A government doctor -- accused of receiving $48,200 from an advocate of a drug he was responsible for regulating -- traveled with his benefactor to India, purchased expensive clothing and repaid part of the money only after he came under investigation by his own agency.
Dr. K.C. Pani, 63, of Bethesda, a medical officer of the U.S. Food and Drug Administration, is charged with accepting the money from Dr. Stanley Jacob, an Oregon medical professor and leading proponent of DMSO, a controversial drug touted as a miracle pain reliever for arthritis and other ailments. Both Pani and Jacob are charged with conspiracy and giving or receiving gratuities between 1975 and 1979.
Pani testified in the fourth day of their trial today that it was all an innocent mistake he would not repeat in light of "all this confusion and humiliation."
"I didn't realize it was a mistake, and looking backwards, I wouldn't do it . . . There was no conspiracy," said Pani.
Describing himself as a "deep thinker," Pani said, "My life is a message. I have been only giving to people, helping people. That is my way of life."
It was on Pani's recommendation that the FDA in 1978 approved the limited use of DMSO for treatment of bladder inflammation, based on tests monitored by Jacob and performed by a Salt Lake City corporation in which Jacob had an interest. Jacob, who had been a member of the board of the Salt Lake firm and an author of a book promoting DMSO, gained national recognition when he treated muscle ailments of star athletes and former Alabama governor George Wallace with the drug. Although the government has approved DMSO only for bladder inflammation, the government cannot regulate how an individual doctor uses any drug.
At the time of the government's approval, Pani and Jacob had by then become friends, a relationship that the government charges Pani attempted to conceal from FDA investigators.
Pani said he and Jacob, 57, of Portland, shared an interest in Sai Baba, a spiritual leader in Pani's native India and that the "loans" were to be repaid by Pani through donations to hospitals, colleges and orphanages established in the name of Sai Baba.
Much of the money he received, Pani said, was to help defray medical bills incurred by his wife, who died in 1977. "Day and night, she would cry in agony and pain I couldn't bear," said Pani. Jacob, he said, "knew my problems and was a very sympathetic human being."
Prosecutors attempted to show, however, that insurance covered more than half of the Panis' medical bills and that in 1978, when Pani said he was "robbing Paul to pay Peter," the FDA official spent $1,324 on clothing at an expensive Washington haberdashery.
"After my wife's death, I tried to rehabilitate myself to look better, to go to work," Pani said. "What's wrong with that?"
Earlier this week, Pani's lawyer sought to portray his client as financially inept, often carelessly misdating checks and comingling accounts but always without guile or criminal intent.
Assistant U.S. attorney Richard Dunne suggested that the apparent sloppiness sometimes amounted to intentional deception. Pani repaid $20,000 he owed Jacob, Dunne noted, only after being notified he was under investigation.
The repayment, according to testimony, was made with additional loans Pani obtained from three friends and $5,000 more from Riggs National Bank. He testified that he told the bank the money was for home improvements and his son's tuition.
Dunne also confronted Pani with statements he made to FDA investigators early in 1979, a few months after he and Jacob had visited India together. Pani had said their flight together had been coincidental and he said their relationship was strictly business.
Acknowledging his earlier statements were incorrect, Pani testified he had been confused. "At that time, they (FDA investigators) were bombarding me with so many questions. They were bumping me all around," he said. "The government doesn't need to know who is a friend, who is an enemy."
Pani also admitted that he had failed to list any of his loans from Jacob on government financial disclosure forms. "Ladies and gentlemen," he said, addressing the jury, "I don't think the administration wanted us to list all these things."
Pani, who has been suspended without pay from his $50,000 a year FDA job since February, then asked the court to "look into other political officers" and their financial affairs. The judge ruled him out of order.
Federal prosecutors began investigating the FDA's experience with DMSO after complaints by some agency officials that the tests upon which limited approval had been granted -- and which Jacob monitored -- contain serious flaws. DMSO is a chemical solvent used by veterinarians for animal injuries and is also used in industry as a degreaser.