Said Donald Ralbovsky, another NIH spokesman: "What it really boils down [to] is that fewer people are filing 278s because of changes in pay plans."
The shift imparts an implicit message to employees, said George J. Galasso, a former NIH researcher and administrator who retired in 1996:
"If you've got something to hide, you file a 450. If you don't, you file a 278."
Make-or-Break Grants
As director of the National Institute of Arthritis and Musculoskeletal and Skin Diseases, Katz is one of the few at the NIH who still must file public financial-disclosure reports.
Katz, 62, is paid $200,000 a year -- more than members of Congress, justices on the Supreme Court and the vice president.
His institute leads the government's research into the causes, treatment and prevention of disorders of the joints, bones and overall muscle-skeletal system.
With a yearly institute budget of $485.4 million, Katz's decisions are watched closely by industry. The director's office decides how much of the budget will be spent on grants and contracts coveted by companies.
And Katz has been available for outside consultation: From 1993 through 2002, Katz took between $476,369 and $616,365 in fees from seven biotech and pharmaceutical companies, according to his annual disclosure statements. He consulted while chief of the dermatology branch at the National Cancer Institute and continued after becoming arthritis institute director in 1995.
Katz said that his private consulting broke no rules and that he relied in part on Varmus' 1995 memo while entering arrangements with companies.
"The consultations provided my global knowledge as a dermatologist and research scientist," Katz said in written responses to questions from The Times. "I have always received official permission to perform these consultations and have performed these consultations outside of my normal NIH work schedule and according to strict government guidelines and rules."
One of his clients was Advanced Tissue Sciences Inc.
The struggling biotech company in San Diego hired Katz as a consultant in 1997, a year after he had announced a new NIH research initiative for bone and connective-tissue repair.
Advanced Tissue installed Katz on its scientific advisory board and paid him fees between $142,500 and $212,500 from 1997 through 2002, according to his income-disclosure reports.
