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BP/UC Deal Raises Concerns

By Richard Brenneman
Friday February 16, 2007

The proposed agreement between one of the world’s largest oil companies, BP (formerly British Petroleum) and UC Berkeley, Lawrence Berkeley National Laboratory and the University of Illinois has ignited a firestorm that promises to burn long and hot. 

But the largest issue raised by the proposed half-billion-dollar agreement involves a long-standing campaign by powerful conservatives to substitute private funding for public support of America’s universities. 

Ironically, one of the best expositions of the trends at work was sketched out by then-UC Berkeley Chancellor Robert Berdahl in a May 23, 2000, address to Erfurt University in Germany titled “The Privatization of Public Universities.” 

Berdahl traced the history of American land-grant universities, funded with cash raised from the sales of vast tracts of land provided by the federal government, through their heyday during the post-World War II years of the GI Bill and federally funded Cold War research programs. 

He cited as a seminal moment in the decline of public funding a U.S. Chamber of Commerce-backed effort headed by future Supreme Court Justice Lewis Powell in the late 1960s which was cemented in place during the presidency of former California Governor Ronald Reagan. 

Powell laid out a series of strategies designed to give big business the upper hand both in the mass media and on campus, a simultaneous attack on liberal educators coupled with a move to dominate business schools by severing their ties with the more liberal social science departments. 

“To a very large extent, this program has been successful,” Berdahl said. It has been aided by conservative foundations and think tanks and speakers like former Secretary of Education Bill Bennett, Dinesh D’Souza and Alan Bloom. 

The era of the great liberalizing institution had been displaced by what Berdahl described as “the emergence of an industry-university research partnership,” as the Reagan era shifted educational costs from taxpayers onto the students themselves and universities began seeking out ever-larger amounts of private funding. 

The result, Berdahl said, was the “emergence of a substantial ‘university-industrial complex.’” 

Among its dangers, the chancellor wrote, were the “loss of common ground, common unity, common purpose within the university” and the emergence of major salary differentials between scientific and engineering departments which were favored by corporate largess and the humanities departments which corporate funders ignored while devaluing their work. 

Another major danger he cited was the perception that academic researchers backed by corporate grants lost objectivity. 

Those charges were directed at the University of California during the most controversial move of Berdahl’s tenure, the 1998 $25 million funding package negotiated between Swiss agro-pharmaceutical giant Novartis (more recently Syngenta) and UC Berkeley’s College of Natural Resources. 



Another wrinkle in the transformation of academia—and not cited by Berdahl—was provided by the passage of the Bayh-Dole Act in 1980, which gave universities and corporations the right to patent federally funded research. 

The measure was introduced by the two senators, a Kansas Republican and an Indiana Democrat, and gave schools the right to patent if they made serious efforts to commercialize their discoveries. Prior to passage, discoveries made with federal funds were in public domain, available to one and all. 

While the measure was strongly opposed by then-President Jimmy Carter’s Secretary of Commerce Phillip Klutnick and by Carter’s mentor, retired Admiral Hyman Rickover, Carter signed the bill into law. 

The bill was buttressed six years later by the Federal Technology Transfer Act of 1986, which gave scientists at federal laboratories the right to cut deals with corporations, effectively privatizing the fruits of most taxpayer-funded research. 

Federal courts and regulators have since ruled that the laws allow, for example, pharmaceutical manufacturers to charge American patients several times more for drugs than firms charge in other industrialized countries. 

Critics like David Boltier, a senior fellow at the University of Southern California’s Norman Lear Center, have cited cases when pharmaceutical- company-funded university researchers were barred from disclosing potentially lethal effects of drugs or cases where expensive treatments proved no more beneficial than far cheaper alternative regimens. 

Similarly, researchers who publish in prestigious journals have no legal obligations to disclose the source of funding for their research, though journal editors have been tightening their own disclosure rules in several notable cases. 


Berdahl’s research park 

Another attendant phenomenon cited by Berdahl in his Erfurt address was the university research park, “intended to attract industrial partners ... dependent both on the intellectual capital—the ideas generated in research universities—and the human capital—the students educated in these universities.” 

Under Berdahl, UC Berkeley launched a program to create just such a center at its Richmond Field Station, a program with plans to partner with a San Francisco developer to create Bayside Research Campus, featuring more than two million square feet of space for corporate and academic research partnerships. 

The university selected a developer, Simeon Properties, to oversee the massive construction effort on a site contaminated by a century of industrial waste dumping and the manufacture mercury-based explosives. 

Simeon was already developing the adjacent site to the southeast, the highly contaminated former site of a major chemical manufacturing complex. 

But those plans were derailed, at least for the moment—over strong objections from the university—when Richmond activists and environmental organizations forced a change in state oversight of the cleanup effort. 

UC Berkeley, which prides itself on being one of the world’s leading scientific institutions, fought in vain to prevent oversight by the only state regulatory agency staffed by experts in handling toxic chemicals. 

Thanks to the efforts of Assemblymember Loni Hancock and colleague Cindy Montanez, backed by a Richmond City Council Resolution and support from Contra Costa County officials, the state Environmental Protection Agency transferred jurisdiction from the San Francisco Bay Regional Water Quality Control Board to the state Department of Toxic Substances Control. 

The water board has no staff toxicologists, while the toxics agency is well staffed with scientists.  

Ironically, the firm which bears financial responsibility for much of the mess at the Richmond Field Station and the nearby chemical plant site is now part of a company which drew the wrath of critics down on UC Berkeley for the most controversial research collaboration since Berkeley scientists teamed up with Washington to bring the atomic bomb into being. 

Agro-chemical giant AstraZeneca had the legal responsibility for cleanups at both the Richmond Field Station and the adjoining site, dubbed Campus Bay by the developer. 

In 2000 AstraZeneca merged its agricultural chemical branch—which manufactured herbicides, insecticides and other compounds at Campus Bay—with Novartis to form Syngenta. 



Two years before the merger, Novartis had created the Novartis Agricultural Discovery Institute and created a university-industrial partnership that would rock UC Berkeley and set the stage for the emerging furor over the newest and far larger deal with BP. 

The agreement, which fused the interests of a Swiss biochemical giant with the university’s College of Natural Resources, produced a cause celebre that continues to the present day. 

Discontent and the lack of prior review triggered a controversy that ultimately led the university’s academic senate to commission a $300,000 study of the agreement by investigators from Michigan State University’s Institute for Food and Agricultural Standards. 

That report, while finding no evidence of serious misconduct, noted that the dispute had surfaced long-simmering tensions at the university and “highlighted the crisis-ridden state of contemporary public higher education in California” and the nation. 

Among their nine specific recommendations, the authors urged that the university avoid future agreements “that involve complete academic departments or large groups of researchers” and to engage in large-scale debate before embarking on new research agendas and conducting discussions with transparency to the public. 

The Novartis contract expired, with the company left with no commercially viable research to show for its investment. A proposed extension of the contract was never negotiated, and a planned research building was never erected. 

But Wlliam J. Drummond, the journalism professor who chairs the university’s Academic Senate, said he didn’t see how the controversy over the Novartis agreement applied to the BP proposal. 

“I don’t know that that really applies here,” he said. “That happened under the previous regime and one department was the sole beneficiary. There was no discussion beforehand and there was no decision to share the information learned. Here there is.” 

Chapela also agreed that was at least one significant different between the two proposals. One was for $25 million, the other for $500 million.