       Document 0003
 DOCN  GALLO003
 TI    GALLO REPORT: INSTITUTIONAL RESPONSE TO THE HIV BLOOD TEST
       PATENT DISPUTE AND RELATED MATTERS
 DT    9501
 SO    U.S. House of Representatives: Subcommittee on Oversight and
       Investigations Committee on Energy and Commerce
 TX    TABLE OF CONTENTS

          I. INTRODUCTION
             A. Background
             B. Focus and Process of the Investigation

         II. EARLY ATTEMPTS TO ISOLATE AND GROW HIV
             A. The LTCB's Misplaced Focus
             B. Subversion of the Barre-Sinoussi et al. Paper
             C. Paradoxical Claims
             D. Consequences of the LTCB's Misplaced Focus

        III. CLAIMS AND REALITY CONCERNING THE LTCB'S HIV RESEARCH
             A. Claims about the LTCB's "Early Isolates"
                1. Claims in the Scientific Literature
                2. Claims in Legal Proceedings
                3. Dr. Gallo's Statements to OSI and Subcommittee Staff
             B. How the LTCB Scientists Benefitted from their Knowledge
                and Use of LAV
                1. Knowledge of the IP Work with LAV
                2. Use of LAV at the LTCB
                   (a) Dr. Popovic's Notes
                   (b) What the LTCB Records Show
                   (c) The "Host Range" Experiment
                3. What Gallo and Popovic Said About their Use of the
                   IP Virus
                   (a) What Gallo/Popovic Said to Montagnier et al.
                   (b) What Gallo/Popovic Said in 1985-86
                   (c) What Dr. Gallo Told OSI and Subcommittee Staff
             C. LAI/LAV by Another Name
                1. LAI as "MOV"
                   (a) The Transformation of LAI to "MOV"
                   (b) Gallo/Popovic's Explanations
                2. LAI as "HTLV-IIIb"
                3. The HUT-78/HT/H9 "Breakthrough"
                   (a) Claims that HT/H9 was "New"
                   (b) Claims of a November 1983 "Breakthrough"
                   (c) H9's Hidden Defect

         IV. EVENTS LEADING TO THE APRIL 1984 HHS ANNOUNCEMENT
             A. Further Work with LAI/MOV
             B. Work Reportedly Done with "HTLV-IIIb"
                1. Origins of H9/IIIb
                2. Chaos in LTCB "IIIb" Records
             C. Subsequent Claims by Gallo/Popovic About Their
                "Breakthrough" Discoveries
             D. The CDC Data
             E. Functional Identity of LAV and "HTLV-III"
             F. The Popovic et al. Science Paper
             G. Selection of the Isolate for the LTCB HIV Antibody
                Blood Test
                1. The Gallo/Popovic Debate
                2. Other Isolates and the LTCB HIVBlood Test -- There
                   Was No Choice
                3. There Was No Time for Delay

          V. COMPARING THE VIRUSES
             A. The HHS Press Conference
             B. Comparisons in the Spring/Summer of 1984
                1. Serological Comparisons
                2. Immunological (Proteins) Comparisons
                3. Molecular (Genetic) Comparisons
             C. Accusation
             D. Stonewalling the Assistant Secretary
             E. Aftermath of the Comparisons
             F. The Sabotaging of Bryant et al.
             G. Fate of the Comparison Papers
             H. Dr. Gallo's Explanations

         VI. GALLO/HHS ON LTCB MATERIALS TRANSFERS
             A. Practices at the LTCB
             B. Practices at NCI, NIH, and PHS
             C. The Unique Role of Dr. Lowell Harmison

        VII. THE FRENCH/AMERICAN DISPUTE: FIRST PHASE
             A. Scientific Events Leading to the Dispute
                1. Scientific Papers: HIV is Not an "HTLV"
                2. Scientific Papers: Too Alike to be Different
             B. Issuance of the Gallo et al. Blood Test Patent
             C. The Initial Challenge

       VIII. HHS' INITIAL RESPONSE
             A. The HHS Mindset
             B. Gallo and Popovic Respond
             C. The "Fischinger Report"
             D. Beyond the Fischinger Report
                1. The Grinstead Response
                2. Malcolm Martin's Information
                3. CDC's Information
                4. "Major Areas of Oversight"
                5. Disposition of the Martin and CDC Information
                6. Dr. Gallo's Response
                7. Dr. Gallo's Explanations
             E. Key Players at HHS
                1. C. McLain Haddow
                2. Dr. James Mason
                3. Darrel Grinstead
                4. Dr. Lowell Harmison
             F. The Negotiations
                1. Bad News From the HHS Attorneys
                2. IP's Quest for Information

         IX. THE FRENCH/AMERICAN DISPUTE: LITIGATION
             A. Overview of the Proceedings
                1. Lawsuit in the Court of Claims
                2. Interference Before the USPTO
                3. Tort Claim
                4. Lawsuit Under the Freedom of Information Act (FOIA)
             B. THE U.S. GOVERNMENT STRATEGY
                1. Major Players
                2. Litigation Strategy
                3. Government Attorneys in Action
             C. DEFINING EVENTS
                1. The LAI/LAV EM "Mix-Up"
                2. The Counter-Offensive to the EM "Mix-Up"
                   (a) Counteroffensive: "CC"
                   (b) Counteroffensive: The "Early Isolates" Nature
                       Letter
                3. Potential Disaster at PTO

          X. THE SETTLEMENT (AND THEREAFTER)
             A. Terms of the Settlement
             B. Unravelling of the Settlement

       STAFF REPORT

       I. INTRODUCTION

       A. Background

       In April 1984, the United States Government announced with
       great fanfare that government scientists had discovered the
       virus that was the cause of AIDS, had discovered a method for
       growing the virus, and had invented a blood test to detect
       antibodies to the virus. Officials and scientists of the
       Department of Health and Human Services (HHS) described these
       claimed accomplishments as "a triumph of science" and "another
       miracle" added to "the long honor roll of American medicine and
       science."

       On April 23, 1984, the same day HHS held a major press
       conference for the international media, the HHS scientists who
       claimed these accomplishments (Dr. Robert C. Gallo and his
       colleagues at the National Cancer Institute's [NCI] Laboratory
       of Tumor Cell Biology [LTCB]) applied for United States patents
       on an HIV antibody blood test and a method for propagating the
       AIDS virus. In the patent applications, Dr. Gallo and his
       colleagues affirmed, under penalty of criminal prosecution for
       making false statements, that they were,

          "... the original, first and joint inventors... of the
          subject matter which is claimed and for which a patent is
          sought ..."

       Gallo et al. also affirmed, under penalty for making false
       statements, their duty

          "... to disclose information which is material to the
          examination of this application ..."

       Dr. Gallo and his colleagues likewise all signed the
       declaration at the conclusion of the patent application that
       contained this affirmation:

          "... all statements made herein of my own knowledge are true
          and ... all statements made on information and belief are
          believed to be true ... with the knowledge that willful
          false statements and the like ... are punishable by fine or
          imprisonment, or both, ... and such willful false statements
          may jeopardize the validity of the application or any patent
          issued thereon."

       Announcement of the HHS scientists' claimed discoveries also
       was made via numerous scientific papers and presentations. But
       the announcements were no sooner made than suspicions about the
       claims, followed by overt concerns, began to be voiced. The
       concerns included the following:

          the U.S. Government scientists' supposed discovery of the
          AIDS virus was not a bona fide discovery; the U.S.
          Government scientists in reality had "discovered" another
          scientist's virus (that of Dr. Luc Montagnier of France's
          Institut Pasteur [IP]) and used the IP virus for their
          putative breakthroughs;

          the U.S. Government scientists had not appropriately
          credited the prior work of the IP scientists in discovering
          the AIDS virus and inventing the HIV antibody blood test;
          neither had the U.S. scientists acknowledged and
          appropriately credited the contribution of the IP
          scientists' virus samples to the LTCB's "discoveries";

          the U.S. Government had engaged in "inequitable conduct"
          before the United States Patent and Trademark Office
          (USPTO), having failed in its duty of candor and disclosure
          to that office.

       In 1985-86, following a breakdown in informal negotiations
       between HHS and IP, the issues were joined in four formal legal
       proceedings (a lawsuit for breach of contract, a patent
       interference proceeding, a tort claim, and a lawsuit under the
       Freedom of Information Act [FOIA]). The legal battles continued
       for nearly two years, ending only when a political settlement
       was negotiated by the President and Prime Minister of the
       United States and France, respectively. Under the terms of the
       settlement, the United States Government has received an
       average of $2,000,000 annually, while Dr. Gallo and his two
       "coinventors" each have received $100,000 annually, since 1987.

       During the 1985-87 legal proceedings, United States
       representatives from the Department of Justice (DOJ) submitted
       numerous briefs and other pleadings on behalf of the research
       of Gallo et al. Many of the claims made by the United States
       representatives mirrored claims made by Dr. Gallo himself, in
       statements to the media, to colleagues and associates in
       official correspondence, and to HHS officials and HHS/DOJ
       attorneys, in memoranda and related documents generated in
       response to the French/American dispute. The U.S.
       representatives' and Dr. Gallo's claims have been examined in
       detail during the Subcommittee's investigation; the
       Subcommittee has documented numerous instances in which these
       claims cannot be substantiated and, in fact, are contradicted
       by the available evidence.

       The Subcommittee's investigation also has produced evidence
       that during the 1985-87 legal proceedings, the United States
       Government significantly disadvantaged the IP by systematically
       denying its representatives access to key information about the
       work of Gallo et al.,  particularly information contained in
       laboratory records and related documents withheld from the IP.
       The Subcommittee's investigation has identified a number of key
       documents and items of information whose very existence was
       withheld from the IP. IP representatives have told Subcommittee
       staff that their willingness to agree to the 1987 settlement
       with the United States was attributable in large part to their
       lack of awareness of these documents and key items of
       information, particularly those relating to the LTCB
       scientists' use of the IP virus, LAI/LAV.

       The settlement that supposedly ended the French/American
       dispute once and for all began to unravel almost as soon as it
       was consummated in March 1987. The unravelling of the
       settlement was due in significant part to the inherent
       weaknesses of the U.S. position, plus the work of investigative
       journalists who documented compelling evidence that profound
       deceits had been officially perpetuated by representatives of
       the U.S. Government. Yet it was not until 1991, in the midst of
       a three-year series of HHS investigations that Dr. Gallo
       finally acknowledged publicly what for years he had denied was
       even physically possible: the virus the LTCB scientists used to
       make their HIV blood test -- the virus claimed by the LTCB as
       its "prototype" HIV isolate -- was in fact the IP HIV isolate
       LAI/LAV.

       Two years earlier, Dr. Gallo acknowledged publicly that the
       cell line he used to grow the AIDS virus, like the virus
       itself, was not his own laboratory's discovery, but the
       discovery of a scientist in another NCI laboratory, Dr. Adi
       Gazdar. Dr. Gazdar originally pressed NCI officials for
       inclusion as an inventor on the Gallo et al. patents.
       Eventually, however, Dr. Gazdar accepted a $10,000 NCI award,
       and he left off his inventorship claims.)

       Even with these admissions, and notwithstanding the HHS
       investigations, many significant questions remained, both about
       the LTCB's HIV research and about the claims made by the United
       States Government concerning that research. In fact, from 1987
       on, even as several HHS components initiated investigations of
       Dr. Gallo's claims, other HHS components continued to propound
       the questionable claims and to suppress evidence that
       demonstrated their dubious nature.

       The investigation touches on matters of scientific truth, of
       institutional integrity, and of national honor. The fact that
       these issues had their origins a decade ago in no way
       diminishes their contemporary significance, particularly
       considering that in some quarters, a cover-up of apparent
       misconduct has persisted to the present day. The very
       persistence of the questions concerning the U.S. Government's
       claims, as well as the actions of U.S. Government officials in
       defending those claims, demonstrate compellingly that until the
       Subcommittee investigation, major questions remained
       unresolved. This report addresses those questions.

       B. HHS/NIH's Sorry History of Misconduct Investigations

       The 2 1/2-year investigation by the Subcommittee on Oversight
       and Investigations focused on the following issues:

          Possible scientific fraud associated with the putative
          discovery of the AIDS virus and development of an HIV
          antibody blood test at the LTCB, NCI, National Institutes of
          Health, (NIH). At all times during the events examined in
          the Subcommittee investigation, Dr. Gallo was Chief of the
          LTCB.

          Possible patent fraud and inequitable conduct associated
          with the United States' application for an HIV blood test
          patent (as well as several associated patents);

          Apparent inequitable handling of patent applications at the
          USPTO;

          A cover-up by senior government officials of the original
          scientific and patent fraud and inequitable conduct, in the
          context of several legal proceedings, including the PTO
          interference and a lawsuit in the United States Court of
          Claims. As part of the cover-up, these officials and U.S.
          Government attorneys asserted on behalf of the United States
          claims that they knew or had reason to know were false,
          claims that could not be substantiated.

       The investigation included interviews with several dozen
       witnesses, along with review and analysis of ten of thousands
       of pages of documentary evidence. The investigation was
       significantly delayed by the obstructionism of key officials,
       past and present, particularly at HHS. In one instance, the
       Subcommittee held a hearing in Executive session, due to the
       refusal of a potential witness to appear voluntarily for an
       interview by Subcommittee staff. In the case of other witnesses
       who did appear for a voluntary interview, their memories seemed
       to have been selectively obliterated concerning matters in
       which they were substantially involved.

       Agency obstructionism was particularly pronounced vis-a-vis
       documentary evidence. Because of the passage of time since many
       key events, because of deliberate as well as genuine
       forgetfulness concerning these events, documentary evidence was
       a particularly important element in the investigation. Yet very
       significant delays, as well as several incidents of actual
       withholding and destruction of documents responsive to the
       Subcommittee's requests, took place.

       II. EARLY ATTEMPTS TO ISOLATE AND GROW HIV

       A. The LTCB's Misplaced Focus

       During the first critical months of research on HIV, the work
       of the LTCB scientists was far behind that of the scientists at
       the IP. The reason the LTCB scientists lagged behind was a
       misplaced focus on the "HTLV" (human T-cell leukemia virus)
       family as the probable source of the cause of AIDS. Not only
       did this incorrect focus misdirect the work of the LTCB
       scientists, for a time it misdirected the work of much of the
       scientific community, due to Dr. Gallo's preeminent position
       vis-a-vis human retrovirus research.

       In early 1983, scientists at both the IP (Montagnier et al.)
       and the LTCB (Gallo et al.), searching for the cause of AIDS,
       attempted to isolate a retrovirus (a virus that reproduces
       itself using RNA as well as DNA) from AIDS and pre-AIDS
       patients. Dr. Gallo frequently asserted it was he who first
       proposed the idea to look for a retrovirus as the cause of
       AIDS. But Dr. Gallo's early theorizing about the AIDS virus
       mistakenly placed that virus in the "HTLV" (for "human
       T-leukemia virus," later changed to "human T-lymphotropic
       virus") family (see, e.g., Medical World News,
       August 14, 1982, p. 9).

       By Dr. Gallo's own admission (see below), his misunderstanding
       of the fundamental nature of the AIDS virus associated with the
       mistaken belief that HIV was an "HTLV" resulted in significant
       confusion and delay in the work of the LTCB scientists. Even
       for years after HIV had been discovered and its true defining
       features identified, Dr. Gallo fought a losing battle to keep
       the AIDS virus in the "HTLV" family by retaining the name
       "HTLV-III," rather than HIV (see below ).

       Dr. Gallo himself acknowledged in his November 1986 sworn
       declaration before the USPTO, that in the Spring of 1983,

          "...I thought that the best idea of the causative agent of
          AIDS was most likely to be a new variant of HTLV-I ... our
          thinking at the time was that the AIDS virus was likely to
          be a close relative of HTLV-I" (Declaration of Robert C.
          Gallo; November 8, 1986, p. 10).

       The IP scientists isolated and began to grow their virus in
       January/February 1983. Some of the early IP experiments
       characterizing this virus used reagents provided by Dr. Gallo,
       for which contribution Dr. Gallo was acknowledged in the first
       IP paper, published in May 1983 (Barre-Sinoussi et
       al., Science, 220, pp. 868-871). In the same issue of the
       journal, Dr. Gallo and his colleagues published two papers
       reporting HTLV-I antigens in three AIDS patients and HTLV-I
       proviral DNA sequences in two of 33 AIDS patients.

       The IP scientists recognized early on that their virus, first
       called "LAV" for "lymphadenopathy-associated virus"
       (lymphadenopathy is a pre-AIDS condition) appeared to be
       distinctly different from the known human retroviruses, HTLV-I
       and II. The AIDS virus, unlike the other human retroviruses
       known in 1983, is strongly "cytopathic," i.e., it kills the
       cells in which it grows. The IP scientists recognized the
       cytopathicity of the virus and kept their virus cultures alive
       by adding fresh cells to the cultures or by "passaging" the
       virus to fresh cell cultures (see e.g., Barre-Sinoussi et
       al.,1983; Montagnier et al., 1984; Barre-Sinoussi  et al.,
       1984).

       By contrast, the LTCB scientists, because they were looking for
       a variant of HTLV-I (the human T-cell leukemia virus), which
       immortalizes the cells in which it grows, did not comprehend
       that the virus they occasionally detected in AIDS patients'
       samples actually was killing the cells. Consequently, the LTCB
       scientists, for a prolonged period of time, were unable to keep
       their AIDS patients' virus cultures alive. Consequently, by
       their own accounts, the LTCB scientists repeatedly discarded
       AIDS patient cultures, when the cultures died out or failed to
       grow. Again and again the LTCB scientists unsuccessfully
       attempted to grow an AIDS virus using methods suitable for an
       "HTLV" -- not an HIV-type virus.

       Meanwhile, throughout all of 1983, the only contribution the
       LTCB scientists made to the scientific literature and dialogue
       concerning possible causes of AIDS was to reiterate that "HTLV"
       was "... a very attractive candidate" (Gallo remarks at 7/18/83
       meeting of the NCI AIDS Task Force).

       B. Subversion of the Barre-Sinoussi et al. paper

       Dr. Gallo was not content to rely on his own papers to support
       his thinking about "HTLV" and AIDS; while serving as nominal
       "peer reviewer," he actually altered the contents of the
       seminal paper by the IP scientists (Barre-Sinoussi et al.;
       Science,  1983, 220, pp. 868 - 871), composing a misleading
       abstract, adding to and otherwise revising the text of the
       paper to strengthen the apparent relationships between the IP
       virus and "HTLV," defined by Dr. Gallo as "human T-cell
       leukemia viruses." Later, during the French/American dispute,
       Dr. Gallo, HHS officials, and DOJ attorneys compounded the
       damage to the IP scientists' work by blaming them for the very
       "errors" of understanding -- particularly the alleged close
       associations of the IP virus with the leukemia virus -- that
       Dr. Gallo introduced into their paper (see below ).

       Dr. Gallo argued to OSI that the changes/additions he made to
       the IP scientists' paper were fully substantiated by what the
       IP scientists originally wrote. But the Subcommittee staff's
       review of various drafts of the paper showed that the most
       significant passages Dr. Gallo offered to justify the
       changes/additions he made to the paper were themselves itself
       written by him! An example is Dr. Gallo's alteration of a
       sentence in the body of the paper that originally referred to
       "... this virus [the IP virus]  as well as  HTLV
       isolates" to read "... this virus, as well as  all
       previous  HTLV isolates ..."

       Dr. Gallo's actions vis-a-vis the Barre-Sinoussi et al. paper
       were characterized by the NIH Office of Scientific Integrity
       (OSI) as, "gratuitous, self-serving, and improper" and by the
       Office of Research Integrity (ORI) as reflecting, "... Dr.
       Gallo's propensity to misrepresent and mislead in favor of his
       own research findings or hypotheses."

       C. Paradoxical Claims

       Curiously, despite his admitted failure to grow the AIDS virus,
       Dr. Gallo frequently claimed it was he who developed the
       methodology for detecting and propagating the AIDS virus and
       that he taught these methods to the IP scientists. Like Dr.
       Gallo's claim concerning the "idea of a retrovirus" as the
       cause of AIDS, the claims about the method for growing the
       virus played an important role in the U.S. effort to defend the
       patent of Gallo et al.

       In a July 1985 letter to Dr. Claudine Escoffier-Lambiotte,
       Medical Editor of  Le Monde,  Dr. Gallo wrote that among his
       contributions to the IP scientists, he provided,

          "...the major techniques to grow the T-cells (the same as
          used for HTLV-I)."

       In his 1991 book  Virus Hunting,  Dr. Gallo described an
       occasion on which allegedly instructed the IP scientists
       concerning the growth of their new retrovirus:

          "In January 1983, Chermann called to tell me about their
          positive reverse transcriptase in this one sample and to ask
          for my advice about how to keep the culture going. I
          suggested that he add human T4 blood lymphocytes obtained
          from the umbilical-cord blood of newborns as target cells,
          an approach used earlier for HTLV-2. Applying this
          information he succeeded in saving their virus ... by
          obtaining and adding new umbilical-cord blood cells every
          few days" (p. 147).

       Dr. Gallo repeated to OSI the claims that he taught the IP
       scientists how to grow the AIDS virus and that Chermann and
       Montagnier themselves acknowledged this was a Gallo
       contribution. Here is what Dr. Gallo told OSI:

          "Both Chermann and Montagnier have acknowledged openly Gallo
          for suggesting adding cells, either directly, that is
          Chermann by telephone acknowledges this, or indirectly, that
          by way of his published work in the case of Montagnier. This
          was the standard technique of cultivation for retroviruses
          that our lab had developed. The notion that the French group
          had enormous clarity of thought while we blundered about
          with HTLV-I is just a bit of nonsense" (8/3/90 OSI
          interview; transcript p.236).

       But Dr. Gallo's claims do not square with the facts. His claims
       also are contradicted by accounts of the IP scientists,
       including even Dr. Chermann, an occasional ally of Dr. Gallo.
       Speaking to OSI, Dr. Chermann was both more discriminating
       concerning what Dr. Gallo "suggested" to him and more complete
       in his account of the significance of Dr. Gallo's suggestions.
       Dr. Chermann said Dr. Gallo told him that, "...we can use also
       cord blood lymphocytes" to grow the AIDS virus, but according
       to Dr. Chermann, the basis for Gallo's suggestion of the use of
       cord blood was not because Dr. Gallo recognized the
       cell-killing property of the AIDS virus but,

          "... because in HTLV-I it is better to use cord blood cell"
          (10/5/90) OSI interview; transcript p. 4).

       More importantly, according to Dr. Chermann, weeks before Dr.
       Gallo offered the suggestion of adding cord blood, the IP
       scientists, having already discerned the cytopathic nature of
       their virus, were already adding fresh cells to their LAV/BRU
       cultures.

       Similarly, in a July 26, 1989 letter to Dr. Gallo, a letter
       Gallo has frequently invoked as evidence of Chermann's
       acknowledgement of Gallo's putative contribution, Dr. Chermann
       made clear how limited was the suggestion reportedly conveyed
       in the telephone conversation with Dr. Gallo.

       Dr. Chermann said this:

          "...we requested to you sera to do immunofluorescence and
          ... you suggest we also to use cord blood lymphocytes."

       Dr. Chermann wrote tellingly about these matters in a preface
       he prepared to the French edition of Dr. Gallo's  Virus
       Hunting.  In the preface, Dr. Chermann said that in the
       telephone call with Dr. Gallo early in the IP scientists' work,

          "Gallo also told me that the lymphocytes in the blood of the
          human umbilical cord are very sensitive to human
          retroviruses ... Gallo and his team had postulated the
          existence of a cousin to HTLV-I, and the search for this
          'cousin,' in addition to attempts to culture it directly,
          was one of the reasons the American team got behind."

       Dr. Chermann employed a vivid metaphor to describe the
       different approaches of the LTCB and IP scientists in their
       attempts to detect and propagate the AIDS virus, a metaphor
       that makes clear the limitations and limiting consequences of
       Gallo's HTLV-I-focused approach. Speaking of Gallo's approach,
       Dr. Chermann said this:

          "He [Gallo] used a key for which no one could identify the
          lock. We, on the other hand, looked for the lock and made
          the key afterwards."

       On another occasion, Dr. Chermann used another vivid metaphor
       to describe the differences in the IP and LTCB approaches to
       growing the AIDS virus:

          "We grew the plant until it bloomed and we could see what
          kind of flower it gave. The Americans kept examining seeds
          and shoots and trying to see if they would turn into the
          plant they wanted" (AP story in  The Cleveland Plain Dealer,
          5/1/84).

       Drs. Montagnier and Barre-Sinoussi denied outright that they
       were instructed by Dr. Gallo about how to grow the AIDS virus.
       Writing to Gallo in December 1989, Montganier said this:

          "... I did myself the passage of LAV/BRU to human cord blood
          T lymphocytes as early as March 10, 1983 ... This was the
          second passage of BRU virus on normal T lymphocytes, the
          first being on T lymphocytes from an adult blood donor ...

          I used cord blood lymphocytes for many years for EBV
          transformation ... I really do not think that it was
          Chermann who gave the idea after he was told by you"
          (12/29/89 Montagnier-to-Gallo letter; p. 1).

       Most recently, Dr. Gallo himself significantly downplayed the
       significance to the IP scientists' work of his reportedly
       having "given the protocol" to Dr. Chermann. Speaking to
       Subcommittee staff in the Summer of 1994, Dr. Gallo said this:

          "I never said I helped Barre-Sinoussi or Montagnier. I gave
          the protocol to Chermann. All they had to do was ask
          Chermann. Chermann doesn't get asked. I don't want to tell
          you that I believe that was necessary. I don't know that.
          Montagnier and Barre-Sinoussi would probably disagree with
          Chermann. I'm just saying I sent it. And Chermann says that.
          That's the truth. I'm not lying."

       D. Consequences of the LTCB's Misplaced Focus

       Not only did Dr. Gallo not teach the IP scientists how to grow
       the AIDS virus, because of his commitment to the leukemia virus
       as a potential cause of AIDS, Dr. Gallo and his associates, for
       a prolonged period of time, failed utterly in their own efforts
       to grow the virus. The reason Gallo et al. failed was because
       they did not discern the cell-killing nature of the virus.

       By Dr. Gallo's own admission, it was the IP scientists who
       revealed the cytopathicity of the virus to him, and not the
       other way around. Here is an early account of the
       circumstances, based in part on an interview with Gallo, as
       published in June 1984 in the  Baltimore Sun:

          "...Dr. Chermann helped Dr. Gallo solve a problem that had
          him stymied in his AIDS research ... one day in his NCI
          laboratory, something Dr. Gallo had heard Dr. Chermann say
          in France 'hit me like a ton of bricks.' It was, in
          retrospect, a simple observation. Dr. Chermann had said the
          cells kept dying because the virus killed them" (6/17/84).

       The early secret of success in growing the AIDS virus was not
       the use of cord blood per se. Rather, the secret was in
       understanding that the virus was killing the cells and the
       corollary understanding that because of the cytopathicity of
       the virus, one way to succeed in its propagation would be to
       replenish virus culture with fresh cells, either by feeding the
       existing cultures or passaging the virus to fresh culture
       material.

       It is on this key point that Dr. Gallo's claims that he taught
       the IP scientists how to grow the AIDS virus fail on logical as
       well as substantive grounds, i.e., if Dr. Gallo really knew
       early on that cell-replenishment was the key to propagating the
       AIDS virus, and if he disclosed this key methodology to the IP
       scientists in early 1983, why then, for months thereafter, did
       Gallo and his associates continue to fail in their efforts to
       grow the AIDS virus? In particular, why did Gallo et al. not
       use cell-replenishment themselves?

       Dr. Gallo recognized the illogic of his claims. When asked by
       OSI if he fed his cultures with fresh cells, he replied,

          "Not as fast as I would like to have done. No, we weren't.
          We were trying to grow with IL-2 [interleukin-2, also known
          as 'T-cell growth factor," or TCGF]. It is ironic that I am
          telling Chermann to add more cord blood cells ... We didn't
          do it with ours. We thought we could grow it with IL-2. I
          don't know when more primary cells were added back. I don't
          know who did that the first time" (9/23/90 interview;
          transcript pages 83-84).

       In fact, in an earlier OSI interview, Dr. Gallo dated the
       LTCB's initial use of cell-replenishment to "late summer, early
       fall of 1983," many months after the IP scientists began using
       the technique (7/25/90 OSI interview; transcript pp. 51-52).
       Shortly after this interview, Dr. Gallo gave OSI what is
       probably his most authentic account concerning the prolonged
       inability of the LTCB scientists to grow the AIDS virus -- and
       the reasons for that failure:

          "... I could kick myself [for] not concentrating earlier and
          trying alternatives to grow the HTLV-I negative specimens"
          (7/27/90 OSI interview; transcript p.104).

       Dr. Gallo attempted to argue that "this is science," but he
       acknowledged the LTCB scientists' failure to grow the AIDS
       virus was directly related to their failure to understand its
       intrinsic nature. Speaking of the many specimens the LTCB
       scientists failed to grow, Dr. Gallo said this:

          "... they were always in bad shape. They were in bad shape
          because they often came far and because the cells were being
          killed. But we didn't understand yet they were being killed.
          So, you say, why didn't we just keep -- Yes, now I wish we
          would have tried other experiments to do anything to keep
          those samples going. But, if you -- At the time, you are
          seeing crud and you are losing RT positivity very rapidly,
          you put it away and you say, 'I will try again. Give me
          another AIDS specimen.' That is what our whole pathway was"
          (op cit., p. 104).

       Indeed, for many months, that was what the "whole pathway was"
       for the LTCB scientists. Again and again, they attempted the
       same experiment -- short-term culture of suspected viruses from
       AIDS/pre-AIDS patients, using the old HTLV-I culture techniques
       -- failing every time. When they failed, they discarded the
       cultures, assigning the failure to the circumstance that the
       "cells were in bad shape," failing to realize why this was so
       -- i.e., because the cells were being killed by the virus.

       Actually, long before his admissions to OSI, in a rare moment
       of candor, Dr. Gallo acknowledged his failure to recognize the
       cytopathic nature of the AIDS virus, and his consequent failure
       to grow it. Speaking of the cytopathic effects of the virus,
       Dr. Gallo said this to Science magazine:

          "We just didn't believe that is what this kind of virus
          could do ... It is certainly true that in that period of
          time in summer and certainly by early fall (1983), Chermann
          had recognized the cytopathic effect of that virus and I had
          not ... As I look back now, I could bang my head against a
          wall that we were so stubborn in trying to grow those cells
          long term in IL-2 ... We went through loss of months with
          that problem" (230, 1985; p. 520).

       Thus, by Dr. Gallo's own admission, he either did not possess
       the secret of growing the AIDS virus or if he did possess it,
       he inexplicably failed, for many months, to use it. On multiple
       grounds, Dr. Gallo's frequent claims that he discovered how to
       grow HIV and "taught" the method to the IP scientists are
       without foundation.

       III. CLAIMS AND REALITY CONCERNING THE LTCB'S HIV RESEARCH

       A. Claims about the LTCB's "Early Isolates"

       Although during 1982 and much of 1983, the LTCB scientists'
       efforts to isolate and grow the AIDS virus failed again and
       again, during and after the blood test dispute, Dr. Gallo, HHS
       officials, and DOJ attorneys ascribed extraordinary
       significance to those early efforts. In particular, Gallo et
       al. repeatedly asserted that the first HIV isolates were
       obtained at the LTCB in late 1982-early 1983.

       The reason for these claims was simple. The Gallo et al. blood
       test patent application was submitted months after the
       application of the IP scientists. By the fundamental criterion
       of priority of invention, the IP scientists should have been
       awarded the blood test patent. But once the Gallo et al. patent
       issued (due both to PTO's extraordinary incompetence and
       Gallo's failures of candor and disclosure), and an
       "interference" between Montagnier et al. and Gallo et al. had
       been declared, PTO rules provided a potential "out" for Gallo
       et al. by which they could attempt to demonstrate that they
       were first to invent.

       Under U.S. patent law, a domestic inventor may be able to
       demonstrate priority by "swearing behind" the submission date
       of another's patent application, by demonstrating "conception"
       of an invention prior to the conception date of a competing
       inventor, together with diligence in practicing the invention
       to the point of its reduction to practice. An individual who
       thus conceives and diligently practices an invention may be
       afforded priority for that invention even if his/her reduction
       to practice occurs after the reduction to practice of the
       competing inventor. "Swearing behind" was the central tactic of
       the U.S. Government, during the blood test patent dispute, in
       its attempt to defend the patent of Gallo et al. The assertion
       of "early isolate" claims was an integral element of that
       strategy.

       1. Claims in the Scientific Literature:

       The LTCB's "early isolates" claims actually began before the
       formal legal proceedings of the French/American dispute. In
       early-to-mid 1985, Gallo et al. wrote that,

          "The first  HTLV-III isolates were obtained in this
          laboratory in November 1982, and HTLV-III was subsequently
          isolated from approximately 100 patients with AIDS or ARC or
          from healthy individuals at risk for AIDS" (Gallo  et al.,
          in  AIDS: Etiology, Diagnosis, Treatment and
          Prevention,"  1985, p. 34).

       In August 1985,  the "early isolates" claim was formally
       propounded in a particularly significant forum, the
       Proceedings of the National Academy of Sciences   (PNAS).  The
       PNAS  article, by Salahuddin  et al.,  made these claims:

          "Since the  fall of 1982, independent isolates of HTLV-III
          have been obtained in this laboratory ... from 101 AIDS and
          ARC patients and healthy donors at risk for AIDS"
          (Salahuddin  et al.,   PNAS,   82,  pp. 5530-34).

       Salahuddin et al. were very precise about how their isolates
       had been identified, and how they were defined, for purposes of
       the PNAS paper:

          "The  minimum criteria  used to identify new HTLV-III
          isolates were (i) release of particulate, Mg2+-requiring,
          viral reverse transcriptase into cell culture supernatant
          fluids...; (ii) transmission of virus to cultures of normal
          human peripheral blood mononuclear cells or to permissive
          T-cell lines with resulting characteristic cytopathic
          effects and release of virus ...; and (iii) detection of
          HTLV-III proteins by indirect immunofluorescence assays
          using virus-specific monoclonal antibody ... or hyperimmune
          sera ..." (emphasis added; op cit., p. 5531).

       Elsewhere in the paper, Salahuddin et al. said this:

          "All 101 virus isolates  were classified as members of the
          type-III subgroup of HTLV based on their immunological
          reactivity with specific monoclonal antibody or hyperimmune
          antisera and by their cytopathic effect on normal peripheral
          blood mononuclear cells in vitro" (emphasis added; op cit.,
          5533).

       In other words, according to Salahuddin et al., each and every
       one of their 101 isolates "since the fall of 1982" had been
       tested and found reactive with HIV-specific reagents. But there
       were two fundamental problems with these claims: (1) no
       laboratory data have ever been produced to substantiate that
       "101" isolates, still less the "over 200" claimed elsewhere by
       Dr. Gallo (9/23/85 Gallo-to-Fischinger memorandum) met the
       criteria specified in the  PNAS  paper and (2) there is no
       evidence that any so-called "early isolates," particularly any
       isolate dating from the Fall of 1982 or early 1983 were ever
       tested by HIV-specific reagents.

       In fact, no sample could have been tested with HIV-specific
       reagents in 1982 -- or at any time prior to February 1984 --
       for the simple reason that no such reagents existed before that
       time. Theoretically, virus isolates obtained in 1982-1983 could
       have been frozen and tested later, after proper reagents became
       available. This is what Dr. Gallo claimed to have done. Thus,
       in January 1987, writing in  Scientific American,  Dr. Gallo
       articulated the claim that once he had developed HIV-specific
       reagents, particularly the hyperimmune rabbit antiserum, he
       used the reagents to analyze and type archived samples, samples
       that he dated as early as 1982:

          "By December (1983) substantial quantities [of virus] were
          being grown, and soon afterward reagent production was
          underway. With reagents in hand, we could go back and
          identify the many stored viral isolates. Initial testing
          showed that 48 isolates from AIDS patients or members of
          risk groups were of the same type" (p. 50).

       The 48-isolate claim and the companion claim that very early
       LTCB samples had been typed with HIV-specific reagents actually
       became a part of the settlement agreement, via their inclusion
       in a "Chronology of AIDS Research." The "Chronology," published
       by Montagnier and Gallo as a "Commentary" in  Nature  in April
       of 1987, was identified as "part of the agreement between the
       U.S. and French AIDS research groups"  (Nature,   326,  April
       2, 1987; p. 435).

       Among the "critical published facts" cited in this "official"
       chronology was the following:

          "May 1984. Gallo's group (1984) reports ... (2) 48 virus
          isolations ... The use of anti-p24 hyperimmune sera proves
          that the 48 isolates belong to the same kind of virus" (op
          cit., p. 436).

       And in a 1988  Scientific American  article, also coauthored by
       Gallo and Montagnier, the claim was repeated:

         "The first reagents for specifically typing this virus were
         rapidly made. Employing those reagents, it was shown that 48
         isolates obtained beginning in early 1983 from AIDS patients
         and people in risk groups were all the same type of virus,
         which was called HTLV-III on the American side"  (259,
         October 1988, p. 44).

       Despite these repeated published claims, when Dr. Gallo was
       challenged to provide substantiating evidence, he did not,
       could not, do so. In April 1990, testifying to OSI, Dr. Gallo
       acknowledged that at the time of publication of the LTCB's May
       1984  Science  papers,

          "... we had more than 50  detections  and more than
           10 true isolates  of HIV-I (emphasis added; 4/26/90
          OSI interview; transcript p. 58).

       Elsewhere in the same interview, Dr. Gallo said,

          "... there was about 10 by the time of our publications" (op
          cit., p. 62).

       In September 1990, when he was asked by OSI to document LTCB
       isolates obtained prior to April 1984 that were tested against
       HIV-specific reagents, Dr. Gallo listed only nine samples that
       he said were tested against the rabbit antiserum; no primary
       data accompanied this response.  None  of these was a
       1982/early 1983 sample.

       More recently, in May 1994, when Dr. Gallo was asked by NCI
       Director, Dr. Samuel Broder, to substantiate the claims in the
       PNAS  paper, particularly the claim of 1982 isolates, Dr. Gallo
       again responded with lists of samples, only one of which dated
       from 1982. This sample was clearly noted in the data summary
       provided by Dr. Gallo himself as "ND" (for not done, not
       determined, or not determinable) against HIV-specific reagents.
       Other documents in the package submitted to Dr. Broder by Dr.
       Gallo included several handwritten tallies of samples including
       six samples started in culture in 1982. None of these samples
       is indicated to have ever been tested with HIV-specific
       reagents.

       Dr. Gallo has suggested the possibility that stored 1982
       samples were later sent for testing with HIV-specific reagents;
       however, he has produced no evidence documenting that this
       actually occurred. In fact, concerning the late-1982 LTCB
       samples he later would claim as HIV (see below), Dr. Gallo said
       this to OSI:

          "... these cultures did not survive long enough to test with
          HIV-specific reagents" (9/23/90 OSI interview; transcript p.
          81).

       Finally, on several occasions, Dr. Gallo confirmed to
       Subcommittee staff that no 1982 sample was ever tested and
       confirmed to be HIV.

       2. Claims in Legal Proceedings:

       The absence of evidence to substantiate claims for 1982/early
       1983 isolates did not stop the United States Government from
       asserting such claims before the USPTO, during the blood test
       patent interference proceeding. One document submitted by the
       U.S. Government particularly laid out the framework for false
       claims about early AIDS research efforts at the LTCB. This
       document -- titled "Preliminary Statement of the Party Gallo et
       al." -- was submitted to USPTO at the outset of the PTO
       interference.

       As required by PTO's rules, the Gallo et al. preliminary
       statement specified the conception and reduction to practice
       dates Gallo et al. claimed for their invention. PTO rules
       specify that if a party to an interference fails to submit a
       preliminary statement, that party is precluded from attempting
       to "swear behind" the other party's filing date, during the
       interference. Furthermore, according to PTO rules, as "Junior
       Party" in the interference, Gallo et al. would not have access
       to the preliminary statement of Montagnier  et al., unless they
       (Gallo et al.) filed a preliminary statement of their own.
       Thus, on multiple grounds, a preliminary statement was
       essential to the U.S. Government's defense of the Gallo et al.
       patent.

       But the U.S. Government ran a significant risk in filing a
       preliminary statement on behalf of Gallo  et al.,  because the
       contents of a preliminary statement are required to be
       absolutely truthful; violation of this precept carries
       significant penalties. The USPTO's "Patent Rules" state that:

          "A party shall be strictly held to any date alleged in the
          preliminary statement" (37 CFR, Appendix R, section 1.629)."

       The rules further state that doubts about the claims in a
       preliminary statement:

          "... will be resolved against the party filing the statement
          by restricting the party to the earlier of its filing date
          or effective filing date or to the latest date of a period
          alleged in the preliminary statement as may be appropriate"
          (op cit.).

       For Gallo  et al.,  this meant that any doubts concerning
       accuracy of the dates in their preliminary statement would have
       resulted in an adverse outcome for the Gallo et al. patent in
       the interference proceeding, since the Gallo et al. filing date
       was demonstrably later than that of Montagnier et al. Yet, the
       facts are clear that Gallo et al. could never have supported
       the claims in their preliminary statement concerning early AIDS
       research at the LTCB.

       The central claims laid out in the U.S. Government's
       preliminary statement to the USPTO concerning the LTCB's early
       AIDS research were as follows:

          "The invention was first conceived prior to May 1, 1982."

          "The invention was first disclosed to another person prior
          to May 1, 1982."

          "The first  written description of the invention was made on
          December 15, 1982."

          "The invention was actually reduced to practice on October
          6, 1983."

          "Active exercise of reasonable diligence toward reducing the
          invention to practice began on December 15, 1982."

       Attached to the Gallo et al. Preliminary Statement was the
       purported "first written description of the invention" of Gallo
       et al. -- two pages from the laboratory notebook of an LTCB
       technician, Elizabeth Read-Connole, dated December 15, 1982.
       Two samples, "HR" and CM," were circled on these pages,
       indicating these were the samples the U.S. Government
       considered proof of Dr. Gallo's priority of invention.

       Examination of the Read-Connole notebook pages appended to the
       preliminary statement reveals how weak was the evidence
       submitted by the U.S. Government in support of Gallo et al. The
       data were not HIV blood test data, rather, they represented the
       LTCB's putative initial "isolation" of the AIDS virus. This was
       at least ironic, because ever since the charge of
       misappropriation was made, Dr. Gallo and HHS officials alike
       have argued that the discovery of the AIDS virus was distinct
       from and  not  critical to the blood test invention.

       Even viewed from the limited perspective of virus isolation,
       the data produced with the preliminary statement to support the
       Gallo et al. invention were extremely weak. The notebook pages
       contained only two kinds of data, "RT" or reverse transcriptase
       data, and anti-p19 (HTLV-I) data, marginal data at that. The RT
       results recorded for the two circled samples were only "+/-,"
       which in other circumstances, when it suited his purposes
       (e.g., interpreting results with LAV) Dr. Gallo termed
       "marginally positive" (Gallo "LAV" submission to OSI; 5/15/90).

       The data were otherwise exceedingly limited. They were obtained
       on a single occasion; there was no evidence that the cultures
       continued to grow, nor was there any evidence that the
       one-time, December 15 results were replicated. The most anyone
       could have deduced from the December 15 data was that there
       were two samples that seemed to be weak producers of reverse
       transcriptase and thus, apparently contained a retrovirus, a
       retrovirus that appeared not to be HTLV-I. But there was no
       testing with HIV-specific reagents performed on the samples.
       Thus, what the new retrovirus was -- and whether it had
       anything to do with AIDS -- that information could in no way be
       deduced from the scanty December 15, 1982 data.

       Dr. Gallo knew this well.  In September 1985, Dr. Gallo wrote a
       memorandum to Peter Fischinger, responding to a number of
       questions Fischinger and others had raised about, among other
       things, the LTCB's putative early HIV isolates. Dr. Gallo's
       remarks to Fischinger on this occasion made clear the vital
       significance of HIV-specific reagents. Speaking of his
       late-1982 "isolates," Dr. Gallo said this:

          "... there were  no  reagents to HTLV-III/LAV at that time
          because the virus could not be mass-produced by anyone then"
          (September 23, 1985 Gallo-to-Fischinger; p. 1).

       Dr. Gallo went on  to say that until he was able to grow the
       suspected AIDS virus in large quantities and develop specific
       reagents, he was not able to link it to AIDS. Gallo said in the
       memorandum:

          "What good would it do me or the field to slip in a few
          sentences that another retrovirus is  occasionally  detected
          (at that time it was only occasional) and that it is not
          HTLV-I or II; but we have no evidence that each time this
          new virus is detected it is one and the same virus, i.e.,
          this could have been an HTLV-III in patient one, no virus
          detected in patient two, ... and when detected again in,
          say, patient seven it could have been an HTLV-IV, i.e., not
          the same as HTLV-III ... Proper specific viral reagents
          were, in my mind, required to establish the identity of what
          was believed to be a new virus" (emphasis in original; p.
          1).

       Dr. Gallo's concluding observation was entirely correct. Until
       the development of HIV-specific reagents, there was no way to
       know with certainty if a particular sample was infected with
       the AIDS virus. Yet, contrary to his own precepts, as described
       above, Dr. Gallo repeatedly published claims of HIV isolates
       that -- because the "isolates" were not tested with specific
       reagents -- could not be substantiated.

       3. Dr. Gallo's Statements to OSI and Subcommittee Staff:

       When questioned by OSI investigators about statements he and
       government attorneys made concerning his putative discoveries,
       particularly the claims of early isolates, Dr. Gallo professed
       naivete about the patent process and, by implication, his
       obligation to tell the truth, both in the patent applications
       and in the subsequent legal proceedings in defense of his
       patents. Dr. Gallo also portrayed himself as entirely dependent
       on the instructions he received from United States attorneys.

       Here is what Dr. Gallo said to OSI about his 1982-isolate claims:

          "... I was  asked by the United States Government to draw a
          lineage to the first time we detected this virus to show
          lineage of our work. You see what has happened as a
          scientist I am being put into a legal position, which I am
          not used to ...

          "When the government sat down with me they asked me, look,
          we just want to have lineage from your earliest detection of
          something that you were reasonably confident was not pure
          HTLV-1 or 2 ... We went back to our records. I didn't have
          it in my brain. I didn't make any claim" (5/16/90 OSI
          interview; transcript pp. 99-100).

       Dr. Gallo further said:

          "... we have some samples that were HTLV-I, HTLV-II negative
          by antisera and that are RT positive. Those were not data
          that allowed me to publish.  They were not data that
          convinced me of the cause of AIDS.  They were not even
          enough to say with absolute certainty this is a great new
          virus that I can handle and play with. Therefore, we didn't
          publish. But when I am asked to go back and draw lineage to
          our first experiments that have positive indications, that
          is what I did for the government" (emphasis added; op cit.,
          pp. 100-101).

       Later in the same interview, Dr. Gallo elaborated on the theme:

          "...that is obvious that that is lineage, isn't it? You had
          it detected in December '82, February '83 clearly, it is not
          HTLV-I, right ... You have got RT positive, yes. That is the
          lineage. You know, that is what you write. That is the
          advice from the consulting lawyers.

          "But that wasn't for me to get scientific credit. Just
          suddenly I am in a legal thing, I am back to a morality
          ethics thing issue. They are asking me to draw lineage from
          the day we first detected a non-HTLV-I and II virus and to
          show that the mind was a little bit open.

          "... for a legal case, I was asked to draw the lineage, I
          presented our notebooks and I sat down with the consulting
          firm ... and with the Health Department lawyers, who had
          scientific backgrounds" (op cit., page 109).

       Asked if he used different criteria in "drawing the lineage" of
       his work than in writing a scientific paper, Dr. Gallo denied
       that this was the case, adding:

          "... you are  asking me to defend something that I don't --
          I don't claim we had the cause of AIDS discovered in
          February 1983 or December 1982"  (emphasis added; op cit.,
          page 110).

       What Dr. Gallo did claim was that he isolated the AIDS virus
       "in February 1983 or December 1982." When he was unable to
       substantiate the claim with data, Dr. Gallo fell back on his
       brand of logic, arguing that even though he did not test the
       early samples, he still knew they were HIV:

          "You had it detected in December '82, February '83, clearly.
          It is not HTLV-I, right, no, it is not HTLV-I. You have got
          RT positive, yes. That is the lineage" (5/16/90 OSI
          interview; transcript p. 109)/

          "Is that HIV in December '82? You bet it is. Is it there in
          February '83? You bet. You tell me what it is if it is not"
          (5/25/90 OSI interview; transcript p. 28).

       But these assertions by Dr. Gallo are contradicted by his own
       words, in other fora. Dr. Gallo himself told Dr. Fischinger
       that "proper reagents" were essential to confirm the presence
       of HIV. Dr. Gallo himself said his standard for accuracy is the
       peer-reviewed scientific literature. In that literature, Dr.
       Gallo himself defined an HIV isolate with great precision; he
       reported numbers and dates for isolates according to that
       definition. He did not say he merely reasoned back in time and
       assumed his early non-HTLV-I samples had to be HIV. These kinds
       of arguments by Dr. Gallo, in an attempt to defend clearly
       false statements in the scientific literature and in legal
       pleadings, are at variance with all standards of scientific
       integrity and responsibility.

