Madoff scandal may impede Penn research - Picower Foundation- Victim of Madoff Fraud

Madoff scandal may impede Penn research
Some researchers lost non-University funding in scheme
Harrison Garfinkle

The financial fraud of New York financier Bernie Madoff did not affect Penn's endowment, University spokeswoman Lori Doyle said - but that doesn't mean the University wasn't affected in other ways.

Last month, the Picower Foundation of Florida - which funded two Penn research projects - announced that it would cease all grantmaking because the foundation lost its entire endowment with Madoff.

The discontinuation of funding from the foundation, located in Palm Beach, Fla., will affect Penn research projects on Parkinson's disease and diabetes.

Director of Penn's Center for Neurodegenerative Disease Research Virginia Lee had received more than $3 million over a five-year period from the Picower Foundation to fund drug discovery for Parkinson's disease.

"It was the funds from the Picower Foundation that enabled us to get started," she said. "It's not your typical hypothesis-driven science and therefore it's impossible to get funding from the NIH," Lee said. "That's why we were very fortunate to get this fund."

She is now looking "desperately" for new funding from alternative sources to continue the project, she said.

For now, Lee is trying to get in touch with other foundations that are involved in Parkinson's disease research, but believes that it is unlikely that her lab will get an equivalent grant.

"I think by late spring we'll have to make some decisions about how to fund this program," Lee added.

Lee's project is not the only Penn research that received funding from the Picower Foundation.

Penn genetics professor Mitch Lazar expected to receive a $300,000 per-year grant from the foundation to study how a high-fat diet affects diabetes-related genes.

"This funding was an important part of our laboratory's operating budget, but fortunately not the only support we have," he wrote in an e-mail. "Our major source of funding is from the National Institutes of Health, and we also receive funding from the American Diabetes Association and other foundations."

Lazar wrote that the Picower Foundation was willing to fund "high-risk/high-reward" work that allowed his laboratory to try "out of the box experiments to generate new hypotheses about the cause of diabetes."

Without the foundation's grant, he and his colleagues must find ways to replace that funding.

"At this point the impact is minimal on us," said Senior Vice President for Public Affairs of the Penn School of Medicine Susan Phillips. "Many times the work is being supported by federal grants as well, and it may be a matter of [continuing the projects on] a smaller scale."

Penn's medical research laboratories are not the only university laboratories that will be affected by the foundation's connection with Madoff.

According to a recent article in the Boston Globe, the Picower Foundation had also awarded grants to laboratories at the Massachusetts Institute of Technology and Harvard Medical School.