Federal grant money can be a wonderful resource for non-profits, charities, start-ups, and educational organizations in need of capital to advance their stated mission or purpose. However, federal grants are accompanied by lengthy and detailed agreements that impose conditions on the recipient with regard to permissible uses for the funds. Failure to abide by the terms of the grant can lead to exposure to liability for the organization, including possible liability under the False Claims Act.
In today’s post, we examine a recent settlement involving popular radio show host Ira Flatow and his affiliated Science Friday, Inc. – an organization named after his radio program “Science Friday,” which airs on National Public Radio and features weekly discussions about the environment, biology, outer space, and any other science-related topic.
Details of ‘Science Friday’ Settlement
Science Friday has been on the air since 1991 and is distributed by NPR affiliates around the United States. While the organization and its producer did not expressly admit to any wrongdoing, the settlement terms require the defendants to repay $146,000 to the federal government, as well as forgo participation in federal grant programs for one year.
While the details of the settlement do not expressly reveal the specifics of the wrongdoing, the government contends Flatow and SciFri misused a portion of the proceeds from a $1 million grant received from the National Science Foundation, based in Arlington, VA. The agreement states that Flatow “inappropriately used grant money to cover unallowable and unsupported costs,” thereby submitting false documents to the federal government – and triggering liability under the False Claims Act.
The alleged violations occurred between August 2009 and July 2011.
Responses to the Settlement
Science Friday producer Flatow has vehemently denied his culpability in the matter, stating:
“I disagree with the conclusions of this investigation. I spent the money exactly how I said I would, delivered the show exactly how I said I would.”
Flatow continued by reiterating:
“We’ve agreed to disagree….How much is it going to cost to disagree, that’s what we’re talking about here. I’ve been successfully receiving grants for 40 years….Why am I suddenly being penalized for conforming to the same standards I have for four decades?”
Officials for the federal government reiterated the contrary position, stating:
“This settlement sends a clear message that recipients of federally funded grants must strictly adhere to the regulations applicable to those grants….If recipients fail to do so, they risk significant consequences.”
Fraud With Federal Grant Money
Also known as “research fraud,” misuse of federal grant money is one of the largest sources of recovery under the False Claims Act. In July, 2013, Northwestern University paid $3 million to the Department of Justice to resolve claims that one of its professors used grant money for inappropriate personal use. The Institute for International Education settled a similar lawsuit in 2011 for $1 million.
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