       Dr. Gallo attempted to assign responsibility for his statements
       in U.S. Government legal pleadings to the lawyers who defended
       the claims of Gallo et al. In a statement that seemed to sum up
       his account of his dealings with the patent attorneys,
       concerning his alleged "early isolates," Dr. Gallo told OSI
       that,

          "... I repeatedly emphasized to U.S. Government lawyers and
          consultants that I never made any claim for priority in any
          discovery of the AIDS virus based on those samples ... The
          only relevant dates are dates of peer reviewed
          publications."

       But the attorneys involved in the Gallo et al. patent
       applications and/or the subsequent defense of the patents gave
       very different accounts. William Bundren, formerly of the
       contract law firm that prepared the LTCB patent applications,
       told Subcommittee staff that he and his partner counseled Dr.
       Gallo and his colleagues on the duty of disclosure and the
       importance of making truthful statements in the patent
       application. Bundren also said that the scientific "facts"
       embodied in the patent applications were supplied by the LTCB
       scientists and not by the attorneys.

       As for the claims in the legal papers submitted in defense of
       Gallo  et al.,  the attorneys pointed to Gallo et al. as the
       original and sole sources of information used in that defense.
       One outside attorney asserted that the content of motions he
       prepared for the U.S. government "were based on what we were
       told" by Gallo and his colleagues. According  to this attorney,
       "we didn't know enough to lie."

       Another  outside patent attorney said that for the most part,
       he had to rely on interviews with Dr. Gallo or his associates
       as a source of information. The attorney said he asked the LTCB
       scientists, "Do you have data to support these claims?" and,
       "Sometimes the data were provided; often they were not." But,
       said this attorney, "I never had any reason to doubt what I was
       told." When confronted with significant pieces of data that
       contradict the claims of Gallo  et al.,  this attorney
       responded, "You're telling me things I know nothing about."

       Concerning the USPTO preliminary statement, the outside private
       attorney who prepared the statement said he asked Dr. Gallo to
       provide him with the earliest documents he had  that supported
       the isolation of HTLV-III,  not "documents showing RT+, p19-
       samples," as reported by Dr. Gallo. In response to the
       attorney's request, Dr. Gallo reportedly provided the December
       15 data pages. Dr. Gallo did not explain to the attorney the
       contents of the December 15 data pages, particularly how, if at
       all, they supported his claim to have isolated HIV, much less
       his claim to have invented the HIV antibody blood test. The
       attorney said he had no understanding of the data independent
       of what Gallo told him about them.

       A U.S. Government attorney provided similar testimony. This
       attorney said he conducted a number of interviews with Dr.
       Gallo and his staff. The attorney said he asked Gallo "if he
       had documents to support his statements and Gallo said 'yes' or
       he believed so." No one, it appears, asked Dr. Gallo if there
       were data or other pieces of evidence that would contradict his
       claims.

       Another U.S. Government attorney offered this description of
       the process by which "facts" were obtained and "verified":

       Here's  this guy, almost a Nobel prize winner, you walk in his
       office and see all these awards all over his walls -- if he
       tells us he did something, are we going to question it?"

       Besides the isolate claims in legal pleadings, there is the
       scientific literature, which Dr. Gallo repeatedly asserted to
       OSI is  the  information forum by which he stands. The  PNAS
       paper, of course, is part of the peer-reviewed scientific
       literature, so the question that must be asked is, is there any
       substantiation for the claims in that paper, particularly the
       claims about HIV isolates dating from the Fall of 1982?

       During one OSI interview, Dr. Gallo was asked about statements
       attributed to him by the  Chicago Tribune,  citing a telephone
       conversation with Gallo in which his "early isolates" data were
       discussed. According to the  Tribune,  in the telephone
       conversation, Dr. Gallo reportedly said:

       The December '82 data is really marginal ... The data were
       equivocal. At the time they were not even real data" ( Chicago
       Tribune,  11/19/89).

       Of his early 1983 data, Dr. Gallo reportedly said:

          "We stuffed them in the freezer. When we measured RT we
          couldn't do anything with it. The cells died. I can't make
          any claim for that. Some people would" (op cit.).

       Dr. Gallo did not dispute the  Tribune's  account. In fact, Dr.
       Gallo told OSI this:

          "Probably the bulk of what he has there is right in our
          conversation" (5/25/90 OSI interview; transcript p. 28).

       Dr. Gallo added,

          "It is not much different than what I said here ... I never
          made a claim in the literature for the December '82 samples.
          I am saying that we knew we had virus particles that weren't
          HTLV-I ..  I never fully characterized them. We never
          succeeded in growing them in long term. Have I ever claimed
          differently?

          "He is getting me to get into legal issues, rather than the
          scientific issues, of what is published.  We didn't publish
          these claims in any publication.  I am a scientist. I go by
          what I publish" (emphasis added; op. cit., pp. 26-27).

       In another OSI interview, when he was quizzed about the PNAS
       paper, Dr. Gallo professed puzzlement. Asked specifically if he
       could substantiate the claim of HIV isolates "since the fall of
       1982," Dr. Gallo said this:

          "For  all of '82? ... Can I have the reference? I would like
          to see that in writing if I said that ... I don't believe I
          would have any reason to say that in PNAS. I mean, it
          doesn't sound like me" (5/16/90 OSI interview; transcript
          pp. 103-104).

       In July 1993, when Dr. Gallo was questioned by Subcommittee
       staff about the claims in the  PNAS  paper, he responded by
       accusing the staff of "not understanding science," adding this:
       "No one believed we really had that many isolates" and "No one
       believed we really meant that." In a follow-up conversation
       with Subcommittee staff, Dr. Gallo claimed he had evidence to
       substantiate the claim of "101 isolates," in the form of a
       letter from the former head of Biotech Laboratories, that
       claimed hundreds of HIV-specific IFAs had been performed by
       Biotech for the LTCB. But the June 13, 1994 letter, containing
       the "recollections" of Dr. Robert Ting, provided little useful
       information, stating only that a number of samples were tested
       for "HTLV," "which included HTLV-I, HTLV-II and HTLV-III." The
       letter said nothing about how many of the samples tested
       positive for HIV, still less about how many met the other
       criteria specified in the  PNAS  paper.

       Also in a follow-up conversation with Subcommittee staff, when
       he was asked if he really tested any 1982 samples with
       HIV-specific reagents, Dr. Gallo said it was "absolutely right"
       no 1982 samples had been tested. Yet in May of 1994, when he
       was required by Dr. Samuel Broder to substantiate the PNAS
       claims, Dr. Gallo responded with this:

          "No one should have any reason to believe we would not have
          the isolates claimed in view of our past record..."

       The evidence is compelling that the oft-repeated isolate claims
       -- concerning both the quantity of isolates and, particularly,
       the claims of isolates dating from 1982/early 1983, are not
       true, and were known to be untrue at the time the claims were
       made.

       B. How the LTCB Scientists Benefited from their Knowledge and
          Use of LAV

       1. Knowledge of the IP Work with LAV:

       Following publication of the May 1983 papers, the IP and LTCB
       scientists continued on their different tracks vis-a-vis the
       AIDS virus. By mid-summer 1983, the IP scientists had developed
       an ELISA (enzyme-linked immunosorbent assay) to test human
       blood samples for antibodies to their newly-discovered virus.
       The IP  scientists also made important discoveries about the
       characteristics of the virus, including the size of its
       proteins, its morphology, and, particularly important, its
       selective tropism for human T-cells. Additional isolates of the
       virus and results of its further characterization were reported
       by Dr. Montagnier at the July 1983 meeting of the NCI AIDS Task
       Force, headed by Dr. Gallo. Particularly important were
       election micrographs (EMs) of the IP virus, showing its
       distinctive lentivirus morphology, different from that of the
       leukemia virus, HTLV-I.

       Initial results  of the IP ELISA and more aspects of the
       characterization of the virus the IP scientists now called
       "LAV" (for lymphadenopathy-associated virus) were presented by
       Dr. Montagnier at a September 1983 meeting at Cold Spring
       Harbor, New York. Simultaneously, in Great Britain, the IP
       scientists filed a patent application for their virus antibody
       blood test.

       Documentary evidence, witness testimony, and Dr. Gallo's own
       statements to OSI show that he was present at both the July
       1983 and September 1983 meetings. Dr. Gallo heard Dr.
       Montagnier's presentations at both meetings. Moreover,
       documentary evidence shows that even before the Cold Spring
       Harbor meeting in mid-September, 1983, some LTCB scientists,
       including Dr. Gallo himself, knew about and made use of the IP
       virus antibody blood test. On September 2, 1983, LTCB scientist
       Dr. Marjorie Robert-Guroff transmitted to Dr. Montagnier a set
       of human blood samples, to be assayed "for specific reactivity
       against your AIDS virus-producing cells by immune fluorescence
       or against  the AIDS virus antigens  by your ELISA approach"
       (emphasis added). Robert-Guroff's letter was copied to Dr.
       Gallo.

       About six weeks later, at a meeting in Europe of the
       Association for Cancer Research, Gallo and Montagnier exchanged
       written observations and requests concerning the IP's early
       serology, including serology of the LTCB samples. A note in Dr.
       Gallo's hand shows that he asked Montagnier to,

          "Please send enough [virus] particles ... for about 200
          assays ... Also, please let me know data with sera recently
          from us. Also, when available, some of your sera."

       This note shows there is no question that Dr. Gallo knew about
       and made use of the IP antibody blood test.

       It was at the Cold Spring Harbor meeting in September 1983 that
       Dr. Gallo mounted an aggressive attack on Montagnier,
       questioning the quality and significance of his data,
       particularly the data that demonstrated how different the IP
       virus was from HTLV-I. Dr. Gallo now admits that his aggressive
       questioning of Montagnier, " ... widened the growing chasm
       between the two labs ..." (R. Gallo,  Virus Hunting,  1991, p.
       170 ).

       Dr. Gallo also was present at a November 1983  meeting in Japan
       at which Dr. Barre-Sinoussi gave a detailed, wide-ranging
       review of the IP data, including detection of viral antibodies
       in significant proportions of pre-AIDS and AIDS patients (74%
       and 38%, respectively). The detection rate in pre-AIDS patients
       was particularly impressive because for blood screening
       purposes, what is most important is the ability to detect virus
       in individuals who have not already been diagnosed with the
       disease.

       The November 1983 data on characterization of the IP virus were
       also impressive; they showed how far the IP scientists had come
       in their understanding of the nature of the virus. Dr.
       Barre-Sinoussi reported on T-cell tropism of the virus,
       particularly its selective affinity for OKT4+ cells, on the RT
       (reverse transcriptase) of the virus, and on the identification
       of viral proteins.

       Besides attending meetings at which the IP scientists presented
       their data, Dr. Gallo also received prepublication copies of a
       number of the IP scientists' papers, including both the
       Barre-Sinoussi et al. May 1983 paper and a chapter by
       Montagnier, published in a volume of the Cold Spring Harbor
       meeting proceedings (Dr. Gallo was editor of this book).

       None of these circumstances was reported to the USPTO, despite
       their obvious significance to the patent claims of Gallo et.
       al. Neither was there any disclosure by Gallo et al. of an
       important paper by the IP scientists, published weeks before
       Gallo et al. submitted their patent applications. In this paper
       (Vilmer  et al.,   The Lancet,  1984, pp. 753 - 757), the
       authors described the methods of the IP ELISA. Vilmer et al.
       also reported that antibodies to the core protein of their new
       retrovirus,

          "... are widely distributed in the population at risk of
          AIDS ..." (p. 757).

       The significance of the IP scientists' work to the claims of
       Gallo et. al. was confirmed in rulings of the Examiner at the
       United States Patent and Trademark Office (PTO) who handled
       both the Gallo and Montagnier HIV blood test patent
       applications. During 1986, the Examiner repeatedly rejected all
       pending claims in several Gallo et al. follow-on applications
       ("continuations-in-part" [CIPs]) to the Gallo et al. blood test
       patent. In submitting the CIP applications (in July and August
       of 1984), Gallo  et al.,  under criminal penalty for making
       false statements, said concerning the material common to the
       parent blood test:

          "...we do not know and do not believe that the same was ever
          known or used in the United States before our invention
          thereof or patented or described in any printed publication
          in any country before our invention thereof..."

       But the USPTO Examiner declared that the work of the IP
       scientists was "prior art" to Gallo et al. The Examiner
       substantiated her rejection of the CIP claims of Gallo et al.
       with the observation that those claims were:

          "... anticipated by or, in the alternative, ... as obvious
          over Barre-Sinoussi et al. ... or over the disclosures of
          Montagnier (Cold Spring Harbor Meeting 9/1983...)" (2/11/86
          PTO Office Action, Gallo  et al.,  SN #635,610).

          "... deemed to be drawn to subject matter which is the same
          as or substantially the same as that taught by
          Barre-Sinoussi et al. or Montagnier et al." (2/11/86 PTO
          Office Action, Gallo  et al.,  SN# 635,610);

          "... unpatentable over Barre-Sinoussi or Montagnier et al.
          ..." (4/4/86 PTO Office Action, Gallo  et al.,  SN#
          643,715).

       The Examiner further said that,

          "... the methods taught by Barre-Sinoussi for the assay of
          LAV appear inherently to anticipate or render obvious the
          claimed methods drawn to assay of HTLV-III" (op cit.).

       The Examiner also cited Vilmer et al. as prior art to the work
       of the LTCB scientists. The Examiner used this paper to reject
       numerous claims in Gallo et al. CIPs.

       2. Use of LAV at the LTCB:

       It is clear from the rulings of the USPTO that the work of
       Gallo et al. benefited from the prior work of the IP
       scientists. But these benefits were far from the whole story;
       benefits at least as substantial accrued to the LTCB scientists
       through their actual use of the virus samples provided to them
       in 1983 by the IP scientists.

       One of the major foci of the 1985-87 French/American dispute
       was the assertion of IP representatives that the LTCB putative
       "prototype" virus, "HTLV-IIIb," was actually the IP virus,
       which the LTCB scientists received from the IP long before IIIb
       reportedly was isolated. For years, Dr. Gallo and his
       associates, particularly Dr. Popovic, not only denied that they
       had willfully misappropriated LAV, they also argued strenuously
       that (1) the viruses were not really identical (see Part E
       below ) and (2) even if they were identical, there could not
       have been even an innocent "contamination" of the LTCB cultures
       with LAV, because, the LTCB scientists claimed, they could not
       grow the IP virus.

       Over the years Dr. Gallo modified these claims as the truth
       gradually was revealed. During the OSI, OIG, and Subcommittee
       investigations, vital new information concerning the LTCB's use
       of the IP virus emerged. This information, derived from LTCB
       laboratory notes, submissions to OSI by the LTCB scientists
       (principally Gallo, Popovic, and Elizabeth Read-Connole
       [Popovic's laboratory assistant]), and interviews by OSI and
       Subcommittee staff produced the following facts.

       (a) Dr. Popovic's Notes:

       First, a word about Dr. Popovic's laboratory notes is in order.
       Dr. Popovic singlehandedly carried out the most important early
       HIV experiments at the LTCB, yet his laboratory notes are
       extraordinarily sparse and fragmentary. Numerous experiments
       claimed to have been performed are not recorded at all; notably
       absent are records of the inception of several putative
       cultures, including the "mystery virus," MOV. Moreover, such
       notes as exist are suspect on several grounds, particularly the
       dates on which the experiments allegedly were performed.

       Dr. Gallo told OSI, concerning Dr. Popovic's notes, the
       following:

          "As a senior scientist doing cell culture, he did not keep a
          daily laboratory notebook. He relied on technician notes as
          far as I can tell, his brain, his observations and cryptic
          notes periodically" (12/2/90 OSI interview; transcript p.
          45).

       Dr. Gallo described to the OSI the process by which Dr.
       Popovic's notes were said to have been assembled for OSI:

          "... we were finding stuff in drawers, pieces of paper ... I
          mean, we pulled out stuff that Mika didn't even know he had
          and there it was, you know, old stuff, old archaic papers
          with scribbles on them ..." (op cit., p. 140).

       Dr. Popovic himself gave a particularly memorable account of
       his customary practices concerning laboratory notes:

          "Part of them existed, part of them I think was put together
          a little bit later I would say ... Obviously, those
          protocols are fragmentary and could be used very effectively
          against me and against the lab ...

          "... usually I relied on the notes that Betsy had, partly
          what Ersell had, and also we send the samples out to Sarin,
          Sarang, that was a part of our protocols ...

          "So I did not put down on the paper notes for weeks. So this
          is one thing I have to tell ..." (6/26/90 OSI interview;
          transcript p. 57 - 59).

       Concerning the crucial matter of the dates on which experiments
       were performed, when they were said to have been performed, and
       when the experiments actually were recorded, Dr. Popovic said
       this:

          "... how we recorded certain things we just wrote it on the
          flask. Others (tissue culture people) I know that they do
          it. If you don't have time, so you put the particular flask
          (with the note) away and it is recorded (from the flask)
          significantly later, into the protocol. So this would be an
          explanation of my protocols, how it was done. I dated
          significantly later, some told me that I changed the date,
          and so. Of course, many experiments were not recorded
          parallel at all" (op cit., p. 59).

       Dr. Popovic also made clear how the French/American dispute was
       the precipitant for the collection (if not the actual creation)
       of his notes:

          "And when the litigation started, the patent problem came
          up, suddenly I was asked for notes. So I was a little bit
          surprised ...

          "the system over in the LTCB (tissue culture lab) was that I
          scribbled on some paper of experiment pointing out some
          important details and I used to put such notes on the hood
          (for Betsy, for myself, for Ersell) and then eventually I
          put it in my protocol  or I rewrote it  and put it in my
          protocol, which I didn't consider as a protocol. It became a
          protocol only when the litigation started and they told me I
          have to give all notes (any paper regarding my work)
          otherwise I would go to jail if I would not provide all my
          notes (obstruction of the [sic.] justice). So I told take
          whatever I have. I don't want to go to jail" (emphasis
          supplied; op cit., pp. 57 - 59).

       (b) What the LTCB Records Show:

       By the LTCB's own records, the materials sent from the IP to
       the LTCB included the following:

       1. Two shipments (April and July 1983) of DNA from patient
          "BRU" (the individual who was the source of the original LAV
          isolate);

       2. At least three shipments of BRU serum (July, August, and
          December 1983). BRU serum was the principal reagent Gallo et
          al. used, prior to the development of the HIV-specific
          hyperimmune rabbit antiserum, to test cultures for the
          presence of the suspected AIDS virus; yet no results from
          any of the LTCB's experiments with BRU serum were ever
          reported, neither was any acknowledgement of the serum's use
          ever made. In fact, during the blood test patent
          interference proceeding at PTO, attorneys for the Department
          of Justice submitted a key motion in which they asserted
          that,

          "The receipt of sera by Gallo from Montagnier taken from the
          patient [BRU] ... is ... of no significance ... there is no
          evidence to indicate that the sera contained any antibodies
          to the AIDS virus" (Opposition of Gallo et al. to the Motion
          for Judgement of Montagnier  et al.,  USPTO interference; p.
          13).

       3. Two shipments of LAV virus (as cell-free supernatant) -- in
          July 1983 and September 1983.

       The September 1983 shipment of LAV contained two samples with
       somewhat different identifiers -- "JBB/LAV" and "M2t-/B/LAV."
       At the time, both samples were believed to contain the same
       virus, from patient BRU. In reality, as demonstrated in 1991 by
       Wain-Hobson et al.  (Science;   252,  pp. 961-965) and
       confirmed by the Roche analyses, in 1993 (Nature, 363, pp.
       466-469), the M2t-/B/LAV LAV/BRU sample had been accidentally
       contaminated at the Institut Pasteur and overgrown with virus
       from another patient "LAI." Consequently, in September 1983,
       Gallo et al. received a sample of BRU (JBB/LAV) and a sample of
       LAI (M2t-/B/LAV). These samples were both IP HIV isolates. LAI
       is the source of the LTCB's "HTLV-IIIB."

       The September virus samples sent from the IP to the LTCB were
       accompanied by a transfer agreement that stipulated the virus
       would:

          "...not be used for any industrial purpose without the prior
          written consent of the director of the Pasteur Institute."

       The transfer agreement further bound the recipient,

          "...not to disseminate the virus in any form (to companies
          or other scientists) without the prior written authorization
          of the Director of the Pasteur Institute."

       Dr. Popovic signed the IP transfer agreement on September 23,
       1983, affirming (in addition to the above conditions) that the
       virus would be used,

          "... by the recipient himself, exclusively, and only for the
          following research purposes ...: (a) biological; (b)
          immunological and (c) nucleic acid studies."

       The research purposes for which the IP virus could be used --
       purposes specified by Dr. Popovic himself -- obviously were
       quite broad. They even included use of the virus to make an
       antibody blood test. But what was prohibited by the transfer
       agreement was industrial use and/or dissemination of the virus
       to commercial firms. These proscribed acts were precisely what
       the LTCB scientists did when they distributed the IP virus,
       wittingly or unwittingly, to the manufacturers HHS licensed to
       make the LTCB HIV antibody blood test. The transgressions of
       the transfer agreement were the focus of the suit for breach of
       contract filed by the IP against the United States government
       in December 1985 (see below ).

       The knowledge and experience Dr. Gallo and his colleagues
       gained from their work with the IP virus, even before it was
       renamed and claimed as an LTCB isolate, were very substantial.
       The Richards Committee said on this subject that,

          "The Gallo lab 'went to school'  with the French  virus..."
          (emphasis in original; 2/19/92 Richards to Healy; p. 2).

       Part of the reason the LTCB scientists benefitted so
       significantly from their use of the IP virus was the
       substantial quantity of work on the virus carried out by the IP
       scientists themselves. Dr. Popovic was clear about the value of
       the IP scientists' work. Concerning the data Dr. Montagnier
       presented in September 1983 at Cold Spring Harbor, the same
       data that Dr. Gallo publicly derided, Dr. Popovic described
       them as, "very impressive" (6/26/90 OSI interview; transcript
       p. 46). Dr. Popovic further said that while Dr. Montagnier's
       data at this time did not prove the cause of AIDS,

          "... he has excellent data there. He was most advanced.
          There is no question about that. He picked out the correct
          virus ..." (op cit., p. 48).

       Dr. Popovic said, concerning his initial work with the IP
       virus, in the Fall of 1983, that the initial work,

          "... was just to repeat the experiment which was described
          by Montagnier et al. .... They (French) defined it at that
          point, from the point of a novel retrovirus, relatively
          well. They (French) had good data in this regard" (op cit.,
          p. 109).

       The uses the LTCB scientists made of the IP virus  included the
       following:

       (1) The July 1983 virus sample was used for a number of
           important experiments at the LTCB. Among these experiments
           was the electron microscopy (EM) of the July sample that
           provided the first LTCB identification of the AIDS virus as
           a "lentivirus."  The EM results  for the July virus sample
           were conveyed to Dr. Popovic in an October 3, 1983 letter
           from the EM specialist, Dr. Matthew Gonda. Gonda's letter,
           which included the notable observation that the morphology
           of lentiviruses "is quite distinct from type C or HTLV
           particles," was copied to Dr. Gallo. Thus, there is good
           reason to believe that early on, Dr. Gallo know Dr. Popovic
           was working with the IP virus and knew that virus was
           clearly distinct from the "HTLV" family.

       (2) Another important experiment in which a number of samples,
           including July LAV, were tested by immunofluorescence assay
           (IFA) against BRU serum and other reagents, showed that LAV
           was the only sample tested  that was positive against both
           AIDS/pre-AIDS patients' sera while also negative for
           HTLV-I. During the French/American dispute, DOJ attorneys
           told PTO that this experiment represented the LTCB
           scientists' "reduction to practice" of their HIV antibody
           blood test "invention." The DOJ attorneys did not reveal to
           PTO that this claimed reduction-to-practice was achieved
           with the IP virus tested against serum from an IP patient.
           To have done so would have demolished Dr. Gallo's argument,
           made under oath in November 1986, that he did not believe
           the IP and LTCB viruses were even substantially the same.

       More broadly, Dr. Gallo denigrated the significance of the July
       sample of the IP virus to the work of the LTCB, even to the
       point of denying that the sample contained any useable virus.
       Here is what Dr. Gallo told OSI:

          "I always took the position that the July sample didn't
          survive. Because that was our results in our lab at the
          time. We never went back to reprove the thing ... in my
          mind, the July specimen was not a useable specimen. There
          was no significant virus there. That is what I told
          Montagnier" (7/18/90 OSI interview; transcript p. 65).

       But Dr. Popovic gave a very different account of his initial
       experiments with the IP virus. Speaking to OSI about the
       results and significance of his early work with the virus, Dr.
       Popovic said this:

          "That was apparently the first indication in our lab that we
          can grow this virus, that this virus infects the cells ...
          The French came out with this one first, as I saw, this
          virus is here and has this type of characteristics. So we
          tried to confirm their observations ... we came to
          conclusion that, of course, this type of virus we have in
          our samples as well. We are on the same track" (6/26/90 OSI
          interview; transcript p. 108 - 110).

       (3) The September 1983 M2t-/B IP virus sample was the first
           suspected AIDS virus the LTCB scientists grew in permanent
           cell lines. In fact, the Pasteur virus was the first virus
           the LTCB scientists even tried to grow in permanent cell
           lines. The reason the IP virus was used for this attempt
           was precisely because of the success of the LTCB scientists
           with the July sample of the IP virus, together with the
           considerable prior work the IP scientists had done with it.
           Dr. Popovic told OSI that he chose the IP virus for his
           first attempts to infect permanent cell lines because:

          "... it was the best defined isolate from an AIDS-like
          patient and was available isolate. But most importantly,
          there was substantial evidence that the virus is not
          immortalizing T cells" (12/1/90 OSI interview; transcript
          p.50).

       The IP virus LAI , under the name "LAV," grew  at least
       two-to-three months at the LTCB, in two permanent cell lines
       (HUT-78 and Ti7.4); by Dr. Gallo's own account to OSI, the
       growth of the Pasteur virus was "significant  and continuous"
       (4/8/90 OSI interview; transcript p.25).

       Confirmation of the successful growth of LAI was obtained in
       two sets of experiments-- IFA and EM -- whose results were
       recorded on December 14, 1983. In the IFA experiment, two LAI
       cell lines -- "HUT-78/LAV" and "Ti7.4 LAV" -- (these were the
       surviving lines of five originally infected) reacted positively
       when tested against BRU serum, but did not react with HTLV-I
       anti-p19. In the EM experiment, the same two LAV cell lines
       were reported as follows:

          "Productive lentivirus infection with all forms of virus
          maturation." (Gonda-to-Popovic letter; December 14, 1983).

       It bears mention that the two LAI cell lines were the only
       samples found EM positive, of a total of 33 samples whose
       results were reported on December 14. (In fact, throughout all
       of 1983, the only LTCB EMs identifying a new retrovirus in AIDS
       patients' material were the October and December 1983 LAV EMs.)
       The LAI/LAV samples were sent for EM on November 15, 1983, a
       full month before the report was prepared. This makes it all
       the more remarkable that the samples were reported to be
       productively infected, "with all forms of virus maturation."

       The status of these cell lines as observed by EM directly
       contradicts Dr. Popovic's assertion that in mid-November,
       because the LAI cell lines were doing poorly, he was forced to
       reinfect the cell lines with the IP virus. There is no
       substantiation for this claim. In fact, according to
       Read-Connole's notes, the entire amount of the M2t-/B sample
       was consumed in the original inoculation. The only thing that
       may have happened is that Dr. Popovic added HUT-78 cells to the
       two LAI cell line cultures (or he passaged both cultures to
       HUT-78). Betsy Read-Connole told Subcommittee staff she
       believed the latter event occurred; however, there are no notes
       to substantiate this occurrence.

       Even if the LAI cell lines were passaged to HUT-78, the virus
       remained alive. In other words, the LAI cell lines were
       continuous. Contrary to the assertions of Drs. Gallo and
       Popovic, the cell lines did not have to be "restarted."

       Still other successful experiments were performed with the
       permanent cell lines infected with LAI/LAV. On November 9,
       1983, Dr. Prem Sarin reported the results of RT assays n the
       five original LAV cell lines, using samples taken on October
       27, 1983, one week after the initial infection attempts were
       made. Dr. Gallo, in his testimony to OSI, described these
       results as three "marginally positive" and two "negative," but
       according to Dr. Sarin's notes, one LAV cell line was "?-"
       three were "+/-," and one was clearly "+." (It is noteworthy
       that when it came to the LTCB's own cultures, Dr. Gallo cited
       "+/-" results from Dr. Sarin as "positive." The most important
       examples of this are the late-1982 LTCB samples, whose "+/-" RT
       results Dr. Gallo [and later the U.S. Government] would cite as
       proof that Gallo et al. had "isolated" the AIDS virus before
       1983.)

       The most significant result of the LAV cell line experiments
       was the demonstration that the new cytopathic retrovirus
       believed to be associated with AIDS could be grown and produced
       in substantial quantities in certain specific permanent cell
       lines. Dr. Popovic and the LTCB scientists, rightly, deserve
       credit for this accomplishment, an accomplishment that opened
       the way to numerous other major advances in HIV research. At
       the same time, it must be recorded that the LTCB success was
       attained with the IP virus, a virus selected for the initial
       attempt at infecting cell lines precisely because of the
       careful early work of the IP scientists, work confirmed in
       important measure by Dr. Popovic.

       Here is how Dr. Popovic assessed the significance of the cell
       line experiments with the IP virus:

          "In my evaluation the first LAV sample from HUT-78 tested by
          Sarang [Dr. Sarngadharan] was positive and it was positive
          enough ... So the conclusion from this experiment was that
          it can work with HUT-78. We have to continue to use these
          (permanent) cell lines which are immortal. These cell lines
          are susceptible to infection with these cytopathic viruses.
          We can productively infect them ... We picked up these two
          cell lines, HUT-78 and Ti7.4 as targets (6/26/90 OSI
          interview; transcript pp. 141 - 142).

       Subsequently in the same interview, Dr. Popovic reiterated
       that,

          "... the first indication came from LAV that LAV can infect
          the permanent cell line" (op cit., p. 159).

       Importantly, the data showing the productive infection of the
       LAI/LAV cell lines were either withheld or obscured, during the
       HHS response to the IP FOIA request, during the French/American
       dispute (see below ). Consequently, for a prolonged period of
       time, the IP scientists and attorneys had no idea how long and
       how well the IP virus grew at the LTCB.

       (4) According to Dr. Gallo's testimony to OSI, the LAI/LAV cell
           line cultures were frozen on January 13, 1984. Dr. Gallo
           implied that the entire stock of the cell lines was frozen:

          "In early January of 1984, Dr. Gallo recalls that he asked
          Dr. Popovic to concentrate on work with isolates from LTCB
          ... and not give so much time to LAV. Accordingly, on
          January 13, 1984, Dr. Popovic froze Htu (HUT-78)/LAV and
          Ti7.4/LAV..." (5/15/90 "LAV" submission to OSI, page 7).

       Dr. Gallo also gave OSI a notebook page dated January 13, 1984,
       purporting to show the frozen LAI/LAV cell lines. But this
       notebook page does not show whether the freezes constituted the
       entire stock of the cell line cultures, as implied by Dr.
       Gallo, or were only aliquots of the cultures. This unresolved
       issue has important bearing on the subsequent uses of LAI/LAV
       (see immediately below, also PartB2c below ).

       It also bears mention that the LAI/LAV freeze page was not
       provided to the IP attorneys under FOIA, during the blood test
       patent dispute. Furthermore, according to testimony of top NCI
       officials such as Drs. Vincent DeVita and Peter Fischinger,
       they were never told that LAV cell lines were frozen at the
       LTCB, nor were they told the cell lines even existed. Indeed,
       Fischinger and DeVita said, they were repeatedly told that LAV
       was not/could not be grown.

       One of the most significant uses of the LAV cell lines,
       subsequent to their reported freezing, occurred in February
       1984, when what appear to be the LAV cell lines were used for
       the initial testing of the first HIV-specific reagent -- the
       hyperimmune rabbit antiserum. Dr. Gallo provided a written
       submission on the rabbit antiserum to OSI. According to the
       Gallo submission, the first use of the rabbit serum to
       characterize a virus culture occurred on February 24, 1984,
       when the serum was used to test two samples identified as "H/L
       and "H/TI/L." According to the Gallo submission, these cultures
       were "coded samples from a now unknown source."

       The laboratory notebook page on which this experiment is
       recorded (page 25 of Read-Connole Book III) shows that the two
       "L" cultures were positive against the rabbit antiserum, as
       well as positive against both BRU and ET patient sera, but
       negative against serum from an HTLV-I+ patient and normal
       rabbit and human sera. These data show that the "L" samples
       were infected with the AIDS virus. Relatively few samples were
       tested at this time against the rabbit antiserum; since the "L"
       samples were the first samples so tested, it is reasonable to
       assume that Gallo et. al were particularly interested in
       confirming the identity of the virus in these samples -- or
       else they were confident of the identity of the virus in the
       samples and thus, believed the samples would provide a useful
       test of the rabbit antiserum.

       There are a number of compelling reasons to believe the "L"
       samples are the LAI/LAV cell lines. The "L" identification is
       an obvious clue; Gallo et. al. were unable to provide any other
       identification for the samples. In addition, a review of the
       laboratory notes by Subcommittee staff failed to reveal any
       other sample cultured at the LTCB around this time for which
       "L" was used as an identifier.

       The existence of two "L" cultures, in two different cell lines
       in February 1984, is consistent with the two LAV cell lines
       established the previous fall. The identifiers for the cell
       lines match the identities of the LAV cell lines, according to
       LTCB conventions: "H/L" represents HUT-78/LAV; "H/TI/L
       represents Ti7.4/LAV, except for the additional "H," which
       indicates a co-culture of Ti7.4/LAV with HUT-78. In fact ,
       Elizabeth Read-Connole told Subcommittee staff she recalled the
       Ti7.4/LAV cell line was co-cultivated with HUT-78. Read-Connole
       also told Subcommittee staff she could not provide any
       additional information about the "L" samples, which she said
       were given to her by Dr. Popovic, for testing against the
       hyperimmune rabbit antiserum.

       The positive results of the LAI/LAV cell lines against the
       HIV-specific rabbit antiserum in February 1984 were vitally
       significant. The results confirmed that LAV was the AIDS virus
       and thus were proof against any subsequent claims that LAV and
       HTLV-III were substantially different viruses, or that LAV
       might not be the cause of AIDS. Yet such claims were made by
       Dr. Gallo in the Popovic et al. May 1984  Science  paper, when
       he itemized several findings that he said "suggest HTLV-III and
       LAV may be different." And in his November 1986 sworn
       declaration, Dr. Gallo said:

          "At the time the Gallo patent was filed, my colleagues and I
          did not consider LAV and HTLV-III to be the same or even
          substantially the same. Quite clearly, the data available to
          us indicated that the two viruses functioned differently and
          reacted differently" (Page 13).

       Similar claims were made by the U.S. Government attorneys
       during the patent dispute, e.g.:

          "At no time prior to the filing of the Gallo application,
          was it appreciated by anyone that LAV and HTLV-III were the
          same or even similar viruses" (Opposition of Gallo et al. to
          the Motion of Montagnier et al. for Judgement; page 22).

       The positive February 1984 results of the tests of the LAI/LAV
       cell lines against the rabbit antiserum showed that these
       statements were not true. Thus, it was important to know who
       knew about the results, and when. In light of Elizabeth
       Read-Connole's statement that Dr. Popovic cultured the two "L"
       samples and provided them to her, it was obvious that Popovic
       was the critical person to be questioned concerning these
       matters. However, Dr. Popovic declined repeated invitations to
       appear for a Subcommittee staff interview, and thus could not
       be questioned concerning these matters.

       (c) The "Host Range" Experiment:

       One other experiment said to have been performed with the IP
       virus needs to be mentioned. The so-called "host range"
       experiment, said to have been performed in January/February
       1984, purportedly included use of LAV to attempt infection of
       clones of the HUT-78 (HT) cell line. The experiment is
       important because during the French/American dispute, Dr. Gallo
       and the U.S. Government attorneys attempted to use it as
       evidence that LAV and "IIIb" were different viruses because
       LAV, unlike IIIb, allegedly did not grow in "H9." The evidence
       said to support this claim was sparse indeed, a single EM
       report from Dr. Matthew Gonda, dated February 22, 1984.

       The claims about the significance of the "host range
       experiment" include Dr. Peter Fischinger's August 1985 report
       of his "investigation" into the claims of Gallo et al. In this
       report, based on information obtained from Gallo  et al.,  Dr.
       Fischinger wrote this:

          "... Dr. Popovic later attempted to infect the parental
          uninfected H9 cells with the LAV isolate ... the total
          amount of reverse transcriptase obtained (~20,000 cpm) was
          inadequate to initiate an infection of continuous cells"
          (8/27/85 Fischinger-to-Harmison memorandum; Background
          Information; p. 8).

       (Note: notwithstanding Dr. Fischinger's reference to RT
       results, no such data have ever been produced, and there is no
       evidence RT assays -- or any assays other than the EMs -- were
       performed.)

       In his November 1986 sworn declaration, in which he sought to
       argue that at the time he submitted his blood test patent
       application, neither he nor any of his colleagues believed LAV
       and "HTLV-III" were even substantially the same virus, Dr.
       Gallo invoked the February 1984 experiment in support of his
       assertion:

          "... the data available to us indicated that the two viruses
          functioned differently and reacted differently. One such
          difference was shown by the fact that we could grow the
          HTLV-III using the H9 cell line, and we could not do this
          with LAV" (11/8/86 declaration; p. 13).

       Dr. Gallo also said in his declaration that Dr. Popovic,

          "... tried the H9 cell line with LAV but was not able to
          produce virus with that cell line,"

       referencing the "host range" experiment (op cit., p. 12).

       The U.S. Government attorneys told PTO, in their Opposition to
       the Motion for Judgment of Montagnier  et al.,  that,

          "He [Popovic] was not able to infect this cell line [H9]
          with LAV" (Appendix, p. 14).

       The fact is that the February 1984 experiment was so faulty and
       so many aspects of it so questionable, that little or no
       confidence can be placed in any of its claimed findings,
       particularly for so important a purpose as supporting the
       assertion that the IP and LTCB viruses were functionally and
       genetically different. Here are the major defects with the
       experiment:

       (a) The entire rationale for the experiment, particularly its
           performance at the time it allegedly was done, makes no
           sense. Why would Dr. Popovic, in the middle of the "rush to
           save the blood supply" with "IIIb," suddenly decide to
           perform a laborious experiment comparing MOV, LAV, and
           (allegedly) IIIb (identified in the experiment as
           "HTLV-A"), an experiment that reportedly involved taking
           LAV from the previous September from the freezer, thawing
           it, and using it for attempted cell line infections (of
           five different cell lines), within two-to-three weeks of
           Gallo's order to Popovic to freeze LAV and "concentrate on
           our own isolates"?

       Up to the time of Dr. Gallo's reported order, Dr. Popovic had
       been growing LAV quite successfully, in permanent cell lines.
       Why then would Dr. Popovic, weeks later, suddenly feel the need
       to attempt the LAV experiments all over again?

       Dr. Popovic told OSI he did the experiment to,

          "... discriminate different isolates ...[using] several
          markers for evaluation" (6/26/90 OSI interview; transcript
          p. 142).

       But it is unclear why Dr. Popovic chose the isolates he
       reportedly did -- MOV, LAV, and "IIIb." MOV reportedly embodied
       a serious drawback due to its alleged "one-way cross-reaction"
       with HTLV-II (see Part C1b below). LAV, supposedly, had been
       ruled off bounds for further experimentation by Dr. Gallo, and
       in any event, could not legally be used in an LTCB blood test,
       due to the restrictions in the IP materials transfer agreement.
       And where was RF, the supposed contender to "IIIb" for the LTCB
       blood test (see PartG2 below ). In short, the reported design
       of Dr. Popovic's experiment is entirely out of sync with
       Gallo/Popovic's accounts of the LTCB's research at this time.
       This suggests the experiment, if it really was done, was done
       for a reason other than what Dr. Popovic described, a reason
       that may be inferred from the use to which the putative results
       were put.

       (b) Dr. Popovic's reliance on a single index of viral
           infection, a notoriously insensitive index -- electron
           microscopy -- for so important an experiment is another
           significant enigma. It is informative to recall that
           whenever it suited his purposes, e.g., arguing the
           viability of an LTCB isolate, Dr. Gallo argued strongly
           that a negative EM does not provide definitive evidence of
           the absence of virus:

          "... not finding virus by EM is neither qualitatively or
          quantitatively definitive. It is probably more of an art
          than a science. Correctly interpreting the complex data is
          more important than an EM report" (8/3/90 OSI interview;
          transcript p. 243).

       In another OSI interview, Dr. Gallo asserted that electron
       microscopy was less sensitive than other assays, and

          "... not felt by me ever to be a key criterion except
          possibly for a first-time publication of a new virus or
          virus detection ..." (12/2/90 OSI interview; transcript p.
          37).

       In his "rebuttal" to the November 1989 story in the  Chicago
       Tribune,  Dr. Gallo wrote that,

          "... a negative EM report does not mean the cultures are
          negative" (10/23/90 draft "Rebuttal"; p. 67).

       The mere fact that the "host range" experiment, if it was
       performed, relied exclusively on a single, insensitive
       indicator of virus, further renders the experiment highly
       suspect. Yet Dr. Gallo repeatedly cited the February 1984
       negative EMs as proof positive that the LAV cultures were
       negative, with no caution or qualification on these assertions.

       (c) There also is the matter of the laboratory notebook page
           not provided to OSI, a page associated with the "host
           range" experiment, bearing an "X" next to six of the 15
           samples that were tested. The "Xs" appear next to the two
           samples that were reported EM+, plus four of the five LAV
           samples, all of which were reported EM-. This suggests the
           possibility that there were data from experiments other
           than the EMs reported in the February 22 Gonda-to-Popovic
           letter, either alternative EM results, or perhaps more
           likely, RT or IFA results, results that showed the LAV cell
           lines  were  infected and were producing virus.

       The page bearing the "Xs" is a handwritten copy of another
       notebook page, a page bearing the same date, but without the
       "Xs," a page that was given to OSI. Both pages are in the hand
       of Elizabeth Read-Connole, who was questioned by Subcommittee
       staff about the hand-copied version of the February 13 notebook
       page. Read-Connole confirmed the page was written by her, but
       said she could not recall why she recopied the entire page.
       Read-Connole also said she could not explain the "X" entries on
       the page not provided to OSI. She said she was not aware of
       other data that existed for the cultures, but she made it clear
       she did not grow them, but merely received samples from Dr.
       Popovic, for transmittal for electron microscopy.

       The bottom line is that the data from the February experiment
       are, at the very least, not conclusive evidence of anything,
       first because the data consist of nothing more than EMs. Even
       if the results of the experiment had indicated that LAV and
       IIIb grew differently in H9, that would not prove the viruses
       were functionally and genetically independent. Dr. Gallo
       himself told OSI that the putative differential "target
       specificity" of two viruses such as LAV and IIIb,

          "... doesn't mean two viruses are not derived from the same
          person or sample, because it is conceivable that minor
          variants might not behave precisely the same way" (4/8/90
          OSI interview; transcript p. 28).

       In 1994, Dr. Gallo told Subcommittee staff he believed he had
       given too much credence to the February 1984 experiment, and
       had "overinterpreted" it. Dr. Gallo said he now recognizes he
       should, at a minimum, have sought to replicate the experiment,
       at least once. Dr. Popovic went even farther than Dr. Gallo,
       expressing frank skepticism about his own experiment. Speaking
       to OSI, Dr. Popovic said of the February 1984 experiment,

          "It was done in a rush, comparative experiment with IIIb,
          MOV and LAV. We tried to find out differences between these
          isolates" (6/26/90 OSI interview; transcript p. 147.

       Dr. Popovic described the reasons he doubted the experiment:

          "I was afraid that, okay, god knows what could happened with
          that sample in February 1984. Those negative data is
          difficult interpreting ... That comparative study that I did
          in February was done in rush and not carefully monitored for
          all the parameters" (op cit., p. 149)

       3. What Gallo and Popovic Said About their Use of the IP virus:

       Concerning the LTCB's use of the IP virus, Dr. Gallo claimed,
       for years, publicly as well as privately, that the July LAV
       sample contained no useable virus, and that LAV had not been
       grown, could not be grown more than "transiently," at the LTCB.
       Most often, these claims were made in an effort to deny that
       HTLV-IIIb was derived from LAV, on grounds that since LAV could
       not be grown, it could not have contaminated LTCB cultures.

       Dr. Gallo particularly denied the permanent grown of LAV, e.g.,
       in the May 4, 1984 Popovic et al.  Science  paper, in which
       Gallo wrote that LAV "... has not yet been transmitted to a
       permanently growing cell line for true isolation..." This is
       the statement for which ORI found Dr. Gallo guilty of
       scientific misconduct, of which the consultants nominated by
       the National Academy of Sciences to oversee the OSI
       investigation said this:

         "The statement that LAV had not been transmitted in a
         permanent cell line is simply false, and was known to be
         false at the time the paper was written. This is one of the
         most glaring faults in the paper and is part of the pattern
         of misrepresentation in the discussion of the problem of
         continuous culture. There is no way in which Dr. Gallo can be
         excused from sharing the blame for this misstatement"
         (2/19/92 Richards- to-Healy: p. 5).

       (a) What Gallo/Popovic Said to Montagnier et al.:   Drs. Gallo
           and Popovic acknowledged to OSI that prior to publication
           of the May 1984  Science  papers, they deliberately
           withheld from the IP scientists information concerning the
           LTCB's growth of LAI/LAV in permanent cell lines. Dr. Gallo
           told OSI that Dr. Popovic "...did not give away current
           research details..." to the IP scientists concerning his
           (Popovic's) work with the IP virus (Gallo 8/4/90 OSI
           interview). Dr. Gallo also acknowledged he did not tell the
           IP scientists he had grown their virus, when he visited the
           Institut Pasteur in early-April 1984 (Gallo 12/2/90 OSI
           interview; p. 191).

       At the same time, Dr. Gallo has frequently asserted that in the
       comparison papers written jointly with the IP scientists (see
       PartG below ), he did inform them, albeit after-the-fact, about
       the LTCB scientists' growth of September 1983 LAV in the
       "Ti7.4" cell line. This assertion is not true. The
       collaborative papers never reveal that the LAV cell line for
       which data were reported was derived from 1983 LAV, and Drs.
       Montagnier and Barre-Sinoussi told Subcommittee staff they
       understood the Ti7.4/LAV cell line reported in the papers was
       infected with the LAV sent to LTCB in the Summer of 1984, both
       because of Dr. Gallo's repeated denials that he had grown the
       earlier LAV and because of his urgent demands, in the Summer of
       1984, for additional samples to enable him to complete the
       comparison studies. This understanding is consistent with what
       Dr. Gallo himself told Dr. Chermann in June of 1984. Speaking
       of the virus sent to the LTCB in 1983, Dr. Gallo said this:

          "Obviously we now know that the material you sent to us was
          inadequate for comparative studies" (6/15/84
          Gallo-to-Chermann letter; p. 1).

       Dr. Popovic acknowledged to OSI that on at least two occasions,
       he deliberately withheld from the IP scientists information
       about his growth of LAI/LAV in permanent cell lines:

          "...when I got the data with the permanent cell lines,
          including his LAV (Montagnier), in the end of November '83,
          I again called him up at his home, and I told we got it,
          learned how to handle the virus...

       What I didn't tell him was that the virus grows very well in
       permanent T-cell lines" (6/26/90 OSI interview; p. 111).

       Popovic added this:

          "I didn't consider that it was my duty to inform him in
          detail, that we have a breakthrough with this virus. So at
          that point we didn't" (op cit., p. 112).

       Dr. Popovic's choice of words in the above passages is
       noteworthy, i.e., the statement that in November 1983, the
       experiments showed that LAI/LAV "grows very well" and "we have
       a breakthrough with this virus." Clearly, in Dr. Popovic's
       mind, in the Fall of 1983, LAI/LAV was a virus of great
       significance at the LTCB, a fact that Dr. Popovic later would
       attempt -- and because of Dr. Gallo's intercession, would fail
       -- to acknowledge publicly.

       As for Dr. Gallo, by at least early Spring of 1984, he knew
       that Dr. Popovic had grown LAI/LAV in permanent cell lines.. In
       fact, in an early draft of Dr. Popovic's May 1984  Science
       paper, Dr. Gallo personally added a statement that LAI/LAV had
       been grown in a permanent cell line at the LTCB (see Part F
       below ). But Dr. Gallo deleted this sentence from the paper
       prior to its submission, and he added to the conclusion of the
       paper the unqualified assertion that LAV,

          "... has not  yet been transmitted to a permanently growing
          cell line... " (Popovic et al., p. 500).

