Whistleblower

As the medical school's strategic nerve center, the dean's office plays a critical role. Money set aside for use at the dean's discretion allows the school to recruit prominent faculty, launch innovative research, and otherwise support educational programs. The tens of millions of dollars available each year may appear small compared to UCSF's total budget of $2.6 billion. But, as at other institutions, the dean's funds can make or break the school's ambitions.

In 2003, UCSF sought a replacement for then-Dean Haile Debas, who was retiring. With the 43-acre Mission Bay expansion taking shape, it seemed logical that the university would turn to someone of Kessler's stature. Having overseen a huge expansion of both research and clinical care facilities at Yale, he was eager for a new challenge. But the decision to come to San Francisco didn't come easily, friends and associates say.

"He was excited about the [UCSF] situation, but of course one of his first priorities was to assess what resources he could expect if he took the job," recalls Irwin Birnbaum, the Yale medical school's former chief operating officer. Birnbaum was among the "kitchen cabinet" of Kessler advisers at Yale who helped him vet the UC offer.

The compensation package the university presented was never a sticking point. To get Kessler, the university offered a salary unprecedented for UCSF — $510,000, plus perks, while allowing him to continue to serve on several for-profit and nonprofit boards that would enable him to earn several hundred thousand dollars beyond his UC pay. Still, Kessler hesitated while seeking assurances about the level of resources he would have, Birnbaum and others say.

In June 2003, Kessler got the answer he was waiting for. It came in a spreadsheet produced under the imprimatur of Jaclyne Boyden, UCSF's then-vice dean for administration and finance. It suggested that the prospective new dean could expect at least $48 million a year to spend at his discretion. Kessler was so pleased, associates say, that the only other item for which he negotiated, and to which UCSF's chancellor acquiesced, was that the dean's office retain the institution's full share of patent settlements emanating from medical school research.

But the rosy picture soon faded. In December 2004, after barely 16 months at the helm, Kessler received disturbing news from Boyden's successor, Jed Shivers, whom Kessler had hired away from Yale. Shivers had ordered an in-house analysis of the dean's office finances, and the numbers he got back were shocking. Instead of $48 million being available to the dean, the projected figure was closer to $28 million — adding up to a whopping $100 million difference extrapolated over five years.

Worse, as Shivers soon confided, the financial books were in disarray, with the university inexplicably booking fund balances as income, making the dean's office appear to be flush when it wasn't. Moreover, the analysis showed that in four of the five years before Kessler arrived, the office had spent more than it was taking in. As internal e-mails and other correspondence from late 2004 and early 2005 show, Kessler shared the grim discovery with the chancellor and the university's finance office.

Yet it was Kessler who was soon on the defensive. In February 2005, the university received an anonymous "whistleblower" letter accusing him of lavish spending habits that threatened to wipe out the dean's office reserve funds. It specifically took aim at Kessler's pay and that of about a dozen of his academic appointees.

But for someone suggesting that the dean might have something to hide, the letter writer had a peculiar complaint: "We are now forced by Dean Kessler to open the financial books of the Dean's Office."

From the anonymous letter until Kessler's firing nearly three years later, the drama played out almost entirely in secret, with colleagues and even close friends unaware of the details. "He didn't talk about what was going on, and remarkably it didn't seem to affect the high-quality work he was doing as dean," says Jeanne Robertson, a Kessler friend and former chair of the UCSF Foundation.

But to a handful of people in the know, there were disturbing signs that after persisting in raising questions about the school's finances, Kessler was set up for a fall.

For one thing, there was UCSF's handling of the anonymous letter-writer's complaints. UC auditors found them to be without merit, clearing Kessler. But it took nearly two and a half years, as opposed to the several weeks UCSF officials first announced as a likely timeframe when news of the whistleblower appeared in the press.

"The effect was to damage his reputation internally by dragging out the process," says Nicholas Gimbel, a friend and former assistant U.S. attorney in New York. Kessler retained Gimbel to parse the dean's office numbers before deciding to go public with his allegations.