DOJ Announces $7.6 Million Settlement with Cleveland Clinic Foundation Over Foreign Sources of Funding
The Cleveland Clinic Foundation (CCF) recently reached a $7.6 million settlement with the Department of Justice to settle allegations that it violated the False Claims Act by failing to disclose foreign sources of funding on grant applications and progress reports submitted to the National Institutes of Health (NIH). Of the $7.6 million, $3.8 million is restitution.
According to the settlement, from November 1, 2013 to May 31, 2020, CCF repeatedly failed to disclose that a key employee – designated as the Principal Investigator on three federal grant awards – had both pending and active financial research support from foreign institutions. This is a violation of NIH requirements to disclose all sources of research funding, which is used by NIH to determine whether an applicant has sufficient time for the proposed project as well as to determine whether there are potential conflicts of interest or duplications of funding. NIH requires full transparency in applications and throughout the life of the grants it awards.
The settlement also resolved allegations that CCF violated NIH password policies by permitting employees to share passwords and enabling unauthorized access to the NIH online grant reporting platform. The government notes that some of the false submissions at issue were made through that improper access. CCF also falsely certified to NIH that the grants submissions that omitted the Principal Investigator’s other research support from foreign sources were true and accurate.
In addition to the $7.6 million settlement, NIH imposed Specific Award Conditions on all CCF grants for one year, effective October 1, 2024. The Conditions include: (1) a high-level CCF employee must personally attest to the accuracy of all “other grant support” information provided to NIH; (2) CCF must develop a corrective action plan that includes an assessment of internal controls related to grant support and foreign component reporting; (3) CCF must also create mandatory training on disclosing grant support, research security, and cybersecurity; and (4) CCF needs to develop an improvement plan for institutional oversight to confirm the accuracy of information disclosed by Principal Investigators. While the settlement expects the Specific Award Conditions will remain in effect for one year (through September 30, 2025), NIH may remove the Conditions early if it is “satisfied that CCF has successfully completed the Corrective Action Plan.”
U.S. Attorney Rebecca C. Lutzko stated, “Each year, NIH awards federal grants to support research to improve public health, but those funds are limited and the grant process is competitive. Every entity or person who seeks such grant money must strictly play by the rules. As stewards of taxpayer dollars, our Office takes seriously its responsibility of ensuring that grant recipients fully and accurately report all required information to NIH so that it may properly award its limited funds to deserving institutions.” The settlement acts as a reminder of the importance of disclosing all relevant information on grant applications and reports, as failure to do so can have significant consequences.
As is often the case, the settlement is not an admission of liability by CCF nor is it a concession by the United States that the allegations were not well-founded.