       Furthermore, notwithstanding his knowledge of the growth of
       LAI/LAV, Dr. Gallo repeatedly and strongly asserted -- to the
       IP scientists, to HHS officials, and to the world at large --
       that the July LAV sample contained no useful virus. As for
       September LAV, Dr. Gallo variously claimed the LTCB scientists
       could not grow it at all or they were unable to grow it more
       than very briefly, and  never  in permanent cell lines. Thus,
       in early March 1984, Dr. Gallo wrote to the editor of  The
       Lancet  that the IP virus (viruses),

          "...have never  been characterized nor transmitted
          permanently to recipient target cells. Therefore,  no one
          has been able to work with their particles , and because of
          the lack of permanent production and characterization, it is
          hard to say they are really 'isolated' in the sense that
          virologists use this term" (Emphasis added; 3/5/84
          Gallo-to-Ian Munro letter; p. 1).

       According to Dr. Montagnier's testimony to OSI, Dr. Gallo
       telephoned him and Dr. Chermann at the end of March 1984,
       saying that,

          "... he had a virus growing to a very high titer on a
          continuous cell line and he believed it was the cause of
          AIDS. When I asked him whether this virus was similar to
          LAV, he refused to answer" (6/18/91 Montagnier-to-Hadley
          letter; p. 1).

       According to Dr. Montagnier, in April 1984, when he asked Dr.
       Gallo why he had not already compared LAV to IIIb (since he had
       received LAV the previous September), Gallo "... said he could
       not grow the LAV virus well" (op. cit., p. 2).

       Dr. Gallo's 1984 denials that he grew the IP virus often were
       associated with his apparent efforts to preempt a charge of
       contamination/misappropriation of that virus, a charge that --
       at the time -- no one but Gallo had raised. In his June 15,
       1984 letter to IP scientist Dr. Jean-Claude Chermann, Dr. Gallo
       said this about the IP virus received at the LTCB in 1983:

          "What we received from you was minute amounts of
          extracellular virus on two occasions. The first time there
          were no detectable virus particles. The second time there
          were, and we confirmed your transmission of these to fresh
          T-cells and the ensuing cytopathic effect. We did not 'mass
          produce' these for characterization of them. We assumed that
          was your job. We also did not want to cross-contaminate our
          lines..." (p. 1).

       (Note that by Dr. Gallo's own definition -- "mass produce" =
       "continuously produce" [4/26/90 OSI interview, transcript p.
       64] -- the claims to Dr. Chermann that the LTCB scientists did
       not "mass produce" LAV were untrue.)

       Similarly, on June 28, 1984, Dr. Gallo telephoned the CDC's Dr.
       Donald Francis. According to Francis' telephone notes, in the
       course of a long conversation, Dr. Gallo said this about his
       use of the IP virus:

          "I don't have their virus growing ... In this field once you
          receive a virus -- open to criticism. Don't mass produce two
          viruses in same lab. If I had of waited and mass produced
          them I would have been told I got cross-contamination."

       Similarly, in an August 24, 1984 letter Dr. Chermann, Dr. Gallo
       said this:

          "The sample  of the virus you sent us the first time had,
          upon arrival, no detectable virus..." (p.1) and this: "...
          we did not grow LAV. We confirmed your transmission and
          cytopathic effect. To keep it going in production would have
          required considerable work which we would have been doing
          for you, not us. I work for NCI, not you. Second, clearly we
          would be accused by many of cross-contamination, i.e., we
          would run the risk of not being able to convince the 'tough'
          that we had independent isolates" (p. 3).

       (b) What Gallo/Popovic Said in 1985-86:   In public, especially
           after the onset of the French/American dispute, Dr. Gallo
           made more strident statements that he had not grown/could
           not grow LAV. A November 1985 article in  Science  about
           the French/American dispute (based in part on interviews
           with Gallo and Popovic) described the IP claim that
           "Gallo's group somehow grew the French isolate," reporting
           Dr. Gallo's reaction as follows:

          "Gallo indignantly  disputes this allegation on several
          counts, including the fact that the viruses are not
          identical and that the amount of virus Montagnier sent would
          not have been sufficient to infect a cell line" (230,
          p.642).

       Further, according to the  Science  article, Gallo and Popovic
       said the September LAV sample,

          "...contained 11,000 counts per minute of reverse
          transcriptase activity, a level that Gallo says is
          considerably less than is required to infect a cell line ...
          Gallo and Popovic say they infected fresh lymphocytes with
          the virus Montagnier sent, but when the reverse
          transcriptase activity declined they put the material in the
          freezer" (op cit., p. 643).

       And in January 1986, according to  U.S. News and World Report:

          "...some experts have speculated that Gallo may have
          mistakenly contaminated his experiments with the French
          virus.

          'That's the height  of outrage,' responds Gallo, who adds
          that 'it was physically impossible' to grow the particles of
          virus sent by Montagnier" (1/13/86).

       In March/April 1986, at the heart of the French/American
       dispute, there occurred the incident described by the media as
       "acutely embarrassing," i.e., the revelation that published
       pictures reported to be "HTLV-III" growing in a permanent cell
       line, actually were pictures of LAI/LAV (see Part C1 below ;
       these were the EMs of the HUT-78/LAV cell line, produced in
       November/December 1983 described above). Following this
       revelation, Dr. Gallo finally acknowledged he had grown LAV in
       a permanent cell line, but he said the growth had been very
       brief. According to the April 12, 1986  New York Times:

          "...Dr. Gallo said that his lab had been able to infect
          human cells with the virus sample received from France only
          'transiently.'"

       To the journal  Nature,  Dr. Gallo was more explicit, saying
       about his work with the IP virus that he had,

          "... achieved transient growth ... but for one week only and
          in small quantity" ( 320 , 1986, p. 96).

       See Part C1 below , for more information about the incident of
       the LAV EMs.

       Dr. Gallo also made strong representations to HHS/DOJ
       officials/attorneys, throughout the blood test patent dispute,
       that he did not grow the IP virus and that he gained little or
       nothing from his use of that virus. These claims were accepted
       uncritically and were incorporated into official papers and
       legal pleadings of the U.S. Government. At the very outset of
       the patent dispute, Dr. Gallo wrote to the official charged
       with investigating the LTCB scientists' claims -- Dr. Peter
       Fischinger -- that July LAV "... did not contain detectable
       virus" (8/19/85 Gallo-to-Fishinger memorandum; p. 2).
       Concerning September LAV, Dr. Gallo, in the same memorandum,
       said only that his colleague, Dr. Popovic, "... was able to
       detect RT in these supernatants ..." (p. 2).

       In April 1986, Dr. Gallo prepared a document titled "History of
       Key Events and Side Issue of the HTLV/LAV Discovery." This
       document, which was widely circulated within the upper echelons
       of NCI, NIH, and the Public Health Service, as well as DOJ,
       appears to have been a forerunner of Dr. Gallo's November 1986
       sworn declaration. In the April 1986 document, concerning the
       LTCB's use of September LAV, Dr. Gallo said this:

          "...there were only two things we  could  do: a) EM & b) RT.
          We did both and confirmed it was a retrovirus and
          immediately told them so. To try to do EM's and to try to
          grow it, Popovic transmitted it to human cord blood T-cells,
          to a T-cell line -- HUT-78 and another T-cell line. All
          transmissions were transient" (p. 3).

       Dr. Gallo continued the "transient" growth theme concerning
       LAI/LAV, in his November 1986 sworn declaration before the PTO.
       In the declaration, Dr. Gallo said that Dr. Popovic succeeded
       in "temporarily transmitting" the Pasteur virus to two (not the
       "one" Dr. Gallo previously publicly acknowledged) permanent
       cell lines. But, said Gallo, "both transmissions were only
       temporary in nature" (11/8/86 Gallo declaration; p. 12). At no
       time did Dr. Gallo reveal that the only reason the LAI/LAV cell
       lines were only "transient" or "temporary" in nature -- if they
       really were -- was because he ordered the cultures to be
       frozen.

       Concerning the July LAV sample, in his 1986 sworn declaration,
       Dr. Gallo said this:

          "...we could find no detectable virus in the sample ...
          subsequently some minute viral activity was noted in the
          sample but this was so small that nothing could be done with
          the sample ... the sample I received did not show meaningful
          viral activity" (op cit., p. 11).

       (c) What Dr. Gallo Told OSI and Subcommittee Staff:   During
           the OSI inquiry/investigation, Dr. Gallo acknowledged the
           discrepancy between the facts and his earlier statements
           that LAV did not grow at the LTCB. Presumably recognizing
           that OSI's examination of the laboratory notes would make
           those discrepancies clear, Dr. Gallo said this:

          "I always took the position that the July sample didn't
          survive ... So in my mind, the July specimen was not a
          usable specimen. There was no real significant virus there
          ... That is what I told Montagnier. But when the report came
          back six weeks later as EM positive, we knew  we had
          something there and so we saved it" (7/18/90 OSI interview;
          transcript p. 65).

       Dr. Gallo here makes clear his awareness of the October 1983
       EM+ report for July LAV, an awareness starkly at odds with his
       subsequent, repeated denials that July LAV contained any virus.

       In other interviews, Dr. Gallo specifically referred to his
       earlier denials that he grew the IP virus:

          "...there has been confusion in the response of what we did
          to LAV. In my response during the passionate period ...'oh
          we never grew LAV' and of course we did grow LAV" (5/16/90
          OSI interview; transcript p. 87).

       In a subsequent interview, Dr. Gallo said this:

          "There is a point where I say I didn't grow LAV. And, of
          course, LAV was grown ... Quite frankly, it wasn't so
          germane to me at the time and I was just anguished as to
          what was coming out of the newspaper. At that moment bombs
          were going off" (5/25/90 OSI interview; transcript p. 13).

       More recently, Dr. Gallo told Subcommittee staff, concerning
       his January 1986 denial to  U.S. News and World Report  that he
       grew LAV,

          "... the statement is somewhat misleading ... If it misled
          anyone, I am sorry. I am also sorry for my certainty of
          being right."

       Yet Dr. Gallo also asserted his January 1986 statements were,
       "... in no way intentionally inaccurate."

       The "Richards Committee" was not willing to excuse Dr. Gallo on
       the basis of his passion/anguish, nor on the basis of "bombs
       going off." Referring to the May 1984 Popovic et al.  Science
       paper, to which Dr. Gallo added the unqualified assertion that
       LAV,

          "...has not been transmitted to a permanently growing cell
          line for true isolation..."

       The Richards Committee said this:

          "The Gallo lab failed to mention the fact that they had
          propagated the French virus and stated (in the Popovic et
          al. manuscript) that the French virus had never been
          transmitted to a permanent cell line. Given the quality of
          the information derived from propagation of the French
          virus, we believe that this constitutes intellectual
          recklessness of a high degree -- in essence,  intellectual
          appropriation  of the French viral isolate" (emphasis in
          original; 2/19/92 Richards-to-Healy; p. 3).

       Finally, concerning the LTCB's early use of the IP virus, it
       remains to be noted that the LTCB records relating to the
       LAI/LAV experiments exhibit a number of forensic anomalies
       possibly indicative of, among other things, retrospective
       creation, destruction and/or suppression, and obscuring of
       relevant records. Particularly noteworthy is the probability
       that IFA experiments on the LAI/LAV cell lines -- experiments
       not disclosed to the IP nor to OSI -- were performed in the
       Fall of 1983. Elizabeth Read-Connole told Subcommittee staff
       these IFAs were performed; she could not explain why the
       resulting data were not provided to OSI.

       C. LAI/LAV By Another Name

       Laboratory records and Gallo/Popovic's retrospective accounts
       show that the LTCB's seminal experiments, particularly
       experiments associated with the development of the LTCB HIV
       antibody blood test and the genetic sequencing of the LTCB's
       putative "prototype" HIV isolate, were performed with an
       isolate called "MOV" (for "MO/Variant") and later, with an
       isolate called "HTLV-IIIb."

       MOV and IIIb are LAI/LAV. Experiments performed for OSI by
       Roche Molecular Systems, using the earliest samples that could
       be located (samples frozen since 1984), demonstrated
       conclusively that this is so (Chang et al.,   Nature,  363, pp.
       466 - 469). Drs. Gallo and Popovic asserted to OSI that MOV and
       IIIb were independent of LAV/LAI. Following revelation of the
       Roche results, they modified their accounts to claim that MOV
       and IIIb, originally independent samples, had been accidentally
       contaminated by LAI/LAV.

       In a letter to  Nature,  written shortly after publication of a
       paper by the IP scientists that demonstrated the LAI/LAV
       origins of IIIb (Wain-Hobson,  et al.,   Science,  1991) Dr.
       Gallo said this:

          "It ... appears that cultures of virus from people with AIDS
          became contaminated with HIV-LAI at NIH ... (1991, 351, p.
          358).

       But the Wain-Hobson et al. and Chang et al. data  did not  show
       that any culture of a person with AIDS became contaminated with
       LAI at the LTCB. The data did not eliminate the possibility of
       misappropriation, neither did they substantiate the occurrence
       of contamination. Indeed, there is no evidence to support the
       "contamination" scenario with respect to MOV, IIIb, and
       LAI/LAV; other than Gallo/Popovic's claims, there is no
       evidence there ever were MOV and IIIb isolates independent of
       LAI/LAV, to begin with. Moreover, it is important to recall
       that contamination is precisely what Gallo/Popovic -- for years
       -- asserted was impossible.

       The evidence is compelling that "MOV" and "IIIb" were merely
       different names given to the single readily-usable isolate
       Popovic/Gallo had in late 1983/early 1984 -- LAI/LAV. Following
       is an account of the pertinent evidence:

       1. LAI as "MOV":

       Dr. Gallo patented and claimed as his HIV prototype an isolate
       he identified as "HTLV-IIIb," an isolate he said originated in
       a pool of virus samples (see below). But IIIb is not the first
       HIV isolate Gallo et al. produced in large quantities. IIIb is
       not the isolate Gallo et al. used to develop their HIV antibody
       blood test or their first HIV-specific reagents. Neither did
       Gallo et al. perform any of their initial, significant
       experiments with "IIIb." Rather, these accomplishments all were
       achieved with another, "mystery" isolate, the existence of
       which was not acknowledged until the OSI investigation, an
       isolate identified in LTCB records as "MOV." Yet no scientific
       paper reported any of these experiments as performed with
       "MOV." Rather, the experiments were described as performed with
       "HTLV-III," Gallo/Popovic's generic name for the AIDS virus, or
       -- in several instances -- experiments recorded as being
       performed with MOV were reported to have been done with "IIIb."

       (a) The Transformation of LAI to "MOV":

       Here is what the LTCB laboratory records and Gallo/Popovic's
       OSI testimony reveal about LAI/MOV:

       o The designation "MOV" appeared without explanation in Dr.
         Popovic's notes for November 22, 1983, alongside two infected
         permanent cell lines in which LAI/LAV was growing. No HIV
         isolate other than LAI/LAV ever grew simultaneously in these
         two cell lines at the LTCB; neither is there any record of
         any attempt to infect these cell lines with an isolate other
         than LAI/LAV.

       o The actual notebook entries that lead to the emergence of the
         LAI/MOV cell lines are as follows:

         10/21/83: Elizabeth Read-Connole inoculated five cell lines
                   with LAV, including HOS, Ti7.4, and HUT-78

       (Read-Connole Book 1, p. 222);

       (Read-Connole performed the inoculations because at the time,
       Dr. Popovic was travelling in Europe.)

       10/24/83: Read-Connole's notes show five LAV cell lines "in
                 culture," including LAV/HOS, LAV/Ti7.4, and
                 LAV/HUT-78.

       (op cit., p. 223);

       11/08/83: Dr. Popovic's notes show these entries:

          "HOS - dead cells
          HUT-78 cell increase slow Ti7.4

          Giemsa: Giant cells multinucleated
          More in HUT-78RT - Sarang"

       (Popovic notebook; p. 29)

       11/10/83:

          "HOS- does not grow - discarded
          Ti7.4 - O.K. viability 70%
          HUT-78 - O.K. " 65%

       (op cit., p. 32)

       11/11/83:

          "HUT-78/V cell number 6 x 105/ml
          Ti7.4/V cell number 4.3 x 105/ml"

       op cit., p. 32)

       11/15/83:

          "HUT-78/inf. +++
          Ti7.4/inf. +++"

       (op cit., p.33)

       11/22/83:

         "HUT-78/V; Ti7.4/V = MOV."

       (op cit., p. 34).

       A critical entry in the above chronology is the entry for
       November 8, 1983. It is Read- Connole and Popovic's testimony
       about the events said to have occurred on this date that
       conclusively links the so-called "MOV" isolate directly to its
       origins as "LAV." Here is what Dr. Popovic said about the
       November 8 entries, which he specifically related to "Our work
       with the MOV isolate":

          "Following my arrival back in the U.S. ... sometime between
          November 1st and 4th, we co-cultured patient cells with
          HUT-78 and Ti7.4. (I think it is most likely that it was
          patient HM's cells, but as I said, I am not absolutely
          sure.) On November 8, 1983, I noticed the presence of giant
          multinucleated cells in both of these cocultures. Aliquots
          of culture fluids from these cultures were sent to Dr.
          Sarnagadharan and he detected reverse transcriptase activity
          in both, the levels of activity being higher in the HUT-78
          culture. We then 'scaled up' the HUT-78 culture for further
          biochemical and serological analysis" (3/4/91 Popovic
          submission to OSI; "Final Version of Preliminary Responses"
          pp. 36 - 37."

       That Dr. Popovic, in the above passage, was referring
       specifically to the November 8, 1983 entry in his notebook,
       detailed above, is evident from, among other things, his
       statement that, on November 8, "I noticed the presence of giant
       multinucleated cells" (in the putative "MOV" cultures allegedly
       begun "sometime between November 1st and 4th"). This statement
       corresponds to the November 8 notebook notation, "Giant cells
       multinucleated; more in HUT-78." Further, Dr. Popovic's March
       1991 statement that "Aliquots of culture fluids from these
       cultures were sent to Dr. Sarngadharan and he detected reverse
       transcriptase activity in both" mirrors the notebook entry "RT
       - Sarang."

       It is clear that Dr. Popovic, in his March 1991 statement to
       OSI, was referring to his November 8 notebook entries as
       entries for "MOV." But the November 8 notebook entries are
       entries for the  LAI/LAV  cell lines; proof of this assertion
       is seen in the fact that the November 8 entries include not
       only the two cell lines Popovic referenced in his "MOV"
       statement -- Ti7.4 and HUT-78, but also HOS, the
       LAI/LAV-infected HOS cell line that was dying (note that Dr.
       Popovic's November 8 entry says for "HOS," "dead cells").  Only
       LAI/LAV  was used to infect all three of these cell lines, and
       Betsy Read-Connole's OSI testimony confirms that the notebook
       entries Popovic invoked as the  origins of MOV  actually are
       entries for LAI/LAV. Here is what Read-Connole said about her
       initial LAI/LAV experiments:

          "The initial experiment that I set up in October, I kept
          until he returned [Dr. Popovic]. I guess only three of the
          cell lines were struggling along by the time he got back ...
          I believe soon after that the HOS culture died. I believe,
          he repeated the isolation from mine because mine were pretty
          well dead or dying when he returned. So, I had done the
          initial experiment and I kept them while he was gone and
          then I gave them all back to him ...So, from the second
          isolation that he did in the HUT-78, he once again saw the
          giant cell formation like I had been and that was sort of
          when we decided maybe we should try using HUT-78 for some
          other isolates" (6/6/90 OSI interview; transcript p. 46).

       (See Part B2b above , for Read-Connole's subsequent
       clarification about Dr. Popovic's further work with the cell
       lines she started in October 1938.)

       It remains only to be noted that Read-Connole's mention of Dr.
       Popovic's observation of "giant cells" in the HUT-78/LAV
       culture, an observation that reportedly led to the decision to
       "try using HUT-78 for some other isolates" is directly
       reminiscent of Dr. Popovic's statement, concerning "MOV," that
       he observed RT in the November 8 cultures, "the levels of
       activity being higher in the HUT-78 culture," upon which, "We
       then 'scaled up' the HUT-78 culture for further biochemical and
       serological analysis" (3/4/91 Popovic submission to OSI; p.
       37).

       In short, it is clear that the November 8, 1983 entries in Dr.
       Popovic's laboratory notes reflect the point at which the two
       identities of the single isolate used for the first attempt to
       infect permanent cell lines -- the identities "LAV" and "MOV"
       -- overlap.

       (b) Gallo/Popovic's Explanations:

       o Gallo/Popovic told OSI that "MOV" originated with patient HM.
         But the Roche analysis found no HIV in a sample taken from
         patient HM, and the LTCB's own records show that HM samples
         and cultures were repeatedly negative in a variety of tests
         for the presence of virus;

       o Gallo/Popovic told OSI that the two virus-infected cell lines
         were retrospectively-designated "MO/Variant" because they
         were found to be immunologically cross-reactive with HTLV-II,
         which the LTCB had designated "MO/Virus." This putative
         cross-reactivity, according to Gallo/Popovic, caused them to
         "phase-out" the LAI/MOV cell lines and replace them with
         H9/IIIb. Dr. Popovic also told OSI that his inability to
         determine the origins of MOV was one of the reasons he,

          "phased it out as soon as I could ... avoiding its inclusion
          in any of the publications (op cit,. page 159).

       Dr. Gallo made a similar assertion, telling OSI, concerning the
       origins of MOV,

       "I don't care which virus. I am not going to ask him [Popovic]
       what is the patient history of every virus. You know, it wasn't
       something to focus or to care about and MOV doesn't get --
       doesn't really play any further role" (5/16/90 interview, page
       64).

       The claims  of Drs. Popovic and Gallo that LAI/MOV played "no
       further role" after approximately the beginning of 1984 are not
       correct. In the first place, the putative one-way
       cross-reaction of MOV with HTLV-II early on was shown to be a
       generic trait of HIV and thus not a unique problem with "MOV."
       Dr. Popovic told OSI that Dr. Sarngadharan found that,

          "... even with IIIb one can get such cross-reactivity and I
          think even RF or so on" (12/1/90 OSI interview; transcript
          p. 90).

       Dr. Sarngadharan said the same thing:

          "Later on we found the same thing with the IIIb and other
          viruses too, so the original reason for calling it was
          suspicion of contamination, but it was not true ..."
          (1/29/91 OSI interview; transcript p. 55).

       The LTCB scientists actually published the finding of the
       one-way HIV/HTLV-II cross reaction (Sarngadharan  et al.,
       PNAS,   82,  1985, p. 3481). But they were aware the phenomenon
       was shared by HIV isolates much earlier. Most importantly, Dr.
       Sarngadharan himself told OSI that when he received LAI/IIIb
       from Dr. Popovic, he tested this isolate as he previously had
       tested LAI/MOV, and,

          "... concluded that the two virus preparations were
          antigenically similar" (12/1/90 OSI interview; transcript p.
          8).

       In short, there was nothing unique about the MOV/HTLV-II
       cross-reactivity, and the LTCB scientists knew it early on.
       Thus, it should not be surprising that the LTCB records show
       LAI/MOV was used very extensively, for a number of major
       experiments for many months after the beginning of 1984. Clear
       evidence of the following such experiments exists:

       (a) LAI/MOV was sent in large quantities from the LTCB to its
           contractor Bionetics, where it was used to make the
           HIV-specific rabbit antiserum and to make and refine the
           LTCB HIV antibody blood test.

       (b) LAI/MOV was sent to LTCB contractor Electro-Nucleonics Inc.
           and to Biotech Laboratories, for large-scale production, by
           February 1984.

       (c) LAI/MOV was repeatedly sent from the LTCB contract
           laboratories to LTCB scientist Dr. Suresh Arya, throughout
           at least the first quarter of 1984, for use in the LTCB's
           seminal HIV molecular biology experiments. One particularly
           important aspect of the experiments with LAI/MOV was the
           production of the first cDNA probe for HIV.

       An additional intriguing aspect of the LTCB's LAI/MOV molecular
       biology experiments is that, in several instances, they were
       reported to have been performed with "IIIb." Several clones
       (identified by the letter "C") were produced by Dr. Arya;
       according to Arya's notes, as confirmed by him, these clones
       originated with "MOV." But when three of these clones were
       partially sequenced, they were published in a 1985 paper which
       describes the "C" clones as derived from a,

          "... permanent T cell line... infected with pooled blood
          samples from a number of different patients with AIDS or
          ARC,"

       a clear reference to the IIIb "pool"  (Nucleic Acids Research,
       13,  1985, page 8221).

       When confronted with the obvious question -- why clones derived
       from MOV were described as having originated with IIIb -- the
       first author of the paper, Dr. Lee Ratner, told OSI Dr. Arya
       told him the clones  were  from IIIb. Dr. Arya (a coauthor of
       the paper) was unable to explain the discrepancy, and Dr. Gallo
       said he did not remember ".. being told who, what, when, or
       from where samples came" for the clones (May 6, 1991 letter to
       OSI).

       Another even more significant instance of LAI/MOV experiments
       reported as performed with "IIIb" is a paper by Arya  et al.,
       published in  Science  in August, 1984  (225,  pp. 927-929).
       Dr. Gallo is a coauthor of this paper, whose senior author is
       Dr. Flossie Wong-Staal, at the time, the LTCB's senior
       molecular biologist. Dr. Wong-Staal, according to Drs. Arya and
       Wong-Staal, actually wrote the paper.

       There are several significant points to be made about Arya et
       al. Submitted on May 1, 1984, one week following submission of
       the Gallo et al. blood test and cell line patent applications,
       it was the first published scientific paper ever to
       specifically cite use of the putative "pool" isolate, "IIIb,"
       described as,

          "... obtained from pooled supernatants of short-term
          lymphocyte cultures of AIDS patients" (p. 928).

       The principal point of the Arya et al. paper was to advance the
       HIV/HTLV-relatedness theory of Gallo et al. To that end, the
       authors presented results of a series of experiments that, they
       said,

          "... support our proposal that this virus ["HTLV-III"]
          should be classified within the HTLV family" (op cit., p.
          929).

       The putative homology of the AIDS virus with HTLV-I and -II,
       reported in Arya  et al.,  was illusory. As early as the end of
       1984, Gallo et al. were retreating from their earlier homology
       claims, and by 1988, Dr. Arya frankly acknowledged that the
       results reported by Arya et al. were obtained only under
       "non-stringent conditions."

       Dr. Arya further wrote, concerning the results in Arya  et al.,
       that,

          "Where we may have slightly erred was the interpretation or
          rather the over-interpretation of the hybridization
          results."

       Arya added this:

          "This was an honest mistake reflecting our insufficient
          appreciation of the complexity underlying the hybridization
          reactions and the theoretical basis of the kinetics of
          hybrid formation and hybrid stability" (12/22/88
          Arya-to-Crewdson letter).

       During the OSI investigation, Dr. Gallo himself described the
       HIV/HTLV homology reported by Arya et al. as "limited." Dr.
       Gallo asked Dr. Arya to prepare his own response to queries
       from OSI concerning the putative HIV/HTLV homology. In his
       response, Dr. Arya referred to his experiments as "studies
       attempting to detect relatedness, however distant,  of HIV-1 to
       HTLV-I and HTLV-II ..." (emphasis added). This response
       indicates there was a preconceived notion on the part of the
       LTCB scientists concerning what they expected/hoped to find in
       the homology experiments, as well as a belated recognition that
       such "homology" as existed was distant indeed.

       Even more important  than the spurious homology data is the
       fact, discovered during the Subcommittee investigation, that
       the experiments reported by Arya et al. as performed with the
       "pool" virus, "IIIb," actually were performed with LAI/MOV.
       This is a very significant finding, for it is a concrete
       instance of what had long been suspected, namely, that "IIIb"
       was not a genuine, independent isolate, but merely a different
       name for the isolate the LTCB previously called "MOV," itself
       merely a new name for what was originally called "LAV."

       Neither Dr. Gallo nor Dr. Arya denied the validity of the
       Subcommittee staff's findings with respect to the misreporting
       of LAI/MOV experiments. Instead Gallo and Arya attempted to
       explain and minimize the significance of the findings. But in
       so doing, Gallo and Arya opened up new, even more significant
       concerns about other possible misrepresentations -- whether
       witting or not -- in the scientific literature.

       Specifically, in response to questions posed to him in May
       1994, by NCI Director Dr. Samuel Broder, relating to the
       MOV/IIIb identity, Dr. Gallo said this:

          "Since it [MOV] came from an early Mika isolate in a cell
          line ... I think he [Dr. Arya] and others in the molecular
          biology group assumed that it was equivalent to the pool
          virus, i.e., IIIb, only later realizing their different
          history."

       Dr. Arya himself said he had:

          "... no recollection of the specifics, but the more I think
          about it the more I feel that when Dr. Wong-Staal wrote our
          manuscript for the  Science  1984 paper, we used the term
          HTLV-IIIb as a common or generic term for the various
          preparations that were thought to have originated in Dr.
          Popovic's laboratory ..." (5/27/94 Arya-to-Gallo
          memorandum).

       These explanations only add to the significant,
       already-existing questions concerning the quality of LTCB
       research. Even acknowledging the extreme compartmentalization
       that existed at LTCB, how could the LTCB scientists, including
       Dr. Wong-Staal herself, have merely "assumed" the equivalence
       of one sample with another, never even asking the individual
       from whose work the samples were derived (Dr. Popovic), about
       their presumed identity? How could such an assumption have so
       readily been made, particularly considering that: (1) the paper
       in question (Arya et al.) was the very first paper in which the
       "IIIb," "pool-derived" isolate was identified as such; (2)
       prior to, during, and after the preparation of the paper, "MOV"
       and "IIIb" were clearly distinguished in Dr. Arya's laboratory
       notes; and (3) the experiments reported in the paper are
       clearly identified in the laboratory notes as being performed
       with "MOV"?

       The "innocent assumption" explanation for the substitution of
       "MOV" with "IIIb" is belied by an act of apparent deliberate
       deception, namely, the deletion -- from a chart provided to OSI
       -- of information showing that Dr. Arya used "MOV" to make the
       cDNA reported in (at least) the Arya et al. and Ratner et al.
       papers as derived from "IIIb" (see Part 2 below for more
       information concerning these matters).

       The "assumption" explanation also opens up an entirely new area
       of concern, namely, how far did this erroneous "assumption"
       extend? How many LTCB scientists made the same "assumption"?
       How many papers were published reporting putative "IIIb"
       experiments which in fact were performed with "MOV"? And since
       LAI, MOV, and IIIb are now proven to be the same isolate, what
       if any evidence is there to show that  any experiments
       actually were performed with a genuine LTCB prototype, i.e.,
       Dr. Popovic's putative "pool"?

       Concerning the issue of scientific papers, Dr. Gallo himself,
       in his June 3, 1994 response to Dr. Broder, said this:

          "The papers as I saw them simply called the clones
          IIIb-derived or pool virus derived. Obviously, I assumed
          they were from IIIb. Some were. Others were MOV derived."

       The obvious question is how many "papers" is Dr. Gallo
       referencing here? How many papers reported MOV experiments as
       performed with IIIb?

       It also bears mention that according to Dr. Gallo's statement,
       at some point, Dr. Arya and his colleagues "later realized the
       different histories" of "IIIb" and "MOV". The obvious questions
       are when was this realization achieved, and why -- when it was
       achieved -- was no effort made to correct the literature
       concerning the misreporting of the putative "IIIb" experiments?

       As this report is being written, these questions are before the
       Director, NCI. It remains to be seen how he will deal with
       them.

       (d) MOV was provided by Dr. Arya to Drs. George Shaw and
           Beatrice Hahn, for molecular studies that extended at least
           into the Summer of 1984. Among these studies were
           comparisons performed in April 1984 that, according to Dr.
           Gallo and his attorney, Joseph Onek, indicated "MOV" was
           genetically identical to IIIb. Dr. Gallo's attorney
           actually wrote to Subcommittee staff that these experiments
           showed MOV had been "contaminated by IIIb," but this is a
           significant misrepresentation of what the experiments
           showed, and what the LTCB scientists believed they showed.
           Testimony of Dr. Gallo to OSI, cited by attorney Onek as
           evidence to substantiate a IIIb/MOV contamination, actually
           emphasized apparent differences as well as similarities
           between MOV and IIIb. Leaving aside for the moment the
           evidence showing MOV and IIIb never were independent
           isolates, there is a significant inconsistency between
           Gallo/Onek's claim that the LTCB scientists knew of a
           "IIIb/MOV" contamination -- in the Spring/Summer of 1984 --
           and the fact that over one year later, they published a
           paper citing comparisons of MOV and IIIb as if they were
           genetically independent isolates (Wong-Staal  et al.,
           Science,   229,  1985). Finally, even if Gallo  et al.,  in
           April 1984, did believe MOV and IIIb were
           cross-contaminants, contrary to Onek's assertion, there was
           no reason to believe MOV had been contaminated by IIIb, and
           every reason to believe it was the reverse, since MOV
           existed well before the putative IIIb was isolated.

       (e) LAI/MOV was sent from Biotech Laboratories to the Frederick
           Cancer Research Center, in May 1984, apparently for
           commercial-level production;

       (f) LAI/MOV (identified only as "HTLV-III") was used in a
           number of published serological and protein analysis studies
       conducted by Dr. M. Sarngadharan and his colleagues (see Part A
       below ). Several of these studies were included in the Gallo et
       al. HIV blood test patent application; the description of these
       studies did not identify the virus isolate as MOV, but merely
       as "HTLV-III," although the patents declared that the "cell
       line corresponding to the present invention is H9/HTLV-IIIb."

       Testimony of Drs. Gallo and Popovic shows that, in the case of
       Dr. Gallo, he knew or had reason to know that MOV could be the
       IP virus, and in the case of Dr. Popovic, if his testimony is
       to be believed, he simply did not care. Speaking of Dr.
       Popovic's experiments that allegedly led to the "isolation" of
       MOV, Dr. Gallo said this:

          "See he [Popovic] has got the two positive samples. One is
          labelled 'LAV' and one has a number on it. And the one with
          the number on it he thinks is 'HM,' but we cannot prove
          it... We didn't know what was going on. Whether cross
          contamination with LAV, whether the culture would last..."
          (5/10/90 OSI interview; transcript pp. 63).

       Later in the same interview, Dr. Gallo returned to this theme.
       Speaking of Dr. Popovic's cultures that eventually were called
       MOV, Dr. Gallo said this:

          "Was LAV the same as this new thing? If so did -- you know,
          would they cross react with HTLV-2? Was the new thing one
          thing or a mix? Anyway, I have got these two things growing.
          And he simply called the virus HUT-78 because it was in
          HUT-78 virus. He didn't know what name to give it." Dr.
          Gallo added, "My belief is Mika is not certain as to what
          the origin is" (op cit., pages 70-71).

       As for Dr. Popovic, when he was asked if he had attempted in
       1983-84 to determine the true identity of MOV, he said he had
       not, and he evinced considerable disregard concerning the
       identity of the isolates he used in his early experiments,
       emphasizing instead his singular focus on obtaining a viable,
       vigorous isolate that he could grow in large quantities:

          "At that time it didn't matter too much ... as concerning
          the AIDS virus, what did matter was its growth in high titer
          that one could work with it. It didn't matter in terms of
          its precise origin" (6/26/90 OSI interview; transcript p.
          160).

       Practically speaking, Dr. Popovic was right. With respect to
       the overriding concerns of (1) growing the suspected AIDS virus
       in large quantities and (2) using the virus to make an antibody
       blood test, the "precise origin" of the virus, "didn't matter
       too much." But for purposes of scientific publication and
       obtaining a blood test patent, a virus of obscure or suspect
       origins would not do.

       2. LAI as "HTLV-IIIb":

       For purposes of their patent applications and for many
       publications, Gallo/Popovic claimed the existence of another
       HIV isolate, designated "IIIb," an isolate said to be derived
       from a "pool" of ten patient samples. The "evidence" for the
       existence of the pool consists of Dr. Popovic's word, plus a
       few cryptic pages of laboratory notes. But as described in the
       report of the HHS Office of Inspector General, there is reason
       to doubt that the IIIb "pool" experiment, as described by
       Gallo/Popovic, really was done, or if it was done, that it ever
       produced anything other than LAI/LAV. Among the facts that call
       into question the putative "pool" experiment are the following:

       (a) The entire rationale for the experiment -- i.e. that by
           pooling several virus-positive samples, one would boost the
           titre of the resulting culture -- is belied by what Dr.
           Popovic actually did. Specifically, Dr. Popovic (contrary
           to the claims in his May 1984  Science  paper and claims in
           other fora by Dr. Gallo) did not use only RT+ samples for
           his "pool," neither did he test the putative pool samples
           for virus (specifically, for RT) before he pooled them. Dr.
           Gallo himself said, in a memorandum to the NCI's Peter
           Fischinger during the French/American dispute, that the
           samples for the pool came from "several patients who showed
           high RT activity in primary culture" (8/19/85 Gallo to
           Fischinger memorandum; p.3).

       In fact, as revealed by examination of the LTCB laboratory
       notes, most of the putative pool samples were not tested for
       RT, or if tested, they were found to be RT-. Consequently, Dr.
       Popovic had no idea if most of the samples he used contained
       any HIV, and in fact, fully four of them did not. Yet Dr.
       Popovic reportedly added the virus-negative samples to the pool
       at precisely the point at which he feared that "... I would
       lose the culture ..." (early January 1984). Such an action
       defies rational explanation.

       (b) The samples -- contrary to the Popovic et al.  Science
           paper and the Gallo et al. cell line patent application --
           did not all come from AIDS/pre-AIDS patients. Two of the
           patients whose samples reportedly were used for "the pool"
           were diagnosed with hemophilia and one with "chronic
           lymphatic leukemia."

       (c) Many of the samples allegedly used for the pool were noted
           in the LTCB records to be contaminated with mold, one was
           terminated the same day it allegedly was used for the pool,
           and for one sample, there is no indication a viable culture
           was even in the laboratory at the time it allegedly was
           used.

       (d) There is no evidence there ever was a "IIIb" isolate
           independent of LAI/LAV. There are no laboratory data
       showing the independent existence of a pool isolate and,
       notably, there is  no sample  of "the pool" in the LTCB
       freezers, although samples of all ten putative constituent
       samples were found. Every "IIIb" sample sequenced by Roche
       Laboratories was found to be LAI, except for the earliest
       putative IIIb sample, one dating from February 1984. This
       sample was found to contain no HIV at all. While it is possible
       that -- as asserted by Gallo et al. -- this last sample was a
       mislabelled, uninfected control, it remains the case that the
       latter-day claim of Gallo et al. that IIIb was "contaminated"
       by LAI cannot be substantiated because there is no evidence
       there ever was a IIIb to be contaminated by anything.

       The affidavits of Dr. Francoise Barre-Sinoussi concerning Dr.
       Popovic's reported admission that he deliberately used LAV in
       the experiment that resulted in the putative "IIIb" may explain
       the anomalies concerning the nonexistent "pool." According to
       these affidavits, in 1992, Dr. Popovic told Dr. Barre-Sinoussi
       he combined LAI/LAV with other virus samples to obtain a
       high-titre cell line, not knowing that LAI/LAV would grow out
       of the pool.

       A  Chicago Tribune  story about the Barre-Sinoussi affidavits
       reported that Dr. Popovic now denies admitting to Dr.
       Barre-Sinoussi his deliberate use of LAI/LAV. Yet Dr. Popovic
       came very close to making the same admission to OSI. Describing
       his "pool" experiment, Dr. Popovic said this:

          "If I have a cell line which is virus positive and I take
          another virus-positive cell line and mix together and put
          together LAV, is it bona fide experiment? What is difference
          if I take from one of these flasks, I have two different and
          mix together, and then I put in one cell line, or I have
          cell line which is positive and I take the virus and put it
          there. What is the difference between these two" (6/26/90
          OSI interview; transcript pp. 69 - 70).

       For more information about the putative pool experiment and the
       alleged result of that experiment -- "HTLV-IIIb -- see Part B
       below .

       3. The HUT-78/HT/H9 "Breakthrough":

       Dr. Gallo's discovery of how to grow the AIDS virus in quantity
       occurred when Dr. Popovic used another scientist's cell line
       (HUT-78; developed by Dr. Adi Gazdar and his colleagues) to
       grow another scientist's virus isolate (LAI/LAV; isolated by
       Montagnier et al.). In the process, as was true for the virus,
       Gallo/Popovic gave the cell line a new name: "HT/H9" -- HT was
       the parent line, H9 a clone of that line -- giving no credit to
       the true originators, and thereby, tacitly as well as
       explicitly claiming the "discoveries" as the LTCB's own. The
       true origins of the cell line were finally, convincingly,
       documented in the scientific literature (Mann  et al.,   AIDS
       Research and Human Retroviruses;   5,  1989, pp. 253 - 255),
       following an investigation ordered by the Director, NIH.

       The results of the investigation showed that:

          "... the original cell line HUT-78, H9 utilized for HIV
          isolation, and the ATCC versions of these lines are
          genetically identical and were derived from the same
          individual" (op cit., 5, Page 254).

       Dr. Gallo asserted he did not claim the HT/H9 (HUT-78) cell
       line as an LTCB discovery and that he made reasonable efforts
       to determine the cell line's origins. But the facts indicate
       otherwise.

       Dr. Popovic used a CD4+ T-cell line taken from the LTCB
       freezers, identified as "HUT-78," in his initial attempts at
       permanent growth of the AIDS virus, in the Fall of 1983. HUT-78
       had previously been provided to the LTCB by the scientist who
       discovered it and published its derivation, Dr. Adi Gazdar. The
       cell line originated with a patient diagnosed with Sezary
       Syndrome, a type of lymphoid leukemia. Shortly after his
       initial successful experiments growing LAI/LAV in HUT-78, Dr.
       Popovic cloned the parental cell line on two separate occasions
       (November 1983 and January 1984), reportedly for two reasons:
       one, to ensure that the cell line did not harbor any
       contaminating virus, particularly HTLV-I, and two, to obtain
       single-cell clones that would maximize the growth of the AIDS
       virus. These experiments produced over 50 clones, of which
       Popovic selected the eight "best growers" for use in his
       "HTLV-III" experiments. "H9," reported to be the best growing
       of the clones, was obtained in January 1984.

       Meanwhile, Dr. Popovic renamed the parental cell line, changing
       the name from "HUT-78" to "HT." The principal reason offered
       for the change is that Popovic was uncertain that the cell line
       in which he succeeded growing the AIDS virus was the authentic
       HUT-78. Subsequently, beginning in the Popovic et al. May 1984
       Science  paper, and in numerous papers and public speeches, as
       well as numerous legal briefs, Gallo et al. and the U.S.
       Government represented "HT" and its H9 clone, as new,
       "breakthrough" discoveries of the LTCB. Another major theme of
       the claims by Gallo et al. and the U.S. Government was that the
       putative "discovery" of the cell line enabled the "isolation"
       of the LTCB's prototype HIV isolate, which was followed
       immediately thereafter by the development of HIV-specific
       reagents and the HIV antibody blood test, all this beginning in
       the Fall of 1983. These claims, in significant respects, are
       contradicted by the facts.

       (a) Claims that HT/H9 Was "New":

       Statements claiming credit for the "discovery" of HT/H9
       appeared first in 1984, in the Popovic et al.  Science  paper.
       The published version of the paper contained this description
       of the cell line in which Popovic grew the AIDS virus:

          "One neoplastic aneuploid T-cell line, derived from an adult
          with lymphoid leukemia, was found to be susceptible to
          infection with the new cytopathic virus isolates. This cell
          line, termed HT, has produced HTLV-variants in sufficient
          quantities to permit the development of specific
          immunological reagents and nucleic acid probes..." (p. 498).

       The Popovic et al. paper further described the cell line as a
       "new  immortalized T-cell population" and said the cell line
       was  "found"  by Popovic and Gallo (emphasis supplied).

       The evolution of the cell line description through successive
       drafts of the Popovic et al. paper is informative. Early drafts
       of the paper correctly reported the cell line, not identified,
       as originating "from a patient with mature T-cell malignancy
       (Sezary Syndrome)..." In draft 3, the reference to the
       patient's diagnosis as "Sezary Syndrome" was dropped; inserted
       in its place was an obscure reference to a "mature T-cell
       malignancy." In draft 4 of the paper, Dr. Gallo made an
       important change that significantly misrepresented the cell
       line, making it appear to be a  de novo  discovery, i.e. the
       addition of the word "new" to the sentence,

          "We report here the establishment and characterization of a
          new  immortalized T-cell population which is susceptible to
          and permissive for HTLV cytopathic variants."

       Finally, in draft 7, the name "HT" was introduced for the cell
       line.

       Lest there be any doubt as to whether Dr. Gallo was claiming
       the cell line as a discovery of the LTCB, his words at the
       Beecham symposium, delivered shortly after submission of the
       Popovic et al. paper, bear mention. On this occasion, Dr. Gallo
       said this:

          "The breakthrough  occurred for us when we learned how to
          transmit this [the AIDS virus] to a particular cell line
          developed in our lab.  That happens to be H4 [another "HT"
          clone],  a new line"  (emphasis added; 4/5/84 Beecham
          "Symposium on Infective Agents and Their Effects").

       The origin of "HT/H9" was obscured even further in December
       1984, when Drs. Gallo and Popovic published an important letter
       in  The Lancet,  a letter that presented comparative data for
       several different T- and B-cell lines, with respect to their
       ability to support growth of the AIDS virus  (The Lancet,
       1984, pp. 1472-1473). In the December 1984 letter, "HT/H9" were
       distinguished from HUT-78, as if they were distinct,
       independent cell lines. HT/H9 were even described as
       originating from a patient with a different clinical syndrome
       than that of the HUT-78 patient.

       At the same time as Gallo/Popovic obscured the HUT-78 origins
       of H9, Dr. Gallo withheld H9 from a number of scientists who
       sought to obtain it (see Part A below). HUT-78 was freely
       available to scientists through the American Type Culture
       Collection (ATCC), where it was deposited in 1981. But,
       scientists seeking H9 were not able to avail themselves of this
       ready access because they did not know H9 was  HUT-78.

       The combination of these circumstances led the Richards
       committee to make these observations:

          "... the so-called  HTLV-III virus was thus established and
          introduced to the world with no reference to or discussion
          of two crucial facts ... the cell line utilized [HUT-78] was
          one that had been obtained from the Minna laboratory [Dr.
          Minna was Dr. Gazdar's laboratory chief] ... Although others
          could have obtained HUT-78 from the ATCC ... the essential
          identity of HUT-78 with H9 had been effectively obscured"
          (2/19/92 Richards-to-Healy; p. 3).

       Dr. Gallo seemed to feel that the true identity of the "H9"
       cell line was a non-issue. Speaking to  Science  magazine, Dr.
       Gallo said this:

          "The fact is I never really thought it was important. And
          quite frankly, I still don't and I don't understand the
          people who do."

       Dr. Gallo also said, concerning the discovery of the cell line:

          "I don't consider  it so brilliant. In my mind, there is no
          credit for a cell line. If it happens by accident you have a
          cell line, so freaking what?" ( Science,   248,  1990; p.
          1507).

       (b) Claims of a November 1983 "Breakthrough":   As for the
           erroneous claims about when the "discovery" of H9 took
           place, these claims appeared principally in various legal
           briefs filed during the French/American dispute, including
           Dr. Gallo's sworn declaration. The claims invariably
           advanced by several months when the purported "H9
           breakthrough" occurred. Thus, in the Opposition by Gallo et
           al. to the Motion for Judgment of Montagnier  et al.,
           submitted by DOJ attorneys to PTO in November of 1986,
           there appeared this passage:

          "By the fall of 1983, Popovic had  developed  such a line [a
          permanent cell line] using H9 cells" and ".. once the
          permanent cell line for HTLV-III was developed, HTLV-III was
          produced in substantial amounts and used to prepare reagents
          for testing against AIDS sera ..." (Emphasis added; Page
          14).

       The statements in the U.S. Government motion mirrored
       statements in Dr. Gallo's November 8, 1986 sworn declaration,
       which was appended to the motion:

          "... in the fall of 1983, Dr. Popovic discovered that a few
          cell lines but in particular a  cloned  cell line,
          designated H9, was resistant to the retrovirus and could be
          effectively used to produce the virus in relatively large
          amounts of a consistent composition. Dr. Popovic
          accomplished this by November, 1983 ..." (Page 7).

       Dr. Gallo later would claim that his references to H9 were in
       error, that he meant to say "H4." Gallo's attorney, Joseph
       Onek, was quoted in  Nature  saying that:

          "... some references to the 'H9' cell line -- one of the
          most successful lines for growing the AIDS virus -- are
          actually describing an earlier cell line known as 'H4'"
          (11/14/91).

       According to Onek:

          "... this was a mistake that does not significantly change
          the conclusion of the declaration or the basis of the
          agreement."

