Ex-Official Testifies UCI Ignored Clinic Woes

A former senior administrator at UCI Medical Center testified Thursday that her superiors, including the school’s chancellor and the legal counsel, were informed in 1992 that there were serious improprieties within UC Irvine’s once-vaunted fertility clinic.

The testimony of Stephany Ander, who began a two-day deposition, appears to contradict statements by UCI Chancellor Laurel L. Wilkening, who has said her office was unaware of problems in the clinic until 1994 at the earliest.

Dr. Ricardo H. Asch, the clinic’s director, and his partners, Drs. Jose P. Balmaceda and Sergio Stone, are the figures at the center of the scandal. The three are accused of taking the eggs and embryos of scores of women and, without their consent, implanting them in others. The doctors are the subject of seven separate investigations.

The university has accused the doctors of insurance fraud, financial wrongdoing and research misconduct. All three have consistently denied any deliberate malfeasance. Asch and Balmaceda have left the country, while Stone--who sat in on Thursday’s deposition--continues to live in Orange County.

“What’s really insightful about Ander’s testimony,” said attorney Lawrence Eisenberg, who represents some of the plaintiffs in the more than 40 lawsuits against UCI, “is that [previous UCI Chancellor Jack Peltason] appears to have been aware of this as early as 1992, when Ander initiated her first audit.”

In July 1993, “When Wilkening took over for Peltason [who left to become president of the UC system in October 1992], she had to be aware of what had happened before,” Eisenberg said, “because the audit was already in progress.”

Wilkening could not be reached for comment Thursday, but university spokeswoman Fran Tardiff alluded to remarks by Peltason in a recent issue of the New University, the UCI student newspaper.

Peltason, who retired from his UC post last October, was quoted as saying that, while he accepted responsibility for having hired the clinic’s teams of doctors, there was “no evidence of any wrongdoing brought to my attention” during his tenure as UCI chancellor.

Attorney Louise Douville, who represented UCI and Ander at Thursday’s deposition, said she could not say for sure when either Peltason or Wilkening knew of improprieties within the clinic, including allegations of egg-stealing.

But Melanie Blum, an Orange attorney who represents 17 plaintiffs in the case, said that Ander testified to notifying her superiors about an array of issues within the clinic in 1992 in a conversation that also involved UC attorney John Lundberg, who continues to represent the university.

In a letter to university auditors in 1994, in which she reported details of a 1992 meeting with Mary Piccione, the former executive director of UCI Medical Center, Ander wrote that Piccione told her she would “follow up” immediately with both the legal department and Peltason. At the time, Ander was senior associate director at UCI Medical Center.

Based on Thursday’s testimony, “The university definitely knew back in 1992,” Blum said angrily. “There’s no doubt they had the problem placed in their hands in 1992 and did nothing about it--except to cover it up.”

Blum said it was inconceivable that Wilkening would not have known about the problems when she assumed office in 1993, but Wilkening has steadfastly maintained that she did not know of problems involving the clinic.

Attorneys spent much of Thursday going over the letter written by Ander in October 1994 to Robert A. Chatwin, the principal auditor charged with making the initial inquiries into the scandal-ridden clinic.

In the letter, Ander contends that Piccione and her chief deputy, Herb Spiwak, were informed of irregularities in the clinic more than two years before UCI launched formal investigations into the clinic in September 1994.

At the time, Ander wrote, Piccione said she worried that the allegations might disturb “the halo effect” that Asch, a popular physician who enjoyed an international reputation, had brought to UCI.

Spiwak, Ander told UCI auditors in 1994, learned of egg misuse at the clinic nearly two years earlier. But auditors concluded that Spiwak had “done nothing about it.”

Ander told the auditors that Spiwak often referred to the medical center faculty as “a piece of [expletive]” and blocked efforts to “move issues forward in a responsible, professional manner.”

In the October 1994 letter, Ander said Piccione failed to “intervene in what I considered to be a blatant obstruction of progress.”

Piccione and Spiwak have since been fired by the university, which has been sued by both. Attorneys for both have said the two had knowledge only of financial improprieties at the clinic--and knew nothing of the misappropriation of eggs and embryos--until March 1994.

Attorneys said Ander testified that as early as the summer of 1992 she had informed UCI executives that women’s eggs were being “bartered” or “harvested” in lieu of payment for medical services at the clinic. She also testified, they said, to other problems, including insurance fraud and falsified medical records.

Ander’s testimony is supported by a former clinic nurse, who told a state Senate committee last year that he had brought evidence of improper egg transfers to the attention of university auditors as early as 1992. Ander’s statements expand on that testimony, since she contends that concerns about medical and financial wrongdoing were brought directly to Piccione and Spiwak before she left UCI in February 1993.

Ander, 49, said in her 1994 letter that, had she remained in Orange County, she would have “begun looking for another position” because of what was happening at UCI.

In the letter, Ander said the meetings addressed staff allegations that jewelry and eggs were exchanged for medical treatment, that medical records were being modified, that physicians were not present in the operating rooms even though their names were on the corresponding reports, and that patients were treated without being registered. Also discussed at the meetings were allegations of theft and cash management problems at the clinic and an investigation by an insurance company of possible forgery by an employee, Ander wrote.

In a June 1994 interview, Ander told auditors that she discussed “all the issues,” including egg misuse, with Spiwak, and he said he would “take care of it.”

“To my knowledge,” Ander wrote in the letter, “there was NO action taken.”