Correction: The original subhead contained an error. Michael Pottenger only performed research outside of the university. The original version of this article also contained an error. Because employment status is personnel information, the university could not release whether Pottenger still holds his position at UCLA.
In 2009, a newly hired UCLA employee obtained a $100,000 NASA research contract for a project at his private firm.
The contract Michael Pottenger won was part of an award program for small businesses, and recipients were required to work primarily at their company.
But Pottenger was ineligible to receive the contract funds because he had a full-time job outside the firm he operated, SmartWear LLC. He also worked at the UCLA Office of Intellectual Property and Industry Sponsored Research.
By not disclosing his job at UCLA and falsely stating he was qualified to accept the contract, Pottenger defrauded the government of thousands of dollars when he accepted the research award. On Wednesday, a Mississippi federal judge sentenced Pottenger to three years of probation and ordered him to pay $133,333 in restitution fees.
Pottenger’s case is indicative of a larger trend. Fraud connected to research funds is likely increasing nationwide, though it is hard to track the trend exactly, experts said.
It is impossible to know how often fraud occurs, because only cases where the fraud is caught come to light.
Over the years, federal agencies that award research funds have instituted more measures designed to prevent fraud.
But if an individual is determined to commit fraud, they can find a way to do it, experts said.
“Everyone knows there will always be bad apples,” said Dan Wikler, the Mary B. Saltonstall professor of ethics and population health at Harvard University, who studies ethical issues in research.
A 2011 audit by the NASA Office of Inspector General found that the Small Business Innovation Research program, which awarded Pottenger the contract, was “vulnerable to fraud and abuse.”
Although Pottenger confirmed with NASA that he worked primarily for his company, he accepted a full-time position at UCLA in 2008 ““ a few months before he started receiving payments for research under the contract, according to the indictment.
At UCLA, Pottenger helped faculty commercialize their research, but did not perform research or solicit research grants.
Those who apply for the business research contracts must certify several times that they meet the requirements for the funds, said Gary Jahns, NASA Small Business Innovation Research Level II program manager.
“We get over 2,000 proposals, so we are basically trusting that certification when it comes in,” Jahns said. “It’s a little hard with our administrative staff. I’ve got four people in my office.”
Businesses send in about 1,500 proposals for contracts each year, Jahns said. Of those, about 300 proposals win contract funds, he said.
Since 1997, the Office of Inspector General has investigated 51 allegations of fraud, waste or abuse in the NASA Small Business Innovation Research program. Of these allegations, eight have resulted in retributive action, such as criminal convictions, according to the audit report.
Pottenger pleaded guilty to one count of wire fraud in August after a plea agreement was reached. Because employment status is personnel information, the university could not release whether Pottenger still holds his position at UCLA, said spokesman Steve Ritea.
Last February, a former University of Florida nuclear engineering professor was convicted of 28 counts of fraud linked with government contracts, including awards from NASA.
In several cases, contract applicants have put in the same proposal to two different federal agencies, Jahns said. When the work is finished, they essentially get paid for the same research twice.
Other businesses have illegally used contract funds or violated the eligibility criteria for receiving a contract.
As the competition for federal research awards becomes rougher, the pressure may drive scientists to commit fraud more frequently, said Katrina Karkazis, a senior research scholar at Stanford University’s Center for Biomedical Ethics who also teaches a course on the responsible conduct of research.
Federal funding for research is decreasing partly because of the dreary economic climate, said Erna Aridzanyan, research director for the Strategic Research group in the UCLA Office of the Vice Chancellor for Research. The run of the American Recovery and Reinvestment Act, which provided money for research, is also coming to an end, Aridzanyan said.
On the flip side, this tough environment could have the unexpected effect of decreasing fraud cases, said Stanley Korenman, distinguished professor of medicine at UCLA and the associate dean for ethics at the David Geffen School of Medicine.
“It’s becoming harder to be a scientist, a real scientist, so it becomes more of a calling rather than a profession,” Korenman said. “Being a scientist and being dependent on grants will be harder and harder, so people go in more devoted. … They’re more inclined to be honest.”
Pottenger, his attorney and the UCLA Office of Intellectual Property and Industry Sponsored Research declined to comment for this story.