January 3 ,
2007
Metabolife Paid Charity to Channel Funds
Metabolife channeled money through a nonprofit organization to pay for a supplement research project because the company did not want its involvement in the study known, said the researcher who received the funds.
Metabolife International issued grants totaling $228,000 to the Fisher Institute for Medical Research to fund a study for the company, said Gilbert Kaats, the researcher.
Metabolife – a company that eventually went bankrupt after an onslaught of personal injury lawsuits arising from heart attacks and strokes caused by their supplements – wanted to test a new supplement but required that it be funded by money routed through a nonprofit organization.
Kaats said that in return, Metabolife awarded the Fisher Institute the grants and an additional sum. The Fisher Institute netted a surplus of $12,000 from the deals.
Nonprofit organizations cannot be used to channel money in this way, said Frank Somerville, an attorney who deals with charities. Such transactions, he said, benefit the for-profit companies seeking concealment and serve no charitable purposes.
“I caution my charities on that all the time,” Somerville said.
Kaats said that Metabolife approached him about conducting a study for the company and asked him that the funding be routed through a nonprofit company. He said he gave Metabolife several options to carry out the study, one of which was to employ the Fisher Institute. Metabolife chose this option, and then gave the Fisher Institute the two largest grants.
“We didn’t know what the hell the reason was” for Metabolife’s persistence in demanding that the research was funded this way, Kaats said.
The study results were never published because they were not positive.
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