       But Gallo/Onek's claims that the H4/H9 discrepancy was merely
       an isolated error, and not significant at that, are not
       credible. The claim in Dr. Gallo's declaration that H9 was
       developed in November 1983 was not an isolated occurrence; Dr.
       Gallo repeated the claim again and again, including in a formal
       submission to OSI, in 1990, which Gallo also forwarded to NCI
       Director, Dr. Samuel Broder. In this submission, titled
       "History of HIV-1 Detection and Isolation ...," Dr. Gallo
       represented that  both  the H4 and H9 clones were developed at
       the LTCB in November 1983.

       Dr. Gallo's claim that H9 existed and was infected with the
       AIDS virus in November 1983 was a material misstatement related
       to some of the central themes of his declaration, including the
       claim that Gallo et al. made the breakthrough discovery that
       led directly to their HIV antibody blood test in the Fall of
       1983. But Dr. Gallo's prototype isolate, IIIb, the virus Gallo
       et al. said "corresponded to" their blood test invention, did
       not even exist in November 1983, neither was it used to infect
       the H9 cell line until at least late January 1984.

       The false claims in the U.S. Government pleadings were
       anticipated by equally false statements in documents generated
       by Dr. Gallo and his colleagues at the outset of the patent
       dispute, in the Summer of 1985. Dr. Peter Fischinger, in his
       August 1985 report to Lowell Harmison, described "HT" as a
       "relative" of HUT-78, a relative "developed by Dr. Gallo." Dr.
       Gallo signed an affirmation that the Fischinger report had been
       reviewed for accuracy by him and were substantiated by LTCB
       data (see below ).

       Dr. Gallo himself wrote to Dr. Fischinger that Dr. Popovic "...
       developed the H9 clone in early November 1983" (9/23/95
       memorandum, page 5), even though Dr. Gallo knew from a
       September 6, 1985 memorandum from Mikulas Popovic that the
       final cloning of "HT" and the subsequent infections of the
       clones did not take place until January 1984. In the September
       6 memorandum, Dr. Popovic also said that H9 represented,

          "... a single cell clone obtained by limiting dilutions from
          a continuously growing T-cell  which we originally thought
          to be HUT-78"  (emphasis supplied).

       Dr. Popovic described the putative confusion at the LTCB
       concerning the actual identity of the cell line, and he added
       this:

          "Since primary non-cultured HUT-78 cells are not available,
          we cannot make a definitive conclusion whether the
          designated HT cells are identical with the original HUT-78
          or not."

       This statement was not true, since Dr. Popovic at any time
       could have obtained primary HUT-78 from the ATCC. Dr. Popovic
       never made this effort, because, he said to OSI:

          "I don't consider so exciting the work aimed at tracking
          down precisely the origin of HUT-78 cell lines each time"
          (6/26/90 interview; transcript page 183).

       Similarly, in a January 1991 response to OSI queries, Dr.
       Popovic said this:

          "... I did not consider it my responsibility to work out the
          confusion surrounding HUT-78..." (p. 9).

       Dr. Popovic's  September 6, 1985 memorandum also stated that
       "The detailed characterization of the clone, H9, is being
       prepared for publication and its comparison with HUT-78 cells
       ... will soon be performed." But, continued the memorandum, "In
       any case, why would anyone care." A draft of the memorandum
       bearing handwritten notations by Dr. Gallo shows that this
       sentence was added by Dr. Gallo himself.

       (c) H9's Hidden Defect:   One other matter relating to the H9
           cell line needs to be mentioned; the defect had a
           significant, deleterious impact on the HIV blood tests
           licensed under the Gallo et al. blood test patent. Both
           this patent and the two Gallo et al. cell line patents
           described H9 as,

          "... a representative and preferred (cloned) cell line in
          accordance with the invention."

       But H9 had an inherent defect that made it particularly
       problematic for use in a virus antibody blood test, i.e., the
       presence of HLA Class II antigens, which can cause significant
       numbers of false positive readings in an antibody blood test.
       By the Summer of 1985, problems with H9 false positives had
       become a significant concern for blood banks and the companies
       that manufactured the LTCB HIV antibody blood test. A
       significant proportion of the blood that tested HIV+ by the
       LTCB ELISA appeared to represent false positives. This meant
       that large quantities of blood were being needlessly discarded.
       It also meant that blood banks were having to perform a large
       number of the more costly Western blot confirmatory tests, in
       an effort to determine the actual HIV status of blood donors
       who initially tested positive.

       During 1985, the LTCB scientists published at least two papers
       referring to the H9 false positives problem. Dr. Popovic told
       OSI, concerning the second of these papers:

          "We considered important to stress using the confirmatory
          (Western blot) assays, because of HLA class II [the defect
          that caused the H9 false positives]. It was important"
          (6/26/90 OSI interview; transcript p. 184).

       But Dr. Popovic, and possibly other LTCB scientists as well,
       knew about the H9 problem long before the 1985 papers were
       published, possibly even before the submission of the first of
       the patent applications that described H9 as "preferred." Here
       is what Dr. Popovic told OSI concerning this matter:

          "H9 is a mature T cell. It has characteristics very similar
          to ATL cells ... It has Class II antigens ...

          "At the beginning we favored this cell line [H9] because of
          pressure to have a source of virus as soon as possible for
          the blood bank assays. Later I was not favoring it and I was
          not favoring it for a simple reason. When the viral budding
          occurs it takes also HLA-II with it, so the viral prep has
          also Class II antigens, cellular antigens. So that means if
          individuals let's say, got blood transfusion in the past, it
          can have a false cross-reactivity with the virus in ELISA.
          This reactivity does not have anything to do with the AIDS
          virus (HIV). The companies worked hard to establish negative
          controls ...

          "At the beginning the H9 was pulled out because of the
          speed. However, they (Mr. Roberts, patent attorney) told us
          that we can come later with other T4 cell lines ... The
          virus which would be produced from such cell lines, for
          instance, as Molt 3 which doesn't have Class II antigens,
          gives far less unspecific cross-reactivitiy in ELISA"
          (6/26/90 OSI interview; transcript pp. 176 - 178).

       Gallo et al. did submit a "continuation-in-part" (CIP)
       application to their cell line patent application. In the CIP
       application, Gallo et al. named several cell lines other than
       H9 that could be used for growing the AIDS virus. This CIP was
       submitted in August 1984; one of the cell lines identified was
       Molt 3, the cell line identified by Dr. Popovic as preferable
       to H9. "HTLV-III/Molt 3" was deposited at the ATCC. But even in
       the CIP, even recognizing the defect in the H9 cell line, Gallo
       et al. still said that,

          "H9 is a representative and preferred cell line in
          accordance with the invention."

       Like the parent application, the CIP application made no
       mention of the H9 defect and the resulting false positive blood
       test results.

       IV. EVENTS LEADING TO THE APRIL 1984 HHS ANNOUNCEMENT

       During the end of 1983 and through the first quarter of 1984,
       the LTCB made considerable progress in its work with the AIDS
       virus, virtually all of it with LAI (as LAV, then as MOV and
       IIIb). By mid-December 1983, Dr. Popovic was attempting to grow
       a small number of authentic LTCB isolates in the HUT-78 cell
       line, based on his successful experience with LAI. Several of
       these other isolates eventually were established in permanent
       cell lines. Some were published in the May 1984
        Science  paper by Popovic et al. But nothing grew
       in permanent cell lines as well as did LAI.

       A. Further Work with LAI/MOV

       During December 1983, work on LAI/MOV moved into high gear. Dr.
       Popovic's notes show that in December 1983, he sent substantial
       quantities of MOV to LTCB collaborator Dr. M. Sarngadharan.
       Sarngadharan performed early protein chemistry experiments with
       LAI/MOV, the results of which, he told OSI, were "extremely
       exciting," proving to him that MOV was a new retrovirus
       (5/10/90 Gallo submission to OSI, Exhibit 5, p. 1). In January
       1984, Sarngadharan's associate, Dr. Jorg Schupbach, performed
       experiments with LAI/MOV that, according to a letter from Dr.
       Schupbach to OSI, showed him that MOV "had to be the AIDS
       agent" (10/05/90 letter to OSI, p. 2).

       In late-December 1983, MOV was used to inject a rabbit, with
       the objective of producing the first HIV-specific reagent. The
       experiment succeeded, and by late-February, the resulting
       hyperimmune rabbit antiserum was available for use to test LTCB
       samples for the presence of the suspected AIDS virus. (As noted
       previously, there is compelling evidence that the first
       cultures so tested were the two LAI/LAV cell lines.)

       According to Dr. Gallo's own submission to OSI, LAI/MOV was
       used to raise the rabbit antiserum until June of 1984, when it
       reportedly was replaced by LAI/IIIb. This circumstance is
       telling evidence that the allegedly problematic HTLV-II
       cross-reaction observed with "MOV" -- if it actually occurred
       -- was not a hinderance to the continued significant use of MOV
       at the LTCB. Thus, the putative cross-reaction is not a
       credible explanation for the LTCB scientists' failure to report
       the existence and use of MOV, and for its alleged "replacement"
       with IIIb.

       Besides the rabbit antiserum, LAI/MOV also was used as the
       source of the antigen for the LTCB HIV antibody blood test. Dr.
       Sarngadharan reportedly initiated the LTCB ELISA on January 6,
       1984, using "MOV" as the source of the antigen. (Note, however,
       that the antigen source is not identified in the laboratory
       notes. Dr. Sarngadharan's instructions to his technician
       describe the source of the antigen merely as "the virus we had
       been analyzing."

       According to Dr. Sarngadharan's testimony to OSI, by January
       20, 1984, he had fine-tuned the LAI/MOV ELISA to the point that
       it was "extremely specific and sensitive" for the AIDS virus
       (5/10/90 "MOV" Submission to OSI; p. 3). (The blood sample used
       as the standard for AIDS/pre-AIDS in the initial ELISA testing
       at the LTCB was identified as "LAV." Presumably, this was the
       BRU serum received from Dr. Montagnier shortly before, in
       December 1983.)

       Notwithstanding  Dr. Saragadharan's claim about the performance
       of his blood test as of January 20, 1984, by Dr. Gallo's own
       testimony, it was not until February 29, 1984, that "the
       critical serology" (the "Guroff Panel" of sera) was performed.
       The ELISAs performed on this date were done using LAI/MOV as
       the antigen. According to Dr. Sarngadharan's testimony to OSI,
       concerning these assays:

          "When the test results were analyzed and the code was broken
          in Dr. Gallo's office he was convinced as I was that we had
          a reliable test" (5/10/90 "MOV" submission to OSI, Exhibit
          5; p. 4).

       Meanwhile, in January and February 1984, LAI/MOV was sent to
       two LTCB contract facilities for large-scale production. The
       contractors in turn provided MOV to the molecular biologists at
       the LTCB, who used it to, among other things, develop the first
       cDNA probes for HIV. As previously described, these experiments
       were reported in at least two papers published by the LTCB
       scientists to have originated with the "pool" virus IIIb (see
       Part C1B above).

       B. Work Reportedly Done with "HTLV-IIIb"

       1. Origins of H9/IIIb:

       As late as January 2, 1984, six-to-seven weeks after the
       claimed initiation of the "pool" culture on November 15, 1983,
       the culture, by Popovic's own account, was showing signs of an
       imminent demise. These circumstances came about despite one
       reported reinoculation of the culture with fresh material from
       the same three samples used to start the culture and despite an
       unknown number of refeedings of the culture with fresh HUT-78
       cells. According to Mikulas Popovic, the "pool" culture was,

          "... not well established ... and I was afraid that I would
          lose the culture. Therefore, I told myself, oh good god, I
          won't have it .... So it was a fear behind it, I would say,
          that I would lose the culture .... So what I tried to save
          the culture was to reinfect it again" (6/26/90 OSI
          interview; annotated transcript p. 84).

       Dr. Popovic reportedly added another seven samples to the pool,
       most of which, contrary to Dr. Gallo's claims of high RT
       activity, had never even been tested for RT. Dr. Popovic
       himself described this as "Obviously ... more or less a blind
       experiment" (op. cit., p. 103).

       Yet just two and a half weeks after Popovic's dramatic,
       last-ditch effort to save the "pool" culture, by
       Gallo/Popovic's own accounts, the "pool" culture was used to
       infect the eight "best-growing" clones of the HT (HUT-78) cell
       line, most notably H9. According to Gallo/Popovic, this cell
       line became the LTCB prototype HIV cell line, "H9/HTLV-IIIb,"
       and on March 6, 1984, virus from this cell line reportedly was
       substituted for LAI/MOV as the source of the antigen in the
       LTCB HIV antibody blood test. Thereafter, according to
       Gallo/Popovic, this cell line became the centerpiece of the May
       1984 Popovic et al.  Science  paper. But the LTCB laboratory
       notes and the Popovic  et al.,  paper do not substantiate the
       reported progression of events concerning "HTLV-IIIb." In fact,
       the records, insofar as they exist, are remarkably ambiguous
       and confused, and thus, susceptible to many different
       constructions.

       The designation "IIIb" does not appear anywhere in the Popovic
       et al.,  May 1984  Science  paper, nor for that matter, in any
       of the  Science  papers published on the same occasion. Yet
       other isolates,  e.g.,  "RF," "SN," "BK" are identified
       by a unique designation. Correspondingly, the experiment that
       allegedly resulted in the isolation of "IIIb" is described only
       in very general terms that might describe a "pool," but could
       equally well describe the culturing of individual isolates. In
       particular, there is no mention of a "pool," neither is the
       concept or rationale of pooling described in any manner
       whatsoever. It is noteworthy that the obscure description of
       the experiment that does that appear in the published paper was
       nowhere to be found in the paper when it first was drafted by
       Mikulas Popovic. In fact, the first approximation to the
       published version did not appear until draft #7 of Popovic et
       al.

       The designation "IIIb" also does not appear in any LTCB
       laboratory notes before April 12, 1984. The designation "IIIb"
       does appear in the Gallo et al. blood test and cell line patent
       applications (submitted April 23, 1984), and it appears in
       records of Biotech Laboratories, the LTCB contractor that
       reportedly grew up IIIb in large quantities for transmittal to
       the Frederick Cancer Research Center, for mass production for
       an HIV-antibody blood test. But the only Biotech document
       substantiating the putative IIIb transfer to Frederick is a
       laboratory technician's calendar, containing an April 9, 1984
       "IIIb" entry written over another entry that cannot be
       deciphered.

       At the Frederick facility, laboratory notes record the sample
       that was received merely as "HTLV-III," the generic name Gallo
       et al. used for the AIDS virus, and not "IIIb," the alleged
       "pool" virus. Notably, according to testimony of both Biotech
       and Frederick scientists (Drs. Robert Ting and Larry Arthur,
       respectively), the alleged "IIIb" virus culture came close to
       dying shortly after it was shipped to Frederick, leading to a
       request to Biotech to supply more virus. Shortly after this
       request, according to Biotech records, Biotech shipped to
       Frederick a large quantity of LAI/MOV.

       2. Chaos in LTCB "IIIb" Records:

       The confusion in the LTCB records concerning the claimed
       existence and use of "IIIb" is reflected in Dr. Gallo's own OSI
       testimony. According to Dr. Gallo, the "pool" virus was given
       numerous other designations prior to the "IIIb" designation,
       including these: "HT/pool," "HTLV-A," "HTLV-AIDS," "HT/III,"
       and "HTLV-III" (4/17/90 submission to OSI on "HTLV-IIIb;
       "Response to Question 3; Page 1.) There is no independent
       evidence to support the assertion that all these designations
       actually referred to the "pool" isolate.

       In fact, there is considerable confusion about the meaning of
       "HTLV-A," and there are strong indications that Dr. Gallo used
       the term as a generic one to encompass all AIDS virus isolates,
       not to designate the "pool" isolate in particular. Dr. Gallo
       first used the term "HTLV-A" on March 5, 1984, in a letter to
       the editor of  The Lancet.  In this letter, Dr. Gallo referred
       to his "very very exciting patient serological results" with a
       suspected AIDS virus, and he said,

          "We are debating whether to call  them  HTLV-III or HTLV-A
          (A=AIDS)" (emphasis added).

       It was not until much later, in fact, as late as April 25,
       1984, that Dr. Gallo finally made the decision to forego
       "HTLV-A" in favor of "HTLV-III" as a generic team to designate
       the AIDS virus. On April 25, Gallo wrote to Dr. Robert Downing
       of Wiltshire, England, stating that,

          "I am now confident that HTLV-A is, in fact, the cause of
          AIDS."

       Above "HTLV-A," Dr. Gallo wrote, by hand, "(HTLV-III)," with an
       asterisk to a footnote below, that read as follows:

          "We decided to keep the trend of the previous nomenclature
          so it is HTLV-III."

       Thus, there is consistent evidence that Gallo used "HTLV-A" as
       a generic term for the AIDS virus, and there is  no evidence
       to support Gallo's claim that "HTLV-A" referred uniquely to the
       "pool" isolate. Similarly, Dr. Popovic also used the term
       "HTLV-A," in the first draft of the Popovic et al. paper, to
       describe the isolate that was featured in Figure 2A of the
       paper. In subsequent drafts, "HTLV-A" was struck out and
       replaced with "HTLV-III."

       As if this were not confusing enough, there is also the curious
       matter of "HTLV-IIIA," a designation used for  both  the
       putative pool virus and MOV. Dr. Gallo mentioned the "IIIA"
       designation in his book  Virus Hunting,  where he said of
       HTLV-IIIb that,

          "... the 'b' simply stood for the fact that the sample [the
          putative "pool" sample] was split into portions, A and B"
          (page 181).

       In an OSI interview, Dr. Gallo gave a somewhat different
       account. Referring to Dr. Popovic's work with the "pool" virus,
       Dr. Gallo said, "HTLV-IIIA" "... is probably the other part of
       the pool." Responding to a question about what he meant by "the
       other part of the pool," Dr. Gallo said this: "He had aliquots.
       He had two aliquots. One aliquot was 'A' and one was 'B' that
       he used to infect different clones of HT. It turned out that
       clones of the 'B' went into H9. H9 was better. So arbitrarily
       'B' became the producer" (4/26/90 interview; transcript page
       114). Responding to a question about what happened to
       "HTLV-IIIA," Dr. Gallo said,

          "Well, 'A' wasn't as good. He just didn't continue with it.
          The clones that 'A' was used -- 'A' was used ... to infect
          ... those clones didn't do as well as H9 did, and so H9 was
          chosen and H9 happened to be this hand instead of this hand,
          and he called it 'B' as opposed to 'A'" (op cit., page 114).

       In a subsequent interview, Dr. Gallo said that:

          "HTLV-A or HTLV-AIDS are early designations for virus from
          the pool, later named HTLV-IIIa and HTLV-IIIb. B was the one
          that grew best in H9 eventually and became more
          standardized" (7/25/90 OSI interview; transcript p. 4).

       These statements by Dr. Gallo are discrepant with the evidence.
       Dr. Gallo's claim that "IIIa" did not produce well and was
       discontinued does not square with the fact that "H4/HTLV-IIIA"
       was given out to other scientists, e.g., Dr. Robin Weiss, at
       least as late as the Spring of 1984. Moreover, "HTLV-IIIa" as
       well as IIIb was specifically cited in a Gallo  et al.,  CIP
       patent application, submitted in August 1984. This application
       said that:

          "... a DNA fusion has led to the conclusion that there are
          at least two definite fractions to the HTLV-III, namely
          HTLV-IIIA and -IIIB, particularly susceptible to use by the
          present assay test kit procedure of the present invention"
          (Application for United States Patent: "Method and products
          of immunological test kits useful in assaying retroviruses
          such as HTLV-III," Serial Number 643,715, page 2).

       Subsequently, in November 1985, additional claims were
       incorporated into the "715" patent application, including two
       claims specifically citing use of "HTLV-IIIA." In short,
       contrary to Dr. Gallo's claims to OSI, all indications are that
       "HTLV-IIIA," whatever it was, was not discontinued.

       Moreover, evidence from several different sources indicates
       that "HTLV-IIIa," which Dr. Gallo repeatedly said was part of
       "the pool," and "MOV," the allegedly independent isolate, were
       one and the same isolate. Provocative testimony and evidence
       were obtained from Biotech Laboratories, the LTCB contract
       laboratory that received samples labelled "MOV" and "HTLV-IIIa"
       and "IIIb" for large-scale production. Dr. Robert Ting, the
       founder and former President of Biotech, also the scientist who
       personally initiated the large-scale production of "IIIb" at
       Biotech, told the OSI that,

          "... in later freeze cultures (at Biotech) we call H9/MOV is
          HTLV-IIIa" (2/21/91 OSI interview; transcript page 9).

       In response to a follow-up question, Dr. Ting reiterated his
       information:

          "... in our lab we call HTLV-IIIa so when we tell the
          technician to grow HTLV-III, which do you want to grow, 'a'
          or 'b.'"

       Asked if "HTLV-IIIa" was "MOV," Dr. Ting responded "yes."

       Dr. Mark Manak, in 1991 the Senior Vice President at Biotech,
       confirmed Dr. Ting's testimony. Dr. Manak told OSI, in a June
       24, 1991 letter, that,

          "The samples we received from Dr. Gallo's lab were labeled
          MO(V) and we retained that designation in our records. Our
          understanding was that this represented a culture of
          HTLV-IIIA in H4 cells." Dr. Manak further said that, "Our
          understanding was that HTLV-IIIA and HTLV-IIIB were
          different cultures and were to be handled separately."

       The Biotech laboratory records confirm the nomenclature
       described by Drs. Ting and Manak. A Biotech freezer log entry
       identified "MOV," frozen 2/29/84, as "= (H4/HTLV-IIIA)." A
       separate entry in the freezer log was identified as
       "HTLV-IIIA," said to have been frozen 3/28/84. Dr. Manak told
       OSI that both the 2/29/84 and 3/28/84 freezes were HTLV-IIIa
       cultures, with the latter "... possibly in different host
       cells" (June 24, 1991 letter to OSI).

       And in 1994, Dr. Ting provided even more definitive evidence
       concerning the identity of MOV and "HTLV-IIIA." In a June 13,
       1994 letter to Dr. Gallo, elicited by Dr. Gallo when NCI
       Director Dr. Samuel Broder required him to provide evidence
       about the origins of MOV,  Dr. Ting said this:

          "... I received MOV about a month before I received
          HTLV-III. Later LTCB designated HTLV-III as HTLV-IIIB. At
          the time of cryopreserving HTLV-III, I have told the
          technician to footnote in her log book MOV = HTLV-IIIA to
          distinguish it from HTLV-III."

       Finally, there is evidence originating with LTCB scientist Dr.
       Suresh Arya showing that Dr. Arya believed "HTLV-IIIa" was
       another name for the isolate previously named "MOV." In
       September 1986, at the height of the blood test patent dispute,
       Dr. Arya prepared a list of 1984 entries from his laboratory
       notes in which he received samples and labelled them as "LAV."

       Dr. Arya claimed to OSI, as did Dr. Gallo to the United States
       Government attorneys, that he never worked with the actual LAV
       isolate from Institut Pasteur, and used the term "LAV"
       generically to designate the AIDS virus. However, there is at
       least one notebook page, not provided to OSI, that shows Dr.
       Arya, on May 6, 1984, was working with "LAV cDNA [Paris]." Dr.
       Arya confirmed to Subcommittee staff that this notebook page
       was his, but he claimed he did not remember the experiment. Dr.
       Arya also said he did not know why the notebook page was not
       provided to OSI. The Subcommittee staff was not able to obtain
       any additional information concerning this matter.)

       Particularly relevant to the present discussion is this entry
       from the September 1986 Arya list:

          "Notation on June 28 -- Mika if LAV (MOV) should be
          HTLV-IIIA; on Aug 8 - Mika, if cells should be HT cells
          infected with HTLV-IIIA/MOV."

       The above entry, along with numerous other entries, was deleted
       from Dr. Arya's list before it was provided to OSI.

       The fact is that, at best, the designations "MOV," "HTLV-IIIA,"
       and "IIIB" were hopelessly confused in the laboratory notes at
       the LTCB. In many instances, these terms were used
       interchangeably. These circumstances cast significant doubt on
       the claim that MOV and the "pool" isolate were genetically
       distinct. The Roche Laboratories revelation that both "IIIb"
       and "MOV" are the IP virus LAI conclusively refutes the claim.

       C. Subsequent Claims by Gallo/Popovic about Their
          "Breakthrough" Discoveries

       During the French/American dispute, Drs. Gallo and Popovic made
       a number of significant claims about their "breakthrough"
       discoveries in AIDS research, many of which appeared in the
       popular and scientific media, as well as (in Gallo's case) in
       legal briefs filed on behalf of the U.S. Government, which
       erroneously dated the LTCB discoveries to late 1983, were
       incorrect and significantly incomplete, and thus, were
       significantly misleading.

       The incorrect claims concerning the "discovery" of H9 have
       already been discussed. Other incorrect claims concerned when
       Gallo/Popovic "isolated" HTLV-IIIb, the "pool" virus, and when
       the LTCB HIV antibody blood test was developed. Claims such as
       these appeared in, for example, the same November 1985 article
       in  Science  magazine, previously cited, reportedly based on
       interviews with Gallo and Popovic, and containing their
       unqualified assertions that they were not able to grow LAV.
       According to the article, when Dr. Gallo realized that the new
       retrovirus he had detected was,

          "... killing the cells it infected, he began to look for
          cells that would resist its cytopathic effects. He found
          what he was looking for in early November."

       The article went on to say that:

          "Popovic discovered that clones developed from a line of T
          cells established from a leukemia patient could be infected
          with virus from the cells of AIDS patients and go on
          producing virus indefinitely ... Because virus from some
          patients appeared to infect the cell line more readily than
          others, Popovic ... pooled virus isolates from 10 patients
          and used the mixture to infect the cells.  By December,,
          Gallo's lab was mass-producing virus from a cell line,
          called H9, infected with virus from the pooled samples"
          (emphasis added;  Science,   230,  November 1985, Page 521).

       The November 1985  Science  article continued:

          "This breakthrough enabled Gallo's group to characterize the
          virus ... Equally important, mass production of the virus
          opened the way for development of a sensitive test ... to
          detect antibodies to the virus in blood samples. The test
          nailed down, to almost everybody's satisfaction, that the
          virus was the cause of AIDS."

       The article then quoted Dr. Gallo directly:

          "'The data poured  in in December and by January we had
          solved the problem  [of the cause of AIDS],' says Gallo"
          (emphasis added; op cit., Page 521).

       The evidence presented in this report shows that these claims
       were not true. Gallo et al. were not "mass-producing"
       H9/HTLV-IIIb by December; neither the H9 cell line nor the
       putative IIIb isolate even existed by that time. Nor did the
       data "pour in" in December -- the LTCB blood test was not even
       reliably adjusted until late-January, and it was not used for
       definitive serology on blind samples until late-February.
       Moreover, what was not revealed by Dr. Gallo was the fact that
       the only isolate in large-scale production before late-January
       1984 was LAI/MOV/, and  all  the serology prior to March 1984
       was based on MOV.

       That the untrue statements attributed to Gallo/Popovic by
       Science  magazine were not "misquotes" or due to some other
       journalistic failing is seen in the fact that Dr. Gallo
       repeated the same claims again and again, always moving events
       that occurred well into 1984 back to the Fall of 1983, always
       implying that key experiments were performed with LAI/IIIb,
       when most actually were performed with the mystery isolate,
       "MOV," always exaggerating his understanding of the
       significance of the data at the time they were actually
       obtained.

       o Dr. Gallo claimed, at the April 1984 HHS press conference
         that he had been "mass-producing" the AIDS virus for six
         months. Further, he said, "I was developing reagents over
         that period of time to go back and do the analyses." This
         claim would date the beginning of "mass production" at the
         LTCB to late October. But the  only  AIDS virus isolate
         Gallo,  et al., even had in a permanent cell line six months
         prior to the press conference was LAI/LAV, the isolate Dr.
         Gallo said for years he could not grow. Moreover, even
         LAI/LAV was not "mass produced" for six months prior to the
         news conference, and it was not until December 1983, two
         months later, that LAI under the name, "MOV" was produced in
         anything even approaching large quantities.

       o Dr. Gallo told a February 1985 meeting of the NCI Division of
         Cancer Treatment (DCT) Board of Scientific Counselors that an
         HIV blood test "was ready in December 1983" in his
         laboratory.

       o As late as November 1986, Dr. Gallo was repeating the same
         claims, this time to a meeting of scientists at the Royal
         Postgraduate Medical School in London. According to  New
         Scientist:

          "Gallo says that by the end of December 1983, he had enough
          virus to show that AIDS patients had antibodies to it"
          (February 12, 1987, p. 54).

       Concerning the meeting in London,  New Scientist  reported
       this:

          "... Gallo said that the results of his test at this time
          (December 1983) were 'unambiguous evidence that this [virus]
          and this alone was the cause of AIDS'" (op cit., p. 54).

       D. The "CDC Data"

       During the first half of 1984, Gallo et al. continued to refine
       their HIV antibody ELISA test. The ELISA tests developed by the
       IP and LTCB became the first-stage (screening) tests employed
       by blood banks world-wide. Dr. Gallo had known since at least
       the previous autumn about the IP blood test. In mid-March 1984,
       Dr. Gallo obtained important information about the performance
       of the LTCB test  and  about the IP test as well. The
       information came from the Centers for Disease Control (CDC)
       scientist, Dr. James Curran. Dr. Curran had previously sent Dr.
       Gallo a panel of over 200 sera for blind testing with the LTCB
       HIV antibody blood test. On March 12, 1984, Dr. Curran met with
       Dr. Gallo and his colleague Dr. Sarngadharan to "break the
       code" to determine how accurate the LTCB test was in detecting
       antibodies to the suspected AIDS virus.

       Dr. Gallo frequently recounted the meeting with Dr. Curran,
       asserting that Curran told him the LTCB results were
       "clear-cut" and that, in Curran's view, Gallo and his
       colleagues "had determined the cause of AIDS" (4/30/86 Gallo
       "History of Key Events ..."; 11/8/86 Gallo sworn declaration).

       But Dr. Gallo's accounts of the meeting with Dr. Curran were
       highly selective. What Dr. Gallo invariably failed to say is
       that the LTCB test scored only  48 percent  positive in AIDS
       patients in the CDC tally. (Handwritten tallies by Dr. Curran
       and another scientist, dated contemporaneously with the
       meeting, confirm this figure.) Several subsequent tests by
       Gallo et al. of other large serum panels were no more
       impressive,  e.g.,  in May 1984 and June 1984, the LTCB test
       scored only 40 percent and 47 percent positive in sera panels
       provided by Drs. David Ho and Bijan Safai, respectively (the
       latter data were published in  The Lancet  in June 1984 -- see
       below).

       Since the HIV blood test was in its developmental stages, these
       low figures would not be particularly remarkable, were it not
       for the fact that on numerous occasions, the United States
       Government and Dr. Gallo himself criticized the IP test for its
       early AIDS detection rates in the 40 percent range,  e.g.,
       "... serum samples from 37.5 percent of patients with AIDS were
       found to react with it [LAV]" (Popovic  et al.,   Science,
       224,  1984, p. 500); "Even in July 1984, the LAV- containing
       test systems picked up only 41% of AIDS patients"
       (Fischinger-to-Harmison memorandum; August 27, 1985, p. 9); and
       "... as late as July 1984, Montagnier reported only about 40
       percent positives with his composition" (Submission of Motions
       by Gallo  et al.,  October 1986, p. 4.)

       It also bears mention that Dr. Gallo invariably cited the June
       1984 Safai et al. paper  (The Lancet,  1984, pp. 1438-1440) as
       an instance of 100 percent accuracy of the LTCB blood test. But
       this figure was achieved only by combining both the LTCB ELISA
       and Western Blot (a confirmatory test), using the latter test
       to assay all samples negative by ELISA, a practice directly
       opposite the practice in blood screening clinics, where ELISA+,
       not ELISA- samples are subjected to confirmatory testing.

       Even more important, what Dr. Gallo invariably failed to reveal
       about the meeting with Dr. Curran is that Curran told him CDC
       had sent many of the same sera tested by Gallo et al. to the IP
       scientists, for testing with their LAV antibody blood test. The
       IP blood test scored as good or better than the LTCB blood
       test, and according to Dr. Curran's testimony to GAO
       investigators, he told Gallo about the concordance of his
       results with those of the IP, during the March 1984 meeting.

       Dr. Gallo told Subcommittee staff he did not recall being told
       by Dr. Curran about the IP blood test results, yet just a few
       weeks after the Gallo/Curran meeting, while lecturing in
       Zurich, Dr. Gallo said this about the work of the IP
       scientists:

          "... I have heard recently that their serological data has
          gotten very good, almost as good as I know we have with
          these" (Symposium on Infective Agents and Their Effects -
          New Perspectives; Beecham Research Laboratories, April 5,
          1984, audiotaped address).

       Dr. Gallo confirmed to Subcommittee staff that he made the
       above remarks, but he claimed he could not recollect the basis
       for them, other than "rumors via the grapevine."

       The day after the Beecham symposium, an even more significant
       event relating to Dr. Gallo's knowledge about the IP LAV
       antibody blood test, took place. On April 6  at the Institut
       Pasteur in Paris, Dr. Gallo was shown the CDC computer
       print-out containing a side-by-side tabulation of the LTCB and
       IP blood test data. Five other scientists who were present in
       the room (including two scientists from the United States: Drs.
       Donald Francis and Murray Gardner) substantiate these events,
       particularly, that: (a) Dr. Gallo saw the data; (b) the data
       showed convincingly that the IP and LTCB viruses were both
       associated with AIDS; and (c) the IP blood test was equal to or
       better than the LTCB test in detecting antibodies to the
       suspected AIDS virus.

       Dr. Gallo revealed nothing about the CDC data to the PTO, nor
       even to the attorneys who prepared the LTCB patent
       applications, the lawyers who told Subcommittee staff they
       instructed Gallo and his colleagues concerning their duty of
       candor and disclosure. Neither did Gallo et al. cite any
       information about the CDC data or its implications in the May
       1984  Science  papers, submitted just six days before Gallo saw
       the data, and by Gallo's own account to OSI, "updated" to the
       time the galley proofs were reviewed. Instead, in the  Science
       papers, Dr. Gallo cited IP blood test data from the Summer and
       Fall of 1983, and he contrasted these data with data for his
       own test from months later, i.e., from the Spring of 1984.

       Dr. Gallo for years denied his knowledge of the CDC data, and
       he denied the data's significance; yet in so doing, Dr. Gallo
       revealed much about his actual knowledge of the data and his
       understanding of their significance. In OSI interviews, Dr.
       Gallo made these kinds of statements about what he saw during
       the April 1984 meeting at the Institut Pasteur:

          "I saw nothing. I sat where I am and they were working on a
          corner of a circled table but I didn't know why Don Francis
          was there. He said, 'oh you know, the results were quite
          comparable in the blind comparative test. I was saying, 'I
          am going to get right sucked into this. They are going to --
          I said, ' look I am not publishing CDC data sera. We have
          our own publications planned and gone off already. I was
          getting worried that they were going -- this is what was
          happening.

       I was thinking to myself, what the heck is Don doing here? But
       I never had a chance to review this data ...

       I repeat again, I saw that data from six feet away for two
       milliseconds. I saw no real numbers" (7/27/90 OSI interview;
       transcript pp. 95-97).

          "...in that meeting, I never saw the data" (8/3/90 OSI
          interview; transcript p. 225).

          "...I knew there was no data from Pasteur or CDC. I mean, I
          knew it well because I had just been there. I mean, what
          data was new? There was no new data. It was very little and
          it wasn't going to be published for another six or seven
          months" (12/2/90 OSI interview; transcript pp. 79-80).

       (The above passages illustrate well Dr. Gallo's longstanding,
       deep-seated antipathy toward the CDC as an institution and
       particularly toward Dr. Donald Francis, who on a number of
       occasions spoke out strongly concerning Dr. Gallo's conduct.)

       Another prime example of Dr. Gallo's denials relating to the
       CDC data is a December 17, 1991 memorandum Gallo wrote "To the
       record," titled "Blood Test Patent and Related Information."
       The memorandum was meant for a top-level audience at the NIH;
       copies were noted to Drs. Samuel Broder and Bernadine Healy,
       Directors of the NCI and NIH, respectively, as well as to the
       NIH Legal Advisor, Robert Lanman, and Thomas Mays, Director of
       the NCI Office of Technology Development.

       In the December 1991 memorandum, Dr. Gallo said he had:

          "... learned of rumors ... [of] still another 'new' argument
          being made against me, NIH, the patent and the Agreement
          .... that I 'knew' and reviewed data 'from Pasteur
          scientists' in early April 1984 (about two weeks before
          submitting our patent application), which showed that
          'their' blood test was about as good as ours."

       Said Gallo, "This is a big misrepresentation of the facts."

       Yet, just three months later, in a recorded telephone message
       left on the answering machine of Dr. Donald Francis, the CDC
       scientist who showed him the computer print-out on April 6,
       1984, Dr. Gallo said this:

          "I'm well aware of the serology data that you gave for me to
          look over on one occasion during the visit to Pasteur. I am
          aware of that happening."

       When he was interviewed by Subcommittee staff in July 1993, Dr.
       Gallo said the CDC "had no credibility." He also said that he
       did not trust the results of the IP blood test because the IP
       scientists had changed the cut-off score for its test. Dr.
       Gallo told Subcommittee staff, "You just can't draw the cut-off
       where you want." In fact, adjustment of cut-off scores is
       regularly done when a test is in the developmental stages; it
       is a normal part of the process of maximizing a test's
       sensitivity and specificity. Gallo et al. adjusted the scoring
       of their own LTCB blood test on the CDC panel of sera, changing
       "+/-" scores to "+." This was what resulted in the LTCB test's
       jumping from 48% to 80% positive in persons diagnosed with
       AIDS.

       Notwithstanding  Dr. Gallo's denigration of the CDC data, the
       fact is that HHS itself regarded the data as definitive, and
       believed the data showed that LAV and the LTCB virus were both
       the cause of AIDS. The official HHS position on the matter was
       rendered by Dr. Robert Windom, then-Assistant Secretary for
       Health and Mr. Ronald Robertson, then HHS General Counsel, in
       an April 1988 letter to a German publisher: Concerning the CDC
       data, Windom and Robertson said this:

          "... in early 1984, under the auspices of the Centers for
          Disease Control in Atlanta, Georgia, a series of blind tests
          was undertaken to ascertain whether the sera from patients
          with AIDS contained antibodies to HIV. Of significance is
          the fact that both NCI and Pasteur participated in these
          tests. Each laboratory was provided with sera and asked to
          judge whether each specimen contained antibodies to the
          virus. The results of those tests unequivocally established
          that HTLV-III/LAV was the presumptive causative agent of
          AIDS" (p. 3).

       To this day, Dr. Gallo continues to maintain that at the time
       the CDC data were obtained, the IP scientists "did not have a
       blood test."

       E. Functional Identity of LAV and "HTLV-III"

       Based on the LTCB's own work with LAV and the viruses Gallo et
       al. collectively called "HTLV-III," as well as the work of the
       IP scientists with LAV, Gallo  et al.,  as early as
       February/March 1984, had strong presumptive evidence that LAV
       was --  at least  -- the same kind of virus as the LTCB's own
       putative AIDS virus isolates. This functional identity was
       important scientifically as well as clinically, and it was
       important legally, relative to the patent applications of Gallo
       et al.

       The LTCB scientists subjected LAV to the same battery of tests
       as they used on their own samples. They obtained the same
       results with LAV as they obtained with what they claimed were
       genuine LTCB HIV isolates (see Part B2b above). Dr. Gallo told
       OSI that prior to the publication of the May 1984  Science
       papers, the LTCB's own data revealed that HTLV-III and LAV
       "were of the same virus type ..." (4/17/90 written submission
       to OSI). Dr. Gallo also said that:

          "... the same virus type was suspected, I would say, by ...
          the early part of 1984, certainly before the press
          conference" (4/11/90 OSI interview; transcript p. 62).

       Dr. Gallo's utterances from March/April 1984 confirm these
       statements to OSI. In March 1984, in an audiotaped lecture, Dr.
       Gallo asserted that his "HTLV-III" virus was "very similar" to
       the Pasteur virus (3/17/84 address at the Association pour la
       Recherche sur le Cancer; Marseilles, France).

       Dr. Gallo also made repeated, strong assertions to OSI
       concerning what he told the Pasteur scientists, during his trip
       to the IP in the first week of Aril 1984, concerning the
       likelihood that LAV and "HTLV-III" were the same virus type.
       Among these many assertions, the following are representative:

          "I concluded my seminar by saying 'this is the virus that
          they isolated last year. It is the cause of AIDS ..."
          (4/8/90 OSI interview; p. 12).

          "Remember, when I lectured in Paris I said it. I said this
          is like the cause of AIDS. We've made a blood test for it. I
          believe it's what they'd published last year" (4/11/90 OSI
          interview; transcript p. 62).

          "... I said that, 'this is the cause of AIDS and I believe
          these guys found it last year and it's the same virus that
          they found.' There was no bones about it. I mean it wasn't a
          pulled punch" (op cit., p. 63).

          "... I said that publicly. I said it in the conference. It
          said it in front of 500 people from the Pasteur Institute or
          from all Paris. I closed my final presentation with a slide
          of a picture of viruses and I said I believe this is the
          cause of AIDS. I believe they found it last year. I believe
          we are going to prove it very shortly" (7/27/90 OSI
          interview; transcript p. 85).

       Yet, in direct contradiction of these self-described beliefs,
       shortly before he travelled to Europe, Dr. Gallo edited Dr.
       Popovic's  Science  manuscript in such a manner as to delete
       all references to the functional identity of LAV and HTLV-III
       (see F below), at the same time adding to the paper the false
       claim that LAV had not been transmitted to a permanent cell
       line, plus the assertion that,

          "... HTLV-III and LAV may be different."

       Later, during the blood test patent dispute, in an attempt to
       defend the United States blood test patent, particularly the
       U.S. scientists' failure to disclose the prior art of the IP
       scientists, the U.S. Government attempted to argue that there
       was no need to disclose the IP scientists' work because, at the
       time of submission of the U.S. patent application, there was no
       reason to believe the IP and LTCB viruses were even the same
       kind of virus. Pursuant to this argument, Dr. Gallo asserted,
       under penalty of criminal prosecution for making false
       statements, the following:

          "At the time the Gallo patent was filed [April 1984], my
          colleagues and I did not consider LAV and HTLV-III to be the
          same or even substantially the same, virus. Quite clearly
          the data available to us indicated that the two viruses
          functioned differently and reacted differently" (11/8/86
          Gallo declaration; p. 13).

       Dr. Gallo has attempted to justify these claims by invoking IP
       experimental results that Gallo says were described to him by
       Drs. Montagnier and Chermann. One example cited with great
       frequency by Dr. Gallo is the IP scientists' reported assertion
       that they did not see the envelope protein gp41 in their
       preparations of "LAV," whereas the LTCB scientists identified
       gp41 as "one of the major proteins of the virus" (Sarngadharan
       et al.,   Science,   224,  1984, p. 508).

       There are a number of significant problems with Dr. Gallo's
       claim that prior to the April 1984 submission of the Gallo et
       al. blood test patent application and the May 4 publication of
       the Popovic et al. paper, he had reason to believe the IP
       scientists had not seen gp41 in their virus. Chief among these
       problems is the lack of substantiating evidence. The only
       pre-May 1984 IP reference that Dr. Gallo cited to support his
       claim -- the Montagnier et al. paper presented in September
       1983 at Cold Spring Harbor -- indicates the IP scientists  had
       identified  a protein around the size of gp41 in their virus.
       According to the IP paper,

          "A 36K protein, a 42K protein, and an 80K protein were
          constantly found to be associated with the purified virus
          and may represent the major envelope proteins" (Montagnier
          et al.,  Human T-cell Leukemia/Lymphoma Viruses,  1985; p.
          369).

       Dr. Gallo also has frequently invoked a chart prepared by Drs.
       Montagnier and Sarngadharan in May 1984 ("Status of the
       comparison ...") as evidence of the IP scientists' failure to
       see gp41. In fact, Dr. Gallo has frequently carried the
       argument further, asserting that the chart shows that Dr.
       Montagnier himself was arguing for real differences between the
       IP and LTCB viruses. Thus, in his April 1986 "History of Key
       Events ..." -- widely distributed among HHS administrators and
       attorneys -- Dr. Gallo said this:

          "June 1984: M. Sarngadharan, a close co-worker of Gallo,
          goes to Paris, brings the cell line producing HTLV-III and
          with Montagnier makes comparisons of LAV, to our prototype
          HTLV-III known as the B strain (HTLV-IIIb). They prepare a
          table signed by Montagnier in which Montagnier argues for
          significant differences between HTLV-IIIb and LAV"
          (emphasis in original; p. 5).

       Dr. Gallo made the same kinds of statements, repeatedly, to
       OSI. A representative example is the following:

          "When Sarang visited Montagnier in May 1984, and brought
          IIIb there and did some work together with Montagnier,
          Montagnier insisted on differences between LAV and IIIb. I
          have some of this in writing. For instance, Montagnier said
          that LAV did not have the major envelope transmembrane
          component, gp 41" (4/8/90 OSI interview; transcript p. 35).

       But Dr. Gallo's claims about Dr. Montagnier's position on gp41,
       as of May 1984, cannot be substantiated. The chart completed by
       Drs. Sarngadharan and Montagnier actually shows, in the "agree"
       column relating to the p41-43 proteins, that the scientists
       agreed, "... there is an actin band in viral preparations." In
       the "disagree" column, the notations in the chart show that Dr.
       Sarngadharan said gp41 is "... likely to be viral origin
       (gp),is recognized by most AIDS patients by Western blotting,"
       while Dr. Montagnier said gp41, "is not seen after labelling."
       However, importantly, it is clear that Sarngadharan and
       Montagnier did not consider the matter as resolved, because in
       the "decide" column of the chart there appeared a number of
       "things we have decided to do." These entries included Dr.
       Montagnier's further examining his virus, using "exactly
       technique of Western blotting of M.S. [Dr. Sarngadharan] who
       will send it as soon as possible to L.M. [Dr. Montagnier]."

       Notably, according to the chart, Dr. Sarngadharan also
       committed to send Dr. Montagnier, "the uninfected H9 cells for
       this purpose." But as described below, H9 was not sent to the
       IP scientists until the Fall of 1984, and then only after
       repeated requests by them to Dr. Gallo (see Part A below ).

       The above passages show that as of May 20, 1984 (the date on
       which the Sarngadharan/Montagnier chart was prepared), the
       presence or absence of gp41 in the IP virus was very much an
       open question, with a significant amount of experimentation
       remaining to be done.  Shortly thereafter, the presence of
       identical envelope proteins in both LAV and "HTLVIII" was
       confirmed, both at the IP and LTCB, indicating the earlier
       failure of the IP scientists to see gp41 was due to
       technological deficiencies (see Part B2 below for additional
       information on this point).

       As an experienced scientist, Dr. Gallo knew well that the
       putative gp41 differences between the IP and LTCB viruses, as
       well as other putative differences Gallo said the IP scientists
       described to him (e.g., their reported inability to raise
       rabbit antibodies to their virus), could very well be due to
       methodological problems, as indeed, they were shown to be.
       Thus, the invocation of the early IP data as indicative of
       real, fundamental differences between the IP and LTCB viruses
       was both factually wrong and scientifically highly suspect.

       Moreover, Dr. Gallo's invocation of these data, as in his
       declaration, ignored the substantial quantities of data -- both
       from the IP and the LTCB -- that indicated the viruses were
       functionally the same. These were the data that showed Dr.
       Gallo, by his own account, that the viruses "were of the same
       virus type." They were the data that led Dr. Gallo, by his own
       account, to proclaim in Paris in April 1984, concerning the
       LTCB virus, that, "... these guys found it last year and it's
       the same virus that they found." Thus, the claim in Dr. Gallo's
       declaration that "the data available to us" showed that the
       viruses "functioned differently and reacted differently" is
       significantly incorrect and incomplete, and is contradicted by
       his own words.

       Dr. Gallo has stated that it was the HHS attorneys who advised
       him that the IP and LTCB viruses were "substantially"
       different, and that it was on the basis of this advice that he
       signed his declaration. But Dr. Gallo also told Subcommittee
       staff he wishes he had said in the Popovic et al. paper that,
       "LAV and HTLV-III are probably the same," rather than "may be
       different." Concerning his sworn declaration, Dr. Gallo told
       Subcommittee staff that the denial in his declaration that he
       and his colleagues knew LAV and HTLV-III were substantially the
       same was "not accurate." Dr. Gallo added this:

          "I wish I hadn't signed it [the declaration]. I'm not proud
          of that."

