Hig: 6,Low: 59.
High: 80, Low: 61.
A century of editorial freedom
Vol. C 146 Ann Arbor, Michigan - Thursday, September 12, 1991 Copyright0991*
The Michigan Daily
by Bethany Robertson
Daily Administration Reporter
A federal audit accusing the
University of incorrectly charging
the government for more than
$300,000 in research-related costs is
only one of many reports that has
resulted. from ongoing investiga-
tions into university billing
Public attention was piqued last
March when a government report
accused Stanford University of
*charging taxpayers for more than
$150 million in excess costs over
the past 10 years through a program
known as indirect cost recovery.
The complicated process, while
not illegal if used correctly, is com-
ing under fire for recent abuses.
Universities nationwide charge
the federal government for costs in-
cidental to research projects, such as
,libraries, utilities, and groundskeep-
ing. These costs are incurred during
the process of research, but are not
linked to any specific projects.
Universities negotiate individual
rates of recovery with government
agencies such as the Department of
Health and Human Services and the
Defense Department every few
years. The University had a rate of
59 percent for the past three years
*and a 57 percent rate this year. In
comparison, Stanford's rate was
originally 78 percent.
Translated into dollars, these
figures means that for every dollar
Stanford spent on specific research
projects, an additional 78 cents was
charged to the federal government.
The problem with the system, as
first discovered in Stanford's case, is
that guidelines determining which
*expenses are defined as indirect
costs are unclear, and extraneous
charges often go unnoticed. Stanford
was charged with billing items such
as a 72-foot yacht.
After the Stanford incident was
uncovered, audits were conducted at
See COSTS, Page 2
'U' denies charges of
misspent gov't funds
by Henry Goldblatt
Daily Administration Reporter
Four University administrators
disputed charges yesterday that the
University misspent $7.9 million of
government granted research funds.
Executive Director for Univer-
sity Relations Walter Harrison
opened the press conference at the
Michigan Union by calling such al-
legations "absolutely untrue."
Although the audit was not
scheduled to be formally released
for another few weeks, a draft was
leaked to the press Tuesday night in
The University had received the
draft in late August and was still in
the process of responding, Harrison
The funds in question are related
to the University's indirect cost re-
covery rate. For each dollar a uni-
versity spends on research, the Fed-
eral Government reimburses it a
fixed percentage of the money to
cover costs that are indirectly asso-
ciated with the project, such as
building upkeep. The rate is negoti-
ated between a university and either
the Department of Health and Hu-
man Services (HHS) or the Depart-
ment of Defense.
The University's rate is cur-
rently 57 percent.
The indirect cost recovery rate is
then divided up into two categories
- space related costs and adminis-
trative costs. Part of the adminis-
trative costs are General Adminis-
trative and General Expense.
HHS - the agency that oversees
the University's use of government-
granted research funds - has scru-
tinized $7.9 million of the General
Administrative and General Ex-
pense's fund from 1989.
Throughout last fall and this
past winter, the University and
HHS negotiated the University's
indirect cost recovery rate for the
next three years based on figures
from fiscal year 1989. It was during
this process that government nego-
tiators first raised questions.
The government claimed at that
time that $5.9 million spent in 1989
on the University's News and In-
formation Services, teaching and re-
search personnel, and other expenses
However, during the negotia-
tions, the University agreed not to
include the $5.9 million in deter-
mining the new rate, Harrison said.
He said that it therefore is no longer
But when HHS came to campus
this spring to conduct an audit of
fiscal year 1989, organization repre-
sentatives found an additional $2
million in general administrative
and general expense costs that they
believe were improperly billed. The
$5.9 million, when added to this $2
million, accounts for the total $7.9
million that the University is ac-
cused of misspending.
According to the audit, the $2
million covered the University's
billing of some entertainment ex-
penses, including a $4,329 trip to the
Rose Bowl for the University's di-
rector of communications and his
wife and gifts for an ABC-TV per-
sonality. Moreover, auditors ques-
tioned an advertising spot during
the Rose Bowl that University ad-
ministrators bought to promote the
University during half time.
The Federal Government reim-
burses the University for 15 percent
See CHARGES, Page 2
Farris Womack, vice president and chief financial officer, William Kelly,
vice president for research, Walter Harrison, executive director for
University relations, and Richard Kennedy, vice president for
government relations field questions about the audit of the University
during yesterday's press conference in the Michigan Union.
Thomas says he will keep open mind on abortion
WASHINGTON (AP) -
Supreme Court nominee Clarence
Thomas said yesterday he was
"very very pained" by the thought
of back-alley abortions and insisted
he would have an open mind as a
justice about keeping medically
safe abortion legal.
However, he declined under per-
sistent questioning to say whether
he believed the Constitution pro-
tected a woman's right to end her
On the second day of his Senate
Judiciary Committee confirmation
hearings, Thomas was immediately
confronted on the issue by Sen.
Howard Metzenbaum (D-Ohio).
Metzenbaum pressed for his
view and Thomas refused to say
how he would vote on challenges
to the 1973 Supreme Court deci-
sion legalizing abortion.
To answer that question
"would undermine my ability to
sit in an impartial way on such an
important case," he said.
"I have no reason or agenda to
prejudge the issue ... or a predilec-
tion to rule one way or another on
the issue of abortion," he added.
