Memos Allege Autocratic and Sloppily Run Fertility Clinic : Audit: Lawyer for Asch concedes the doctor took home cash payments but denies patients were left waiting while Asch went to racetrack. Reports were used to investigate charges of retaliation.

UC Irvine’s Center for Reproductive Health was a sloppy, autocratic operation, where the director allegedly left patients waiting for hours while he went to the racetrack and, along with a colleague, took home up to $30,000 in cash each day, according to documents released by the university Monday.

The hundreds of pages of memos, reports and letters had been used by two law professors to investigate charges that three female employees who reported problems at the famed fertility clinic were retaliated against by UCI Medical Center officials. The professors’ audit, made public Wednesday, found that the women’s claims were substantiated.

In response to the newly released records, lawyers for two of the clinic’s doctors acknowledged that their clients had taken home thousands of dollars in cash for safety reasons--but had dutifully reported it on their income tax.

Ronald G. Brower, the criminal attorney for Dr. Ricardo H. Asch, the clinic’s director, said his client “never postponed appointments nor rescheduled surgeries for any purpose let alone to go to the racetrack. Absolutely false. What a scandalous thing for somebody to say.”

Brower, who talked to Asch about the new documents, did not deny that Asch took cash home at the end of the day and declared it on his income tax.

But, he said, “it isn’t against the law to receive cash. . . . He declared it on his income tax return.”

The documents also show that UCI began compiling a mountain of paperwork in late 1993 that detailed serious problems at the fertility clinic but did not launch a full investigation until September, 1994, when the three whistle-blowers filed a third letter of complaint.

The documents, for the first time, give the most complete chronological picture of repeated efforts by three whistle-blowers to trigger an investigation of the clinic.

Marilyn Killane, the former manager of the clinic, is shown, through a series of memos and complaints beginning February, 1994, appealing to one UCI department after another, with little response.

Killane, who told officials that she wanted only to be transferred away from a verbally abusive and ethically untenable situation, endured months of harassment and having her complaints largely ignored.

Killane complained about the atmosphere at the clinic on Feb. 6, 1994, writing in a memo to Asch’s partner Dr. Sergio C. Stone: “I feel that your uncontrollable temper and outbursts are inappropriate and are causing me unnecessary stress in an already stressful environment.”

Karen Taillon, Stone’s attorney, said she found Killane’s charge “ludicrous” and said Stone “has indicated that Marilyn Killane has a very bad temper and has screamed at him often.”

But on Feb. 11, the start of a series of memos, Killane formally complained to the hospital’s human resources department that Stone had harassed her and she could “no longer cope with what she believes to be compromised patient care and improper, if not illegal, practices in the clinic.”

She went on to detail severe problems at the center, and also complained that Asch was bringing drugs into the clinic from Argentina “and directing [staff] to dispense to patients” and was failing to pay the UCI College of Medicine its required 13% of income from his private practice.

In another memo, three days later, Killane also described the illegal sales of the unapproved fertility drug, HMG Massone.

“These drugs are not FDA approved but yet [Asch] sells them to patients (usually Spanish-speaking foreign patients) at a profit to himself (not with his partners).”

Her confidential memo described Asch’s attitude toward patients and cavalier.

“Surgical, anesthesia, lab techs are all kept waiting (at a great cost to the system) because of his tardiness,” she wrote. “He also very often has us change schedules to accommodate his personal/race track commitments.”

By March 15, 1994, Killane formally asked for protection as a whistle-blower, citing cash diversions, drug sales and harassment by the doctors.

Two days later an internal auditor questioned an unnamed medical assistant at the center about the unauthorized drug use and several curious shipments of the drug by Federal Express. When the auditor asked why one shipment was sent to Florida instead of out of the country, the assistant responded, “It would have been stopped by customs” and Asch “told her to do it.”

A letter written March 31, 1994, on university stationery indicates university officials were clearly aware of the drug allegations.

The letter alleges that “medical center staff were directed on at least one occasion to package mail and bill $5,000 for shipment of these drugs to a location outside the state of California.”

Four months and dozens of documents later, another whistle-blower, Debra Krahel, a senior medical center administrator, wrote a six-page, single-spaced letter spelling out the issues once again to auditors.

In her July 18, 1994, letter, Krahel recounted what Killane had told her about the doctors and how Herb Spiwak, the center’s deputy director, and Mary Piccione, the center’s executive director, reacted when she relayed Killane’s allegations. Piccione “advised me that I had loose lips and should keep the facts about [the center] to myself.”

If nothing else, auditors knew on July 25, 1994, how frustrated Krahel was and how strongly she felt about the issues, including the human egg switching at the center. A memo on the day describes a meeting with Krahel quotes her as saying, “I would just like to close the whole . . . thing down.” Krahel “apologized for the language” the auditor noted. On May 16, 1994, Killane formally complained to the UCI Office of Affirmative Action and Equal Opportunity that she was being retaliated against for having complained about Stone.