UCLA Professor Is Focus of Probe

An internal UCLA audit has found that a tenured epidemiology professor, over a 12-year period, directed more than $700,000 in research funds to three companies with links to his family, without disclosing those ties.

University of California and UCLA officials said Wednesday they could not comment on the investigation involving veteran School of Public Health professor Jess F. Kraus, who runs an injury research center there.

But a letter sent Tuesday by UC system general counsel, James E. Holst, to the university’s governing board and other top officials said that UCLA has filed administrative charges against Kraus through the faculty disciplinary process. It also said the audit has been turned over to unspecified federal agencies for criminal investigation.

University officials have not decided whether to file suit, Holst wrote in the letter, which was obtained by The Times.

Kraus, in an interview Wednesday, confirmed that the firms had received certain contracts related to his research but denied that he had violated university policies, or failed to disclose required information.

“I’ve been with the university for 37 years,” Kraus said. “I’ve brought in millions and millions of dollars in grant money. I wouldn’t jeopardize that over issues like this.”

The professor also complained of unfair treatment by UCLA investigators. He said he met with investigators for less than an hour in August 2004 but did not hear from them again, despite what he described as their promise to give him a chance to respond formally to the completed audit report.

Auditors launched their investigation after they received an anonymous tip that Kraus had sent some of his research-related data entry tasks to a San Diego firm, CFM-San Diego, with ties to his family. The investigation was first reported Wednesday by the San Francisco Chronicle.

The auditors initially found that Kraus had directed about $683,000 in state and federal research funds to firms where relatives worked: CFM-San Diego Inc., an industrial parts distributing firm, and 3E Co. Inc., a hazardous materials consulting firm in Carlsbad. CFM’s president, Gerardo Samaniego, is the brother of Kraus’s daughter-in-law. The president of 3E is Kraus’s son, Jess Kraus.

A summary of the audit report said investigators found that the senior Kraus in 2002 also sent business worth about $18,000 to another firm with connections to his family: Real Work Business Results Inc. Kraus’s brother, Stephen A. Kraus, worked for the company as an agent, the summary said.

In the interview, Kraus said all of his actions were above board. And he said his brother was not employed by Real Work at the time of the contract.

In the case of 3E, Kraus said, he filed documents with the university disclosing the family connection and stating that his relatives would not be included in the work. The contract was a partnership involving both 3E and Home Depot and involved a study on back injuries. Regarding CFM, Kraus said the connection was so distant that he was not required to disclose it under UC’s nepotism policy.

Samaniego said his company made only $8,808 in revenue on its UCLA projects. The work, he said, involved administrative and data-entry work. Much more of the money, about $300,000, went to subcontractors.

Samaniego said his sister is married to one of Kraus’ sons but that he sees Kraus only about once a year and does not have a close relationship with him.

He said his company had regular dealings with UCLA staff members, but that his business contact over that period with Kraus, after the original business deal was set up, “was zip.”

“It’s such a disappointing thing to me to be implicated in something that I don’t feel in any shape, form or way that I have done anything wrong,” Samaniego said. “But if you consider the brother of a sister-in-law a nepotist’s relationship, well, that’s pretty new to me. If you really honestly saw what we did, did we earn the $8,808? You bet we did.”

The other firms could not be reached for comment.