Obama Veterans Affairs Appointee Questioned Over $4 Million From Medtronic

A top physician at the U.S. Department of Veterans Affairs was recommended for a government job by medical supplier Medtronic Inc., which paid the doctor $4 million in the two years before he joined the Obama administration, according to U.S. Sen. Charles Grassley.

In a Sept. 28 letter to VA Secretary Eric Shinseki, Grassley, an Iowa Republican, asked the agency to disclose the extent of its knowledge of the financial relationship between Medtronic and VA Senior Policy Adviser Stephen L. Ondra, a Chicago neurosurgeon.

Grassley, a Senate Finance Committee member who has been investigating doctors’ conflicts of interest, wrote that it was “apparent that as a result of his relationship with Medtronic, Ondra was able to penetrate the political establishment at its highest level to obtain a senior position at the VA.”

The senator also asked for records of any post-appointment contact between Ondra and Medtronic, and whether the surgeon has recused himself from dealing with the company.

Ondra told VA officials that he disclosed his prior financial relationship with Medtronic during the administration’s vetting process, according to a response the agency sent Grassley.

The agency concluded that Ondra “had no conflicts regarding Medtronic or any other firm when he assumed his VA duties, and has none since,” said Shinseki’s Sept. 30 letter. Ondra could not be reached for comment through VA spokeswoman Katie Roberts.

‘Common Practice’

Medtronic’s letter of recommendation for Ondra was “appropriate and common practice for someone so highly regarded,” said Brian Henry, a spokesman for the Minneapolis- based company. Ondra was paid fair market value for consulting work and for intellectual property he contributed to the company, Henry said. Ondra’s work for Medtronic stopped in June 2008 and he has done nothing for the company since joining the VA, Henry said.

In his public role, Ondra is not involved in purchasing medical devices, according to the agency’s response. The VA is a major buyer of such goods and Medtronic is one of the world’s largest makers of them, including products used in heart and spinal surgery. Its close relationship with military physicians has been the subject of past scrutiny by Congress.

The VA said any contact between Ondra and Medtronic officials since he took office has been minimal and “of a purely social and personal nature,” according to Shinseki’s letter. It also said that Ondra would be expected to consult with an agency attorney and, if necessary, recuse himself “in the unlikely event” that he confronted a job-related issue that had a direct effect on his financial interests.

Senior Policy Adviser

Ondra was appointed senior policy adviser for health affairs in 2009 after Medtronic Chief Executive Officer William Hawkins told a subordinate to write a letter recommending him for a position in the administration, according to a Hawkins e- mail Grassley quoted in his letter.

Before his government appointment, Ondra was the head of spine surgery at Northwestern Memorial Hospital in Chicago. Grassley’s letter indicates Medtronic paid him almost $4 million for consulting services, speaking engagements and royalties. Ondra has also been an active researcher for Medtronic, having been involved in at least six Medtronic-funded spine studies, the senator said.

In a Jan. 16, 2009, e-mail from Hawkins to the head of Medtronic’s spine business, the chief executive wrote that he had spoken with the then-assistant secretary of defense for health affairs, “regarding the process by which we might recommend a candidate to replace him in the new administration.”

Recommendations Important

Hawkins wrote that his call was “welcomed” and that while he was told the decision on who to name to the post would be made by Defense Secretary Robert Gates and President Obama, “recommendations from CEOs were very important.”

“The public has the right to know whether or not Dr. Ondra’s policy advice and decisions at the VA are vulnerable to potential conflicts of financial interest,” Grassley wrote. In a prior case, Medtronic paid almost $800,000 over three years to a former Army surgeon accused by the military of fabricating a study that reported favorably on Medtronic’s Infuse bone-graft product.

The surgeon, Timothy Kuklo, has denied any wrongdoing and a committee at Washington University in St. Louis, where he worked after completing his Army service said last year that it did not find sufficient evidence to support the allegation that he falsified research results.

To contact the reporter on this story: David Armstrong in Boston at darmstrong16@bloomberg.net

To contact the editor responsible for this story: Gary Putka at gputka@bloomberg.net

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