The inspector general of the Health and Human Services Department has found that Food and Drug Administration head Frank E. Young and his deputy, John A. Norris, did not violate any laws when Young arranged for Norris and his law firm to receive $63,500 for consulting work in the 10 months before Norris joined the agency.
Inspector General Richard P. Kusserow said, however, that the FDA was careless, took procedural shortcuts and ignored some department rules in making the payments.
Norris, an adviser to Young when Young headed the University of Rochester Medical School, became a consultant to the FDA in August 1984 at the new FDA commissioner's request.
In a letter that June to Rep. Ted Weiss (D-N.Y.), Young said that he valued Norris' judgment and needed his advice when he first took over at FDA because he didn't know a single high-ranking agency staff member with whom to share his ideas in confidence.
The IG report was prepared at the request of Weiss, chairman of the House Government Operations subcommittee on intergovernmental relations.
The report said the FDA did not obtain the documentation normally considered necessary to demonstrate that services received "were commensurate with expenses claimed and paid."
It also said the FDA had failed to explain why the work could not be done by agency employes or why the three contracts involved were not opened to competitive bidding.
Weiss said that in seeking the investigation, "We weren't suggesting criminal wrongdoing, we were suggesting that they were violating all their own rules and regulations, that they couldn't substantiate what Norris did for his money."
Norris said: "I regard this as a favorable report. It says I did nothing substantively wrong. It says he Young did nothing substantively wrong."
Norris added, "The government absolutely got its money's worth. We put substantial amounts of additional time in beyond" what was covered by the contracts.
When Norris and his law firm began the consulting work, he was given the status of "special government employe," or one who serves fewer than 130 days. According to the IG report, Norris served in that capacity for 60 paid days between Aug. 9, 1984 and Nov. 19.
Later, he received contracts to prepare three reports: on an FDA action plan to speed up drug approvals; on revisions to that plan, and on how to improve the agency's communications. Each of the contracts was for just under $10,000.
The IG said that the HHS ethics officer had determined that "there was in this case no intent to violate the law" on conflict of interest or other matters. In addition, the report said, a Justice Department prosecutor had ruled that "any violation of these sections would have been unintentional and not worthy of consideration for prosecution."
However, the IG report said that under FDA rules, consultants are required to submit reports certifying the dates and hours that they spent on their assignments.
In Norris' case, it said, no detailed documentation was provided and payments were made simply on the basis of expressions of the commissioner's "continuous satisfaction . . . with the consultant's efforts."