       F. The Popovic et al.  Science  Paper

       On May 4, 1984, the LTCB scientists published four papers in
       the journal  Science,  announcing their putative isolation of
       HIV and development of an antibody blood test. One of the LTCB
       papers, by Popovic  et al.,  described the "continuous
       production" of HIV in the "HT" cloned cell lines (see below ).
       Important as the paper was, there were numerous problems with
       its accuracy and completeness. In addition to the false
       statements concerning the IP virus, the Popovic et al paper
       contained numerous incorrect statements and misrepresentations
       of data. Dr. Popovic was found guilty of scientific misconduct
       by ORI, based on his responsibility for false statements in the
       paper. The HHS Appeals Board reversed this finding, based on
       its own curious definition of scientific integrity, plus its
       own unique determination that falsification of data is not de
       facto scientific misconduct. The demonstrable falsehoods in the
       paper remain unchallenged.

       The preparation of the Popovic et al. paper was itself
       remarkable, embodying the elements of an extraordinary conflict
       within LTCB that would ultimately become public, a conflict
       between Drs. Gallo and Popovic that was in reality a conflict
       between the truth and a fiction about the LTCB scientists' use
       of LAV, and the knowledge that resulted from that use.

       Dr. Popovic was the LTCB scientist who worked most closely with
       the IP virus and the LTCB's putative prototype isolates,
       LAI/MOV and LAI/IIIb. Based on his work, Dr. Popovic was so
       certain of the functional identity of LAV and HTLV-III that, in
       the first draft of his  Science  paper he wrote, concerning his
       own experiments, that "LAV as a reference virus ... had been
       used in the first series of experiments," and "LAV is described
       here as HTLV-III."

       Dr. Gallo  struck out both of these statements, writing in the
       margins of the paper,

          "I just don't believe it. You are absolutely incredible"

       and

          "Mika you are crazy."

       Dr. Gallo then added to the conclusion of the paper his
       rendition of a few highly selective pieces of data (tellingly,
       Dr. Gallo listed these items on the cover of the manuscript
       under the heading, "Way to deal with this LAV originally").

       Dr. Gallo also wrote, in the conclusion of the paper this
       passage:

          "These findings suggest that HTLV-III and LAV may be
          different. However, it is possible that this is due to
          insufficient characterization of LAV because the virus has
          not yet been transmitted to a permanently growing cell line
          for true isolation and therefore has been difficult to
          obtain in quantity" (Popovic  et al.,   Science,  224, p.
          500).

       This passage contains several notable assertions, including the
       following:

       o The suggestion that "HTLV-III and LAV may be different" --
         when the LTCB's own data and chief scientist were saying
         precisely the opposite and Dr. Gallo himself had publicly
         proclaimed the viruses were likely to be the same;

       o The assertion that LAV had been "insufficiently
         characterized," when in reality, in addition to the LTCB
         scientists' own work, the IP scientists had presented and
         published many papers on the characterization of the virus.
         Dr. Gallo was present for several of the IP scientists' talks
         and he received several of their papers well in advance of
         their publication. The IP papers and presentations included
         the September 1983 Cold Spring Harbor presentation by Dr.
         Montagnier (described above); the November 1983 Tokyo
         presentation by Dr. Barre-Sinoussi (described above ); the
         New York Academy of Sciences presentation concerning the
         effects of LAV on T-cells; the February 1984 presentation by
         Dr. Chermann at Park City, Utah, titled "Characterization and
         Possible Role in AIDS of a New Human T-Lymphotropic
         Retrovirus"; a highly significant paper by Vilmer  et al.,
         containing the first published description of the methodology
         for the LAV ELISA (The Lancet;  April 7, 1984, p. 753); and
         Montagnier et al. (Annals of Virology,  135E; April 1984, p.
         119) on the "further characterization of LAV."

       o The assertion that LAV had not been transmitted to a
         permanently-growing cell line, when both the LTCB and the IP
         scientists, months earlier, had attained this accomplishment,
         and Dr. Gallo knew this was so. Dr. Montagnier told OSI he
         informed Dr. Gallo he (Montagnier) was growing LAV in an
         EBV-transformed B-cell line, well before the publication of
         the Popovic et al.  Science  paper. Moreover, it is certain
         that Dr. Gallo knew that Dr. Popovic had grown the IP virus
         in a permanent cell line. In the fourth draft of the paper,
         in his own hand, Dr. Gallo wrote this:

          "Finally, a T-lymphotrophic retrovirus different from HTLV-I
          and II and associated with lymphadenopathy syndrome was
          detected earlier ... We found that this virus, called LAV
          (provided by L. Montagnier and J.C. Chermann) also grows in
          H4 and produces similar cytopathic effects on it as
          HTLV-III."

       Dr. Gallo deleted the latter statement from the published
       version of the paper. Dr. Gallo also significantly rewrote the
       Popovic et al. paper so that it would indicate Dr. Popovic's
       initial experiments were performed with the LTCB prototype
       isolate, rather than with LAV. These changes were made over Dr.
       Popovic's strong objections (see below).

       (Dr. Gallo's principal defense of the published statements
       relating to the IP virus in the Popovic et al. paper is that he
       [Gallo] was referring only to the IP scientists' work, not work
       at the LTCB. This claim is belied by numerous pieces of
       evidence, not least of which is the content and structure of
       the statement itself which manifestly is not qualified in any
       way, but is a blanket assertion that the IP virus, "has not
       been transmitted to a permanent growing cell line." Additional
       evidence that Dr. Gallo intended to make a general and not a
       limited statement about the growth of LAV is seen in drafts of
       the Popovic et al. paper. As noted above, drafts of the paper
       bearing Dr. Gallo's own handwriting show that prior versions of
       the "LAV" passage included statements about  both
       laboratories' work with the IP virus, not just the work of the
       IP scientists themselves. Notably, prior versions of the
       passage contained the phrase, "poor virus production," rather
       than the phrase "not yet been transmitted to a permanently
       growing cell line." The latter phrase must have been
       substituted -- literally -- at the last minute; it does not
       appear even in the galley proofs of the paper.

       Finally, even if the published statement had been explicitly
       limited to the IP scientists work, it still would not be true.
       Dr. Gallo had known since  at least  the first week of April
       1984 that the IP scientists were growing their virus in a
       permanent cell line. Dr. Gallo actually mentioned the IP
       scientists' accomplishment at the HHS press conference,
       although he misrepresented and minimized its significance by
       the assertion that,

          "They believe they're getting it into a cell line just now"
          [press conference transcript p. 31]).

       Dr. Popovic secured the drafts of the paper that bore Dr.
       Gallo's notations with his (Popovic's) sister in
       Czechoslovakia, because, Dr. Popovic said, he believed that:

          "... sometime in the future, I might need them as evidence
          to prove that I gave fair credit ..." to the Pasteur
          scientists (5/15/91 Popovic-to-Hadley memorandum; p. 7).

       Dr. Popovic produced the drafts of his paper late in the OSI
       investigation, when he believed he was likely to be found
       guilty of scientific misconduct and he hoped the drafts, by
       revealing the significant involvement of others in the writing
       of the paper, would be exculpatory to him.

       Dr. Popovic also repeatedly recounted to OSI the disagreement
       he had with Dr. Gallo concerning Gallo's deletion from the
       paper of his (Popovic's) description of his LAV experiments. Of
       this matter, Dr. Popovic said,

          "... I would consider (it) a major disagreement" (4/10/91
          OSI interview; transcript p. 6).

       Among Popovic's statements to OSI, reflecting the strength of
       his (Popovic's) views on the matter, the following are
       exemplary:

          "I thought that we should include the LAV data in the paper
          ... LAV data what we had with the French virus. I think was
          right because this my paper is suspicious because of those
          LAV data are not included. Retrospectively it is very
          obvious it would be better" (12/1/90 interview; transcript
          p. 103).

          "Regarding my opinion, I told him if in those time and I am
          telling it now that it would be better to refer to the
          French work and present the LAV data what we had, that has
          been my opinion all along ... and I expressed this" (op
          cit., p. 156).

          "I did not agree with Dr. Gallo that the references to the
          work we did with the French virus should be omitted or even
          significantly minimized ... I thought it was wrong not to
          credit Dr. Montagnier's group's contributions more clearly"
          (4/10/91 OSI interview; transcript pp. 7-8).

       In Dr. Gallo's account, what Dr. Popovic called a "major
       disagreement" became "a very brief discussion." Here is what
       Dr. Gallo said to OSI (prior to Dr. Popovic's revelation of the
       draft manuscripts):

          "... there wasn't much emphasis. I think, Mika thought maybe
          we should make a statement to the effect that LAV was in
          culture ... don't think that Mika argued forcefully or
          strongly that we have to have some data on LAV growing in
          culture. That is not the case. He did mention it in an
          almost casual way, maybe we should put a statement in that
          at least for the time being with partial characterization"
          (12/2/90 OSI interview; transcript pp. 184-186).

       According to Dr. Popovic, one of the reasons he acceded to the
       removal from his paper of the account of his LAV experiments
       was Dr. Gallo's assurance that this information would be
       included in the collaborative papers that were soon to be
       produced with the IP. As described below (see below ), three
       such papers were produced; however, none of the papers was ever
       published. Moreover, none of the collaborative papers made any
       mention of the LTCB's growth and extensive use of the IP virus
       they received in 1983; thus, this vitally important aspect of
       the LTCB scientists' work -- until the French/American dispute
       -- was suppressed.

       G. Selection of the Isolate for the LTCB HIV Blood Test

       1. The Gallo/Popovic debate:

       The question of which isolate the LTCB scientists would use as
       the antigen for their HIV antibody blood test became critical
       at the point at which the LTCB patent applications were
       prepared, during the first three weeks of April 1984. As
       previously described, none of the four May 1984 LTCB papers
       mentioned an isolate called "IIIb," including the paper by
       Sarngadharan et al. that described the LTCB blood test. But for
       purposes of the patent applications, greater specificity was
       essential.

       Clearly, an explicit acknowledgement that LAI/LAV was used for
       the LTCB blood test would not do, since such use would have
       violated the noncommercialization agreement signed by Dr.
       Popovic when he received the IP virus the previous Fall.
       Acknowledgement of the use of MOV also would not do, since the
       LTCB scientists -- if their own account is to be believed --
       did not know its origins, even if it had come from an AIDS or
       pre-AIDS patient. So Dr. Gallo and Popovic had to decide which
       putative LTCB isolate would be used, and according to both
       these individuals, the choice came down to "IIIb" or another
       isolate, "RF."

       It is remarkable that at this time, there should have been any
       discussion of this issue at all, since according to Dr. Gallo's
       account, "IIIb" reportedly had been in large-quantity
       production for several weeks, and had been used, reportedly, as
       the antigen for the LTCB HIV blood test since March 6, 1984.
       "IIIb" also, reportedly, had been used to generate most of the
       blood test data reported in the LTCB papers about to be
       published in the journal Science. Judging from these
       circumstances, it would appear that the choice -- IIIb -- had
       long since been made. Notably, there is no indication Dr.
       Popovic objected to any of this

       But suddenly, by his own account, at the point a "IIIb" blood
       test was about to be patented and commercialized, Dr. Popovic
       became acutely anxious about the "origins" of the "pool virus,"
       even to the point of advocating the delay in the blood test
       that would have been occasioned by the choice of an isolate
       other than the putative "IIIb." The interpretation that Dr.
       Popovic's precipitous anxiety occurred precisely because he
       knew or strongly suspected that "IIIb" was LAI is inescapable.

       Dr. Popovic told OSI that he urged Dr. Gallo not to use IIIb
       for the LTCB blood test, to use instead the "RF" isolate, whose
       origins were well-established. Popovic's self-report to OSI of
       his arguments to Dr. Gallo indicate he (Popovic) was concerned
       about the uncertain provenance of "IIIb." Dr. Popovic told OSI
       that although the origin of RF was "more certain," "the best
       was IIIb," because the latter isolate was farther along in its
       growth than the former. Still, said Dr. Popovic:

          "... I personally as well as Betsy [Read-Connole] told let's
          take out the prototype, the RF. Gallo told 'no, we have to
          rush because it is blood bank assay. We have to give this
          one [HTLV-IIIb] because this one is the best one at this
          time' ... if you ask for clear-cut science data, for sure,
          it was better to have RF ..." (6/26/90 OSI interview;
          transcript p. 71).

       Dr. Popovic told OSI that the work with RF was done in a
       different laboratory -- a better organized laboratory -- than
       his own, where he personally performed the major experiments
       with LAI/LAV, LAI/MOV, and LAI/IIIb:

          "The major problem is that individual isolates were under
          more strict control in more organized lab comparing to that
          where -- I worked myself [with] IIIb, MOV, LAV ... That part
          of work with individual isolates were done under far better
          conditions. So not only myself also Betsy was involved in
          it, we (both of us) pushed for the RF isolate, in which we
          were more confident, comparing to the IIIb" (op cit., pp.
          109-110).

       In short, according to Dr. Popovic, he was more confident in
       RF,

          "... because the origin of it was more clear and handled
          under better conditions" (op cit., p. 110).

       (Note: Dr. Popovic's acknowledgement to OSI that he worked with
       LAV in the same laboratory as the allegedly independent MOV and
       IIIb is noteworthy. Among other things, it casts significant
       doubt on a key Popovic-to-Gallo memorandum, written early in
       the French/American dispute, when Dr. Gallo was still adamantly
       insisting there was no possibility that LAV had "contaminated"
       the pool. In the memorandum, Dr. Popovic asserted that his work
       with the "pool virus," "... was almost entirely confined to the
       tissue culture room 6B03A  where no LAV was ever used"
       [emphasis in original; Popovic-to-Gallo; September 6, 1985. See
       below  for more information on this memorandum.)

       Dr. Gallo's OSI testimony, in some respects, mirrored that of
       Dr. Popovic. Dr. Gallo confirmed the rationale Dr. Popovic gave
       for favoring RF over IIIb, namely Dr. Popovic's concerns about
       the murky origins of "IIIb."

          "... Popovic, in fact, came to me to discuss that he favored
          RF for the blood test because it came from one individual,
          as opposed to the pool which could not be traced as well.
          And my response was -- and it was a big, very long,
          discussion -- and I said, more or less, 'Why? It's just as
          good to use IIIB, even if it's from 20 people, because
          basically we want to move as fast as we can..." (4/26/90 OSI
          interview; annotated transcript page 72).

       On another occasion, Dr. Gallo offered a more colorful
       recollection of the discussion with Dr. Popovic:

          "I can see Mika standing in front of me with his pipe and
          saying, you know, 'why don't we go with RF with the blood
          test' and I saying you know, 'what the hell' -- you know,
          'what for.' And he said, 'well, it is -- we have the lineage
          much better defined. We know exactly what it is all the
          way.' And I said, 'Look, if this picks up, you know, this is
          working, it picks up, it is available now in higher
          amounts.' If we wait two weeks, three weeks, you know, I
          thought this was worse. So, that was the end of the
          discussion. I made a decision. You know, I made the
          decision. Yes, let's go with the pool and I told him"
          (12/2/90 OSI interview, annotated transcript, page 106).

       But Drs. Gallo and Popovic's accounts of their discussions also
       reflect some significant differences. Most notably, Dr. Gallo's
       accounts consistently overstated the readiness of RF for used
       in the LTCB blood test, while at the same time, Dr. Gallo
       suggested that other factors,  e.g.,  patient nationality, were
       significant factors in his decision to use "IIIb."

       Instances of Dr. Gallo's overstatements of the readiness of RF
       include the following:

          "... we had little reason to use LAV for the blood test, we
          had RF available, for example, which could have been used
          instead of IIIB. Having developed the method, having other
          isolates that could have been ready within weeks, we could
          have also had other choices" (4/8/90 OSI interview;
          annotated transcript page 38).

          "The point is going to be is that RF was almost as good as
          the pool when we were ready to form the blood test and could
          have been used. We could have said, 'Use this instead. Maybe
          you'll have to charge 10 cents or a dollar more -- I don't
          know -- because you don't get quite the titre'" (4/26/90
          interview; annotated transcript p. 21).

       On another occasion, Dr. Gallo indicated to OSI that RF was
       only two weeks behind "the pool" relative to its utility for an
       HIV antibody blood test. Dr. Gallo also invoked nationality as
       a significant factor in his decision to use "IIIB":

          "RF was also ready ... You don't have anything to lose.
          Maybe you lose two weeks. You can give that to anybody to
          calculate. When we sent out for blood tests, we could have
          taken RF ... Mika favored RF ... I favored IIIB because it
          was American instead of Haitian. And because the count was a
          little bit better and I didn't give a damn if it came from
          ten or it came from one" (5/10/90 OSI interview; annotated
          transcript page 88).

       It is not certain why Dr. Gallo introduced the "nationality"
       issue as a rationale for his selection of the allegedly
       all-American "IIIB." One obvious possibility is that the
       nationality issue was introduced to deemphasize the lack of
       readiness of RF as a critical consideration. Whatever the
       reason, the fact is that the nationality argument was bogus --
       for one of the alleged "pool" samples, F6367, came from a
       Jamaican patient; thus, in no way was the "pool" an
       all-American one.

       Dr. Gallo nonetheless repeatedly invoked nationality as a
       reason for his choice of "IIIB" over RF. In his December 2,
       1990 OSI interview, Dr. Gallo said this:

          "With the blood test he (Popovic) favored ... going with RF,
          and I said, 'Look, the IIIB is ahead of RF by some weeks and
          it is a U.S. versus Haitian ... The other four or five, six
          he had in culture were not yet well characterized, were
          further behind. And he favored going with RF because it came
          from a single patient and was well characterized, etc., etc.
          And I said, 'But it is a few weeks behind. Why make any
          delay? IIIB is from the United States, the other is from
          Haiti. Why do I want to have a Haitian that is two weeks
          behind?" (transcript pp. 101-102).

       Dr. Gallo also asserted to OSI that "RF was available for
       expansion into large-scale culture almost at the same time as
       IIIB" (4/26/90 OSI interview; transcript p. 72).

       But the existing evidence shows that RF -- in 1983-84 and well
       beyond, was discernibly inferior to "IIIB" in its titre and
       growth capacity. More importantly, the fact is that whatever
       its potential capabilities, RF was not expanded at the same
       time as IIIB, and this circumstance itself was another reason
       that at the time Gallo and Popovic were debating the issue, RF
       was not a genuine contender for use in the LTCB blood test.

       Dr. Popovic emphasized the significance of the demonstrated
       growth capacity of LAI/IIIB when he described to OSI that
       factors that weighed in the decision to use IIIB:

          "... what was in our mind is as follows: If we transfer this
          system into the large scale production ... would the virus
          producing cells behave the same way as in the small scale?
          We didn't know. So this was also one consideration, that if
          we go, we go with that which is the best, because we still
          didn't know if a large industrial production can work or
          not..." (6/26/90 OSI interview; annotated transcript p. 77).

       These statements by Dr. Popovic demonstrate that large-scale,
       high-titre production was a critical consideration in the
       selection of the LTCB HIV prototype. Dr. Popovic expressed
       confidence that he could have achieved this with RF, but he
       also said that,

          "... in order to be in a good position and go ahead with RF,
          we needed at least four weeks of work to concentrate on that
          one and that wasn't done" (12/1/90 OSI interview; annotated
          transcript p. 116).

       As to whether there was any candidate isolate other than RF
       that might have been a contender for use in the LTCB blood
       test, Dr. Popovic made it clear there was not. Dr. Popovic said
       that aside from RF,

          "... to do with any other virus isolate it was a question of
          starting from three to six weeks or something like that ..."
          (6/26/90 OSI interview; annotated transcript p. 78).

       2. "Other Isolates" and the LTCB HIV Blood Test -- There was No
           Choice:

       As described previously (p. 11), over the years, Dr. Gallo
       frequently asserted claims of multiple isolates of the AIDS
       virus, claims that steadily grew in number from 48 to "over
       200." As early as April 1984, at the HHS press conference, Dr.
       Gallo asserted that he had "produced more than 50 isolates" of
       the suspected AIDS virus; yet in 1990, Dr. Gallo acknowledged
       to OSI that these putative isolates "are mostly detections ...
       by our criteria" (7/27/90 OSI interview, transcript p. 17). OSI
       itself could confirm no more than 10-12 of the LTCB's claimed
       detections/isolates. Dr. Gallo himself admitted to OSI he had
       only around ten isolates at the same time he was claiming 50 or
       more (4/27/90 OSI interview; transcript p. 61).

       As the HIV blood test dispute began to escalate, Dr. Gallo
       stepped up his claims about the number of HIV isolates his
       laboratory had made. Dr. Gallo also frequently emphasized the
       relationship between the isolate claims and his attempts to
       refute the IP charge that the LTCB scientists had knowingly
       used the IP virus for the LTCB blood test. "RF," in particular,
       was frequently invoked as so worthy a candidate for the LTCB
       blood test that it alone should lay to rest suspicions about
       deliberate use of the IP virus.

       Thus, for example, in his September 23, 1985 response to a
       series of questions put to him, at the start of the
       French/American dispute, by NCI Associate Director Dr. Peter
       Fischinger, Dr. Gallo said this:

          "... we isolated, mass produced in H9 cells, patented and
          published on a major variant HTLV-III-RF (Haitian isolate),
          very different from LAV, at exactly the same time, making
          all this crap irrelevant. In addition, last month (August
          1985) we published in the  Proceedings of the U.S. National
          Academy ofScience  on  one hundred and one  different
          isolates of HTLV-III/LAV. This paper was submitted for
          publication six months ago. Now the number of isolates
          approaches 200" (emphasis in original; p. 5).

       The  PNAS  paper referenced in this passage is the paper
       concerning which Dr. Gallo acknowledged to Subcommittee staff
       he could not substantiate the claim of HIV isolates dating from
       1982, because no 1982 sample was tested by HIV-specific
       reagents. Concerning the number of isolates claimed in the
       paper -- 101 -- Dr. Gallo told Subcommittee staff he could
       document 25 - 50 isolates, but he said he also had
       circumstantial evidence, including some laboratory data, that
       up to 200 "isolates" had been tested by LTCB scientists and
       confirmed to be HIV. Despite repeated requests that he produce
       the laboratory data, Dr. Gallo failed to do so. What Dr. Gallo
       did produce was a June 13, 1994 letter from LTCB collaborator
       Dr. Robert Ting (formerly of Biotech Laboratories), who wrote
       to Dr. Gallo that during the period "1984 to 1985,"

          "... we have received more than 2000 samples from LTCB
          during that period and most of the samples were for HTLV
          tests which included HTLV-I, HTLV-II and HTLV-III. HTLV-III
          samples included many of LTCB new isolator (sic.). Results
          of these tests were sent directly to the LTCB staffs right
          after the test."

       This letter, obviously, confirms nothing about how many HIV
       isolates were obtained by the LTCB; the letter shows only that
       many samples were tested, for several different viruses..

       Dr. Gallo's claims about multiple isolates, including "RF,"
       that allegedly could have been used for the LTCB HIV antibody
       blood test, also were reflected in the Colin Norman November 8,
       1985 article in  Science.  In a box headed "HTLV-III and LAV:
       Similar, or Identical," Norman wrote, based on interviews with
       Drs. Gallo and Popovic, that shortly after starting the "pool"
       culture:

          "... Popovic also established virus-producing lines infected
          with isolates from single patients. One of these, infected
          with virus from a Haitian ["RF"], was included in the patent
          application for the method of mass-producing HTLV-III. This
          virus has since been sequenced and it is as different from
          LAV as ARV is" (p. 643).

       Norman then noted Dr. Gallo's use of "RF" as a defense against
       a charge of misappropriation:

          "Gallo argues that this ought to silence any speculation
          that he deliberately grew the French virus. If he already
          had other lines infected with other viruses, why would he
          sequence the virus from a line he had infected with the
          French isolate?

          Gallo also notes that his group had several virus isolates
          before Montagnier's sample arrived. 'It was no big deal to
          get supernatant. We got that from many patients for a long,
          long time before he sent us this virus,' Gallo says. 'Am I
          going to throw away [my reputation] for a virus that is
          simple to isolate, and then publish its sequence with
          multiple collaborators? It just doesn't make sense.'"

       But, as the OSI report made clear:

          "... the existence of other isolates would not eliminate the
          possibility that the French virus was intentionally
          misappropriated" (p. 15).

       Clearly, the existence of "other isolates" would have no
       bearing on the "misappropriation" issue unless any such
       isolate(s) were demonstrably (1) contemporaneous with LAV and
       (2) as readily useable as LAV  at the juncture  the blood test
       isolate was chosen at the LTCB. In other words, it would never
       be adequate to assert in the abstract as Dr. Gallo frequently
       did, that the LTCB scientists had "other AIDS virus isolates,"
       for in the rush to publish and otherwise claim international
       credit for the discovery of the AIDS virus and the creation of
       the HIV antibody blood test, in the rush to patent the
       invention, weeks -- even days -- counted. Dr. Gallo and his
       associates had some HIV isolates that were genuinely their own.
       No one disputes that this is so. But the crucial questions with
       respect to whether there was a motive for misappropriating the
       IP isolate are these: "Did Gallo et al. have even one other
       isolate at the critical time it was needed for the LTCB blood
       test?" and "Was any such isolate as readily useable as LAV?"

       The answer to these two fundamental questions is clearly "no."
       Review of the laboratory data for RF -- invariably touted as
       the LTCB's best contender to LAI/"IIIB" for the LTCB blood test
       -- demonstrates clearly the inevitable delays that would have
       been occasioned by the use of RF, due to RF's not having been
       scaled-up for large-quantity production. The very fact that RF
       had not been scaled up suggests there may have been concerns
       about its early growth; laboratory data and testimony of LTCB
       scientists show there was cause for such concerns.
       Specifically:

       -- The initial culture history of RF was decidedly unpromising.
          RF was put into short-term culture in mid-November 1983; by
          mid-December, according to Betsy Read-Connole, who worked
          with RF most intensively, the culture was "dying rapidly"
          (Gallo 4/26/90 submission to OSI; p. 2).

       -- The history of RT assays of RF, such as it is, is suspect in
          several respects. RT assays reportedly were not done for at
          least the first two-to-three months of culturing of RF. The
          failure to perform such assays is difficult to comprehend,
          given the importance that Gallo et al. say they assigned to
          this isolate. When queried about this matter, Dr. Gallo told
          OSI that the lack of RT assays on early cultures of RF was
          due to,

          "... an enormous backlog of RT samples to be run in Dr.
          Sarin's laboratory during the period of the RF cultures"
          (9/23/90 Gallo Written Responses to Follow-up Questions;
          Response to Question 4d).

       But according to Dr. Popovic and Ms. Read-Connole, by the time
       RF was in culture, it was  Dr. Sarngadharan,  not Dr. Sarin,
       who was performing RT assays for the LTCB, because Dr. Sarin's
       assays had earlier proven to be unreliable.

       -- Such information as does exist about RT assays on RF casts
          significant doubt on the early viability of the isolate. A
          January 10, 1984 note, in Read-Connole's hand, states
          concerning RF that, "Initial cultures negative for p19, RT
          and EM" (Popovic notebook; page 46).

       -- The early IFA data on RF also were problematic. Tested
          against BRU serum on February 2, 1984, RF produced only 5-6%
          positive readings. On February 20, RF produced only an 11%
          positive reading against ET serum, while against BRU, RF was
          listed only as "+," which Read-Connole told OSI was the
          entry she used for a minimal positive reading. Notably, when
          describing the LTCB's culturing of the IP virus, both Drs.
          Gallo and Popovic repeatedly asserted that low IFA readings
          such as those obtained during the early months for RF,  did
          not indicate successful infection of a permanent cell line.
          Presumably, Drs. Gallo and Popovic would apply the same
          determination to RF, meaning the RF cell line could not be
          considered to be permanently infected until well over two
          months after the initial inoculation.

       -- Finally, on February 29 and March 1, RF produced high
          positive readings against both BRU and ET patient sera, as
          well as against the hyperimmune rabbit antiserum. But the
          February 29 assay also indicated a small positive reaction
          against serum from a patient infected with HTLV-I. In this
          regard, it is very noteworthy that Dr. Popovic, in the list
          of "isolates" he gave Zaki Salahuddin to use in preparing
          the Gallo et al. May 1984 Science  paper, listed RF as
          anti-p19 (HTLV-I) "+/-."

       -- The LTCB had no EM+ reading on RF before October 1984 (even
          though RF was published as EM+ in the May 1984 Popovic et
          al. paper). RF was sent for EMs in December 1983 and January
          1984. Both reports were clearly  negative  for HIV; and Dr.
          Popovic himself later wrote to Dr. Gallo these telling
          words:

          "Because of the lack of EM evidence in the case of HTLV-III
          RF isolate we decided to pursue the isolate(s) obtained from
          pooled culture fluids known as HTLV-IIIb" (Popovic-to-Gallo
          memorandum, 11/28/84; p. 2).

       Dr. Gallo insisted, contrary to the expert opinion of Dr.
       Matthew Gonda, that the early EMs on RF were positive; Dr.
       Gallo even included Dr. Popovic in his (Gallo's assertion):

          "... Dr. Popovic and Dr. Gallo always considered the RF
          culture to be EM positive and reported it as positive in our
          1984  Science  paper ..." (9/23/90 Gallo written responses
          to OSI follow-up questions; Question 4E).

       As evidence for his claim, Dr. Gallo produced an EM of a sample
       labelled "Betsy's cells" (reportedly a code for "RF). Dr. Gallo
       said this sample was sent to Dr. Gonda on March 13, 1984;
       according to Gallo, the sample was EM+ for HIV. But no written
       report was ever produced showing that Dr. Gonda had found
       Betsy's cells to be EM+, and Elizabeth Read-Connole told OSI
       that neither she nor Dr. Popovic had ever seen such a report.
       Read-Connole also told OSI that the "Betsy's cells" EM itself
       was not located at the LTCB until 1990. Thus, this EM could not
       have been the basis for the "+" EM entry for RF in Table 2 of
       the 1984 paper by Popovic et al.

       Despite his assertions that RF was actually EM+, Dr. Gallo
       acknowledged to OSI that the EM results for RF were a factor in
       the decision not to use the isolate for the LTCB blood test.
       Dr. Gallo told OSI:

          "It affected us. We did discuss Gonda's negative reports
          because if it were produced in large amounts it would go to
          Frederick ... and he's saying that, you know, Gonda didn't
          -- He's worried that we're going to have to expand it at
          Frederick, and Gonda is at Frederick and is going to be
          gossiping, 'Oh, I didn't see anything in it'" (4/27/90
          interview, annotated transcript pages 63-66).

       -- RF was not put  into the LTCB's "best grower" clone, H9,
          until June 28, 1984. This attempted infection  did not
          succeed. RT data up to a week later were negative
          (Read-Connole Book 5; p. 35), while IFAs against the
          hyperimmune rabbit antiserum, which were 30-31% positive by
          day 13, by one week later, had fallen to half those values
          (Read-Connole Book 3; p. 49). Consequently, a reinfection of
          H9 with RF took place on July 27, less than a month after
          the first infection occurred. The fact that an H9/RF
          reinfection was required less than a month after the initial
          attempt indicates clearly that if the LTCB had relied on RF
          for its blood test, it quite likely would have confronted a
          much more significant delay than the "two weeks" Dr. Gallo
          frequently cited. "Success" with RF, in other words, was by
          no means assured.

       The subsequent history of RF only reinforces the dubious
       impression of its utility, based on the early data:

       -- RF was not sent for large-scale production until, according
          to Gallo  et al.,  "around the end of November 1984" (Gallo
          submission to OSI on RF; p. 4). This date, if correct, is
          9-10 months after LAI/MOV was sent to LTCB contractors for
          this purpose. But in fact, it is questionable if the
          transmission for large-scale production occurred even at the
          end of November, for in his November 28, 1984 "RF"
          memorandum, Dr. Popovic said that,

          "At the present time we are intensively pursuing the
          single-cell cloning and superinfection of H9 cells and other
          target cells to achieve 80 to 90% positivity for HTLV-III,"

       According to Dr. Popovic, this level of positivity, "should be
       accomplished within a few weeks."

       -- As late as April of 1985 , according to the "large-scale
          production" facility, Electro-Nucleonics, Inc., RF was
          available to be provided to AIDS investigators only in cases
          of "urgent need," due to the presence of mycoplasma in the
          cultures. (Two separate cultures of RF, designated "RF-I"
          and "RF-II," were identified by the laboratory as being
          contaminated. The origins of and distinctions between RF-I
          and -II have not been determined.) According to an April 17,
          1985 letter signed by Dr. John Lemp, Director of the
          Electro-Nucleonics Cell  Science  Laboratory, the laboratory
          did not expect to have a mycoplasma-free RF culture for
          "several months." Thus, even this late, more than one year
          after the LTCB initiated mass production of virus for its
          HIV blood test, RF was not ready for even routine use.

       -- RF-I, at least,  was not  a satisfactory grower. Minutes of
          a July 1985 meeting of the NCI Vaccine Development Group
          record a discussion of the problematic growth of "RF-I,"
          which had been sent to the Frederick facility, presumably
          for mass production for work on an AIDS vaccine. The minutes
          show that the meeting participants, who included Dr.
          Popovic, agreed that RF-I should be replaced with "RF-II,"
          not otherwise identified except as being available from Dr.
          Popovic.

       -- Independent testimony from the scientist at Frederick who
          worked with mass-production of the LTCB's isolates confirms
          the lower productivity of RF. Dr. Larry Arthur, Director of
          the AIDS Vaccine Program at Frederick, told OSI that RF,
          which he received "well after" he first received IIIb,

          "... was a lower producer than the IIIb in our hands"
          (1/28/91 OSI interview; annotated transcript pp. 19-29).

       3. There Was No Time For Delay:   The evidence clearly shows
          that RF was not a viable candidate for use in the LTCB HIV
          antibody blood test; the few other theoretically-available
          isolates  (e.g.,  LS, BK) were even less likely prospects
          than RF. If Dr. Gallo and his associates had had more time,
          they might well have been able to scale up other isolates as
          potential candidates. But  there was no more time.  At the
          point at which the isolate choice was made, Dr. Gallo had
          already told his superiors at the NCI, as well as scientists
          at CDC and at several meetings in Europe about his putative
          discoveries. The Assistant Secretary of Health also had been
          briefed, and provided copies of the four  Science
          manuscripts, which had just been submitted.

       In this regard, it is very notable that Dr. Gallo himself moved
       up the submission date for the papers by a full month,
       indicating clearly the accelerated timetable he had imposed on
       the laboratory. This event in and of itself committed the LTCB
       scientists to "IIIb" as the LTCB prototype, including its use
       in the LTCB HIV antibody blood test. Dr. Popovic told OSI that
       advancing the submission date of the papers meant his paper
       would have,

          "... to focus on HTLV-IIIb as a prototype instead of the RF
          isolate whose origin was more certain" (12/1/90 OSI
          interview; transcript p. 8)

       and

          "At that time when we had to go ahead, the best was IIIb and
          practically it was not difficult to choose whether IIIb or
          RF would be ... but for sure his [Gallo's] choice was IIIb
          ... that time what we have the best, we go ahead. That was a
          decision" (op cit., pp. 115 - 116).

       By April 11, NCI was moving actively to prepare patent
       applications. There was a particular urgency to this effort.
       Unless Gallo et al. filed their United States blood test patent
       application before there was any disclosure of the invention,
       they would forfeit their foreign filing rights. With news of
       the Gallo et al. blood test about to appear, much of it due to
       leaks engineered by Dr. Gallo himself, it was essential that
       the patent applications be filed immediately.

       Under these circumstances, it clearly would have been
       unthinkable for Gallo et al. to suddenly announce a delay of a
       month or more while they attempted to scale up another isolate
       and re-run their blood test data with that isolate, whose
       origins were "more certain" than the isolate they originally
       had chosen. Heterogeneity of HIV had not been discovered at
       this time; thus, there was little reason to fear that the use
       of LAI would be found out. For this reason and because there
       was no more time, the LTCB scientists had no choice but
       LAI/"IIIb" for the LTCB blood test.

       V. COMPARING THE VIRUSES

       A. The HHS Press Conference

       On April 23, 1984, HHS held a press conference for the
       international media. The press conference was scheduled on
       short notice, when news of the LTCB "discoveries" began to leak
       to the public. During the press conference, HHS Secretary
       Margaret Heckler announced that:

          "... the probable cause of AIDS has been found --  a variant
          of a known human cancer virus,  called HTLV-III ... a new
          process has been developed to mass produce this virus ... we
          now have a blood test for AIDS which we hope can be widely
          available within about six months. We have applied for the
          patent on this process today" (emphasis added; press
          conference transcript, p. 4)

       Secretary Heckler, in her written text, spoke of the IP
       scientists' work, particularly their prior discovery of "a
       virus which they have linked to AIDS patients." Secretary
       Heckler said,

          "... within the next few weeks we will know with certainty
          whether that virus is the same one identified through the
          NCI's work. We believe it will prove to be the same"
          (Heckler prepared remarks, p. 3).

       These remarks and others acknowledging the IP contributions --
       remarks added at the insistence of the scientists at CDC --
       were selectively deleted from Secretary Heckler's spoken
       remarks.

       For his part, Dr. Gallo made the aforementioned unsupportable
       claims that he and his colleagues,

          "now have produced more than 50 isolates ... in mass
          production, and in detailed characterization" (op cit., p.
          9) and "... we've been mass-producing it for six months" (op
          cit., p. 31).

       (Note : Dr. Gallo later would tell OSI that by
       "mass-producing," he meant "continuously producing" virus
       [4/26/90 OSI interview; transcript p. 64]. By this definition,
       Dr. Gallo's repeated claims that he did not "mass produce" LAV
       were untrue [see above ]).

       Remarkably, Dr. Gallo also disparaged the IP scientists' virus
       on grounds that it "did not react with the reagents we had."
       This statement was significantly misleading, since (1) LAV did
       react with the LTCB's AIDS/HIV reagents while (2) it not
       reacting with HTLV-I and II reagents, which is exactly what one
       would expect with a truly novel retrovirus. Dr. Gallo went on
       to say that his "HTLV-III" isolates "clearly do belong to the
       HTLV family." Thus, he said, he was not certain that the IP
       virus and his own were the same, although he added this:

          "It's probably because they really didn't have enough
          material. They didn't have enough material to send to us.
          That's what's been the delay. They don't have a mass
          producer. As of a few weeks ago, they didn't have it
          successful in a cell line ... I'm not sure they have enough
          quantity to do everything I'd like to do ... The problem
          before is there could not be a definitive answer from lack
          of amount of material that was sent to us" (op cit., pp.
          31-32).

       Dr. Gallo's press conference claims that he had not received a
       sufficient quantity of the IP virus to compare it with "his"
       virus are belied by the records of his own laboratory, showing
       the extensive culturing and experimentation carried out with
       LAV. In addition, Dr. Gallo's professed uncertainty about
       whether LAV and "HTLV-III" were the same virus were at variance
       with his own utterances in Europe, just weeks before, with Dr.
       Popovic's views -- clearly recorded in the drafts of his paper
       -- and again, by the LTCB's own laboratory notes showing LAV
       and various "HTLV-III" isolates testing the same on a variety
       of assays.

       The tension within the HHS press conference concerning the work
       of the IP scientists vis-a-vis the claims of Gallo et al. was
       but one manifestation of a much broader tension, one that broke
       into public view in the days immediately leading up to the
       press conference. During this period, first the Associated
       Press and then, in a front-page story,  TheNew York Times
       heralded the IP's discovery of LAV, plus the development of the
       LAV antibody blood test. Concerning the blood test, the AP wire
       story cited the IP test's performance in detecting,

          "... evidence of the virus in 80 percent to 90 percent of
          American AIDS patients whose blood samples were sent to
          Paris by the CDC ..."

       The AP story also made clear that the suspected AIDS virus:

          "... is different from the human leukemia virus that Dr.
          Robert Gallo ... and others have suggested is a possible
          cause of AIDS ..."

       The New York Times  story, which ran in the Sunday paper the
       day before the HHS press conference, was even more problematic
       for HHS, for it featured comments by Dr. James Mason, Director
       of the CDC, which had collaborated actively with the IP almost
       from the beginning. The Times story, which led with Mason's
       saying he,

          "... believed a virus discovered in France was the cause of
          the acquired immune deficiency syndrome ..."

       also included the following observations, all of them
       problematic for HHS' imminent announcement of the LTCB's
       "triumphs":

          "Dr. Mason and other scientists familiar with the research
          said that they presumed HTLV-III, LAV and a third virus
          known as IDAV [another IP HIV isolate] were different names
          given to the same virus. But tests have not yet been made to
          determine whether the viruses are the same or not. 'Logic
          would lead you to believe that we are dealing with one agent
          with perhaps some closely related variants,' Dr. Mason said
          ...

          "Isolates of viruses similar to the LAV have been made in
          several laboratories and dozens of papers from these
          research groups are being written or have been submitted to
          medical journals...

          "One of Dr. Gallo's papers concerning HTLV-I and AIDS
          appeared in the issue of  Science  in which the French
          researchers published their results of the LAV virus last
          May...

          "... Dr. Mason said he was speaking out because of the
          urgency of the AIDS epidemic. 'We have to move forward on
          the assumption that this virus [LAV] is the cause in order
          to speed up trials of possible new therapies for the
          patients who are dying from AIDS,' Dr. Mason said."

       Dr. Mason's candid observations, entirely truthful, nearly cost
       him his job. Dr. Edward Brandt, the Assistant Secretary of
       Health, heard about the  New York Times  story in a Sunday
       morning telephone call from C. McLain Haddow, Margaret
       Heckler's Chief of Staff. According to Brandt's statements to
       Subcommittee staff, Haddow "turned the air blue" expostulating
       about Mason's account to the  Times.  Haddow demanded that
       Brandt call Mason to account. Later the same day, according to
       Dr. Brandt, Haddow described Mason's interview with the  New
       York Times  as "a deliberate embarrassment"; Haddow also
       reportedly told Dr. Brandt that Dr. Mason should be fired.

       The next day, Dr. Mason arrived at HHS, where, according to Dr.
       Brandt, he and Mason met alone. Dr. Brandt said that some time
       earlier, Dr. Mason had told him about the IP scientists'
       discovery of the probable AIDS virus and development of an HIV
       antibody blood test. Documentary evidence substantiates this
       account. Dr. Brandt mentioned in particular that on the day of
       the press conference, Dr. Mason told him about the
       "triple-sample" testing (i.e., the CDC comparative serology).
       Brandt said he came away from his meeting with Mason convinced
       that Mason believed the IP scientists deserved the credit for
       the discoveries attributed to them in the  New York Times
       story.

       Dr. Mason told Subcommittee staff he had a vivid recollection
       of being severely scolded by one of Secretary Heckler's senior
       "public affairs" officials. Dr. Mason said this official
       accused him of "demeaning the American contribution" to AIDS
       research and of having "embarrassed Secretary Heckler." Not
       surprisingly, it was a very subdued James Mason who appeared at
       the HHS press conference.

       By the time of the HHS press conference, Dr. Brandt had
       determined it was imperative that a careful comparison of
       "HTLV-III" and LAV be carried out, not to determine if the
       viruses were genetically identical, for at the time, this issue
       had not been raised, but to determine if the viruses were the
       same type and were both the cause of AIDS. (Drs. Gallo and
       Montagnier agreed between themselves to compare the viruses,
       during Gallo's visit to the IP, two weeks before the HHS press
       conference.)

       Dr. Brandt told Subcommittee staff the imperative for the virus
       comparisons was partly "political,"  i.e.,  the press and the
       world were demanding to know if the viruses were the same. But
       also, said Dr. Brandt, the comparison was a matter of public
       health concern, since development of a blood test, development
       of possible vaccines, and development of potential treatments
       all might vary, if in fact there were two distinct viruses
       etiologically associated with AIDS. Dr. Gallo, in contrast,
       asserted to Subcommittee staff that comparisons of the viruses
       "did not affect public health." But Dr. Brandt told
       Subcommittee staff he considered comparison of the viruses and
       development of the HIV antibody blood test as his highest
       priorities, during the days and weeks immediately following the
       HHS press conference.

       Accordingly, by Dr. Brandt's account, the very day of the press
       conference, he relayed an order to Dr. Gallo, via NCI Director,
       Dr. Vincent DeVita, to move immediately to compare the viruses.

       B. Comparisons in the Spring/Summer of 1984

       Three kinds of comparisons of LAV and HTLV-III (with IIIb as
       the prototype) were carried out in the Spring and Summer of
       1984. No results from these comparisons were ever published.

       1. Serological Comparisons:

       A paper describing the results of the serological comparisons
       based on the CDC samples (see above ) was written, but never
       published. Dr. Gallo evidently did not favor publication of
       this paper. A draft, prepared by CDC scientist Dr. Donald
       Francis, concluded this:

          "Overall a high proportion of patients' serum reacted in all
          laboratories whether HTLV-III or LAV prototype strains were
          used as antigens."

       The draft manuscript containing these observations was sent to
       Dr. Gallo for his comments. When Gallo responded, two months
       later, he did not deal with the contents of the paper. Instead,
       Gallo questioned the very existence of the paper, telling Dr.
       Francis that:

          "... I hardly think this [the serological comparison]is very
          important since  we have said from the first that the
          viruses are likely to be the same,  and since the data was
          obtained all of us have publicly reported it. A comparison
          of sera with both is nice but not of any real concern"
          (emphasis added; 12/27/84 Gallo-to-Francis letter).

       Dr. Gallo also told Dr. Francis that until the IP and LTCB
       scientists published their own comparisons of their virus
       isolates,

          "... neither you nor anyone else should be making
          serological comparative papers."

       Dr. Gallo devoted the bulk of his letter to Dr. Francis to a
       declamation on the merits of "HTLV-III" as the designation for
       the AIDS virus. Dr. Gallo was particularly exercised at
       Francis' use of the term "LAV/HTLV-III." Gallo told Francis:

          "I think it is silly ... for you to persist in the LAV
          (first) HTLV-III nomenclature ... LAV is clearly an
          inaccurate name and AIDS virus or AIDS related virus is the
          dumbest name I have yet heard... Clearly, human T
          lymphotropic virus III is as accurate, as innocuous, and as
          consistent with the past ... as any name possible."

       Dr. Gallo went on to assert that,

          "... last June, Jim Curran and Dr. Murphy assured me this
          would be the CDC name when our lines(s) and other reagents
          were distributed."

       But when Dr. Francis passed a copy of Gallo's letter to Murphy,
       querying him, "What was the deal," Murphy responded, in
       writing, "I don't recall any deal whatsoever regarding names."

       Dr. Gallo further said in his letter to Dr. Francis that, "If
       LAV procedes (sic) HTLV-III in this paper as a title then I
       will be last author. If not, I don't care who the last author
       is." Dr. Gallo added this ultimatum:

          "One or the other Don, but not both for your friends
          abroad."

       And Gallo added to the version of the letter transmitted to Dr.
       Francis,

          "If there is a problem for you then let's just forget the
          whole thing."

       Apparently, at least as far as Gallo was concerned, "forgetting
       the whole thing" is precisely what happened. In his letter to
       Francis, Dr. Gallo promised that he and his LTCB colleagues
       "will make our input to you soon" concerning the contents of
       the serology paper. But according to Dr. Francis, there were no
       further communications from the LTCB scientists concerning the
       paper.

       2. Immunological (Proteins) Comparisons:

       Besides the serological comparisons, immunological comparisons
       of the viral proteins and molecular comparisons of the nucleic
       acids also were carried out. Two manuscripts resulted.
       Scientists from both the IP and LTCB were coauthors on both
       papers; the "proteins" paper was authored principally by the IP
       scientists (Chermann et al.), although the LTCB scientists
       performed several of the reported experiments. The nucleic
       acids paper was written by LTCB scientist, Dr. Flossie
       Wong-Staal. Neither paper was ever published.

       The comparisons of the viral  core proteins of LAI/LAV and
       LAI/IIIb were accomplished by early-June 1984. These
       comparisons were initiated in mid-May, when Dr. M. Sarngadharan
       travelled to Paris, taking with him samples of "H9/HTLV-IIIB,"
       both lysate and live virus. The decision to send a live cell
       line to the IP scientists seems to have represented a
       unilateral, last-minute change in plans at the LTCB. It was a
       decision that would have significant consequences. According to
       Dr. Montagnier:

          "At the beginning, the agreement was that we would not
          exchange live virus, but only detergent-treated lysates. But
          at the last minute, he changed his mind [Gallo] and on May
          15, 1984, his associate Dr. Sarngadharan brought live
          HTLV-IIIb growing in H9 cells to our lab" (6/12/91
          Montagnier-to-Hadley letter, p. 2).

       Dr. Montagnier's receipt of live virus  from the LTCB, in May
       1984, would later be used by Dr. Gallo as the basis for an
       accusation that Dr. Montagnier had contaminated his LAV with
       the LTCB's IIIb (see below ). Dr. Sarngadharan's OSI testimony
       did not illuminate why he took live virus as well as lysate; in
       fact, the testimony made it clear that the agreed-upon
       immunological comparisons depended on lysate, not live virus.
       Dr. Montagnier, who had not asked for live virus, may actually
       have harbored suspicions that he was being "set up," since,
       according to Dr. Sarngadharan, he (Montagnier) suggested that
       he might destroy the live virus sample (6/13/90 OSI interview;
       annotated transcript p. 56).

