Ex-UCI Clinic Nurse Tells of Reporting Egg Misuse in 1992 : Hearing: No one paid attention, he says, before more recent allegations. Two whistle-blowers, two UCI fertility doctors also testify before Senate panel.

A former nurse at the UC Irvine Center for Reproductive Health told an angry Senate committee Wednesday that he had warned his superiors about the misappropriation of human eggs and embryos at the center for more than two years before anyone launched an investigation.

Norbert (Gil) Giltner, who worked in the operating room of UCI Medical Center, described in graphic detail how eggs were taken from one patient and given to another without either’s consent--the most disturbing allegations confronting the center and its elite team of specialists.

Giltner contended that misappropriation occurred in at least 10 cases, saying that when he tried to show copies of embryo and laboratory records to a university auditor as far back as 1992, he was told, “I’m an accountant. I have no idea what to do with that.”

Giltner was one of 10 witnesses subpoenaed to testify Wednesday before the Senate Select Committee on Higher Education, which has launched a full-scale inquiry into allegations of financial and medical misconduct at UCI’s internationally renowned fertility clinic.

During some of the more passionate testimony, whistle-blower Debra Krahel accused the university of “biomedical rape,” while the medical center’s top administrator heatedly denied retaliating against whistle-blowers and orchestrating a cover-up.

In her first public statement on the scandal, Mary Piccione, executive director at UCI Medical Center, told the panel: “I have not retaliated against any of the three people alleged to be whistle-blowers. . . . I have a history of being a public servant for a very long time. Never has somebody so heartbreakingly attacked me.”

Piccione later broke down in tears, calling Krahel an “opportunist” who filed the whistle-blower report merely to protect her job status, which she alleged had been jeopardized by poor performance. Piccione said Krahel had a reputation for not “carrying her own weight.”

“Perhaps we had given her a job that was too big for her,” Piccione said.

Dr. Ricardo H. Asch, the fertility center’s director, appeared before the committee but declined to testify. Asch and his two partners, Drs. Jose P. Balmaceda and Sergio Stone, have denied any wrongdoing.

Stone testified late Wednesday that, because of the scandal, his 17-year relationship with UCI had “been changed and shattered forever, by what I believe are unsupported allegations made against me by people who do not know me.”

His voice rising in anger, the 53-year-old fertility expert from Santiago, Chile, said UCI officials “have been unwilling to show me one piece of credible evidence that I have done the things of which I am accused” and from the beginning, have “taken a position of absolute mistrust.”

Stone said that Asch and Balmaceda handled in-vitro procedures while he concentrated on surgeries to correct various diseases. “I have no knowledge that transfers of eggs took place without consent,” he said. “I did not participate in these alleged actions.”

Balmaceda also made a brief appearance before the panel, saying it was his colleagues who focused their attention on the UCI clinic, while he only covered for them on “occasional weekends.” His practice, he said, was focused at Saddleback Memorial Medical Center, where he is a clinic director.

He complained in a prepared statement that he has not been able to review the text of a September whistle-blower letter outlining allegations against him. He said that no investigative panel spent more than an hour with him, and he was never interviewed during a preliminary inquiry into research misconduct.

Lawmakers tried on several instances Wednesday to pin Balmaceda down on how records were kept and how cash was reported. But they were repeatedly thwarted by Balmaceda’s attorneys, who told him not to respond.

Ronald G. Brower, Asch’s attorney, said after Wednesday’s session that it was impossible for his client to receive a fair hearing from state Sen. Tom Hayden (D-Santa Monica), who chairs the committee.

“The chairman has called my client a technocrat playing with the lives of people,” Brower said. “Today in his opening statement he referred to my client as ‘being the one charged’ and said he ‘promoted legislative anarchy.’ Our view is that this is legislative anarchy.”

During testimony Wednesday, Krahel, the former senior administrator turned whistle-blower, said efforts to punish those who reported misconduct came from the highest levels of medical center management, naming Piccione and her deputy, Herb Spiwak.

Krahel, one of three whistle-blowers whose allegations exposed the controversy, often broke down during the hearing, charging the university with ignoring and covering up what she called “biomedical rapes.”

Krahel told the committee that, as an example of the center’s tendency to repress the truth, nurse Giltner had consistently reported allegations of wrongdoing, only to have such findings “sanitized” in later audits.

