging in outside activity with entities having involvement with the employee’s institute,
center or division;
• accepting compensation in excess of $25,000 from outside firms—and no more than $12,500
from any one firm;
• performing in excess of 500 hours per year of compensated outside service;
• accepting stock for themselves, their spouses and minor children as compensation for outside
work; and
• serving as managers or on boards of directors of related activities. (Working Group 2004.)
And so, with a Federal Register notice (61 FR 147 (1996) to the public and a memorandum from
Director Varmus to his staff, the old restrictions were out and the new permissiveness in—all apparently
with not only the approval of but a mandate from Congress, the Executive and the OGE.
(Working Group 2004.)
As of the end of July of 1996, the “Varmus rules” were in place. (61 FR 147, 1996).
2. The New-er Predicate: February 3, 2005
The Presidential elections of 2000 came and went.
January of 2001 arrived—soon thereafter so did a new Executive administration.
Thirty-five months later the L.A. Times published Willman’s exposé.
Congress was shocked. And appalled. And held hearings.
In its Federal Register Interim Final Rule Notice of February 3, 2005, that followed those hearings,
the Department of Health and Human Services (HHS) stated that it was making changes to the
ethics regulations “based on the experience that has been garnered by the Department in implementing
the regulation since it was issued in 1996”—since, i.e., the Varmus rules—to “establish [ ]
more specific requirements with respect to [NIH employee] requests for approval of outside activities
and impose [ ] an annual reauthorization process.” (70 FR22 (2005), at 5543.)
By way of explanation, the Notice continues:
Outside activities with entities substantially affected by NIH programs, policies, or
operations must be further restricted in order to avoid the potential for real or apparent
conflicts of interest that may threaten the integrity of the critically important research
conducted and sponsored by the NIH. This assessment is informed by recommendations
of the Advisory Committee to the NIH Director that were presented in the June 22,
2004, Report of the NIH Blue Ribbon Panel on Conflict of Interest Policies (Blue Ribbon
Panel Report), available at http://www.nih.gov/about/ethics_COI_panelreport.htm, but is
predicated upon a consideration of various outside activities of NIH employees that have
been subject to inquiry and the desire to advance sound public policy. Many of the panel
recommendations and related issues were highlighted and discussed at Congressional
hearings on outside consulting arrangements by NIH employees. Panel recommendations
to liberalize certain current restrictions were not adopted in this rule. Additional restrictions
are necessary because NIH operations increasingly require significant interaction
80 2005 Symposium Proceedings Book