       The virus lysate that Dr. Sarngadharan took to Paris was used
       for proteins comparisons carried out in mid-May. The IP view of
       these experiments was expressed in a May 21, 1984 telephone
       call from IP scientist Dr. Jean-Claude Chermann to the CDC's
       Dr. Donald Francis. According to Francis' notes, the
       information about the experiments conveyed by Chermann was
       this:

          "Competition -- Sarang -- infected cells: competition by
          Francoise -- p25 [the viral core protein] same ... French
          side of comparison done."

       Dr. Gallo himself, writing to Dr. Montagnier, later said this
       about these experiments:

          "We have sent Sarngadharan to you to compare the proteins of
          LAV and HTLV-III using our hyperimmune sera to HTLV-III. As
          you know, there is substantial cross-reaction as
          anticipated" (7/3/84 Gallo-to-Montagnier letter; p. 1).

       Dr. Sarngadharan  brought lysate of the IP virus back with him
       to Bethesda; in early June, he used the lysate to perform both
       Western blot and homologous competition assays. The latter
       experiment produced curves of precisely the same slope for LAV
       and IIIb, showing, according to Dr. Sarngadharan, that the
       viruses were identical in their antigenic determinants (op
       cit., p. 108). It is noteworthy that the PTO Examiner of the
       Gallo and Montagnier blood test patent applications told
       Subcommittee staff she had no idea that comparisons of the
       viral core proteins of LAV and IIIb were carried out as early
       as the Spring of 1984. The Examiner said this information was
       clearly material to her examination of Gallo  et al.,  and
       should have been disclosed to PTO. Substantiating this
       assertion, when a paper by another group of scientists (Casey
       et al.), reporting similar results, was published in August
       1985, the examiner cited it in support of her determinations
       that LAV and HTLV-III were the same virus and the work of
       Montagnier et al. was prior art to Gallo et al.

       The comparisons  of the viral core proteins demonstrated the
       essential functional identity of the IP and LTCB prototype
       viruses, while the results of the Western blot experiments
       indicated that the IP scientists' failure to demonstrate the
       presence of the key envelope protein, gp41, was due to
       methodological deficiencies, rather than any real difference in
       the IP and LTCB viruses. Consequently, Dr. Gallo and his
       associates, around mid-June of 1984, made several on-the-record
       statements to the effect that the IP and LTCB viruses were
       "closely related." Thus:

          "'There is data now that they could belong to the same virus
          group of the same virus family,' said Gallo head of the team
          that made the American discovery" (June 14, 1984; Washington
          Post).

       And in a paper whose senior author was Dr. Sarngadharan, the
       LTCB scientists used the results of the proteins studies to
       induct the IP virus into the HTLV-III family:

          "Additional observations of a retrovirus  likely belonging
          to the HTLV-III group  were independently made by other
          investigators. A virus designated lymphadenopathy associated
          virus (LAV) was first reported in cultured lymphocytes from
          a patient with lymphadenopathy by Barre-Sinoussi et al.
          (1983). The same group also reported additional isolates
          called IDAV, from patients with AIDS (Vilmer  et al.,
          1984). Preliminary comparisons between these viruses and
          HTLV-III demonstrated that they are closely related"
          (Sarngadharan  et al.,  "Seroepidemiological Evidence for
          HTLV-III Infection as the Primary Etiologic Factor for
          Acquired Immunodeficieny Syndrome" (May 1984; Scientific
          Symposium of the American Red Cross; Published in Dodd, R.Y.
          and Barker, L.F. (Eds.),  Infection, Immunity, and Blood
          Transfusion,  Alan R. Liss, Inc., New York, 1985).

       In June 1984, approximately one month after the Red Cross
       symposium, Dr. Sarngadharan was quoted in a story in  JAMA,
       the lead of which was this:

          "... there is mounting belief that the retrovirus recently
          identified by National Cancer Institute (NCI) investigators
          (Bethesda, MD) and the lymphadenopathy virus (LAV) reported
          last year by a group at the Institut Pasteur, Paris ... are
          the same.

          "... from the pattern of antibody reactions, I would be
          surprised if there is very much difference,' said M. G.
          Sarngadharan, Ph.D., ... a member of the NCI group"  (JAMA,
          June 8, 1984, 251, No. 22; p. 2901).

       The contents of the Chermann et al. paper, reporting the
       results of the immunological comparisons of LAV and IIIb show
       how definitive were those results. This paper, which Gallo and
       his associates coauthored, contained the following significant
       passage in the introduction:

          "Two human retroviruses have been recently implicated as the
          causative agents of Acquired Immune Deficiency Syndrome
          (AIDS). The first virus described was designated
          Lymphadenopathy Associated Virus (LAV) ... Another human
          virus, named HTLV-III has been also recently identified as a
          prime candidate for AIDS ...  Several lines of evidences
          (sic.)  argue strongly that both viruses, LAV and HTLV-III,
          are similar and are indeed the primary cause of AIDS"
          (Emphasis supplied; "Comparative Immunological Properties of
          LAV and HTLV-III'; p. 1).

       Chermann et al. elaborated on the lines of evidence pointing to
       the functional identity of the IP and LTCB isolates:

          "They both show a preferential tropism for OKT4+ T
          lymphocytes ... and have cytopathic effects on this target T
          cells (sic.) ...  A high prevalence of antibodies to each of
          the viruses have been found in the sera of patients with
          AIDS or pre-AIDS  ... and both viruses have been frequently
          isolated from all individuals at risk for the disease"
          (Emphasis added; op cit., p. 1).

       So far as is known, Dr. Gallo and his colleagues never disputed
       these statements. Yet during the blood test patent dispute, in
       contrast to the statement in the Chermann et al. paper that "a
       high prevalence of antibodies to each of the viruses have been
       found in sera of patients with AIDS or pre-AIDS," Dr. Gallo
       wrote to Peter Fischinger in August 1985 that Montagnier  et
       al.,

          "... presented data of only 20% sera reacting with their
          isolate. With HTLV-III we had 90% or better" (8/29/85
          Gallo-to-Fischinger memorandum, p. 1).

       Similarly, in September 1985, Dr. Gallo wrote to Dr. Fischinger
       that the IP blood test results were "inconclusive" (9/18/85
       Gallo-to-Fischinger memorandum, p. 3). And the "Fischinger
       report" itself, endorsed as accurate by Dr. Gallo, asserted
       that the IP's blood test data, in July 1984, were "numerically
       much less firm" than the LTCB data.

       The Chermann et al. manuscript also contained the important
       information that LAV had been grown on the H9 cell line. This
       information would take on added significance during and after
       the blood test dispute, when Dr. Gallo would claim Dr. Popovic
       had not been able to grow LAV in H9, and thus, there was reason
       to believe LAV was a different virus than IIIb. The information
       in the Chermann et al. manuscript cast significant doubt on Dr.
       Gallo's assertion.

       The "Results" section of the Chermann et al. paper began with
       this significant observation:

          "Several reports on the characteristics and properties of
          either LAV ... or HTLV-III suggest that these viruses are
          probably the same or closely related viruses" (op cit., p.
          4).

       The "Discussion" section of the paper said this:

          "... the pattern of antigenic immune recognition presented
          here demonstrates that LAV and HTLV-III are antigenically
          identical" (op cit., p. 6).

       and

          "... these results indicate that LAV and HTLV-III are either
          the same virus or variants belonging to a (sic.) same family
          of retroviruses" (op cit., p. 5).

       None of these results was ever communicated by Gallo et al. to
       the PTO, where as late as November 1984, the LTCB blood test
       patent application was being examined. And notwithstanding the
       statement in Chermann et al. that,

          "Several lines of evidences (sic.) argue strongly that both
          viruses, LAV and HTLV-III, are similar and are indeed the
          primary cause of AIDS,"

       Dr. Gallo said in his November 1986 sworn declaration:

          "... I was satisfied that HTLV-III had been proven to be the
          cause of AIDS, but I saw no evidence of this for LAV up
          through the allowances of the Gallo patent" (11/8/86 Gallo
          declaration; p. 14).

       Dr. Gallo now says  that the reference in his declaration to
       "no evidence" that LAV was the cause of AIDS was exclusively a
       reference to the published literature, not a general,
       all-encompassing reference. The declaration, manifestly,
       contains no qualification limiting Dr. Gallo's claim to the
       published literature. Moreover, even if the statement was
       explicitly limited to the published literature, it still would
       not be correct, since a substantial number of papers published
       in leading scientific journals by the November 1984 allowance
       of the Gallo et al. blood test patent, including papers
       coauthored by some of Dr. Gallo's own colleagues, contained
       evidence demonstrating that the IP virus was the cause of AIDS.
       These papers include but are not limited to the following:
       Brun-Vezinet  et al.,   The Lancet,  1984, pp. 1253 - 1256;
       Klatzmann  et al.,   Science,  225, 1984, pp. 59 - 62; Feorino
       et al.,   Science,  225, 1984, pp. 69 - 72; Kalyanaraman  et
       al.,   Science,  225, 1984, pp. 321 - 323; Melbye  et al.,
       The Lancet,  1984, pp. 40 - 41); Mathez  et al.,  The Lancet,
       1984, p. 460; Cheingsong-Popov  et al.,   The Lancet,  1984,
       pp. 477 - 480.

       The failure to disclose to PTO the conclusions contained in
       Chermann  et al.,  plus a number of other papers at around the
       same time, did not relate merely to the Gallo et al. parent
       blood test patent application. More detailed declarations than
       those in the parent application, denying prior art, were made
       by Gallo  et al.,  in July and August 1984, in submitting two
       CIPs to the parent application. In submitting these
       applications, (one for isolation and detection of antibodies to
       the core protein of "HTLV-III," (the 610 CIP), one for
       "immunological test kits" for assaying retroviruses such as
       HTLV-III (the 715 CIP), Gallo et al. said, under penalty for
       making false statements, that

          "... we verily believe ourselves to be the original, first
          and joint inventors"

       of the claimed invention. Further, Gallo et al. declared,
       concerning the material common to the parent and the CIP
       application that:

          "... we do not know and do not believe that the same was
          ever known or used in the United States before our invention
          thereof or patented or described in any printed publication
          in any country before our invention thereof ..."

       By the time these affirmations were made by Dr. Gallo and his
       associates, they knew that LAV and IIIb were  at least
       functionally identical (and that LAV had been discovered long
       before the putative "IIIb"). They also knew that the IP blood
       test, invented many months before the LTCB test, was fully the
       equal of the latter test. Yet despite the PTO requirement for
       disclosure of material information obtained at any time during
       the prosecution of a pending patent, Gallo et al. made no
       disclosure of these clearly material facts to PTO.

       3.  Molecular (Genetic) Comparisons:

       The immunological comparisons of LAV and IIIB, significant as
       they were, did not touch on the issue that soon would become
       the focal point of the French/American dispute, namely, the
       genetic identity of the isolates, particularly, whether IIIb
       was derived from LAV. This issue was reflected in molecular
       comparisons of the nucleic acids of LAV and IIIb, comparisons
       conducted at the LTCB in the Spring and Summer of 1984.

       The circumstances and results of these comparisons were never
       thoroughly examined prior to the Subcommittee's investigation.
       OSI was misled and disadvantaged by being given false and
       significantly incomplete information, and thus failed to
       recognize telling discrepancies that, when examined by
       Subcommittee staff, led to important new revelations.

       Dr. Gallo told OSI that the first molecular comparisons of LAV
       and IIIb occurred in,

          "... August to September 1984 after an HIV probe was
          available" (5/25/90 OSI interview; transcript p. 49).

       According to Dr. Gallo's testimony, this comparison used DNA
       from a LAI/LAV sample ("LAV/B") Dr. Popovic had recently
       received (in July 1984) from Paris. The reason Dr. Gallo asked
       for this sample is not entirely certain, although it may be
       inferred from what happened thereafter. There was ample LAV
       remaining from that received in September 1983, including the
       freezes of the LAI permanent cell lines. Whatever Dr. Gallo's
       intent was in making the request, the fact is that the LAV/B
       supplied in response to the request became the vehicle for a
       "reverse contamination" accusation aimed at the IP scientists.

       In addition, Drs. Gallo and Popovic repeated many times the
       charge that the LAV/B sample they received was contaminated
       with an animal retrovirus. Concerning the LAV/B sample, Dr.
       Gallo said this:

          "This is a B cell line ... which we know has contamination.
          It was for a monkey retrovirus. This was cultured for a
          short time and given to Beatrice Hahn for DNA analysis. The
          cells were found to be contaminated -- Popovic found they
          were contaminated with squirrel monkey retrovirus ...
          Therefore, he didn't keep these cells in culture. The
          contamination was due to the Paris group's use of BJAB, a B
          cell line now know (sic.) to be contaminated with this
          lentivirus ... They should never have used that line" (op
          cit., p. 50).

       But the evidence  shows that the LAV/B cell line received at
       the LTCB in July 1983 was not a BJAB line, but the
       EBV-transformed "FR8" line, the same line deposited by
       Montagnier et al. at the CNCM, in May of 1984. Moreover, there
       is no evidence that the LTCB scientists treated LAV/B as a
       suspect, possibly contaminated line. Rather, the evidence shows
       that the LTCB scientists grew up and extracted DNA from B/LAV,
       and performed a number of significant experiments with it,
       experiments that -- as described below -- showed LAV/B and
       "IIIb" were genetically identical.

       Dr. Gallo told OSI that the August/September 1984 LAV/IIIb DNA
       comparisons, in addition to LAV/B, also included a DNA sample
       designated as "AM." (A prior, undated LAV/IIIb comparison
       experiment -- in Dr. Beatrice Hahn's notebook -- included only
       IIIb and LAV/B.) Concerning the AM sample, Dr. Gallo described
       it as follows:

          "The AM DNA possibly, it is almost certainly -- refers to
          Ti7.4/LAV cells because the origin of that cell line, Ti7.4,
          is Abby Maizel, which Dr. Popovic remembers giving to Dr.
          Hahn, but neither Popovic or Hahn is certain of the identity
          of this DNA ...  The AM DNA did not show the same
          restriction enzyme pattern as IIIb.  So this is the
          confusion now. We begin now to document the source of the
          confusion" (emphasis added; op cit., p. 50).

       Dr. Gallo described another series of LAV/IIIb molecular
       comparisons, conducted in the Fall of 1984:

          "The final analysis of LAV DNA was carried out on November
          27, '84 with DNA received directly from Chermann. This DNA
          hybridized to the HTLV-III probe, that would be IIIb ...
          November 27, however, '84 is long after there is reagents on
          both sides of the ocean.

       The CEM LAV and the HTLV-IIIb DNAs gave identical results with
       the restriction enzymes used. So that is our first comparison
       we are the same, but it comes from the November DNA, November
       27th DNA. They had had for many, many months by then our IIIb
       producer cell line" (op cit., p. 51).

       There are a number of significant points to be made concerning
       the above remarks by Dr. Gallo:

       -- the claim that the first molecular comparisons of LAV and
          IIIb were carried out in August/September 1984 is
          inconsistent with other statements by Dr. Gallo indicating
          such comparisons occurred as early as June 1984 (see below
          for information concerning these other statements);

       -- the claim that the "AM" sample (of uncertain identity but
          believed to be Ti7.4/LAV) "did not show the same restriction
          enzyme pattern as IIIb" is misleading. The statement is
          contradicted by Dr. Gallo's own testimony elsewhere to OSI
          that the AM sample,

          "... could be a subset of the clones in HTLV-III (i.e.,
          HXB2)" (Supplement to IIIb Exhibit 24B; Part 1, p. 3).

       Confirming these statements by Dr. Gallo, Dr. Beatrice Hahn,
       the LTCB scientist who performed the August/September
       comparisons of the "AM," "B/LAV," and IIIb DNAs, told
       Subcommittee staff the AM DNA had "one form of the various
       forms that are in IIIb," i.e., the HXB2 clone. It is important
       to note that by the time of the August/September comparisons,
       the LTCB scientists had already characterized the HXB2 clone,
       and thus, would have known the AM DNA was identical to this
       IIIb clone.

       -- the assertion that the November 1984 CEM/LAV -- IIIb DNA
          comparison "is our first comparison we are the same" is not
          correct. By Dr. Gallo and Dr. Hahn's testimony, LAV/IIIb
          comparisons from months before, including but not limited to
          the "AM" sample (which dated from September 1983) and the
          B/LAV sample received at the LTCB the previous July, showed
          the IP and LTCB viruses were genetically identical;

       -- the observation that the November 1984 results showing LAV
          and IIIb were genetically identical were based on LAV obtained
       from Paris after the IP scientists "had had for many, many
       months by then our IIIb producer cell line" is significantly
       misleading. The implication of this observation is that the IP
       scientists contaminated their cell lines with IIIb, when the
       live virus was sent to Paris in mid-May 1984. But at the time
       Dr. Gallo made this statement to OSI, in May of 1990, he had
       known for over a year that genetic tests had shown to a high
       statistical probability that his virus had to be descended from
       the IP virus, not the reverse (see below  for further
       information on this point).

       Furthermore, evidence from the LTCB itself shows that by at
       least as early as December 1984, the LTCB scientists possessed
       information that cast significant doubt on any possible
       "reverse contamination" of the IP virus by IIIb. The evidence,
       a page in Dr. Hahn's notebook "IV," is headed, "First Patient
       LAV-1"; the page appears to contain a history of the culturing
       of the IP isolate, during 1983 - 1984 (the unnumbered page
       appears between numbered pages 44 and 45 in Dr. Hahn's
       notebook). Particularly relevant to the present discussion, the
       page shows that the IP virus, "frozen" in "September 1983," was
       "thawed" and used to infect the CEM cell line in September
       1984. This LAV/CEM cell line presumably is the cell line
       provided by Dr. Chermann to the LTCB scientists (notably, the
       page in Dr. Hahn's notebook contains the entry, "J.C. Cherman
       [sic.] 12/10/84]).

       This "First Patient LAV-1" notebook page is important because
       the chronology contained on the page shows that the CEM/LAV
       cell line -- the cell line that, by Gallo's own admission was
       "identical" to IIIb -- was infected at the IP with LAV from a
       freeze made  the previous September,  not LAV that post-dated
       the transmission of IIIb to the IP scientists, i.e., LAV/B.
       This information, in conjunction with the LTCB scientists'
       information that their own cell line, Ti7.4/LAV --  also dating
       from the previous September  -- was identical with IIIb,
       rendered impossible both the "reverse contamination" scenario
       and other scenarios posited by Gallo et al. to explain the
       genetic identity of the LTCB and IP prototype viruses (see
       below ).

       As the Subcommittee staff began to review this matter ,
       evidence began to emerge that there were other LAV/IIIb
       comparisons performed at the LTCB, in the Spring/Summer of
       1984, comparisons not disclosed to OSI. The first piece of
       evidence to this effect was the manuscript by Wong-Staal
       reporting the results of the molecular comparisons of LAV and
       IIIb (hereafter, the "Lancet manuscript"). Dr. Gallo did not
       provide this manuscript to OSI; in fact, he told OSI the paper
       was "never written" (4 /17/90 "HTLV-IIIb" List of Exhibits; p.
       16).

       A copy of the manuscript reached OSI anonymously; when Dr.
       Gallo was confronted with it, he confirmed its authenticity.
       Dr. Gallo then revised his account from the assertion that the
       manuscript was "never written" to the assertion that he had
       been unable to locate it. The manuscript was an important
       source of new information. In particular, the Subcommittee
       staff's review of the manuscript revealed that it reported a
       set of comparison experiments different from the
       August/September experiments described by Dr. Gallo to OSI,
       i.e., different enzymes were used and several DNA samples other
       than those in the August/September experiments were analyzed.
       Of particular note, the Lancet manuscript specifically stated
       that Ti7.4/LAV was analyzed, although the manuscript did not
       make clear this was the LAV received the previous September.

       Most important of all, the results actually reported in the
       Lancet  manuscript -- scanty as they were -- showed that
       Ti7.4/LAV and IIIb appeared to be  genetically identical;  yet
       the manuscript asserted, contrary to the reported results,
       that,

          "... LAV and HTLV-III are  independent isolations  of the
          same virus" (emphasis supplied; Wong-Staal et al., p. 7).

       The Lancet manuscript also obliquely alluded to other results,
       which allegedly,

          "... showed that each virus isolate, including LAV, could be
          distinguished provided enough restriction enzyme cleavage
          sites were examined..."

       But the referenced results -- that allegedly distinguished the
       IP and LTCB viruses -- were not included in the paper, and it
       seems impossible that they actually existed. The reality is
       that LAI/LAV and LAI/"IIIb"  are  the same isolate, were
       derived from the same person. And evidence obtained by the
       Subcommittee staff shows that Dr. Gallo himself had come to
       that determination in the Summer of 1984 (see below ).

       A second piece of evidence indicating the performance of
       LAV/IIIb comparisons other than those reported to OSI by Dr.
       Gallo is a letter from Dr. Gallo to IP molecular biologist Dr.
       Simon Wain-Hobson. In July of 1991, following the publication
       in  Science  of the Wain-Hobson et al. paper, reporting the
       origins of the prototype LAV in patient LAI, Drs. Gallo and
       Wain-Hobson had an exchange of letters about the IP and LTCB
       analyses of archived samples of LAV. In one of these letters,
       Dr. Wain-Hobson chided Dr. Gallo for claiming there were no
       "M2t/B/LAV derivatives" remaining at the LTCB that could have
       been analyzed and compared with IIIb (M2t/B/LAV was the
       September 1983 LAI/LAV sample used by Dr. Popovic to infect the
       Ti7.4 and HUT-78 cell lines). Dr. Wain-Hobson asserted he had
       been told by some of Gallo's own LTCB associates that samples
       of M2t/B/LAV  did  exist.

       Dr. Gallo's July 24, 1991 response to Dr. Wain-Hobson adverted
       to comparisons of September 1983 LAV with IIIb and indicated
       those comparisons showed the isolates were  genetically
       identical.  Here is what Dr. Gallo said:

          "You say that we had M2t/B derivatives available to us. I
          imagine this is your greatest misunderstanding. This is not
          the case. The only Ti7.4/LAV remnant that we have been able
          to locate is a Southern blot performed by Beatrice Hahn with
          four to six enzymes using DNA from a culture grown in the
          Summer of 1984. This pattern looked like that of IIIb and
          LAV-1, but  we had a number of other samples at the time,
          which looked like IIIb. These all occurred in one incubator,
          and fortunately did not harm our several other independent
          isolates like RF, MN, JS and SC, which were cultured and
          kept elsewhere in the lab. Our conclusion was that we had a
          serious contamination problem, and as a result, the validity
          of the blot with Ti7.4 was very much in question. We could
          not find any freezes of cultures of Ti7.4 despite a very
          extensive search through our freezers. It was apparently
          long ago thrown out by Mika (Emphasis in original; 7/24/91
          Gallo-to-Wain-Hobson letter)."

       There are several remarkable aspects to Dr. Gallo's account to
       Dr. Wain-Hobson of the LTCB's use of Ti7.4/LAV for comparison
       experiments. The most important points are that: (1) Ti7.4/LAV
       (M2t/B) was used, i.e., the LAV received at the LTCB in
       September of 1983; (2) the results showed that LAV "looked like
       that of IIIb" and "Our conclusion was that we had a serious
       contamination problem", i.e., LAV and IIIb were genetically
       identical; and (3) the allusion to the LTCB's having "a number
       of other samples at the time, which looked like IIIb." The
       latter allusion dates the LAV/IIIb comparison to May/June 1984,
       because, according to other testimony by Dr. Gallo and his
       associates, this was the time at which they discovered the
       existence of several samples supposedly contaminated by
       LAI/"IIIb."

       However, it is important to note that the existence of
       (apparently)  bona fide  "IIIb"-contaminated samples did not
       provide a basis for Dr. Gallo's attempted dismissal of the
       results of the LAV/IIIb comparison. The other allegedly
       IIIb-contaminated samples were grown in the H9 cell line, and
       according to Gallo, H9 was the likely vehicle by which the
       supposed contamination occurred. But there was no H9 involved
       in the Ti7.4/LAV culture; thus the occurrence of apparent
       H9/IIIb contamination of other LTCB cultures did not explain
       why LAV and IIIb were genetically identical; neither did it
       show that "IIIb" had contaminated LAV, and not the reverse.

       Besides the  Lancet  manuscript and the July 1991
       Gallo-to-Wain-Hobson letter, other statements by Dr. Gallo
       alluded to the possibility of LAV/IIIb comparisons well before
       the August/September 1984 experiments described by Dr. Gallo as
       the first molecular comparisons in 1984.

       In the initial interview of the OSI inquiry, Dr. Gallo said
       this:

       Shortly  after our papers appeared in May '84, three of these
       isolates, RF, MN, and JS, as well as the IIIb, of course, were
       analyzed and shown to be distinct from HTLV-I and HTLV-II, from
       each other by restriction endonuclease analyses. RF, MN, and JS
       were also shown to be very different from LAV, but IIIb was
       similar to LAV" (4/8/90 OSI interview; annotated transcript p.
       34).

       Elsewhere in the same interview, Dr. Gallo returned to the
       early molecular comparisons, this time providing important
       additional information:

          "Originally when the restriction maps gave the same pattern
          [LAV and IIIb] we were not so surprised. The restriction
          maps of HTLV-I are usually the same, as are many animal
          retrovirus isolates. Then we got RF and a couple of other
          isolates that showed differences ..." (op cit., p. 43).

       Particularly significant in the above passage is the reported
       order  of the experiments -- first LAV and IIIb were compared
       and found the same,  after which  RF and other isolates were
       found to be clearly different. The experiments with "RF" are
       known to have been performed on June 5, 1984, which means the
       LAV/IIIb comparisons were performed late May/early June.

       In his book  Virus Hunting,  Dr. Gallo said this:

       About  this time (June-July 1984) Wong-Staal compared the
       genetic material of LAV with our isolates ... we learned that
       there was considerable variation in the viral genome when
       comparing one isolate to another ...

       "Last, and most unsettling, we discovered that one of our own
       HTLV-3B isolates was much closer to LAV than was typical of our
       other isolates ... Practically all were genetically different
       from one another. Yet LAV and our IIIb isolate(s) were
       distinctly close to each other" (pp. 197-199).

       Thus, from a multiplicity of perspectives, there is evidence
       that LAV/IIIB comparisons were performed, most likely in
       early-Summer 1984, comparisons that showed the two purportedly
       independent isolates actually were the  same isolate,
       comparisons not disclosed to OSI. Importantly, those
       experiments were performed using the LAV received at the LTCB
       in September 1983, not the LAV received in the Summer of 1984.
       Because of these circumstances, there was no way the genetic
       identity of LAV and IIIb could be ascribed to a contamination
       in Paris.

       When Dr. Gallo was questioned by Subcommittee staff about these
       matters, he acknowledged there were earlier LAV/IIIB
       comparisons than those he reported to OSI. However, Dr. Gallo
       was unable, during the staff interview, to account for the data
       from the earlier experiments, although he continued to pursue
       the matter in follow-up telephone contacts with Subcommittee
       staff. During these contacts, Dr. Gallo at first asserted that
       "there are no new data." Gallo asserted that "if it's in the
       paper [the  Lancet  manuscript], we have data for it," and he
       claimed that all the relevant data were in the hands of OSI.
       Later, Dr. Gallo retreated from those assertions (see below).

       In one follow-up contact, Dr. Gallo pointed to an experiment
       dated July 19, 1984, the protocol for which is found in Dr.
       George Shaw's notebook #3. Dr. Gallo suggested this was one
       experiment that might be relevant to the Wong-Staal et al.
       paper. The experiment to which Gallo referred, headed
       "Characterization of AM infected line," is one of the
       experiments for which Drs. Shaw and Hahn's data are
       unaccountably missing; thus, the results of the experiment are
       unknown. However, the date of the experiment and some aspects
       of its design indicate it might be the Ti7.4/LAV-IIIb
       comparison experiment referenced in Dr. Gallo's 1991 letter to
       Simon Wain-Hobson, in which, according to Gallo, the Ti7.4/LAV
       restriction pattern was identical to IIIb. However, both the
       enzymes utilized and the DNAs analyzed are different from those
       reported in the  Lancet  manuscript. Thus, it is clear the July
       10 Shaw experiment is not the one reported in this manuscript.
       The data for the manuscript, therefore, have never been
       produced.

       Dr. Gallo stated in follow-up telephone contacts with
       Subcommittee staff that his personal attorney, Joseph Onek, had
       in his possession data or copies of data that might include the
       data Drs. Shaw and Hahn said they could not find. Dr. Gallo
       said the data were given to Onek "for safekeeping" at the time
       of a "break-in" at the LTCB:

          "I think we stashed it all with him."

       Dr. Gallo assured Subcommittee staff he and Mr. Onek were
       searching for the missing data and when/if the data were found,
       they would be promptly provided to the Subcommittee. However,
       no data ever were provided; and when a follow-up written
       request was made, Dr. Gallo asserted Subcommittee staff had
       misunderstood him, that no LTCB data were in the hands of Mr.
       Onek.

       As for the  Lancet  manuscript and the July 1991
       Gallo-to-Wain-Hobson letter, Dr. Gallo attempted to distance
       himself from both these documents. Concerning the manuscript,
       Dr. Gallo initially sought to assert that the Wong-Staal et al.
       paper was not significantly misleading with respect to the
       relationship between LAV and IIIb. Dr. Gallo argued that the
       paper,

          "... doesn't work in our favor. It says the viruses are the
          same."

       and

          "The paper says the blots are the same."

       But the paper does not say the blots are the same. Indeed, as
       noted previously, what the paper actually says is that,

          "... each virus isolate, including LAV,  could be
          distinguished  provided enough restriction enzyme cleavage
          sites were examined ..."

       And, as noted previously, the paper makes repeated references
       to its purported findings that LAV and isolates of HTLV-III,
       including "IIIb," are "genetic  variants"  and "independent
       isolations" of the AIDS virus, i.e., the paper says LAV and
       IIIb are genetically independent..

       Confronted with these statements from the paper, Dr. Gallo
       acknowledged "there are no data in the paper" to substantiate
       that LAV and IIIb are independent" (op cit.) and he added this:

          "The worst interpretation that can be made is that the
          writer exaggerated the differences between LAV and IIIb. But
          it was not done by me" (7/27/93 telephone contact with
          Subcommittee staff).

       In fact, Dr. Gallo made it very clear he would not accept
       responsibility for the paper. Initially, Gallo told
       Subcommittee staff he was "doubtful he ever saw the paper."
       Gallo also said Dr. Wong-Staal "definitely" wrote the paper
       and,

          "I did not do one thing. I got the paper handed to me in the
          form you saw it" (7/27/93 telephone call to Subcommittee
          staff).

       Dr. Gallo also asserted "This was not a paper I had any hand
       in" (7/28/93 telephone call to Subcommittee staff).

       These claims cannot be substantiated; the Subcommittee staff
       obtained an early draft of the paper that bears Dr. Gallo's
       handwritten notes throughout the entire text. Notably, Drs.
       Shaw and Hahn, listed as coauthors on the paper, denied ever
       having seen it before it was presented to them by Subcommittee
       staff, during interviews in September 1992. In addition,
       neither Dr. Shaw nor Dr. Hahn had any recollection of
       performing the experiments reported in the Lancet manuscript or
       in the July 1991 Gallo-to-Wain-Hobson letter.

       As for the letter to Dr. Wain-Hobson, Dr. Gallo told
       Subcommittee staff that another LTCB scientist, Dr. Marvin
       Reitz, "helped" with the letter, obtaining information from
       another Gallo associate, Dr. Howard Streicher. Dr. Streicher,
       according to Dr. Gallo, gathered the information he gave to Dr.
       Reitz from data previously provided to OSI. But Dr. Gallo
       eventually acknowledged the data most likely were not provided
       to OSI.

       C. Accusation

       The Subcommittee staff also interviewed witnesses and reviewed
       a number of documents bearing on what Dr. Gallo said and did in
       the Summer of 1984 concerning the apparent genetic identity of
       LAV and "IIIb." The primary focus of the interviews and
       documents was a telephone call Dr. Gallo made to Dr. Luc
       Montagnier, variously dated from "early-June" to late-August
       1984. In this telephone call, according to Dr. Montagnier and
       at least one independent witness, plus at least two documents
       contemporaneous with the events in question, originating with
       Dr. Gallo, Gallo told Montagnier he had compared LAV/B with
       IIIb and found they were identical. Dr. Gallo also accused Dr.
       Montagnier of having contaminated LAV with IIIb.

       If these accounts of Dr. Gallo's actions in the Summer of 1984
       are correct, they would be very significant. If Dr. Gallo
       actually believed, in the Summer of 1984, that LAV and IIIb
       were genetically identical, it would raise questions about his
       subsequent, adamant assertions (as well as those of the U.S.
       Government) that the isolates were definitely genetically
       independent. Furthermore, if Dr. Gallo actually accused Dr.
       Montagnier of having had a contamination in Paris, it raises
       obvious questions about what possible basis, if any, Dr. Gallo
       could have had for such a charge, since LAV clearly arrived at
       the LTCB long before "IIIB" was even "isolated," much less sent
       to Paris.

       Dr. Gallo's accounts of the telephone call to Dr. Montagnier
       were not consistent with those of Dr. Montagnier, the
       independent witness, and/or the documentary record. Dr. Gallo's
       accounts emphasized his and Montagnier's alleged nonchalant
       attitude toward the possibility of a contamination. Dr. Gallo
       also minimized or omitted altogether his accusation of Dr.
       Montagnier and his associates. For example, Dr. Gallo said this
       to OSI:

          "I called Montagnier to tell him our two are close, but our
          others -- the IIIb and LAV are close -- but we have others
          that are not close, and it was like a 'so what,' you know?
          Groupings of the virus will be one way and others will be
          other ways. So we didn't make too much about it then, the
          common restriction enzymes of four or six enzymes" (4/11/90
          OSI interview; transcript p. 66).

       Later in the same interview, Dr. Gallo said this:

          "To me, down deeply, it didn't matter at all until now ...
          and I didn't care if it was -- you know, when I called
          Montagnier, I assumed he made a possible problem" [edited by
          Dr. Gallo to read, "I then assumed if it was a contamination
          he made it"]. "I was letting him know. But then he convinced
          me he was unlikely to be a problem and, more or less, that I
          thought 'who cares anyway.' And it's okay. He had a virus
          earlier and he detected things and he has other detections
          and so what? Why would I want to make a case out of it? You
          know?" (op cit., p. 80).

       In another OSI interview, Dr. Gallo said this:

          "Well, I mean, at the beginning, remember, my first reaction
          was 'could it be?' An early reaction in time of this data
          accumulating when I was first thinking about it was 'could
          it be, could it be cross-contamination,' and quite frankly
          my early assumption was that if it was, it was in
          Montagnier's laboratory, and I called him to tell him the
          result, and I said, 'You know, IIIb and LAV are rather
          close.' And he said, more or less, 'So what? They should be
          close. They're the same kind of virus.' And I said, 'Yes,
          but we have this RF guy,' and now we have another one coming
          out, MN, and I've forgotten what else ... And his point was
          different viruses group, and how can you say this on the
          basis of just two things. But then my thinking, I can tell
          you exactly what my thinking was. 'Well, who cares?'"
          (4/26/90 OSI interview; transcript pp. 48-49).

       Dr. Gallo continued:

          "I mean, I wasn't concluding this was a contamination; it
          was a thought, that it was a possibility and I wanted to
          discuss this with him ... when I was there in March they
          hadn't successfully cloned yet. I mean their coworker there
          said they hadn't cloned anything, and they were certainly
          successful shortly thereafter, so I wondered if they had a
          cross-contaminant with IIIb which was growing very, very
          well. And when we had the discussion, I figured, you know,
          so what? It was clear that they had a virus before we
          brought them IIIb and if IIIb became a contaminant in their
          lab I, quite frankly, wasn't particularly concerned" (op
          cit., p. 50).

       In his book  Virus Hunting,  Dr. Gallo said this about the call
       to Dr. Montagnier:

          "In June 1984, I called Montagnier and told him of this last
          finding [the identity of LAI/LAV and LAI/IIIb] and of how
          odd I thought it. He seemed rather indifferent, however,
          remarking that 'they should be very close -- they were all
          the same virus after all.' I said yes, but also told him
          that we'd obtained data showing variations between different
          isolates, data that would be published in late 1984. He
          commented that maybe there were different groupings. I
          realized that one possibility was that LAV/BRU and HTLV-IIIb
          were actually the same isolate, maybe an accidental
          contamination occurring in his or my lab. I thought his
          attitude then was appropriate, however, and who would care?
          After all, there was no doubt that early on he had his own
          isolate because I knew we had received a bona fide novel
          retrovirus in 1983 from him, and I knew we had isolates
          other than the IIIb strain"  (Virus Hunting,  op cit., p.
          199).

       And to the Subcommittee staff, Dr. Gallo said this:

          "I wondered about that possibility originally [contamination
          in Paris], basically because of my concern about their
          science competence."

       But, said Dr. Gallo:

          "It was really not important to me ... I never accused
          Montagnier of a contamination in his laboratory. I may have
          speculated about it in the bowels of my lab. But I never
          accused him ... it was not important to me" (7/22/93
          interview with Subcommittee staff).

       Dr. Montagnier's account was very different; he took particular
       exception to the statements in Dr. Gallo's book. Responding to
       questions from OSI, in June 1991, Dr. Montagnier said this
       about the telephone call from Dr. Gallo:

          "I believe he called me on [the] telephone in June 84 saying
          that he had analysed LAV (not the early sample of September
          83 'he could not grow,' but the virus produced in B cells
          (B/LAV) that I sent to him on his request ... and found it
          having the same restriction map as IIIb. He was surprised
          since he had analysed other isolates and found different
          restriction maps and wondered whether I could have
          contaminated our B/LAV by the IIIb we received on May 15,
          1984.

       I told him (the version in his book is incorrect) that if there
       were to be contamination, it could only be the other way round,
       IIIb contaminated by LAV, since we had LAV long before and had
       sent this virus to other laboratories ...

       I deny to have said to Dr. Gallo, 'So what? Different AIDS
       viruses may group together.' This may be rather his reply.

       On the contrary, I was shocked by Dr. Gallo's accusation and
       decided soon afterwards to break off our collaboration,
       including the publication of joined papers for the comparison
       of LAV and IIIb.

       Further comments: It is clear now, since Dr. Gallo has admitted
       the contamination of IIIb by LAV/LAI, that the latter virus was
       grown in his laboratory, presumably in the continuous lines,
       for some time in 1983-84.

       Therefore, Dr. Gallo has not said the truth in 1984, or he was
       not informed by his collaborators of what was going on in his
       lab" (Montagnier-to-Hadley; 6/18/91).

       Several points are particularly noteworthy in these remarks.
       First, contrary to Dr. Gallo's accounts to OSI, suggesting a
       nonchalant attitude on the part of both he and Dr. Montagnier,
       Dr. Montagnier's account indicates there was a sharp
       disagreement with Dr. Gallo, and he (Montagnier) was
       particularly angered by "Dr. Gallo's accusation." Second, Dr.
       Montagnier makes clear that it was his outrage at the
       accusation that caused him,

          "... soon afterwards to break off our collaboration ,
          including the publication of joined papers..."

       This account -- as well as the documentary record -- is at odds
       with Dr. Gallo's explanation of why the collaborative papers
       were never published (see below).

       Most important of all, Dr. Montagnier's account makes clear
       that he told Gallo there was positive proof that IIIb had to be
       descended from the IP virus, and not the other way around. That
       proof was the fact that the IP scientists "... had sent this
       virus [LAV] to other laboratories..." before IIIb was sent to
       Paris. In this regard, two scientists in the United States
       received LAI/LAV before the May 15, 1984 transport of "IIIb" to
       Paris -- Drs. Malcolm Martin and Murray Gardner. These
       circumstances would figure importantly in subsequent
       developments relating to the genetic identity of "IIIb" (see
       below).

       Testimony of an independent witness provided additional
       important information concerning events at the LTCB relative to
       the LAV/IIIb comparisons in the Spring/Summer of 1984. The
       witness, Dr. Stanley Weiss, now of the New Jersey College of
       Medicine and Dentistry, wrote to OSI in 1990, describing events
       he observed at the LTCB in the Summer of 1984, while he was
       serving as a Medical Staff Fellow at the NCI. Excerpts from Dr.
       Weiss' letter to OSI follow:

          "One afternoon, I came to 37/6A09 [Gallo's office] to meet
          with Dr. Gallo to discuss data related to a manuscript. Dr.
          Gallo was delayed. I have a distinct recollection regarding
          why. Dr. George Shaw was waiting as well; he was scheduled
          to meet with Dr. Gallo first. While we both were waiting,
          Dr. Shaw talked to me a bit concerning some data he was
          about to present to Dr. Gallo, for the first time. This was
          the result of the molecular analyses (restriction
          endonuclease maps) he and Dr. Hahn were doing on HTLV-IIIb
          and LAV-1. They appeared to be the same!

       At the end of Dr. Shaw's meeting with Dr. Gallo, they both came
       into the hallway and involved a few of us who were around in a
       brief discussion. Dr. Gallo clearly did not want to create new
       troubles, but he felt he needed to let the French know that
       somehow the French group must have contaminated the LAV-1 stock
       in France with some of the HTLV-IIIb that Dr. Gallo's group had
       sent them. The French had sent IIIb back to Dr. Gallo in error!
       The conversation focused on to whom among the French Dr. Gallo
       should first communicate this news.  No one suggested that the
       direction of contamination might have been the reverse.  It was
       absolutely clear that the news from Dr. Shaw had been a total
       surprise to Dr. Gallo. I had had the opportunity to get to know
       Dr. Gallo well enough that I feel confident that this must have
       been absolutely new. It was one of those instances where, in
       the presence of close colleagues, he rattled off his evolving
       thoughts.  This included some harsh words regarding the French
       -- Dr. Gallo was chagrined at the wasted effort, at all the
       work that his lab had just done to compare the virus, only to
       find that they'd been given back IIIb, when there was so much
       else to do!

       I did not get to meet with Dr. Gallo privately that day. He
       retired to his office to solicit advice from other colleagues
       around the country. I believe he eventually called Dr.
       Montagnier later that evening to relate that it looked like the
       French had contaminated their LAV with material from LTCB ...

          "In summary, it is inconceivable to me that Dr. Gallo knew,
          or indeed in any way suspected, that the LTCB HTLV-IIIb
          isolate was derived from LAV-1" (emphases supplied; op cit.,
          pp. 1-2).

       Dr. Gallo's account of his demeanor during the episode
       described by Dr. Weiss was not consistent with that of Dr.
       Weiss. In his book  Virus Hunting,  Dr. Gallo said this:

          "Stanley Weiss, an epidemiologist now working in New Jersey,
          was at NCI at that time and happened to have been near my
          office when I made this call. My concern, he recalls, was
          more for the likelihood of a contamination in Montagnier's
          lab, and  he confirms the relaxed attitude I have described.
          Later I had reason to think that if the two viruses were so
          closely related that they might have been mixed up
          (accidental contamination), the mix-up would like have
          occurred in my laboratory. In any case, because we had many
          other isolates and had made other key scientific advances,
          not to mention the enormous scientific-medical problems that
          still lay ahead of us, my co-workers and I did not think
          this likelihood terribly important" (emphasis supplied; op
          cit., p. 199).

       Clearly, Dr. Weiss' account to OSI did not confirm a "relaxed
       attitude" on the part of Dr. Gallo. Equally  or more important,
       Dr. Weiss' account shows how the last-minute transmittal of the
       live, virus-producing IIIb cell line to the IP scientists in
       May 1984 provided the foundation for the "reverse
       contamination" accusation (see above for a discussion of the
       last-minute decision to send the IIIB line to Montagnier). In
       addition, according to Dr. Weiss' account, there is no
       indication that any LTCB scientist questioned that LAV and IIIb
       were genetically identical. This is a significant point,
       because after the incident described by Dr. Weiss, Dr. Gallo
       and his associates began to publish papers that claimed LAV and
       "IIIb" were genetically independent isolates. Dr. Gallo also
       made repeated public statements to the same effect.

       Subcommittee staff interviewed both Dr. Weiss and Dr. Gallo
       about the reported incidents at the LTCB, in an effort to
       resolve the discrepancies in their accounts. Dr. Gallo seemed
       to contradict himself, when he denied his previous nonchalant
       characterizations of his affect:

          "I don't say anything is casual."

       Dr. Gallo also asserted to Subcommittee staff that the remarks
       attributed to him concerning a possible IP contamination,
       "truly were not an accusation." This claim was at odds not only
       with Drs. Montagnier and Weiss, but with the contemporaneous
       documentary record as well (see below ). Finally, although he
       himself previously referenced Dr. Weiss as a source of
       information concerning the events in question, Dr. Gallo
       suggested Dr. Weiss misunderstood what he observed. Dr. Gallo
       asserted:

          "Weiss doesn't really know me that well."

       But Dr. Weiss' testimony to Subcommittee staff was vivid,
       indicating Weiss had a clear recollection of graphic events:

          "Bob was emotional. I had never heard Bob curse before....
          He was angry and frustrated. Here was everything here to be
          taken care of and he wanted to get on with the science and
          here was something else in the way and going to take up his
          time..." (Subcommittee staff interview, July 9, 1993).

       As for the documentary record , there are two documents dating
       from 1984 that bear importantly on these events. These
       documents show not only that Dr. Gallo, in the Summer of 1984,
       had proof that LAV and IIIB were genetically identical, but
       that he shared this information with an apparently credulous
       Peter Fischinger and Vincent DeVita. The contrast of this 1984
       knowledge with the 1985-87 statements of these individuals,
       particularly the statements of Drs. Gallo and Fischinger,
       adamantly rejecting the possibility of genetic identity of the
       two isolates, is striking.

       The first document is a memorandum "To the record," dated
       August 24, 1984, referenced "Telephone conversation with R.
       Gallo - 8/24/84." The unsigned memorandum is written in a
       manner characteristic of Peter Fischinger; both Gallo and
       Fischinger acknowledged that Fischinger was the author of the
       memorandum. The memorandum bears a number of hand-written
       notations, appearing to be in the hand of Dr. Vincent DeVita.
       Dr. DeVita confirmed to Subcommittee staff the notations were
       his.

       The August 24, 1984 memorandum to the record was never provided
       by Dr. Gallo to OSI, neither was the memorandum ever provided
       by the National Cancer Institute or any component of HHS in
       response to any of the Subcommittee's numerous document
       requests. Neither the August 24 memorandum nor a related
       October 25, 1984 memorandum (see below) was ever provided to
       the IP attorneys, in response to their document requests under
       the Freedom of Information Act (FOIA).

       Significant passages of the August 24 memorandum follow:

          "Gallo's data:

          Original LAV sent to Bob several months ago has now been
          cloned and is different from prototype HTLV-III, i.e., it
          resembles the other HTLV-III that have been cloned, all of
          which have some variations.

          The LAV-containing B cell line sent by Montagnier has only a
          low per cent of cells infected with LAV, i.e., 1 in a 100.

          When this virus for the B cell line is compared, it is
          identical to the HTLV-III prototype, nucleotide for
          nucleotide!

          Gallo called Luc Montagnier and told him the above data ...
          It ... implies that what Montagnier is sending out to others
          as the LAV-infected cell line is HTLV-III and not LAV."

       The second memorandum relating to the Gallo/Montagnier
       telephone call was written by Gallo himself. This memorandum,
       like the August 24 memorandum, was not provided by Dr. Gallo to
       OSI nor to the Subcommittee. Indeed, when Dr. Gallo was
       questioned by Subcommittee staff about the memorandum, he said
       he could not recall why it was written, nor what basis there
       was for its contents. The memorandum, dated October 25, 1984,
       was written by Gallo to Drs. DeVita and Fischinger, NCI
       "Director" and "Associate Director," respectively.

       The memorandum's subject line reads , "Record of Telephone
       Conversation with Dr. Luc Montagnier on August 23, 1984." the
       text of the memorandum, in its entirety, reads as follows:

          "Montagnier was informed that we routinely find genomic
          diversity in our isolates of HTLV-III. He stated that he has
          cloned his virus and finds no variation among isolates. Of
          the cell line we received from Montagnier, one of
          one-hundred cells is producing the virus. The cell that is
          producing the virus has not been fully characterized yet,
          however, the virus looks like the H9/HTLV-IIIb virus. We
          went back to the original LAV that they had sent to us and
          when analyzed it was found to be different from the virus
          growing in the culture they recently sent. All isolates we
          have found are microheterogenous (sic.). We presume,
          therefore, that the cell line we received from them probably
          contains our virus. They had our producer cell line for
          months before we received theirs."

       The most significant fact about both of these memoranda,
       besides the fact that they substantiate that Dr. Gallo was
       accusing Dr. Montagnier of contaminating the IP virus with
       "IIIb," is that both memoranda assert "original LAV" had been
       compared with IIIb and found to be different. This circumstance
       was essential, in order for Dr. Gallo to hope to substantiate a
       charge of reverse-contamination. It is precisely what Dr. Gallo
       claimed had happened, but there is nothing to substantiate that
       it was true.