Her voice breaking, Krahel testified that she was astonished to learn in June of last year that Giltner had reported his complaints in audits in 1992 and 1993.

“When I asked for proof that the egg-switching was occurring, Mr. Giltner produced a stack of cryologs, explained the cryptic entries and pointed out the logging of eggs from one patient to another,” Krahel said. “It appeared that most of the transfers were occurring between young women producing viable eggs and older women who were indicated on the chart to be post-menopausal, thus not producing eggs.”

Giltner clarified that the recipients were not post-menopausal but were suffering “premature ovarian failure.”

Krahel, who was paid $495,000 in a confidential settlement with the university, said she tried repeatedly to report problems at the clinic as soon as she learned of them.

When the clinic’s office manager, Marilyn Killane, came to her with concerns about possible drug misuse in February, she said, she took the matter to Spiwak, who told her to fire Killane and take a “hands-off” approach to the clinic.

Later, after learning of improper egg transfers from Giltner and others, Krahel said, she called Stephany J. Ander, the woman who previously held her job.

“During the conversation [Ander] became quiet and then responded, ‘So, you’ve tripped across the missing eggs,’ ” Krahel testified.

Deputy Director Spiwak repeatedly said he could not remember if he had heard allegations about the eggs prior to 1994 and blamed an auditor for not putting it in his report if he knew about it sooner.

When Hayden asked if Spiwak had disparaged the auditor’s abilities during his inquiry, Spiwak replied, “I don’t recall, but I may have.”

Hayden opened Wednesday’s hearing by calling into question the motives of the three doctors who ran the clinic, as well as university administrators who “in an atmosphere of enthusiasm . . . lionized, subsidized and protected” the physicians.

“In the end . . . this hearing is about whether fertility doctors are becoming godlike in their sway over nature and, when doctors play God, who’s watching?” Hayden said.

“This is a mad and greedy scientist event with doctors who believe they are above the law and above the ethical considerations of the Hippocratic oath,” said Assemblywoman Jackie Speier (D-South San Francisco), who participated in the hearings.

“These physicians were making obscene amounts of money,” Speier said. “They were charging women nearly double for fertility drugs. Why do they do it? They do it because they can get away with it.”

UCI, which recently sued the acclaimed trio who operated the center--Asch, Balmaceda and Stone--on Wednesday released an independent audit that attempts to chronicle the allegations of three whistle-blowers, who claim that, merely for airing their complaints, they fell prey to “a common scheme of retaliation.”

The once-prestigious fertility center is now the focus of academic, legislative and criminal inquiries, including one by the Orange County district attorney.

Asch and his colleagues stand accused of transferring human eggs and implanting them in other women without the consent of either donor or recipient, performing research on patients without their consent and fiscally mismanaging the center by withholding profits from UC Irvine. The university also has accused Asch of giving patients an Argentine fertility drug not yet approved by the U.S. Food and Drug Administration.

The school has filed suit against the doctors, who deny that they ever knowingly committed any offense. One former patient has filed suit against the doctors, and other patients have filed legal claims with UC Irvine.

Attorney Larry R. Feldman, who represents two couples making legal claims against UCI, called the testimony of Giltner and Krahel “both dramatic and incredibly incriminating with respect to the knowledge of the university.”

“It is outrageous and astounding,” Feldman said, “that the university had this information since [1992] and, by ignoring it, failed to prevent the theft of innocent couples’ embryos.”

Throughout Wednesday’s hearing, UC Irvine Executive Vice Chancellor Sidney H. Golub stood in the back row, grimacing occasionally as he watched the testimony.

Midway through the hearing, he held an impromptu news conference in the hall to address allegations of retaliation by the university against the whistle-blowers.

“It is clear that for some individuals the charges of retaliation were substantiated in some areas,” he said. “Killane was retaliated against . . . for coming forward against the doctors.

“The university has responsibility, and we have exercised that responsibility appropriately. The whistle-blowers were good citizens, and they did right. If [UC Irvine administrators] acted inappropriately toward them, we have to bear some responsibility. . . . We will deal with it.”

Despite his belated lauding of the whistle-blowers, Golub said he was distressed to learn during Krahel’s testimony that she had gone out “and started talking to patients rather than work through the system.”

