UC Official Details Actions on Clinic : Medicine: Irvine campus Chancellor Laurel L. Wilkening says she learned of problems early last year and defends settlement with whistle-blowers.

Emerging from a month of virtual silence on the fertility clinic crisis, UC Irvine Chancellor Laurel L. Wilkening said Monday that she made extraordinary efforts to get to the bottom of the scandal and that she never considered hiding the truth from the public.

“The thought that we could protect ourselves from embarrassment over this never occurred to me once I saw the scope of the seriousness of the allegations,” the chancellor said in her first detailed interview since the crisis became public a month ago. “My determination . . . was to find out what really was going on.”

But the chancellor acknowledged that the scandal had been brewing for some time before she learned about it--even before she took the top job in July, 1993.

Wilkening, 50, said she was not informed until February or March of last year that there were allegations of drug misuse and financial wrongdoing at the Center for Reproductive Health. She did not know until July, she said, about accusations that doctors at the clinic had implanted embryos in women without the consent of the donors.

Wilkening said she was not briefed before last year despite a nurse’s contention that he had tried to present evidence to UC Irvine auditors of egg misuse in early 1992.

Documents from the university auditors’ office indicate a senior administrator recalled discussing a range of issues--including egg misuse--with top UC Irvine Medical Center officials by early 1993, and that the chancellor’s attorney sat in on at least one discussion. And two audits, in 1992 and 1993, had detailed cash handling and other financial problems at the center.

But Wilkening insisted Monday, “There was nothing that would put this on my agenda until February of ’94.” In fact, she said, “I didn’t even know the Center for Reproductive Health existed until February of ’94. I’d only been on campus about seven months, and I had a lot to learn.”

Wilkening said she has ordered internal auditors to review why the reports of egg misuse were not passed along at the time they surfaced.

Wilkening said she does not believe her predecessor, Jack Peltason, now president of the UC system, knew anything about problems at the fertility clinic either until she told him last summer. Peltason became UC president in October, 1992.

“Everything I’ve seen leads me to believe he knew nothing at all” until last year’s discussion, she said.

The chancellor also said she was unaware of management problems at UC Irvine Medical Center before an audit this spring. Wilkening fired Medical Center Executive Director Mary Piccione and her deputy, Herb Spiwak, last week after the auditors concluded they had retaliated against whistle-blowers in the fertility scandal and had engaged in “management by fear.”

Still, Wilkening on Monday credited Piccione and Spiwak with turning around a medical center that had been losing $1 million a month. She said she had been aware of some staff and faculty discontent at the center before this year but, until the audit, attributed it to the fact that 650 people lost their jobs during the administrators’ rigorous downsizing.

Once she learned from the audit that three female employees who became whistle-blowers had been punished, Wilkening said, she believed the women had to be “made whole.”

The chancellor said she approved separate financial settlements with the women, but decisions on what amounts were to be paid to each one were made in Oakland, by risk managers and attorneys at UC headquarters. The three were paid a total of more than $919,000.

Wilkening said she is not sure whether she was the highest administrator in the UC system to endorse the confidential settlements. She said, however, that she believes the system for approving such agreements will be changed in the wake of the scandal so that major settlements are approved by the Board of Regents. She said she considers such changes “very appropriate.”

The chancellor vigorously defended confidentiality clauses in the settlements and said she was disturbed at characterizations of them by critics as “hush money.”

Confidentiality clauses, she said, were necessary to protect patient privacy and to preserve the integrity of the university’s investigations. She added that the highest-paid whistle-blower, Debra Krahel, who received $495,000, requested confidentiality.

But some of Wilkening’s critics argued Monday that she did not do as well as she could have by the whistle-blowers.

“I’m not sure if we have made the whistle-blowers whole again,” said Lt. Gov. Gray Davis, also a UC regent. “The agreements aren’t so generous as they may seem at first blush.”

Neither Krahel nor another whistle-blower, Marilyn Killane, disputed Wilkening’s statements about when she first learned of possible misconduct at the center. But both questioned why it took her so long to take action in the crisis.

Krahel noted that it took more than six months between the time Killane came forward in February to the time investigative panels were convened in September.

“I don’t believe that was an immediate or timely response,” she said.

Killane added, “It felt like five years of my life before anything was done. Something should have been done before this, and she had the capacity to do something.”

Killane also scoffed at the chancellor’s comment that the settlements were to make the whistle-blowers whole.

“Well, tell them I’m still not whole yet, I’m in pieces,” Killane said. “I never wanted a settlement, I wanted a job. I get so angry I don’t understand why they didn’t do something sooner. . . . If this is called justice, I don’t live on the same planet.”

Times staff writer Martin Miller contributed to this story.