Thomas, who would be only the
second Black justice on the
Supreme Court, was also asked
why he had criticized decisions by
the Court upholding affirmative
action programs to remedy
Sen. Arlen Specter, (R-Pa.), ex-
pressed concern about whether
Thomas would respect the intent
of Congress while interpreting
civil rights laws that have long
been regarded as requiring affirma-
tive action hiring.
Thomas said he would follow
the intentions of lawmakers and
added that his criticisms of
Congress and of Supreme Court de-
cisions were made when he chaired
the Equal Employment Opportu-
"I advocated as an advocate, and
now I will rule as a judge,"
Thomas recalled that during the
era when abortions were barred by
law "you heard the hushed whis-
pers about illegal abortions and the
individuals who performed them in
a less-than-safe environment."
"If a women is subjected to an
environment like that, on a per-
sonal level, certainly, I am very,
very pained by that," Thomas said.
"I think any of us would be. I
wouldn't want to see people sub-
jected to torture of that nature."
Sen. Patrick Leahy, (D-Vt.), ex-
pressed surprise at Thomas' insis-
tence that he had no opinion on the
landmark 1973 abortion decision
even though he had cited the case in
several speeches and articles.
"I can't believe that all of this
was done in a vacuum, in the ab-
sence of any clear consideration of
Roe vs. Wade," Leahy told
Sen. Dennis DeConcini, (D-
Ariz.), said he thought Thomas
"handled the privacy questions
very well" without taking a stand
on abortion. "I don't see how you
could ask him to do anything
Israel releases prisoners,
NABATIYEH, Lebanon (AP)
- Hopes grew yesterday for the re-
lease of Western hostages in
Lebanon after Israel freed 51
Lebanese prisoners and handed over
the remains of nine guerrillas in ex-
change for word that one of its sol-
diers was dead.
The Israeli move was seen as a
crucial break in the hostage stale-
mate, heightening prospects for a
broad swap including the rest of Is-
rael's dead and missing soldiers,
more Arab detainees and the 11
U.N. Secretary-General Javier
Perez de Cuellar was "very encour-
aged" by the day's developments,
his spokesperson Francois Giuliani
"He will now redouble his ef-
forts to find a solution to the prob-
lems of all hostages, detainees and
missing persons," Giuliani said.
Perez de Cuellar met yesterday
with Iranian officials in Tehran, but
his spokesperson gave no details
about the talks.
In Washington, the Bush admin-
istration welcomed the latest
moves. "We are very hopeful that
this has ramifications that are help-
ful to the hostage situation," said
White House spokesperson Marlin
Sheik Mohammed Hussein Fad-
lallah, spiritual mentor to Hezbol-
lah, which is believed to be an um-
brella for the pro-Iranian hostage-
holding factions, said the releases
and repatriations "creates an atmo-
sphere conducive to positive re-
Fadlallah, who spoke to re-
porters in Beirut, said he expected
movement on the hostage issue as a
result, but did not predict any
Israel's chief hostage negotiator,
Uri Lubrani, also expressed opti-
mism about prospects for an overall
settlement in the wake of yester-
day's "positive omen."
"We all hope this is the begin-
ning of a process which will end
with the solution, once and for all,
of the tragic problem of our POWs
and MIAs and of the Western
hostages," he told reporters at a
news conference in Tel Aviv.
The missing Westerners include
five Americans, three Britons, two
Germans and an Italian. The longest
held is American Terry Anderson,
chief Middle East correspondent for
The Associated Press, who was kid-
napped March 16, 1985.
Israel said in a military commu-
nique yesterday it had received
"irrefutable evidence" that soldier
Rahamim Alsheikh was dead.
Alsheikh had been missing since
1986. With Alsheikh's confirmed
death, six Israeli soldiers are still
See HOSTAGES, Page 3
LSA Senior Bridget Fitzpatrick browses the selection of class rings being offered outside Michigan Book and
Supply by Bob Petran, a representative from Jostens.
City task force will consider jail sentences for noise violators
by Ken Walker
and David Rheingold
Daily City Reporters ,
A City Council task force, orga-
nized to address noise disturbances
from loud parties, discussed a sys-
tem of graduated fines for repeat of-
fenders - possibly including a jail
sentence - vesterdav in the Fire
Under the current law, individu-
als found to be in violation of the
code are punishable by a fine of not
more than $500. According to a
draft resolution prepared by the
City Attorney's office, criminal
misdemeanors would receive:
Upon first offense, a fine of
MA ton V andar /inr in tn 10 $ in
that a jail sentence was unreasonable
except in cases of third-time offend-
ers, and then only if the disturbance
is brought as a criminal complaint.
"The issue of sending (fraternity
officers) to jail because they're cre-
ating some noise ... that doesn't
sound really right in my mind," said
Tnterfraternitv Council (IFC) co-
good neighbors," Foster said.
Councilmember Kirk Dodge (R-
2nd Ward), also a task force mem-
ber, agreed with Foster.
"I just think there should not be
a jail term option on the first or
second offenses, but there should be
a jail term on the third offense," he
and the University administration,
and representatives from the IFC
and the Panhellenic Association.
The City Council established the
task force June 14 in response to a.
sudden increase in the number of
community complaints about noise
from fraternity houses, Grady said.
Foster qsid the T Tniversitv Greek