Whistleblower

Kessler's first meeting with Bishop to share what Shivers had uncovered was in late February 2005, Kessler says. Bishop ordered the university auditor, who had already begun to examine the whistleblower's complaints, to review the matter. But the findings were less than compelling. The auditor concluded that while it was "certainly possible" that the dean's interpretation of the information Boyden provided led him to expect a level of resources different from what was intended, there was no "intentional effort" to mislead him.

Meanwhile, in the spring of 2006, the UC general counsel's office informed Kessler that, considering the nature of his allegations, by law the university now considered him a whistleblower.

That September, with Kessler persisting, Bishop appointed an ad hoc group headed by vice chancellor Eugene Washington to look into the allegations. It concluded that the financial condition of the dean's office was currently sound and that Kessler's claims that controls had been lacking were "not supported by the facts."

But something was missing. Based on the deficit spending Kessler had alleged to have uncovered, he projected that unless something was done, the dean's office could run out of money in as little as two or three years. Bishop entrusted the group to project revenue and expenses for five years, "or whatever alternative future horizon the group might find appropriate." Washington's group projected five years' worth of revenues, but disbanded without determining the expense issue, leaving a key question unanswered. Neither could the group reconcile its numbers with those presented to Kessler in 2003.

Kessler's representatives, Shivers and Yamamoto, became so exasperated that for a time they stopped attending the group's sessions. Asked about the findings, Washington said that expense projections weren't produced because a "majority" of the group "could not accept the Kessler [expense] assumptions."

Even before the group packed it in last spring, Kessler sought permission from the chancellor to hire outside accountants to get to the bottom of the mess. Bishop refused, records show. (Months later, the university authorized a review by the accounting firm KPMG, but its report, released in February after Kessler's departure — and which UCSF initially refused to make public — was hardly a ringing endorsement of the university's position. Among other things, the firm's auditors acknowledged that they were unable to reconcile financial statements from the dean's office with the university's general ledger, or list of expenses, and concluded that UCSF needed to improve its reporting methods.)

Then, last year, with the dean and the chancellor privately at loggerheads, Kessler instigated a series of events that may have hastened his departure.

In April 2007, he fired off an e-mail to a university lawyer, accusing the UC auditor of "obfuscation or worse." He then convened a meeting of medical-school chairs and senior school leaders to lay bare the financial condition of the dean's office. Although Kessler declines to discuss it, citing confidentiality, associates say he also alerted two members of the UC Board of Regents, including its influential chairman, Richard Blum.

Kessler provided Blum (who is married to Senator Dianne Feinstein) with spreadsheets and other documents, says one university source who insisted on anonymity. After subordinates at Blum Capital Partners, the investment firm he heads, reviewed the documents, Blum "appeared to be in Kessler's corner," the source says. (Blum declined comment through a spokesman.)

But there was no one in Kessler's corner when he arrived to meet with Bishop in late June. To his surprise, the chancellor handed him a letter asking for his resignation by year's end. "I was stunned," recalls Kessler, who says he had expected that he might receive an apology from Bishop for the way the university had handled the dispute.

Bishop did apologize — a week later. "In retrospect, I can see how these presentations might have misled you and influenced your decision to accept the offer from UCSF," he wrote via e-mail. "I regret this circumstance and apologize on behalf of the university."

Despite Kessler's refusal to quit, his relations with Bishop continued to be cordial and collegial, those who know the men say. They met often to discuss medical school business, with no further mention of the resignation request, Kessler says.

Even at the last such meeting three days before Kessler was ousted, there was no tension between them and no hint of what was to come. "Things were going swimmingly with the medical school," one UCSF insider says. "In his heart of hearts, David was convinced that everything was going to be okay."

Anyone who thought Kessler might disappear quietly may not have paid attention to his résumé. As head of the FDA from 1990 to 1997, he was the longest-serving and arguably the most embattled commissioner the federal agency has ever seen.