       Dr. Gallo himself, when he was questioned by Subcommittee staff
       about the matter, had no answer. In fact, when asked to explain
       the statements in the memoranda about "original LAV" being
       analyzed and found different from IIIb, Dr. Gallo acknowledged
       that,

          "We have no data analysis of the original LAV until 1991."

       Dr. Gallo added that any analysis of "early BRU" would have
       been biological only, which would provide only minimal
       information concerning the molecular composition of a virus
       sample. Analyses  were done  of M2t/B/LAV, of course, and those
       analyses revealed genetic identity with IIIb. These were the
       critical analyses. These were the analyses not revealed to OSI,
       to NCI officials, or to anyone else, until 1991, when Dr. Gallo
       wrote to Dr. Wain-Hobson.

       D. Stonewalling the Assistant Secretary

       Certainly the analyses were not revealed to the official who
       ordered them in the first place -- the Assistant Secretary of
       Health, Dr. Edward Brandt. Documentary evidence and testimony
       of several witnesses, including Dr. Brandt himself, shows that
       throughout the Spring, Summer, and Fall, Dr. Brandt prodded and
       questioned NCI administrators and scientists, seeking the
       results of the virus comparisons. But as Dr. Brandt told
       Subcommittee staff, "I never got them."

       What Dr. Brandt did get, in response to his repeated queries,
       was a series of denunciations of the IP scientists for
       allegedly delaying the virus comparisons, along with repeated
       promissory notes for results of the virus comparisons at some
       future date. But Dr. Brandt continued to push. Thus, according
       to minutes from the July 30, 1984 meeting of the Public Health
       Services (PHS) AIDS Executive Committee; cited in a memorandum
       written by Peter Fischinger:

          "Dr. Brandt also criticized Dr. Gallo for being so slow to
          produce a definitive statement on the identity (or
          otherwise) of LAV and HTLV-III. In April, he had promised
          this publicly within 30 days. Dr. Brandt says he wants a 2
          or 3 page statement detailing the present status of these
          investigations (with scientific content, not only reasons
          for delay)" (8/9/84 Fischinger to Brandt memorandum; p. 1).

       That Dr. Brandt, in late-July 1984, was still seeking a
       definitive statement from Dr. Gallo concerning the identity of
       LAV and HTLV-III is noteworthy. The CDC serologial studies,
       over four months earlier, had provided compelling evidence that
       both viruses were etiologically associated with AIDS, while
       comparisons of the core proteins, over two months earlier, had
       shown that the viruses were "antigenically identical." Dr.
       Gallo had made statements to the media that the viruses were
       "close relatives," but, despite Dr. Brandt's order to Dr.
       DeVita to see that the viruses were compared, apparently
       NCI/NIH had not provided any authoritative information to the
       Assistant Secretary for Health concerning the functional
       identity of the isolates. Still less did NCI/NIH inform Dr.
       Brandt of the LTCB data indicating that LAV and IIIB were
       genetically  identical.

       On August 13, not having received a satisfactory response, Dr.
       Brandt raised the issue again, at another meeting of the PHS
       AIDS committee. Notes of the meeting, contained in a memorandum
       to the record written by the Special Assistant to the then-NIH
       Director, James Wyngaarden, said this:

          "Dr. Brandt again brought up his concern that the issue of
          identity versus difference between HTLV-III and LAV is not
          yet settled publicly. He believes that the continuation of
          this uncertainty undermines public and congressional
          confidence that either party knows what it is doing.  He is
          aware of the French foot-dragging,  and offered to try to
          contact his counterpart in the French Ministry of Health to
          try to break the logjam. Dr. Harmison proposed a meeting
          next week between NIH and CDC to see if these PHS agencies
          could settle the issue; they have all the necessary
          materials. However, no American investigator is happy to
          proceed to do, with the samples supplied by Institut
          Pasteur, what the source seems unwilling to do. Possible
          implications for the commercial concern working with LAV
          were discussed, but no one present has all the information
          on legal ramifications" (emphasis added; 8/24/84 "Notes from
          PHS AIDS Executive Task Force Meeting 8/13/84," pp. 1-2).

       Dr. Brandt's reported reference  to "French foot-dragging"
       warrants comment; it apparently was based on information
       contained in Peter Fischinger's August 9, 1984 response to
       Brandt's July 30 queries. Fischinger's response catalogued a
       number of alleged failures of cooperation on the part of the IP
       scientists, none of which had any basis in fact. Appended to
       Fischinger's memorandum was a July 3, 1984 letter from Dr.
       Gallo to Dr. Montaganier, a letter copied to no less than four
       IP scientists and administrators, plus 15 United States
       scientists and administrators, located throughout the entire
       East coast of the United States. The letter included this very
       noteworthy claim:

          "We acknowledge receiving some extracellular virus from you,
          but this is, of course, not permanent and small in amount."

       (Dr. Gallo maintains the above information is what he was told
       about the growth of the IP virus at the LTCB. If this is true,
       it would mean that Dr. Popovic, presumably, significantly
       misrepresented the results of his experiments to Dr. Gallo.)

       Dr. Fischinger told Subcommittee staff his August 9, 1984
       response to Dr. Brandt was based on information provided to him
       by Dr. Gallo. However, not only is there no evidence that the
       IP scientists were not cooperating with the virus comparisons,
       the evidence that exists shows that weeks before Fischinger
       wrote his memorandum, in mid-July, 1984, Dr. Gallo wrote to
       thank Dr. Montagnier for sending his LAV/B virus, telling
       Montagnier this:

          "Now we each have the proper lines and reagents and I look
          forward to an era of cooperation and good-will" (7/13/84
          Gallo-to-Montagnier letter).

       Dr. Fischinger was copied on this letter. In addition, on July
       16, 1984, Dr. Gallo wrote again to Dr. Montagnier. Apparently
       referring to his confrontational letter of July 3, Dr. Gallo
       said this:

           "Unfortunately in the previous letter I wrote to you
           recently I neglected to mention that my letter was prompted
           not by failure of you to cooperate with us  but rather by
           some medical articles in the U.S. which had repeatedly
           stated that we had not made reagents available to you"
           (emphasis added).

       Notably, the July 16 Gallo-to-Montagnier letter was copied only
       to the four IP scientists/administrators copied on the July 3
       letter. The 15 U.S. scientists/administrators copied on the
       July 3 letter did not receive Dr. Gallo's "clarification."

       The details of what happened after the August 13 PHS meeting
       are not entirely clear, but it appears that a strategy for a
       series of CDC-coordinated comparisons of the viruses was
       devised. Pursuant to this plan, on August 17, 1984, Dr. Donald
       Francis wrote to Drs. Montagnier, Chermann, and Gallo, seeking
       their cooperation. Dr. Francis' letter indicated the recipients
       already were aware of and had agreed to CDC's involvement:

          "As you know, the proposal has been made that CDC coordinate
          the comparisons of prototype strains of LAV and HTLV-III.
          The data from these comparisons, subject to approval of
          designated scientists, would be published in a scientific
          journal with authorship agreed in advance" (8/17/84
          Francis-to-Montagnier, Chermann, Gallo letter; p. 1).

       Dr. Francis' letter stressed that the "need for comparisons is
       urgent"; the letter also laid out the kinds of comparisons that
       would be done, and what steps were necessary for the
       comparisons to get underway.

       Drs. Montagnier and Chermann responded jointly to Dr. Francis'
       letter on August 29, 1984, noting their understanding that the
       proposal for CDC's coordination of the comparison studies "was
       a specific request from the Secretary of Health in a meeting
       where NCI and CDC representatives agreed that this comparison
       should be urgently completed." Montagnier and Chermann also
       committed immediate shipments of LAV virus and a LAV DNA clone.
       They also agreed that there should be a paper on the
       serological study, "dealing with the data obtained by ELISA LAV
       and HTLV-III on the 300 sera given by CDC to Dr. Gallo and us."

       Still, Drs. Montagnier and Chermann cited reservations about
       the comparisons that supposedly were already underway (the
       reader should keep in mind that the Gallo-to-Montagnier
       "reverse contamination" call had only recently occurred):

          "As you are aware, Dr. Gallo had the possibility to do this
          comparison on its own, since he had our LAV virus at least
          from September 23, 1983. After the isolation of HTLV-III was
          announced, we accepted to make a direct comparison with him
          between HTLV-III and LAV-1."

       Montagnier and Chermann described their concerns at Gallo's
       continued refusal to send them the uninfected H9 cell line,
       which they said was necessary to complete the proteins
       comparison of LAV and IIIb. (See below  for more information on
       this point.) However, Montagnier and Chermann said that
       "whatever the conclusion (or lack of conclusion)" of the
       ongoing comparisons, they agreed that "an official comparison
       be made under CDC control." And Montagnier and Chermann said
       that, with respect to the CDC-brokered comparison,

          "We want to ensure you of our willingness that this
          comparison will be made by all the concerned laboratories
          ... It is important for the sake of public health that this
          comparison be achieved as soon as possible."

       Montagnier/Chermann's letter to Francis was copied to Dr. James
       Mason at the CDC, along with, at NIH, Drs. Wyngaarden, DeVita,
       Fischinger, and Gallo. Dr. Brandt, regrettably, was not copied,
       and thus continued to operate under the assumption that the IP
       scientists were not cooperating with the comparisons (see
       above).

       Dr. Gallo, for his part, never responded to Dr. Francis'
       letter; none of his superiors, it appears, ever directed him to
       cooperate with the supposedly agreed-upon plan. Despite the CDC
       and IP scientists' willingness to proceed with a
       CDC-coordinated comparison of LAV and IIIb, the comparison
       never got off the ground, because NCI and Dr. Gallo would have
       no part of it. And Dr. Brandt continued to be frustrated in his
       requests for the facts. In fact, at the very next meeting of
       the PHS Task Force, on August 27, Brandt addressed the issue
       again. The official minutes of the meeting say this:

          "Expressing his concern about the lack of cooperation of
          L'Institut Pasteur, Dr. Brandt re-stated his belief that a
          comparison between LAV and HTLV-III should be completed soon
          ... Reporting this effort to be on track, Dr. Harmison
          suggested that a meeting between Drs. Gallo and Montagnier
          may need to occur."

       By September 10, 1984, the issue of the
       similarity/dissimilarity of LAV and IIIb had become an even
       more urgent concern. On this date, Dr. Brandt, still not having
       received an answer, wrote to NIH Director Wyngaarden, saying
       this:

          "I am ... advised that a paper has been prepared that shows
          that LAV and HTLV-III are essentially the same. It is my
          understanding that the paper will be presented in Rome in
          September. Since you and I will be testifying on AIDS on
          September 17, and since this will be an issue at that
          hearing, it is imperative that I be advised of the
          situation."

       Emphasizing the urgency of the matter, Brandt added to the
       memorandum,  "Please respond this week."

       There is no record of Wyngaarden's response to Brandt's
       request. Wyngaarden, like all the other major NIH/NCI players,
       told Subcommittee staff he had no recollection of these
       matters. What is known is that on September 17, 1984, when Dr.
       Brandt (accompanied by, among others, Drs. Mason, Wyngaarden,
       and Harmison) testified before the Subcommittee on Health and
       the Environment of the House Committee on Energy and Commerce,
       Dr. Brandt, after praising the LTCB scientists for their
       "discovery" of "HTLV-III," said this:

          "Scientists from the Pasteur Institute in Paris also
          isolated a retrovirus, termed lymphadenopathy-associated
          virus (LAV), from a homosexual man with the lymphadenopathy
          (sic.) syndrome and published their results in April 1983
          (sic.). Recently,  scientists at the NCI have determined
          that LAV is an HTLV-III virus.  CDC and other groups have
          described additional virus isolates of the HTLV-III family"
          (emphasis added; statement of Edward N. Brandt, Jr., M.D.;
          p. 18).

       This, then, is how the results of the LAV/IIIb comparison was
       represented to the Assistant Secretary for Health: not that
       IIIb and LAV appeared possibly to be the same isolate, the
       result of (at best) a contamination; not even that IIIb and LAV
       were the same virus type; but that "LAV is an HTLV-III virus."
       Thus was the parent inducted into the putative family of the
       offspring; this was Dr. Gallo at his finest.

       The failure to provide a full and accurate accounting of the
       LAV/IIIb comparisons to Dr. Brandt was not Dr. Gallo's alone.
       According to Dr. Brandt, the original order to make the
       comparisons was delivered by him to Dr. DeVita, and there are
       indications Dr. DeVita made some effort to comply. Most
       notably, the October 25, 1984 Gallo-to-DeVita memorandum bears
       a handwritten note (confirmed by Dr. DeVita to be his) to Dr.
       Brandt, that says this:

          "11/9. Ed. Interesting point. Doubtful that with the
          variations in the HTLV lines that the line from Montagnier
          could be coincidentally the same. Vince."

       Dr. DeVita's notations also indicate that Dr. Gallo's
       memorandum, together with his note to Dr. Brandt, were to be
       sent to members of the NCI "Executive Committee." But Dr.
       Brandt told Subcommittee staff he never received a copy of
       Gallo's memorandum, nor did he receive a copy of Dr. DeVita's
       note. No copy of either document was ever produced to the
       Subcommittee from any member of the NCI Executive Committee. No
       copy of the typed version of Dr. DeVita's note was provided to
       the Subcommittee from any source.

       Dr. DeVita told Subcommittee staff he could not explain why Dr.
       Brandt would not have received his (DeVita's) note and Dr.
       Gallo's memorandum. Dr. DeVita said he was "sure" the
       memorandum had gone to Dr. Brandt's office, but DeVita added
       this:

          "By this time, Harmison was there [i.e., was  Science
          Advisor to the Assistant Secretary for Health] ... He could
          have stopped it ... By this time, Harmison almost assumed
          ownership of Gallo" (5/3/93 interview with Subcommittee
          staff).

       E. Aftermath of the Comparisons

       Although in the Summer of 1984, Dr. Gallo had told top NCI
       officials that LAV and IIIb were genetically identical, by late
       1984/early 1985, Dr. Gallo was taking a very different line.
       Following Dr. Montagnier's rejection of Dr. Gallo's assertion
       that he (Montagnier) had contaminated LAV with IIIb, Dr. Gallo
       began to assert that the two isolates, although very much
       alike, actually were independent. Thus, as previously
       described, the Wong-Staal et al. manuscript reported -- without
       substantiation -- that,

          LAV  and HTLV-III [IIIb] are independent isolations of the
          same virus."

       Similarly, a February 1985 letter by Ratner et al. (including
       Gallo and Wong-Staal) to the journal  Nature  claimed that,

          "LAV is closely related to HTLV-III"

       and

          "HTLV-III, LAV, and ARV are  variants  of the same virus
          (emphasis supplied; 313, 1985, pp. 636-637).

       Ratner et al. also introduced the geographical/temporal
       proximity explanation for the identity of the IP and LTCB
       prototype viruses,  i.e.,  the viruses were said to be so much
       alike,

          "... because the individuals from whom these isolates were
          derived acquired the virus at a similar time and place."

       This argument was repeatedly proffered by Gallo  et al.,
       without substantiation, and despite the fact that such data as
       did exist indicated there was no evidence for isolates from the
       same geographical area to be more alike in their genetic
       makeup.

       Other papers by Gallo  et al.,  published in the Fall of 1984,
       did little more than note the existence of LAV and give brief
       mention to the results of the immunological comparisons that
       had been performed, including the LAV/IIIb comparisons. The
       already-completed molecular comparisons were not revealed; in
       fact, molecular comparisons were described as work remaining to
       be done in the future. Thus, Hahn et al. wrote in  Nature,  in
       November 1984:

          "The availability of the cloned HTLV-III genome should also
          now allow direct comparison of this virus with a similar
          group of retroviruses described by other investigators ...
          which has also been linked to the pathogenesis of AIDS and
          which appears to be immunologically and morphologically
          indistinguishable from HTLV-III (M. Sarngadharan  et al.,
          unpublished)"  (312,  1984, pp. 166-169).

       The following month, Shaw  et al.,  wrote this in  Science:

          "The availability of molecular clones of HTLV-III will now
          permit the direct comparison of this virus to other
          retroviruses detected in patients with AIDS or ARC. These
          viruses, named variously as LAV, IDAV1, IDAV2, and ARV (27,
          33), are morphologically indistinguishable from HTLV-III
          and, for those isolates tested, immunologically
          indistinguishable as well ... On the basis of these results
          and of our detecting viral sequences in LAV-infected cells
          using HTLV-III probes ... we believe that HTLV-III, LAV,
          IDAV1, IDAV2, and the most recently described
          AIDS-associated viral isolate, ARV, are all essentially the
          same virus. However, given the diversity in the genomic
          restriction pattern of HTLV-III reported herein, we would
          expect similar differences to be present in these other
          viral isolates"  (226,  1984, pp. 1165-1171).

       In reality, Gallo et al. had known for quite some time that two
       of the isolates they mentioned -- LAV and "HTLV-III" (IIIb) --
       did not show differences, but rather, appeared to be
       molecularly identical. These findings, they failed to report.

       F. The Sabotaging of Bryant et al.

       Dr. Gallo's reversal of his original conclusion that LAV and
       IIIb were genetically identical and his adoption of the "close
       but not the same" argument may account for his strongly
       negative reaction to a manuscript he received during the Fall
       of 1984. Coauthored by Dr. Murray Gardner, a specialist in
       simian AIDS at the University of California, and a young
       postdoctoral fellow, Dr. Martin Bryant, the paper reported a
       comprehensive series of studies, including molecular studies,
       comparing LAV, IIIb, and ARV ("AIDS-related virus," isolated by
       Dr. Jay Levy, University of California).

       The Bryant et al. virus comparisons were precisely the kind of
       studies Dr. Gallo attempted to prevent in his materials
       transfer agreement (see below ). Dr. Gardner, who obtained IIIb
       from an LTCB contractor, was not required to sign the "no
       comparisons" agreement, and he apparently had no idea what a
       transgression the Bryant et al. comparison studies would
       represent. Nor could Gardner have anticipated what a threat the
       results of the comparison studies would pose. Notably, neither
       the Bryant et al. manuscript nor any of the correspondence
       related to it were provided to OSI or to the Subcommittee by
       the LTCB or any other component of HHS.

       The Bryant et al. draft reported, concerning the molecular
       comparisons, that "ARV can be readily distinguished from the
       LAV and HTLV-III," but "LAV and HTLV-III are identical"
       (emphasis added). The paper also reported that LAV was found to
       contain "two nearly identical viruses," i.e., "strain
       polymorphism." The same Hind III polymorph was found
       independently in LAV, by Dr. Malcolm Martin, and it was found
       in IIIb by Gallo et al. (Hahn  et al.,   Nature,  1984; Shaw
       et al.,   Science,  1984). The presence of two identical virus
       variants in both LAV and IIIb, i.e., the Hind III polymorph,
       was compelling evidence that these two allegedly independent
       isolates were, in fact, one and the same.

       Dr. Gallo acknowledged to OSI that Dr. Martin's data convinced
       him (Gallo) that IIIb was identical to LAV and that IIIb was
       derived from LAV and not the reverse:

          "... I assumed that we made a cross-contamination ... and I
          kept thinking, well, what the hell is the difference, and
          then also we know that a person, as you know, who is not
          friendly to me [Martin], had said that he received the
          Pasteur virus about two weeks before we gave Montagnier IIIb
          ... Therefore, if he made the same analysis, I always
          assumed that it had to be -- that there was a contamination
          but who really cared?" (7/10/90 OSI interview; transcript p.
          8).

          "In time, because of one individual's data and because of
          realizing that we had crowded conditions, I, in my mind,
          accepted the notion, if it was contamination, if it could be
          proven to be contamination, it probably happened in our
          laboratory, one because of the crowded conditions and the
          move that Popovic made, and secondly because Dr. Martin at
          NIH had stated that he got LAV just before we brought IIIb
          to France" (4/26/90 OSI interview; transcript p. 50).

       Dr. Gallo's admission to OSI concerning the significance of Dr.
       Martin's data occurred very belatedly, nearly five years after
       Dr. Gallo saw the data. In 1985 , when Dr. Gallo first learned 
       about Dr. Martin's data, he adamantly rejected their legitimacy 
       and significance [see below]. The reason for Dr. Gallo's attitude 
       is obvious.  Drs. Gardner and Martin obtained their LAV samples 
       from Dr. Montagnier in April 1984, several weeks before Dr. Gallo 
       sent IIIb to Paris, a circumstance of which Gallo was aware, at 
       least by September, 1985, if not sooner.  Dr. Gardner actually
       received his LAV during his April 1984 visit to the Institut 
       Pasteur, at which Dr. Gallo also was present, when the CDC data 
       were reviewed.  The identity of the Martin and Gardner LAV 
       samples with IIIb, besides demonstrating that the putative LTCB
       prototype virus was not an LTCB isolate, could only mean that 
       IIIb was derived from LAV and not the reverse.

       When Dr. Gallo saw the draft of the Bryant et al. paper that
       Dr. Gardner sent to him for comment, Gallo's reaction was
       strongly negative. According to Dr. Bryant, at first there was
       no reaction from the LTCB. Weeks went by following the
       transmittal of the manuscript, and when Dr. Gallo finally
       contacted Gardner, he (Gallo) alternately harangued and pleaded
       with him to delay or abort altogether publication of the Bryant
       et al. paper. Dr. Gallo reportedly did not question any of the
       results on scientific grounds. Rather, Dr. Gallo reportedly
       stated that he and Dr. Montagnier were "sorting out" the virus
       comparisons, that the LTCB scientists were more expert at such
       studies, and that he and his colleagues desired to inform the
       scientific community about the virus comparisons in their own
       terms, according to their own timetable.

       Dr. Gallo also reportedly appealed to Dr. Gardener's
       patriotism, implying it was unAmerican to publish the Bryant
       data. Dr. Peter Fischinger also reportedly became involved,
       telling Gardner, "You would be well-advised not to get in the
       middle of this." Dr. Gardner was so upset by these
       communications that he called a colleague at the University of
       California, Dr. Jay Levy, to tell him about the pressure being
       exerted on him by NCI. Levy in turn called Dr. Malcolm Martin,
       who memorialized the conversation in a November 28, 1984
       memorandum to the record stating this:

          "At 4:30 today I received a telephone call from Dr. Jay
          Levy. He was quite upset because of pressure being put on
          Dr. Murray Gardner by the NCI staff not to publish data
          presented at the Montana workshop [the molecular data in
          Bryant  et al.].  He likened the situation to a 'Watergate
          coverup' and stated that all data pointed to apparent theft
          of the French AIDS virus."

       Dr. Gardner, who held several NIH grants and contracts, and who
       feared he might lose them, acceded to Dr. Gallo's demands. The
       Bryant et al. paper eventually was published, but not until
       almost a full year had passed. The paper was not published in
       the more prestigious journal for which it was originally
       intended, but in an obscure journal,  Hematological Oncology.
       The published version of the paper had been substantially
       revised vis-a-vis the original version. Notably, the statement
       that LAV and IIIb were "identical" was changed to "nearly
       identical." Other changes on the same theme were made
       throughout the paper. Dr. Bryant, who described himself as
       "devastated" by the entire affair, told Subcommittee it was one
       of the reasons he left Dr. Gardner's laboratory.

       G. Fate of the Comparison Papers

       None of the three virus comparison papers was ever published.
       The serology paper died due to Dr. Gallo's evident lack of
       enthusiasm and his failure to provide any input to the paper
       other than objecting to the virus designation and the order of
       authorship (see above). Concerning the proteins and nucleic
       acid papers, Dr. Gallo for years asserted that Dr. Montagnier
       stopped publication of both papers. Here are examples of Dr.
       Gallo's statements on this issue over the years:

          "We worked together ... We made the comparison. We planned
          the publication. The papers are written. The drafts are
          ready. Montagnier decides we don't need to publish. I get
          blamed for not making comparisons" (8/3/90 OSI interview;
          transcript p. 105).

       Pressed about these statements, asked if, "You wanted to
       publish those papers," Dr. Gallo responded with this:

          "Of course I wanted. No, I wanted him with it. If he didn't
          want it I would ... I was all for the publication of the
          papers at all times. Montagnier convinced me. I said it is
          not unreasonable since the sequence is going to be out, why
          would we really need it?" (op cit., p. 105).

       In a subsequent interview, referring to both of the
       collaborative papers, Dr. Gallo said this:

          "It was planned to make new publications with the Pasteur
          group in the Summer of 1984 ... This was worked on in June
          of 1984 in which some of our isolates would be compared to
          their LAV/BRU. You will recall from multiple times mentioned
          in these inquiries that I told you, we wrote two papers, one
          in which Chermann was coauthor, one in which Flossie was
          coauthor, Wong-Staal. But on Montagnier's suggestion to me,
          we did not publish those papers" (9/23/90 OSI interview;
          transcript pp. 14-15).

       Dr. Gallo made similar comments to journalist Mark Caldwell. As
       quoted by Caldwell, based on audiotaped interviews, Dr. Gallo
       said this:

          "'... we were set to publish an analysis of IIIb and LAV to
          show how close they were: Flossie Wong-Staal had a paper
          written on the molecular biology, Chermann had one on the
          protein comparisons. He wanted to publish, we wanted to
          publish, but Montagnier changed his mind and decided we
          shouldn't: he said he thought it was superfluous, no longer
          needed. Once the sequencing had been done for both LAV and
          IIIb, anybody could see the similarity. I agreed'" (Mark
          Caldwell, "Robert Gallo and the Virus," unpublished
          manuscript, p. 96).

       Most recently, responding to a set of questions posed to him by
       NCI Director Samuel Broder, Dr. Gallo said this:

          "I actively pushed for a joint comparison of HTLV-IIIB and
          LAV. In April of 1984, before publication of the  Science
          papers, I visited the Institute Pasteur, described some of
          our data and arranged for a collaboration to compare the two
          viruses. Approximately two weeks after publication of the
          Science  papers, one of my associates (Sarngadharan),
          visited the Pasteur and began the initial comparison of the
          viruses. That summer and fall, further analysis took place,
          resulting in two joint manuscripts. (Ultimately, Dr.
          Montagnier chose not to publish the two manuscripts because
          the separate sequencing work was moving ahead so rapidly.)"
          (6/3/94 Gallo-to-Adamson).

       The facts do not substantiate Dr. Gallo's account of the fate
       of the collaborative papers. In reality, Dr. Montagnier did not
       object to publication of either paper. Rather, as seen in the
       contemporaneous documentary record, what Dr. Montagnier said
       was that he did not wish to coauthor the Wong-Staal et al.
       paper, for reasons explicated by him and reasons that may be
       inferred from events that had gone on before.

       On January 2, 1985, Dr. Montagnier wrote to Dr. Gallo,

          "... to let you know our opinion (Francoise, Jean-Claude,
          Simon and I) about the projects of joined papers."

       Dr. Montagnier's letter described the IP scientists' views
       about the status of each of the two papers:

          "1) Paper on proteins: This paper is close to the final
              form. We gave a copy to Sarngadharan at the NCI meeting,
              with the original figures. He basically agreed on this
              version and proposed some minor corrections. If you also
              agree, please send back to Jean-Claude the copy with
              original figures and the proposed corrections, so that
              he can send it to the Editor of  Lancet.

          2) Molecular biology paper: We do not wish to co-sign this
             paper because a) it is essentially the work of Flossie,
             and we have not really participated; b) sequence data on
             LAV, HTLV-III will be published very soon, so that the
             paper may be obsolete when it will appear."

       Clearly, Dr. Montagnier was prepared to complete and submit the
       proteins paper. As for the nucleic acids manuscript, Dr.
       Montagnier did not say it should not be published. Rather, he
       said he and his IP colleagues did not wish to be associated
       with it, hardly a surprise, considering Dr. Gallo's "Paris
       contamination" accusation of the previous summer, followed by
       the contradictory inexplicable assertion in the Wong-Staal et
       al. paper that LAV and IIIb were "independent" isolates.

       It was Dr. Gallo, not Dr. Montagnier, who stopped the
       preparation and submission of both the comparison papers. Dr.
       Gallo responded to Dr. Montagnier's letter on January 25, 1985,
       saying this about the nucleic acids paper:

          "Flossie has spent a lot of time to prepare that paper, and
          it is unfair to her at the final stage to say you do not
          want to publish. Although she did most of the work, had your
          group provided the data, she would have gladly incorporated
          them. Therefore, I feel that we should either publish both
          papers or neither. I hope you can understand my position."

       One more letter remained to be exchanged concerning the
       LAV/IIIb comparisons. Dr. Montagnier wrote to Dr. Gallo on
       March 4, 1985, noting without elaboration that the
       recently-published sequences of the IP and LTCB prototypes
       showed them to be "remarkably similar."

       Dr. Montagnier then voiced the concern underlying much of the
       tension between the IP and LTCB scientists, ever since the HHS
       announcement:

          "Wasting time on both sides should have been avoided from
          the beginning, if in one of your  Science  papers of May
          1984, you had published the comparison with the LAV1 sample
          you had received from us six months earlier."

       H. Dr. Gallo's Explanations

       When Dr. Gallo was questioned by Subcommittee concerning the
       Summer 1984 comparisons of the IP and LTCB viruses, he
       initially responded with such comments as, "I don't know why
       this is interesting" and "It wasn't important to me."
       Subsequently, Dr. Gallo acknowledged that in the Summer of
       1984, he had believed the viruses were identical, but he
       offered a variety of explanations he said he entertained
       concerning these circumstances, explanations that according to
       Dr. Gallo, reflected "absolute proof there is confusion" at the
       LTCB concerning the genetic identity of the viruses .

       Dr. Gallo's explanations are itemized below, to permit the
       reader to make an independent evaluation of their credibility;
       however it first is important to note that if, as he now
       admits, Dr. Gallo actually believed or suspected -- during the
       Summer/Fall of 1984 -- that the LTCB and IP viruses were
       genetically identical, no matter how this came about, it would
       be very significant. The greatest significance lies in the fact
       that no disclosure of the possible identity of the LTCB and IP
       viruses was ever made to the USPTO nor to the U.S. Court of
       Claims, nor -- for a prolonged period -- to the scientific
       community or the general public. Instead, even before the blood
       test patent dispute was formally initiated, Dr. Gallo asserted
       in the scientific literature that the IP and LTCB viruses were
       different isolates  of the AIDS virus.

       Subsequently, with the initiation of the blood test patent
       dispute, Dr. Gallo asserted vehemently that the viruses were
       not, could not be the same isolate. Based on these assertions,
       the attorneys representing the U.S. Government made
       unqualified, strident representations in numerous briefs and
       pleadings, of which the following are representative:

          "The scientific evidence is clear that HTLV-III and LAV are
          not so similar that HTLV-III can be said to be the progeny
          of LAV" (Defendant's Rely to Plaintiff's Memorandum in
          Opposition to Defendant's Motion to Dismiss the Complaint;
          p. 6; U.S. Claims Court);

          "Continuing research revealed that LAV and HTLV-III were two
          different isolates of the AIDS virus" (Brief for Appellee
          the United States; p. 4; U.S. Claims Court).

       In light of the strong arguments put forward in 1985 -87 by Dr.
       Gallo as well as the U.S. Government attorneys to the effect
       that the IP and LTCB viruses were unquestionably distinct
       isolates, it is striking that Dr. Gallo told Subcommittee staff
       that by the end of 1986, "... we were hanging onto straws" in
       continuing to argue that the viruses were different. Asked if
       he shared this insight with the attorneys who, at the end of
       1986, were striving mightily to defend the U.S. against charges
       of patent fraud and misappropriation of the IP virus, Dr. Gallo
       said that by March 1987 (the month in which the French/American
       settlement was consummated), "all of us knew the viruses were
       the same -- from the same person."

       Among the explanations proffered by Dr. Gallo concerning how
       the IP and LTCB viruses might have come to be identical, Dr.
       Gallo said that based on Dr. Popovic's report to him -- "even
       earlier than the Summer of 1984" -- that the September 1983 IP
       virus sample behaved differently from the July 1983 sample, he
       (Gallo) and Popovic believed it was possible that the IP virus
       had been contaminated by Dr. Popovic with one of his own
       viruses, at the LTCB! But this extraordinary assertion is
       suspect on many grounds. In the first place, the mere fact of
       apparent biological differences in the July and September IP
       virus samples might have been due to a number of circumstances
       other than possible contamination by another virus; Dr. Gallo
       offered no explanation for why he and Dr. Popovic -- reportedly
       -- seized so readily on the contamination explanation.

       Casting further doubt on the credibility of Dr. Gallo's account
       of his and Dr. Popovic's speculations, there is no known likely
       candidate among Dr. Popovic's contemporaneous samples for the
       supposed LTCB contaminant virus; Dr. Gallo did not himself
       identify a candidate. Finally, the claim of a possible
       LTCB-to-IP virus contamination is completely undercut by

       Dr. Gallo's knowledge -- in the Summer/Fall of 1984 -- of Dr.
       Murray Gardner's data showing genetic identity of LAV and IIIb,
       data based on LAV obtained directly from IP (see above), and
       later, of comparable data from Dr. Malcolm Martin. In short,
       the explanation of a possible contamination of LAV by an LTCB
       sample is entirely bogus.

       Dr. Gallo offered two other possible scenarios to explain the
       identity of the IP and LTCB viruses, both of them variations on
       a theme of deliberate sabotage. According to the first
       scenario, as related to Subcommittee staff by Dr. Gallo,
       Elizabeth Read-Connole (one of Dr. Popovic's research
       assistants) reported to him (Gallo) -- in February 1984 -- that
       some of the cultures in her hood had been "tampered with."
       According to Dr. Gallo, Read-Connole told him that on one
       occasion, she found the quantities of some of her cultures had
       changed: "the volumes changed overnight," according to Dr.
       Gallo.

       But Read-Connole gave a very different description of this
       incident to OSI. According to Read-Connole's testimony to OSI,
       on the occasion in question, she returned from a weekend to
       find a strange coffee cup next to her incubator, and some of
       her cultures "turned around." Read-Connole made no mention of
       changes in the volume of any of her cultures, neither did she
       mention the possibility of "tampering." Read-Connole told OSI
       she gave the same account to Dr. Gallo. When the discrepancies
       in their accounts was described to him by Subcommittee staff,
       Dr. Gallo said he would have to check into the matter. Dr.
       Gallo never raised the matter again.

       The second sabotage scenario described by Dr. Gallo was alleged
       to have occurred later than the "tampering" incident, i.e., in
       June 1984. Dr. Gallo insisted to Subcommittee staff that he
       would not identify the alleged perpetrator, a person who Gallo
       said "stood to economically gain," who according to Dr. Gallo,
       approached Frederick scientist Dr. Raymond Gilden, telling him
       it could be to their mutual benefit to "set up Gallo," i.e., to
       "show the identity of LAV and IIIb." According to Dr. Gallo,
       the individual in question -- a former NCI scientist -- had
       been "in and out" of the LTCB on several occasions; it was one
       of these occasions, presumably, that the deed was done, i.e.,
       the supposed pilfering of "IIIb" and its transfer to the IP
       scientists in France.

       Dr. Gallo hardly needed to have been so reticent about naming
       names in connection with the alleged "set up Gallo" incident.
       As early as August of 1985, Dr. Gallo wrote a memorandum to Dr.
       Fischinger, telling him about the alleged approach to Gilden,
       including the name of the suspect scientist. Later, in his
       widely disseminated April 1986 "Key Events ..." document, Dr.
       Gallo repeated the allegation, twice, naming the individual
       both times. And Dr. Gallo repeated variations of the story, on
       several occasions, to OSI. But there is no independent
       substantiation for Dr. Gallo's account. Even if it were
       substantiated that some sort of an approach had been made to
       Dr. Gilden, there is no evidence that it had anything to do
       with the fact that IIIb is actually the IP virus, LAI.

       If, in fact, Dr. Gallo and his colleagues were "confused" about
       the origins/identities of the LTCB and IP prototype viruses, in
       the Summer/Fall of 1984, they managed to hide their confusion
       well, insisting in numerous published papers in late-84/early
       85 and thereafter that the viruses, while functionally the
       same, were genetically independent (see above ). Dr. Gallo's
       own accounts to Subcommittee staff varied from one occasion to
       the next, ranging from the sabotage scenarios to the supposed
       "contamination" of the IP virus by an LTCB sample, to the
       assertion that Dr. Montagnier had contaminated the IP virus
       with IIIb, at the IP laboratories in Paris.

       In the final analysis, according to Dr. Gallo' s statements to
       Subcommittee staff, eventually he "learned certain things" that
       made it "too likely the contamination is in our lab" (the
       contamination of the LTCB virus by the virus from the IP). Dr.
       Gallo acknowledged to Subcommittee staff that he had "held out
       for more proof ... perhaps I held out longer than I should
       have." But, added Gallo, "... there is something subjective
       about being human" (7/22/93 interview with Subcommittee staff).
       Dr. Gallo's "bottom line" assessment of his actions vis-a-vis
       the genetic identity of the viruses was this:

          "There is nothing I can be criticized for" (7/28/93
          telephone call to Subcommittee staff).

       VI. GALLO/HHS ON LTCB MATERIALS TRANSFERS

       A. Practices at the LTCB

       Immediately upon publication of the May 1984  Science  papers,
       the LTCB received numerous requests for its IIIb-infected cell
       line, its "H9" uninfected cell line, and related reagents.
       According to commonly-accepted standards for scientific
       collaboration and exchange, these materials should have been
       readily and unconditionally provided to qualified scientists,
       since they had already been published. From a public health
       standpoint, one could even argue that the materials should have
       been unconditionally shared well before their May 1984
       publication, considering the devastation of the AIDS epidemic
       and the potential benefits the materials had for AIDS/HIV
       research.

       Dr. Gallo and his associates provided their cell lines and
       reagents to many who requested them. Dr. Gallo frequently
       recites the numbers of scientists who received these materials;
       the LTCB also has prepared several lists of scientists who
       allegedly received LTCB materials. On numerous occasions, these
       lists have been adduced as evidence of the generosity of Gallo
       et al.

       But the lists of scientists who allegedly received LTCB
       materials (some scientists who were listed by the LTCB as
       recipients did not receive the requested materials) cannot
       obscure the reality that, at the same time as he provided
       materials to some scientists, Dr. Gallo withheld reagents and
       cell lines from others. Dr. Gallo also gave special treatment
       to some scientists, actually offering materials under favorable
       conditions to selected collaborators, while at the same time,
       he delayed responding to the requests of others less favored.

       Most problematic of all, for some scientists, Dr. Gallo imposed
       conditions on transfers of materials that were blatantly at
       odds with accepted principles of conduct in research, at odds
       with Dr. Gallo's professed commitment to public health, and
       that apparently were driven at least in part by the intention
       to keep others from demonstrating the uniquely close genetic
       relationship of "HTLV-IIIb" and LAI.

       Dr. Gallo was aware of and professed adherence to principles of
       free access to research materials. Dr. Gallo articulated those
       principles in 1981, during a deposition in the U.S. District
       Court of Maryland, in the lawsuit,  Hoffman-LaRoche, Inc. v.
       David W. Golde, et al. The Roche/Golde et al.  lawsuit focused
       on sharing of cell lines; Dr. Gallo, whose use and transmission
       of a disputed cell line was an important issue in the lawsuit,
       was questioned at some length about his understanding of
       accepted scientific practices relating to the sharing of
       research materials, and about his own conduct.

       Dr. Gallo's answers in the deposition provide informative
       context for his later statements and actions. Asked if he
       freely gave out cell lines from his laboratory, Dr. Gallo said
       this:

          "Yes. The policy is to make them available to everybody on
          publication who asks who's a qualified investigator, whether
          they work in any place, any affiliation, race, color, or
          creed, and so. The lines are available on publication"
          (7/15/81 deposition of Robert C. Gallo; transcript p. 90).

       Later in the deposition, Dr. Gallo responded to questions about
       the rationale for the free exchange of research materials:

       Q: "Is your sending out of cell lines or other things which you
          feel free in your laboratory to send out something that you
          do to further medical research or scientific research?

       A: I mean, that's what we grew up -- when you're growing up,
          you get taught certain rules of behavior, and that was one
          of the rules of behavior in science that we sort of followed
          ...

       Q: Is it also fair to say that one of the reasons why NCI has
          historically encouraged the sending out of cell lines and
          other things is to further medically useful research?

       A: Of course. They have useful cooperation with outside people
          and useful interrelationships rather than any hostilities of
          holding this or holding that. I think that's obvious" (op
          cit., pp. 93-94).

       The reality of Dr. Gallo's actions vis-a-vis his AIDS research
       materials was far different:

          Dr. Gallo required every scientist who received his cell
          lines and reagents to sign a restrictive transfer agreement,
          which besides routine safety and noncommercialization
          provisions, included a requirement that,

          "performed will be on a collaborative basis with Dr. Gallo
          and his laboratory unless stated otherwise."

       Dr. Gallo has claimed that the collaboration requirement
       included in the LTCB transfer agreement was a mere "formality,"
       and that he never actually mandated that research performed by
       recipients of LTCB materials be collaborative with LTCB
       scientists. But the facts show otherwise. For Dr. Gallo's close
       colleagues, the collaboration provision of the transfer
       agreement was modified to make it less restrictive, as happened
       for Dr. Robin Weiss, on whose transfer agreement Dr. Gallo
       added handwritten notes modifying the requirement that "work
       performed will be on a collaborative basis," to this:

          "Collaboration  at will  for Dr. Weiss O.K. R. Gallo."

       For other scientists -- those deemed by Gallo et al. to be
       potential or actual competitors, the collaboration provision,
       as well as other provisions of the LTCB transfer agreement,
       were modified to make them even more restrictive (see
       below ).

       Contrary to Dr. Gallo's claims to OSI, to NIH Director
       Bernadine Healy, and others, the transfer agreement was not
       imposed on Gallo by NCI/HHS officials, contrary to his wishes.
       In March 1992, in an attempt to defend himself against possible
       disciplinary action for his withholding and restricting use of
       LTCB materials, Dr. Gallo wrote this to Dr. Healy:

          "The restrictions on distribution of HTLV-IIIb were made at
          the request of NIH and HHS administrators, Drs. Fischinger
          and Harmison ... the more restrictive non-disclosure form
          was actually Dr. DeVita's form, not mine."

       But according to NCI Associate Director Dr. Peter Fischinger
       (10/23/85 Fischinger-to-Blout letter) the transfer agreement
       mandating collaboration was "spontaneously drafted" by the
       Gallo laboratory. As for the "more restrictive, non-disclosure
       form," it was not Dr. DeVita's form. Dr. Gallo personally was
       party to the decision by which an extraordinary
       "confidentiality/secrecy" provision was added to the agreement.
       In fact, when Dr. Gallo was asked directly by OSI, "Someone
       made you use that form?" his response was this:

          "No, it was just what they prepared. They didn't make me.
          They said you got to use this ... Well, I didn't pay too
          much attention to it ...

          "It either came from Peter Fischinger or Harmison. I don't
          know who else it could be from. I really don't know. But,
          anyway that is what we were advised to do" (9/23/90 OSI
          interview; transcript pp. 64-65).

       Dr. Gallo failed to even respond to a written request for the
       HIV-specific rabbit antiserum, from Dr. Jay Levy (notes in
       Gallo's hand show he pondered with his staff how to respond to
       the request; yet well before publication of the May 1984
       Science  papers, Dr. Gallo had provided the antiserum to his
       close colleague, Dr. Daniel Zagury);

       Other unique reagents also were withheld from qualified
       scientists, while favored scientists were given ready access.
       On April 25, 1984, Dr. James K. McDougall, of the Fred
       Hutchinson Cancer Research Center in Seattle wrote to Dr. Gallo
       requesting "an HTLV probe" to assay what McDougall described as
       "a large number of DNA samples" from lymphadenopathy and AIDS
       patients. Gallo responded on May 10, telling McDougall, that,
       with respect to an HTLV-III probe,

          "... we are still in the middle of characterizing some
          clones. It will be awhile before we can distribute them."

       Gallo added, in a handwritten "P.S." at the bottom of the
       letter, "Jim, write to me again in about 6 weeks. Bob."

       Apparently taking Dr. Gallo at his word, Dr. McDougall wrote
       again on July 3, 1984, saying,

          "If the HTLV-III clones are now available for distribution,
          we would be delighted to receive them."

       A one-word note, in Dr. Gallo's hand, appears at the top of
       McDougall's letter -- "No."

       In contrast, another scientist, a close Gallo colleague who
       requested the probes on May 31, 1984, received a reply from
       Gallo that said this:

          "We will definitely make the molecular clones available to
          you as soon as they are published. Please remind me then"
          (Gallo-to-Alfred Prince [undated]).

       At the same time  as he freely provided the uninfected H9
       cell line to such close colleagues as Drs. Robin Weiss, Daniel
       Zagury, Dani Bolognesi, Wade Parks, Myron Essex, and Barton
       Haynes, Dr. Gallo significantly delayed providing the line to
       other scientists.  The most
       noteworthy  instance of this conduct was Dr. Gallo's delay
       in providing H9 to the IP scientists, who made repeated
       requests for the cell line so they could complete the LAV/IIIb
       collaborative comparison studies agreed to by Gallo. Dr. Gallo
       agreed in mid-May 1984 to provide H9 to the IP scientists, but
       Montagnier and his colleagues did not receive the line until
       September/October 1984.

       Dr. Gallo claimed to Dr. Chermann that "... the U.S. Government
       position is to hold this line" until it was fully
       characterized. And  despite his previous commitment to provide
       the H9 line to the IP scientists, Dr. Gallo insisted the line
       was not necessary to complete the virus comparisons:

          "... good God, how does the uninfected cell line affect
          comparison between LAV and HTLV-III[b] ... Don't use this
          argument to get the uninfected HT cells. We will send them
          to Pasteur Institute soon, but when I think it is
          scientifically and administratively appropriate" (August 24,
          1984 Gallo-to-Chermann letter).

          (As previously discussed, see above , Dr. Gallo claimed the
          IP virus did not grow in H9 at the LTCB. Dr. Gallo's desire
          to prevent other scientists from disproving this claim
          almost certainly accounts for Gallo's reluctance to provide
          H9 to the IP scientists. When the IP scientists did,
          finally, receive H9, they were readily able to grow their
          virus in the line.)

       Dr. Gallo refused outright to provide the uninfected H9 cell
       line to, among others, Drs. Michael Gottleib, Carel Mulder,
       Frederick Jensen and Malcolm Martin, of the NIH's National
       Institute for Allergy and Infectious Diseases (NIAID).

       Concerning the uninfected cell line, Dr. Gallo told Dr. Martin
       and others he would not provide the uninfected line to them
       because it was "still being characterized" for a planned
       "detailed publication." No such publication ever appeared. Dr.
       Gallo also demanded to know what Dr. Martin planned to do with
       the H9 line, if he did obtain it, and -- clearly trying to head
       off the possibility of LAV/IIIb comparisons -- Gallo told
       Martin this:

           "... I do  not think it would be appropriate for you to put
           the French isolate in them [H9 cells]. That is for them
           [the IP scientists] to do in collaboration with me and my
           co-workers and is ongoing" (6/22/84 Gallo-to-Martin
           letter).

       Dr. Gallo's claims about an ongoing collaboration with the IP
       scientists was, clearly, a sham. Even as Dr. Gallo wrote to Dr.
       Martin that the IP scientists would be growing their virus in
       H9, in collaboration with the LTCB, Gallo was refusing to send
       H9 to Dr. Montagnier and his colleagues, and -- as described
       above  -- mocking their requests for the line.

       In 1990, when he was challenged by OSI/ ORI about his
       withholding and restricting use of the uninfected cell line, as
       well as other LTCB materials, Dr. Gallo (and his associates)
       commenced a chorus of claims about the numbers of scientists
       who had received the cell line. Dr. Gallo's associates went so
       far as to launch a world-wide fax survey (at U.S. Government
       expense) of LTCB materials' recipients, in an attempt to
       substantiate Dr. Gallo's claimed generosity. The results of the
       survey -- for all the cost and time involved -- were largely
       irrelevant, since they frequently referred to reagents other
       than the H9 cell line, and covered periods of time considerably
       later than the period in which the withholding/restrictions
       took place.

       In 1993, confronted with irrefutable evidence that he withheld
       H9 from some scientists, Dr. Gallo acknowledged the
       withholding, for what he claimed was a limited period of time
       in the Summer of 1984, claiming the line was withheld due to
       his concerns that it was contaminated with "IIIb" or some other
       AIDS virus isolate. Dr. Gallo told Subcommittee staff he
       withheld the line from Dr. Malcolm Martin and other scientists
       he felt he "could not trust," who would "stab me in the back,"
       who "would embarrass me or call me dishonest if there was
       something wrong with the cells" (July 22, 1993 staff
       interview).

       But these claims by Dr. Gallo were highly suspect. First,
       according to the May 1984 Popovic et al.  Science  paper, the
       parental "HT" -- actually HUT-78 -- cell line, was,

          "... tested for HTLV before being infected in vitro and was
          negative by all criteria including lack of proviral
          sequences" (Popovic et al.,  224,  p. 498).

       Further, according to both Gallo and Popovic, H9 and the other
       clones were derived from HUT-78 -- in part -- precisely in
       order to ensure that no adventitious agent was present.