Krahel wrote a letter to UCI detailing her suspicions July 18, she said. Then, nine days later, she said, she received a telephone call from Piccione telling her not to come back to the office because she was being placed on administrative leave.

“When I asked the basis of the leave,” she said, “the phone went dead.”

Krahel’s settlement with the university barred her from discussing the matter. She was allowed to speak publicly for the first time Wednesday because a Senate subpoena overrides the confidentiality clause.

“Words can’t describe the outrage my co-whistle-blowers and I have felt while we witnessed evidence to the series of biomedical rapes that occurred while the institution turned its back,” Krahel testified.

A Corona couple who have sued the center and UC Irvine, alleging that their eggs were taken and implanted in a woman who later gave birth to twins, told the committee that their experience has been devastating.

“The effect that this has had on my wife, my family and myself has changed my entire life,” said John Challender, whose wife, Deborah, sat at his side.

“It’s not getting any easier, it’s getting more difficult the more we learn,” he said, breaking down during his testimony. “This is just short of devastating to me because I always felt I had control of my family’s future.

“I only wish that the University of California had been more concerned with this before it happened.”

As reporters circled the couple outside the hearing room, Asch--the doctor they accuse of stealing their embryos--waited on the other side of a closed door across the hall. John Challender said he was relieved not to see Asch.

“I hoped we wouldn’t see him,” said the 46-year-old trucking supervisor from Corona. “I might not have been able to maintain my composure. I might have told him I hope he has as much trouble sleeping as I do.”

Robert Chatwin, UC Irvine’s principal auditor, testified that the first time he personally learned of possible egg misuse was in April, 1994, amid an investigation into charges of non-approved drug use and financial misconduct at the clinic.

But his boss, Andrew Yeilding, who was called from the audience to testify, confirmed that an auditor in his office came across similar allegations in late 1992.

Yeilding said the allegations were discussed with medical center officials, “but we did not bring an audit.” When Hayden asked why, Yeilding said, “we look into financial issues,” and this was considered a medical issue.

Chatwin said he reported his suspicions of egg misuse to attorneys for UCI Chancellor Laurel L. Wilkening and the UC regents in April and May, 1994.

It was not until September, however, that UCI appointed a clinical panel to probe the charges, along with two other panels to probe fiscal and management issues.

Times staff writers Susan Marquez Owen and Sarah Klein contributed to this report.

* NOT ON SPEAKING TERMS: Figures in fertility clinic scandal ignore one another. A26

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Sounding Off

Two former UCI Medical Center administrators testified Wednesday about alleged improprieties at the UC Irvine Center for Reproductive Health, while two top medical center administrators defended their handling of whistle-blower complaints.

THE WHISTLE-BLOWERS

* Debra Krahel

Position: Former senior associate director of ambulatory care, UCI Medical Center

History: Was placed on administrative leave July 27, 1994, nine days after reporting staff concerns about financial management and handling of human eggs at clinic.

Settlement: UCI paid her $495,000

“Words cannot describe the outrage my co-whistle-blowers have felt while we witness evidence to the series of ‘biomedical rapes’ that have occurred while the institution turned its back and still argues over who owns the medical charts.”

****

* Marilyn Killane

Age: 56

Position: Former office manager, UCI Center for Reproductive Health

History: In January, 1994, she alleged to Debra Krahel that an unapproved fertility drug was being distributed at the clinic. In May, 1994, Killane said doctors told her she was not allowed back on clinic property.

Settlement: UCI paid her $325,000

“I told the university from the beginning, ‘This will be cleared up before I rest.’ ”

****

THE ADMINISTRATORS

* Mary Piccione

Age: 60

Position: Executive director, UCI Medical Center

History: Piccione took over as executive director in 1988 when multimillion-dollar operating losses threatened to close the county’s only university hospital. She was recruited from University Hospital in Brooklyn, New York, where she served as executive director for seven years. She is credited with reversing financial troubles at both institutions.

****

* Herb Spiwak

Age: 49

Position: Deputy executive director, UCI Medical Center

History: Spiwak served as Piccione’s top assistant at University Hospital in Brooklyn. He followed her to UCI Medical Center in 1988. He was previously a teacher with New York City’s Board of Education and supervised a center for children with developmental disabilities.