       More significantly, Dr. Gallo's claims that he withheld the H9
       line in the Summer of 1984 because he feared it was
       HIV-contaminated are contradicted by documentary evidence and
       his own claims in other fora, i.e., the claim to NIH Director
       Dr. Bernadine Healy that,

          "From about the time of publication of the papers [the four
          LTCB  Science  papers] in May 1984 to August of 1984, I had
          made uninfected H9 available to approximately 45
          investigators" (3/20/92 Gallo-to-Healy letter; p. 2).

       Dr. Gallo's claim that he provided the H9 line to 45 scientists
       by August 1984 is almost certainly an exaggeration. But
       documentary evidence shows that he did indeed provide it to
       several scientists during this period, with no warning that a
       possible contaminating virus might be present, a circumstance
       which, if true, could have devastated the recipient scientists'
       experiments. Yet at the same time, as noted previously, other
       scientists' requests were denied or simply ignored. Dr. Gallo
       cannot have it both ways. Either he arbitrarily and
       capriciously withheld H9, a vital laboratory commodity from
       selected scientists, or he knowingly provided a possibly
       contaminated cell line to several scientists with no warning to
       them of the potential pitfalls they faced in using the line.

       The selective withholding of the H9 cell line and the
       restrictions placed on its use compounded the harm from the
       failure of Gallo/Popovic to disclose the true origins of the
       cell line,  i.e.,  HUT-78, at a time when ready availability of
       the first published cell line permissive for HIV might have
       significantly advanced AIDS/HIV research. Writing in the
       journal  Science,  noted virologist Albert Sabin said this
       about the utility and origins of H9:

          "According to a special National Institutes of Health (NIH)
          committee chaired by Alan Rabson of NCI, the H9 cell line
          was identical with HUT-78. This  is not a trivial or
          irrelevant matter, as it was called by Gallo and Popovic,
          because the use of such uncontaminated, continuous lines of
          human T4 lymphocytes was crucial to the regular isolation of
          the new retrovirus from patients with AIDS and to the
          development of the antibody test by which it was possible to
          establish the etiological association of the virus
          discovered by Montagnier and his colleagues and of
          subsequently isolated viruses related to AIDS" (1990, p.
          466).

       Concerning the restrictions imposed by Dr. Gallo on the
       transmittal of H9 to other scientists, the Richards Committee
       said this:

          "We  consider failure to distribute uninfected H9 cells
          freely after publication of the article by Popovic et al. to
          be essentially immoral in view of the growing seriousness of
          the AIDS epidemic" (p. 3).

       For a few select  scientists, Dr. Gallo crafted a one-of-a-kind
       transfer agreement, tailor-made to restrict as tightly as
       possible the use of his cell lines and reagents by the
       recipient. Some of these agreements prohibited certain kinds of
       research. Others , like the agreement created for Harvard
       University's Dr. James Mullins, itemized the only kinds of
       research that could be done. Specifically, Mullins' transfer
       agreement specified that he could obtain the uninfected H9 cell
       line only by agreeing in advance to the following:

          "Use of H9 will be limited to my immediate laboratory for
          the specific purpose of transfection of CTV and HTLV-I DNA.
          No other experiments will be carried out with this cell line
          without prior discussions with Dr. Gallo."

       Even more restrictive  was the collaboration provision
       developed for the transfer agreement for Harvard University's
       Dr. William Haseltine. (LTCB records show this restrictive
       provision was crafted by Dr. Gallo's close associate, Dr.
       Flossie Wong-Staal. It also appears that Dr. Wong-Staal, with
       Dr. Gallo's knowledge and approval, crafted the restrictive
       provision imposed on Dr. Mullins -- cited The collaboration
       restrictions imposed on Dr. Haseltine were daunting. They not
       only specified the LTCB scientists with whom collaboration was
       mandated, they also -- as was true for Dr. Mullins -- limited
       the kinds of research Dr. Haseltine was able to perform with
       the LTCB's materials:

          "Work  performed will be on a collaborative basis with Dr.
          Gallo, Dr. Popovic, Dr. Wong-Staal, and their colleagues (to
          be specified by them) for the specific purpose of studying
          expression of HTLV-LTR linked genes in these cells. No other
          experiments should be initiated with these cells without
          prior discussion with the above named people."

       For Malcolm  Martin and the CDC scientists and only for these
       individuals, whom Dr. Gallo knew possessed LAV, there were
       special restrictions added to the transfer form required of
       most scientists who sought the infected cell line (Dr. Martin
       did not request the infected line, but Dr. Gallo "offered" it
       to Martin at the same time as he [Gallo] refused to provide him
       the uninfected line).

       One of the special restrictions common to both Martin and the
       CDC scientists, said this:

          "Work with  HTLV-III will not be published without prior
          approval by Dr. Gallo."

       The second special restriction had this element in common to
       both Martin and the CDC scientists:

          "Reagents will not be used in comparisons with other
          viruses."

       For the CDC scientists, there was an additional condition:

          "They  [Gallo's materials] will only be used for
          seroepidemiologic studies and blood bank assays."

       Dr. Frederick Murphy, in a June 11, 1984 memorandum he wrote to
       CDC Acting Director, Dr. Walter Dowdle, gave a vivid
       description of the meeting with Dr. Gallo at which Gallo
       reportedly threatened he would not provide the CDC scientists
       the HIV research materials they were seeking:

          "... it was a tense moment, fraught with the possibility of
          non-delivery. Our tack, stated orally in several different
          ways as we discussed the matter with Dr. Gallo, was that
          public health purposes were paramount. Dr. Gallo agreed. In
          our conversation, it became clear that comparison of his
          HTLV-III prototype with the French prototype LAV occupied a
          separate niche -- the comparison was seen as having both
          academic and public health purposes. Because of the latter,
          I offered, using several tacks, to have certain comparative
          tests between his HTLV-III and the French LAV done at CDC;
          Dr. Gallo declined each time, stating that such would be
          done in his lab. It was quite clear from our discussion that
          this was the only subject which engendered such difficulty
          -- when we switched to other themes ... there was no
          problem."

       Dr. Murphy also said he understood the prohibition on
       "comparisons with other viruses" to mean comparisons with LAV.

       B. Practices at NCI, NIH and PHS

       It is clear that the impetus for selective withholding and
       imposition of restrictive conditions of LTCB research materials
       came initially from Dr. Gallo. But it is equally clear that for
       a prolonged period, Dr. Gallo's superiors at the NCI,
       particularly Drs. Fischinger and DeVita, gave Gallo license to
       give and withhold his materials at will. It also is clear that
       at the PHS level, Dr. Lowell Harmison institutionalized the
       selective withholding of research materials, as a matter of
       political and commercial policy.

       The documentary record from early Summer 1984 shows that NCI
       and NIH officials were aware of problems concerning Dr. Gallo's
       failure to unconditionally share his research materials.
       Minutes of the June 18, 1984 meeting of the NIH AIDS Executive
       Committee show that NIH Director Dr. James Wyngaarden ordered
       Dr. Gallo to "immediately" furnish the uninfected H9 cell line
       to Malcolm Martin and CDC. Dr. Gallo provided the line to CDC;
       he did not obey the order to provide the cell line to Dr.
       Martin.

       Dr. Wyngaarden also ordered Drs. Gallo and Fischinger to
       prepare a response concerning Gallo's provision of LTCB
       materials to other scientists. Dr. Fischinger's memorandum
       transmitting Dr. Wyngaarden's order to Dr. Gallo was typical of
       the boosterism Fischinger typically displayed toward Gallo:

          "If you did not honor an isolated request, you may state
          your reasons. As we discussed, it seems reasonably clear
          that your past concerns can be easily validated" (6/19/84
          Fischinger-to-Gallo memorandum; p. 1).

       Fischinger also told Gallo that:

          "Dr. J. Wyngaarden was highly supportive of your stated
          position and defended your perspective over the objections
          of Dr. K. Sell [of NIAID] at this meeting" (op cit., p. 1).

       But Dr. Wyngaarden told Subcommittee staff his support for Dr.
       Gallo extended only to his (Gallo's) position regarding his
       desire to obtain samples from CDC. Dr. Wyngaarden said he would
       never have supported Dr. Gallo's actions in imposing conditions
       like those imposed on James Mullins and the scientists at the
       CDC, or conditions like those Gallo attempted to impose on
       Malcolm Martin.

       No document prepared by Gallo in response to Dr. Wyngaarden's
       directive was ever provided to the Subcommittee. Dr. Wyngaarden
       told Subcommittee staff that he questioned Gallo about the
       matter, but according to Wyngaarden, Gallo "insisted he was
       sharing his samples as fast as he could." Moreover, said
       Wyngaarden, Gallo showed him a "two-inch thick" list of names
       of scientists to whom he supposedly sent his cell lines and
       reagents. According to Dr. Wyngaarden, Dr. Gallo told him there
       was only one person to whom he had refused to send materials,
       i.e., Malcolm Martin. Restrictive conditions on materials,
       apparently, were not discussed.

       On July 2, 1984, at a follow-up meeting to the June 18 meeting
       of the NIH AIDS Executive Committee, Dr. Peter Fischinger
       presented to the Committee the "Policy on Requests for the
       Distribution of NIH Cell Lines Used in AIDS Research and
       Development." According to minutes of the July 2 meeting,

          "Dr. Fischinger, who prepared the Policy, said that it was
          discussed at a meeting of Drs. Wyngaarden, DeVita, Chabner,
          Gallo and Harmison on July 2 ..."

       The "Policy" actually institutionalized and/or provided cover
       for some of Dr. Gallo's more arbitrary actions relative to
       withholding and/or restricting use of LTCB materials. The two
       most problematic provisions of the July 1984 Policy were these:

       (1) Concerning the "IIIb"-infected cell line,

          "... all further transfer (sic.) to non-profit organizations
          should also include a signed confidential disclosure
          agreement" (p. 2).

       (2) Concerning the uninfected cell line:

          "Release of the uninfected cell line to non-profit concerns
          shall presently be at the discretion of Dr. Robert Gallo,
          LTCB, NCI, with a discussion of the resulting collaborative
          plan. The standard caveats of non-release to third parties
          for commercial purposes, and the prudent containment
          practices on infection shall be heeded as per the required
          confidential disclosure agreement" (emphasis added; p. 2 ).

       The "confidential disclosure" provisions of the NCI/NIH
       transfer agreement were as follows:

          "It [the recipient institution] will maintain in confidence
          all information relating to these materials and not disclose
          this information to others without specific written
          permission, in advance, from the Director, National Cancer
          Institute, or his designee... It is understood that you will
          obtain secrecy agreements from all employees to whom the
          proprietary materials or information will be made available
          as may be necessary to insure their compliance with the
          terms of the agreement."

       Prospective imposition of these conditions, especially in
       academic research settings, was bad enough. But in August 1984,
       when NCI attempted to impose the conditions retrospectively,
       the result was a series of strong protests from officials of
       those organizations, protests both at the infringement on
       academic freedom and the attempted suppression of information
       in the fact of an devastating epidemic. By March 1985, NCI
       Director Vincent DeVita had found it necessary to prepare a
       form letter to respond to the protests. DeVita's letter
       included this:

          "If you interpret that the 'Confidentiality Research
          Agreement' may preclude publication in scientific literature
          without NCI's prior approval, you are overly restrictive.

       The government's position has always been that general
       dissemination of new research information by publication is
       very much appropriate and that such information would only
       serve to ameliorate the current status of treatment and
       prevention of AIDS. Accordingly, please feel free to publish
       your research results. Should you want to consider alternative
       dissemination methods which could in some way adversely affect
       our current licensees, please contact us for further
       discussion."

       It is unclear what "alternative dissemination methods" might
       have adversely affected HHS' five blood test licensees. But the
       mere inclusion of this provision in DeVita's letter is
       revealing with respect to NCI/HHS' motives in restricting
       access to the LTCB's research materials, i.e., to protect "our
       current licensees." Moreover, it is clear that in other
       significant respects, HHS was more-than-zealous in its
       protection of its licensees, even at the cost of public health
       (see below).

       Concerning the policy on the uninfected cell line, the
       codification of the provisions that placed release of the line
       "at Dr. Gallo's discretion" clearly refutes Dr. Gallo's
       assertion that the materials transfer restrictions were forced
       on him by higher officials. The codification also is
       noteworthy, considering that Dr. Wyngaarden, at least, was on
       notice that there were problems with Dr. Gallo's inequitable
       release of the line. In light of Dr. Gallo's demonstrated
       inequitable conduct, the provision vesting authority for
       releasing the line at "Dr. Gallo's discretion" provision was
       clearly at odds with Dr. Wyngaarden's dictum, recorded in the
       minutes of the June 18 NIH AIDS Executive Committee meeting,
       that,

          "... we need a tight and consistent policy, and ... we have
          to have objective criteria as soon as possible."

       Consistency and objectivity vs. "at Dr. Gallo's discretion" --
       these conditions were mutually exclusive. Yet, so far as is
       known, Dr. Wyngaarden made no objection to the NCI policy, when
       it was forwarded to him from Fischinger, through DeVita.

       Whatever NCI/NIH officials said and did in 1984 concerning Dr.
       Gallo's actions vis-a-vis his reagents, in 1992-93, these
       officials professed dismay and indignation when they were
       confronted with the documented evidence concerning those
       actions. In 1993, when Dr. Wyngaarden was shown Dr. Gallo's
       transfer agreement mandating prepublication review and
       no-comparison restrictions for the CDC scientists, Dr.
       Wyngaarden's reaction was immediate and unequivocal:

          "Clearly  inappropriate."

       Dr. Fischinger told Subcommittee staff he believed that Dr.
       Gallo, as a Federal employee, had a "special responsibility" to
       make his materials freely available. Dr. Fischinger said,
       concerning the restrictions Dr. Gallo placed on Malcolm Martin
       and CDC's receipt of his cell lines, "I wouldn't do it, but Bob 
       must answer for himself." Dr. Fischinger was adamant on one
       fundamental point:

          "DeVita, Wyngaarden and I all believed the reagents should
          go out!"

       As for DeVita, he expressed himself more vividly, saying that
       All  restrictions are anti-science." Shown the restrictions
       Gallo placed on Malcolm Martin and the CDC scientists, Dr.
       DeVita's response was, "I think it's terrible."

       C. The Unique Role of Dr. Lowell Harmison

       Dr. Lowell Harmison alone, to this day, defends Dr. Gallo's
       imposition of restrictive conditions on his research materials,
       particularly relating to the CDC. Dr. Harmison's statements in
       this regard seemed to reflect Dr. DeVita's observation that by
       the Summer of 1984, Dr. Harmison had "assumed ownership of"
       Gallo.

       When questioned by the Subcommittee in Executive Session, Dr.
       Harmison initially denied knowledge of the conditions imposed
       on the CDC scientists' use of LTCB materials. Yet when he was
       confronted with the actual transfer agreements the CDC
       scientists were forced to sign, Dr. Harmison defended them:

          "At this period of time, no one knew the degree of
          infectiousness of this particular virus. There were very
          small quantities of this virus available. There were a
          limited number of people with detailed knowledge and
          experience in working in this area.

          The most competent laboratory in this area was clearly that
          of Dr. Gallo's laboratory on retroviruses. The CDC did not
          have this capacity of the level of Dr. Gallo. CDC was not
          charged to do retroviral laboratory research...

          So to me, as I look down over the seven conditions here,
          they are all very responsible and very logical when you did
          not know the nature of the infectious disease ... each one
          of these have a level of specific responsibility that would
          be required of any prudent scientific laboratory director.
          So I find no difficulty whatsoever in those conditions"
          (7/21/93 hearing of the Subcommittee on Oversight and
          Investigations; transcript pp. 54-55).

       But there was no factual basis for Dr. Harmison's assertions
       supporting Dr. Gallo's restrictions on the CDC scientists. The
       claim that "there were very small quantities of this virus
       available" is directly contradicted by the fact that as early
       as March/April of 1984, LAI/MOV and LAI/IIIb were being grown
       in liter quantities at the LTCB contractor, Biotech
       Laboratories. Likewise, Dr. Harmison's claim that the CDC did
       not have the required competency to work with the AIDS virus is
       simply absurd, considering that by the Spring of 1984, when
       they sought Dr. Gallo's cell lines, the CDC scientists had been
       working with the IP virus and their own isolates, for nearly
       one year.

       Dr. Harmison even defended Dr. Gallo's proscription of CDC's
       publishing without his (Gallo's) prior approval, although Dr.
       Harmison was not able to explain why this condition, like the
       "no comparisons" condition, should have been uniquely imposed
       on the CDC and Malcolm Martin's laboratory. Dr. Harmison
       acknowledged that the "prior approval" condition was "an
       absolute constraint" on publication, yet he maintained, "I
       think that was appropriate at this time..."

       Dr. Harmison also promulgated  and, to this day, adamantly
       defends, HHS' withholding of LTCB materials from foreign
       governments and from any commercial firms other than the five
       HHS blood test licensees, three of whom, (both at the time of
       their selection and thereafter) were contractors of the LTCB.
       The 1984 NCI/NIH policy actually incorporated protection of the
       HHS licensees as an overarching principle, placing patents and
       potential financial rewards above public health. The policy
       included these elements (concerning the uninfected cell line):

          "Because patent protection does exist on this cell line, and
          because a number of ongoing useful experiments are taking
          place within NCI which could lead to further patents by the
          Government, release of this cell line to non-license
          for-profit organizations shall not take place at this time.

       An additional reason is that a number of parallel uses of this
       cell line, which could readily lead to analogous AIDS blood
       tests, is obvious. It is considered prudent that the
       effectiveness and rapidity of the realization of the AIDS blood
       test by the existing licensees should not be compromised by
       additional competing technological thrusts" (p. 3).

       In other words, by NCI/NIH policy, competition in developing
       the best HIV blood test was to be artificially constrained by
       restricting the availability of a uniquely permissive cell line
       for growing the virus.

       HHS officials and Dr. Gallo himself asserted that their
       strategy for commercializing the LTCB blood test, including
       limiting the number of licensees, was first and foremost a
       means for ensuring that only quality tests would be developed.
       Thus, in late Summer 1984, in denying a request from the
       Commonwealth of Australia for a license to scale up production
       of "IIIb" to make a government-issue HIV antibody blood test,
       Dr. Edward Brandt (the letter was actually written by Lowell
       Harmison) said this:

          "With regard to your request for permission to scale up
          production of the HTLV-III antigen for non-research purposes
          ... in June of this year we entered into licensing
          agreements with five organizations ... These five licensees
          were selected after scientific and technical reviews ...
          This licensing process has now been completed and we do not
          contemplate any further licensing, at least for the time
          being ...

          "We think that the shortest pathway to obtaining accurate,
          sensitive, and highly selective blood test data is through
          the process that we have established for the assay. It
          should provide a reliable and effective screening tool in
          assuring a safe supply of blood and blood products. These
          assays will be made available through our licensees for use
          as specified in the product license to be issued by the Food
          and Drug Administration. Thus, the benefits of these efforts
          would offer to you a quality assay in minimal time"
          (Brandt-to-McCarthy; undated).

       Dr. Gallo said this about the U.S. Government policy of
       restricting access to LTCB HIV-related materials:

          "Now, there are things that we had to be certain about.
          Remember I could get in trouble for sending this out to
          anybody. The Government was concerned about fraudulent blood
          tests, unfair blood tests by somebody else, by some
          companies, quote. The Government was also concerned that I
          would give somebody AIDS by mailing this stuff out. So, we
          were under reasonable restrictions about who we could give
          it to. They had to show that they had the right facilities
          to grow the virus, enough technical competence and that they
          weren't about to make a test with it. Okay. This was not
          something I had full control over" (8/3/90 OSI interview;
          transcript pp. 124-125).

       Dr. Harmison, during the July 21, 1993 Subcommittee hearing,
       also asserted the "quality control" argument as a rationale for
       restricting commercial firms' access to the LTCB materials:

          "The issue as it emerged in late August of 1984 hinged on
          the following point. When you grant a license to a company
          or to any organization, you have granted them a license to
          do something. In return they have committed to do something.
          During the period of late August, the virus was going from
          research labs out, and different organizations were coming
          up to try to produce different blood tests without getting
          the proper clearances for those blood tests.

          When five companies had gone through a rigorous process to
          qualify the most expert and capable organizations to deliver
          that blood test acceptable to the Red Cross, acceptable to
          the FDA, and clean up the blood supply, so what was
          occurring, we had a lot of me-too organizations coming
          around all over the country wanting to get virus.

          Suddenly they were testing a blood test. And that was
          infringement of the license granted. So when research
          quantities were moved out for research purposes, the only
          objective was to have that you have got to use it for
          commercial purposes, you have to come back and say, we would
          like a license now to commercialize, only to have a level
          playing field. That is the only basis upon which any
          conditions would have been applied to a virus, to my
          knowledge (transcript; pp. 49-50).

       But the fact is that despite numerous requests, including
       requests from such reputable manufacturers as SmithKline
       Beckman, HHS adamantly refused to issue licenses beyond the
       initial five. Moreover, the whole "quality control" argument
       for limiting the licenses was bogus; quality control and
       reliability are the responsibility of the Food and Drug
       Administration (FDA), and only the FDA. No matter how many
       licensees developed an HIV antibody blood test,  only  the
       tests approved by the FDA could be marketed in the United
       States. There was nothing to substantiate that allowing more
       companies to develop antibody blood tests would result in lower
       quality tests. Indeed, logic suggests that greater competition
       would have spurred improvements in some of the worst performing
       of the first-generation U.S. tests developed by HHS' allegedly
       rigorously screened/carefully selected licensees, particularly
       the tests developed by Abbott Laboratories and
       Electro-Nucleonics. These tests embodied significant
       specificity deficits, and in the case of Abbott, significant
       sensitivity deficits as well.

       Elsewhere in his Subcommittee hearing testimony, Dr. Harmison
       made it clear that the limited number of HHS licensees was a
       calculated strategy to reduce competition and thereby heighten
       the likelihood of profitable returns for the five licensees:

          "... to get industry's effective participation, you must do
          something that offers them a grant or a contract. They must
          have within their hands the capacity to move forward. And
          that is basically removing the degree of uncertainty that
          you can remove" (op cit., p. 21).

       Dr. Harmison also specifically invoked protection of the HHS
       licensees as the reason that foreign governments were denied
       licenses to make their own blood test:

          "... you have to keep in mind that the participation of
          industry to invest -- and I am giving you my estimate --
          something in excess of $10 to 12 million of their money,
          which wasn't available within the department to get this
          blood test available. The government went through a very
          elaborate process to license, I believe, five contractors
          ... and they had a license to practice this invention not
          just in the U.S. but worldwide" (op cit., p. 37).

       Even in the face of clear documentary evidence to the contrary,
       Dr. Harmison denied that foreign governments' requests to use
       LTCB materials were refused. Following a question about whether
       Great Britain and Australia were denied licensing or permission
       to use the LTCB virus, (Canadian public health officials also
       were denied), there was this exchange:

          A: "No, no. They were not denied. The U.S. license did not
              permit -- you can't give someone limited exclusive
              license or say to them, 'if you invest your money and
              take this blood test from a laboratory toy to a useful
              blood test that I can go down here to a clinic on the
              corner of X street and produce the virus, those
              companies invested their money and did those tests to
              get this approved to be marketed, with the hope of
              making some return on those investments.

              We, the government, gave them that license. You can't
              then turn around and say, I am going to give this
              government the license or that government the license
              ... you are not being responsible to your agreements. So
              that is a big misunderstanding.

          Q:  You are not being responsible to these licensees?

          A:  "We absolutely were responsible to the governments and
              to the licensees. We were honoring the commitment the
              government made to have the virus and the license
              produced and marketed in this country, and that was part
              of international commerce. That is how it is done.

          Q:  That is how you did it.

          A:  No, that is how the department did it. That is the
              standard (op cit., p. 38).

       It is important to note that Dr. Harmison's authority at HHS
       concerning these matters was absolute. Thus, Dr. Harmison's
       expression of his personal views was, in fact, a statement of
       HHS policy. But there is no substantiation for HHS/Harmison's
       assertion that in order to entice manufacturers to make HIV
       blood tests, it was necessary to limit the number of licensees.
       In June 1984, when HHS announced the availability of licenses,
       it was inundated with dozens of applications, at a time when
       there was no mention that the number of licenses would be
       limited. Moreover, when the limitation policy was announced,
       manufacturers demanded that HHS issue additional licenses. Any
       company that could manufacture a reliable test, at a
       competitive price, stood to make money. All the HHS/Harmison
       policy achieved was to enable a select few companies, most
       notably Abbott Laboratories, to make a great deal of money on
       the HIV antibody blood test, because competition had been
       artificially restrained.

       VII. THE FRENCH/AMERICAN DISPUTE: FIRST PHASE

       A. Scientific Events Leading to the Dispute

       1. Scientific Papers: HIV is Not an "HTLV":

       August 1985 marked the beginning of the French/American
       dispute. Several events earlier in 1985 heightened tensions
       even before the confrontation in August. First was the
       publication in January/February 1985 of several scientific
       papers, including publication of the complete nucleotide
       sequences of LAI/LAV, LAI/IIIb, and a third early HIV isolate,
       ARV. One major revelation in these papers, a revelation in
       direct opposition to the prior theorizing of Gallo  et al.,
       was that the AIDS virus had little or no relationship to HTLV-I
       and/or the HTLV family of retroviruses.

       A paper on the morphology of "HTLV-III" actually included Gallo
       and his associate, Dr. Flossie Wong-Staal, among the coauthors.
       Published in January 1985, the paper made clear that the AIDS
       virus was far more likely to be a member of the lentivirus
       (visna) family of retroviruses than a member of the oncovirus
       or "HTLV" families. First author of the paper was Dr. Matthew
       Gonda, the expert electron microscopist at the Frederick Cancer
       Research Facility who performed the majority of the most
       significant EM work for the LTCB in late-1983/1984. From the
       outset of his work for the LTCB on putative AIDS virus samples,
       beginning with LAV, Dr. Gonda identified the virus as a
       "lentivirus," clearly distinguishable from the HTLV family.
       Notably, Gallo et al. did not report Dr. Gonda's classification
       in their seminal papers.

       The January 1985 Gonda et al. paper contained these very
       significant observations:

          "HTLV-III ... is morphologically distinct from HTLV-I and II
          and type C viruses ... Morphologically, HTLV-III resembles
          visna and equine infectious anemia viruses, both members of
          the lentivirus family, more closely than HTLV-I or -II or
          type C viruses ...

          "On the basis of their morphology, the viruses now
          classified as Lentivirinae are indistinguishable from
          HTLV-III. There are also other features that the
          lentiviruses have in common with HTLV-III, such as their
          cytopathic ... effects in vitro and their ability to produce
          persistent debilitating diseases in vivo. In contrast,
          HTLV-I and -II cause T-cell malignancies, immortalizing the
          infected cell" (Gonda  et al.,   Science,   227,  1985, pp.
          174 - 176).

       The Gonda et al. paper made clear that the lentivirus
       classification of the AIDS virus was no mere academic issue,
       but an issue with important implications for understanding the
       very nature of HIV. Speaking of previously-identified members
       of the lentivirus family, Gonda et al. made these important,
       prophetic observations:

          "... by a process called 'antigenic drift,' these viruses
          mutate rapidly in the env gene, thus allowing variants to
          escape the immune system and induce a new cycle of disease
          ... Isolates of HTLV-III also show heterogeneity in the env
          gene region ... This further similarity between HTLV-III and
          lentiviruses indicates that development of a vaccine to
          prevent AIDS may prove to be a considerable challenge (op
          cit., pp. 176 - 177).

       Gonda et al. summarized the principal findings of their paper
       as follows:

          "... a greater extent of nucleotide sequence homology exists
          between HTLV-III and visna virus than between HTLV-III and
          any of the other viruses ... The data provide strong
          evidence for a close taxonomic and thus evolutionary
          relation between HTLV-III and the Lentivirinae subfamily (op
          cit., p. 173).

       Publication of the Gonda et al. paper occurred only over the
       strong opposition of Dr. Gallo. Dr. Gonda told OSI about the
       impassioned telephone call he received from Dr. Gallo and how
       he (Gonda) dealt with it:

          "You know, I am at home. The guy is calling me from Japan or
          Germany or wherever it is, and he was very upset because I
          submitted a paper to him proving it was a lentivirus ...

          "... he yelled and screamed and I sat there and listened to
          the first 15 minutes of his argument and I said, now you
          have to listen to mine ...

          "I said ... something looks like a duck, I don't care if its
          feathers are black and white. It looks like a duck. It is
          still a duck. I am not going to call it something different"
          (8/13/90 OSI interview; transcript pp. 86 - 89).

       Dr. Gonda spoke about his understanding of the origins of Dr.
       Gallo's angst:

          "I think what they are saying, and I know that I have heard
          that the patent hinged on something being HTLV-related or
          something like that ... if it wasn't an HTLV then he had
          nothing" (op cit., pp. 99 - 102).

       Dr. Gonda was so concerned about Dr. Gallo's telephone call
       that he reported it to the General Manager of the Frederick
       facility; according to Dr. Gonda, eventually even NCI Director
       Dr. Vincent DeVita was drawn into the controversy. Dr. Gonda
       and his boss, Dr. Raymond Gilden, seized on the clever
       expedient of a proposed schema for classification of the
       viruses that, due to an ingeniously-drawn border, placated Dr.
       Gallo without doing significant damage to the truth. Concerning
       the paper, Drs. Gonda and Gilden, for the most part, stood by
       their ground, although they did agree to remove from the paper
       several passages that Dr. Gallo deemed offensive. The paper was
       published, but the difficulties Dr. Gonda encountered
       illustrate vividly the fervor with which -- even at this late
       date -- Dr. Gallo continued to pursue HIV/HTLV linkages.

       As for the sequence papers, the papers other than those by
       Gallo et al. also made clear how different the AIDS virus was
       from the known human retroviruses, the "HTLVs." Thus, the paper
       by Wain-Hobson  et al.,  from the Institut Pasteur, reporting
       the sequence of LAI/LAV, concluded this:

          "These data place LAV apart from the previously
          characterized family of human T-cell leukemia/lymphoma
          viruses" (Wain-Hobson et al.,  Cell,   40,  p. 9).

       A parallel paper by Dr. Jay Levy and his associates, reporting
       the sequence of the HIV isolate "ARV-2," reported that:

          "... ARV-2 was as closely related to murine and avian
          retroviruses as it was to human T-cell leukemia viruses
          (HTLV-I and HTLV-II)" (Sanchez-Pescador  et al.,   Science,
          227,  p. 485).

       Most telling of all, a paper reporting the sequence of LAI/IIIb
       by an independent research team, comprising scientists from the
       CDC as well as from the private biotechnology firm, Genentech,
       reported this:

          "Our results establish that LAV/HTLV-III has no nucleotide
          homology with previously characterized animal and human
          retroviruses ... (Muesing  et al.,   Nature,   313,  p. 450)

       and this:

          "... the HTLV-III genome seems to be entirely unrelated by
          nucleotide homology to previously characterized retroviral
          sequences, ... including HTLV-I and HLTV-II ..." (op cit.,
          p. 456).

       Muesing et al. noted that their data were "inconsistent" with
       the LTCB reports by Arya et al. (August 1984) and Hahn et al.
       (November 1984) of an HTLV-III/HTLV-I homology.

       Muesing et al. added that:

          "These results and the observation that the virus is
          morphologically distinct from the type C viruses ... lead us
          to propose that LAV/HTLV-III is a member of a novel class of
          retroviruses, perhaps including the equine infectious
          anaemia virus, which has a similar morphology and a
          serologically-related major core protein" (op cit., p. 457).

       Dr. Gallo later said it was the sequence data that finally
       convinced him how different the AIDS virus was from HTLV-I and
       II. A July 1985 letter from Dr. Gallo to  LeMonde's  Claudine
       Escoffier-Lambiotte said this:

          "... since the nucleic acid sequence data has become known,
          it is clearly much more different than we or the Pasteur
          group knew or even suspected before ... we all recognize now
          that they (LAV/HTLV-III) are only distantly related to
          HTLV-I or HTLV-II ..." (7/1/85 Gallo-to-Escoffier-Lambiotte
          letter; p. 3).

       But in the January 1985 LTCB paper reporting the "HTLV-III"
       sequence, there was no such admission. Indeed, there were
       repeated references to similarities and linkages among HTLV-I,
       -II, and -III (Ratner  et al.,   Nature,   313,  1985, pp.
       277-284).

       One immediate result of the demonstrated absence of HIV/"HTLV"
       homology was an important news article that appeared in the
       scientific media, an article dealing with what it correctly
       termed Dr. Gallo's "misclassification" of the AIDS virus. The
       article, published in the February 7, 1985 issue of  New
       Scientist, was written by reporter Omar Sattaur.

       Sattaur's article asserted that the publication of the
       sequences of LAV and HTLV-III proved that Gallo "has
       misclassified the virus that causes AIDS." Furthermore, said
       Sattaur, not only had this misclassification deprived the IP
       scientists of rightful recognition for their discovery of the
       AIDS virus, much more serious consequences were involved:

          "While large sums of research time and money are spent on
          trying to understand how the AIDS virus fits into the HTLV
          group, thousands continue to die from AIDS" (O. Sattaur,
          "How Gallo Got Credit for AIDS Discovery,"  New Scientist,
          2/7/85; p. 3).

       Sattaur's story noted the IP team's long-standing belief that
       the AIDS virus might belong to the lentivirus group. The
       article quoted the chairman of the AIDS Working Group of the
       British Medical Research Council saying this:

          "'HTLV-I and LAV have similarities in that they are both
          retroviruses that attack T-cells. But their genes are very
          distinct and they therefore cannot be closely related.
          Experience of taxonomy shows that it is wrong to rush to
          name a virus when you've got only partial information'" (op
          cit., p. 4).

       The  New Scientist  article also dealt with the scientific,
       political, and financial implications of the obvious functional
       identity of the IP and LTCB prototype viruses. In this regard,
       Sattaur quoted IP scientist, Dr. Simon Wain-Hobson:

          "'The viruses LAV and HTLV-III are so close that it proves
          that Montagnier was right and that he was the first to
          discover it'" (op cit., p. 3).

       Sattaur described the patent and financial implications of the
       functional identity of the viruses:

          "Deciding who has priority on the discovery of the virus is
          important for reasons other than to glorify the discoverers.
          The total U.S. market for diagnostic kits alone, to screen
          blood for the presence of the AIDS virus, is estimated at
          $80 million. Who receives the money from patent rights
          obviously depends on who first patented the procedure for
          isolating the AIDS virus" (op cit., p. 3).

       Whether or not one accepts the proposition that "who first
       patented the procedure for isolating the AIDS virus" would
       determine "who receives the money from patent rights," the fact
       is that by the time of the Sattaur story, the IP patent
       application was no secret. As early as July 1984, the journal
       Nature  reported that the IP (and its commercial ally, Genetic
       Systems, Inc. [GS]),

          "... claims patent priority for the venture over the test
          developed by Dr. Robert Gallo ... The basis for the GS claim
          is that the Institut Pasteur in Paris filed for world-wide
          patent rights ... in September 1983 ..."  (310,  1984, p.
          174).

       Dr. Gallo was quoted as saying that the LTCB test "can identify
       AIDS patients with 100 per cent efficiency," presumably based
       on the idiosyncratic study of Safai et al. Referring to the IP
       scientists and their GS affiliates, Dr. Gallo said,

          "... 'they're only in it for the money'" (op cit.).

       The scientific media were not the only ones who noted the
       patent/financial implications of the LAV/IIIb identity. The
       February 28, 1985 issue of  The Financial Times  carried a
       story by Paris reporter David Marsh, headlined, "French
       Evaluate AIDS Test as Patent Row Continues." Marsh's story
       described "a unique trans-Atlantic battle over patent rights
       which has not yet been resolved"  (The Financial Times,
       2/28/85; p. 8). The story also noted the different names
       Montagnier and Gallo had given their prototype AIDS virus
       isolates, adding this:

          "Publication almost simultaneously in January this year by
          the French and Americans of the genetic structure of the two
          viruses ... showed them to be virtually identical" (op cit.,
          p. 8).

       The Financial Times  story noted that the LAV/IIIb sequences
       also showed that the AIDS virus "... shows some significant
       differences from the earlier-discovered HTLV-I and -II viruses
       discovered by Dr. Gallo"; the story further noted that the AIDS
       virus, unlike HTLV-I and -II, "kills T-cells which control the
       body's immune response, whereas HTLV-I and -II make them
       multiply in an uncontrolled manner" (op cit., p. 8).

       And the story added this:

          "These two pieces of evidence, throwing doubt on whether the
          AIDS virus really forms part of the HTLV group,  seem to
          clinch the Pasteur team's claim  to paternity of the virus
          discovery. Much more than scientific prestige is at stake.
          Patent rights on the soon-to-be-marketed diagnostic tests --
          as well as on an eventual vaccine for the disease -- will be
          worth a fortune both to the research institute and to the
          individual scientists who can prove they were first in the
          AIDS field" (emphasis added; op cit., p.8).

       Omar Sattaur's February 1985 article evoked an outcry among Dr.
       Gallo's colleagues, who wrote a long letter to  New Scientist,
       the theme of which was that:

          "Dr. Gallo and his colleagues never reported close
          relatedness of HTLV-III to HTLV-I or to HTLV-II."

       Presumably, the author of this letter, Dr. Dani Bolognesi, a
       close Gallo associate, never saw the Gallo et al. blood test
       patent, which contains the affirmation that:

          "The biological properties of HTLV-III and immunological
          analysis of its proteins show that this virus is a member of
          the HTLV family and  closely related to HTLV-II"  (emphasis
          added).

       Sattaur's story was but one of many in early 1985 that
       questioned the "HTLV-relatedness" claims of Gallo et al.
       concerning the AIDS virus. The name "HTLV-III" itself soon was
       called into question; and in March 1985, the International
       Committee on Taxonomy of Viruses commissioned a special
       subcommittee, under the leadership of now-NIH Director, Dr.
       Harold Varmus, to make an authoritative determination about the
       correct name for the AIDS virus. Dr. Gallo, who was determined
       to keep the AIDS virus in "his" "HTLV" family, immediately
       initiated an exchange of correspondence with Dr. Varmus about
       the nomenclature issue; Dr. Gallo's theme, propounded at
       extraordinary length and with great ardor, was that,

          "'HTLV-III' is a fair, accurate, and safe term to use"
          (4/8/85 Gallo-to-Varmus letter).

       Dr. Gallo's pleas were unavailing. In 1986, the subcommittee
       announced that "human immunodeficiency virus" ("HIV") would
       henceforth be the official name of the virus. Dr. Gallo refused
       to accept the new name, and because of the ongoing
       French/American dispute, not to mention their own awe of Gallo,
       HHS attorneys once again became involved in an issue that
       should have been resolved by scientific consensus.

       On May 6, 1986, PHS attorney Richard Riseberg sent to attorney
       Darrel Grinstead an "Eyes Only" memorandum headed "HIV
       Designation." Riseberg told Grinstead about the international
       committee's decision to adopt the name "HIV." Riseberg said
       that,

          "In view of the prestige of the subcommittee the new
          designation is likely to be adopted rapidly by the research
          community, although ... Bob Gallo and Max Essex opposed the
          change."

       Riseberg said he expected that questions would soon arise
       within PHS concerning,

          "... what effort, if any, PHS should make to resist the
          change and to what extent PHS should persist in using the
          traditional terminology in its own publications."

       Riseberg told Grinstead he (Riseberg) believed the shift in
       terminology would not have any important, predictable effect on
       the ongoing litigation. Accordingly,

          "... to the extent the new reference becomes widely
          accepted, there would be no legal objection to PHS switching
          as well."

       However, Riseberg added this:

          "In light of Dr. Gallo's opposition, I doubt that PHS would
          take the lead in adopting HIV."

       2. Scientific Papers: Too Alike to be Different:

       The other
       major revelation associated with the early-1985 publication of
       the sequences of the first HIV isolates was the confirmation of
       what had been observed earlier, based on comparisons of viral
       nucleic acids, namely that: (1) HIV isolates overall are
       markedly heterogeneous in their genetic make-up, yet (2) in
       contrast to other HIV isolates, LAI/LAV and LAI/"IIIb" were
       virtually identical.

       Dr. Gallo and his associates attempted to deal with the obvious
       implications of the sequence identities of LAI/LAV and LAI/IIIb
       by, among other things, submitting the Ratner et al. letter to
       Nature.  But the Ratner letter's indication, without
       substantiation, that the very close relationship of LAV and
       IIIb fell within the normal range for HIV isolates, plus the
       equally unsubstantiated argument that these isolates were so
       much alike because "the individuals from whom these isolates
       were derived acquired the virus at a similar time and place" --
       these efforts did not head off the growing awareness on the
       part of alert scientists that "LAV" and "IIIb" were too much
       alike to be different.

       One such scientist was NIAID laboratory chief, Dr. Malcolm
       Martin. As early as November 1984, Dr. Martin had concluded not
       only that the IP and LTCB prototype viruses were almost
       certainly identical, but that the LTCB virus was descended from
       the IP virus, and not the other way around. Dr. Martin's
       November 1984 conclusions were based in part on his discovery
       of the existence in LAI/LAV of a Hind III polymorph identical
       to that found by Gallo et al. in LAI/IIIb. In a November 23,
       1984 memorandum to the record, Dr. Martin wrote this:

          "... I learned from presentations by both the Pasteur and
          Gallo groups that a restriction polymorphism of the
          LAV/HTLV-III [IIIb] proviral DNA exists; at least two
          species of viral DNA are present in infected cells. This
          clears up an enigma we had encountered during the week of
          November 11, 1984 when we were analyzing the viral DNA
          present in infected A3.01 cells (LAV). The interpretation of
          our experiments is that two discrete species of proviral
          DNAs containing an extra Hind III and an extra SacI (SsI)
          site ... are present in infected cells in a 2:1 ratio. Both
          proviral DNAs are present in LAV and HTLV-III virus stocks.
          I obtained my pool of the LAV virus on April 13, 1984 ...
          Since Dr. Gallo's laboratory provided a sample of the
          HTLV-III virus to Montagnier in mid-May, 1984, our results
          would indicate that the LAV variant was present in the
          French virus stock at least one month earlier ..."

       With the early-1985 publication of the nucleotide sequences of
       the IP and LTCB viruses, Dr. Martin believe it was important to
       focus the attention of the scientific community on their
       evident molecular identity. Accordingly, in March 1985, Dr.
       Martin and an NIAID colleague, Dr. A. B. Rabson, published a
       "Minireview" in the journal  Cell,  titled "Molecular
       Organization of the AIDS Retrovirus." The Rabson/Martin review
       included a number of important observations about the common
       and distinguishing features of the three principal AIDS virus
       isolates to date: LAV, IIIb, and ARV, which Rabson and Martin
       termed, collectively, "the AIDS RV."

       The most volatile observations in the Rabson and Martin review
       concerned the molecular relationships of different AIDS RV
       isolates to each other. Rabson and Martin noted that the Shaw
       et al. (1984) and Luciw et al. (1984) reports:

          "... indicate that AIDS RVs isolated from different
          individuals exhibit striking structural heterogeneity as
          monitored by restriction enzyme polymorphisms" (op cit., p.
          479).

       Further, said Rabson and Martin:

          "... superficial inspection of published cleavage maps and
          Southern blots suggests that HTLV-III and LAV are closely
          related to one another, whereas ARV and many other isolates
          are substantially different" (op cit., p. 479).

       Rabson and Martin reviewed the recently-published LAV, IIIb,
       and ARV-2 sequences; their analysis of the sequences showed
       that while LAV and ARV differed from each other by 9.3 percent,
       LAV and IIIb differed from each other by only 1.8 percent.
       Rabson and Martin said this:

          "A comparison of HTLV-III [IIIb] and LAV proviruses
          generated virtually identical results, indicating that
          HTLV-III was no more different from LAV than molecular
          clones of HTLV-III were from one another. In contrast,
          striking differences were apparent when LAV was compared to
          ARV" (op cit., pp. 479-480).

       The  Cell  review concluded with these comments about the
       LAV/IIIb relationship:

          "The analysis of nucleotide sequence heterogeneity presented
          in Table 1 indicates that HTLV-III and LAV are virtually
          identical. This result is surprising in view of their
          independent isolation and published reports, cited above,
          which show that extensive restriction enzyme polymorphisms
          exist among different AIDS RV isolates" (op cit., p. 480).

       B. Issuance of the Gallo et al. Blood Test Patent

       On May 28, 1985, the United States Patent and Trademark Office
       (USPTO) awarded patent number 4,520,113 to Drs. Gallo, Popovic
       and Sarngadharan, the named inventors of the LTCB HIV blood
       test. PTO's action in issuing a patent on the Gallo blood test
       came despite the fact that another patent application for
       substantially the same invention -- the IP application -- had
       been submitted to PTO months before the submission of the Gallo
       application.

       PTO officials told Subcommittee staff they issued a patent to
       Gallo et al. because they were unaware of the existence of the
       IP application. PTO records show that from the time the IP
       application was submitted -- December 5, 1983 -- to the time of
       issuance of Gallo  et al.,  the IP application was assigned to
       no less than three different patent examiners. None of these
       examiners performed the vital process of "briefing" the IP
       application, i.e., abstracting its claims and entering them
       into PTO's then-antiquated central records system. Because the
       IP application had not been briefed, its existence was not
       identified when the Gallo et al. examiner performed the
       last-minute "interference search," in which the claims of an
       about-to-be issued patent are checked against the claims of
       other pending applications. The fact that Dr. Gallo and his
       fellow "inventors" had not disclosed to PTO their knowledge and
       use of LAV was another significant reason why PTO issued a
       patent to Gallo  et al.,  with no consideration of the IP prior
       art.

       PTO's slow pace in examining the IP application was less
       remarkable than the near-record rapid pace of prosecution for
       Gallo et al. It is in this area that concerns about apparent
       inequitable handling by PTO of the IP and LTCB blood test
       patent applications are most obvious.

       At the outset, the Gallo et al. application was assigned to a
       low-workload PTO unit, on grounds that the claimed invention
       involved use of radioactive labelling and thus, was deemed to
       be high priority. The decision to assign Gallo et al. to the
       low-workload, high priority unit was made by PTO. Yet the IP
       application, whose invention also included use of
       radiolabelling, was assigned by PTO to a high-volume, high
       backlog unit, guaranteeing a protracted examination process.

       The examination processes for the LTCB and IP applications --
       performed by the same examiner -- also were dramatically
       different. PTO issued but a  single  office action on the Gallo
       et al. application, passing it to issuance in a near-record
       seven months (April-November 1984; the further delay in
       publication of the patent, to May 1985, appears to have been
       due to the HHS contract attorney's failure to promptly pay the
       issuance fee).

       The examiner's review of Gallo et al. was manifestly
       inadequate; e.g., she identified but dismissed Barre-Sinoussi
       et al.; she failed altogether to identify such significant
       publications by the IP scientists as Vilmer et al. In contrast,
       once the PTO examiner finally began her examination of the IP
       application (in June of 1985), she issued innumerable office
       actions, raising one "red-herring" issue after another,
       including issues the IP attorneys successfully rebutted as
       "totally erroneous in law and in fact" (IP Response to PTO
       Office Action, December 16, 1985, pp. 8-9). On one occasion,
       the examiner even attempted to assert that Dr. Montagnier's own
       presentation (at the July 1983 meeting of the NCI AIDS Task
       Force) might be a bar to an IP patent.

       Other curious actions of the PTO examiner relating to the blood
       test patent application of Gallo et al. occurred in the Spring
       of 1985, just before the Gallo patent issued. On May 31, 1985,
       the PTO examiner sent to Gallo et al. a notice that prosecution
       of the "610" CIP (one of the follow-up applications to the
       parent LTCB blood test patent) would be suspended for six
       months because,

          "... a reference relevant to the examination of this
          application may soon become available."

       PTO's citation of a "reference relevant to the examination of
       this application" appears to have been a citation to a paper by
       Casey  et al.,  that was about to be published in  The Lancet,
       in August 1985. The Casey et al. paper was important because,
       among other things, it reported that the amino acid sequence of
       the LAI/LAV core protein was identical to that of LAI/IIIb.
       Because of these findings, the Casey et al. paper, following
       its publication, was cited by the PTO examiner as evidence that
       LAV and HTLV-III were functionally the same virus, and
       therefore, that the work of Montagnier et al. was prior art to
       Gallo et al. Using Casey  et al.,  the PTO examiner repeatedly
       rejected the claims of Gallo et al. in two CIPs to the parent
       blood test patent. (See the PTO chronology appended to this
       report for further information about the PTO examiner's use of
       Casey et al.)

       Several aspects of the May 1985 PTO suspension notice on the
       610 CIP are worthy of note. Since the examiner believed the
       forthcoming reference was relevant to the examination of the
       610 CIP, it would be reasonable to believe the reference could
       be relevant to the parent blood test patent as well (the same
       individual examined both the Gallo et al. parent application
       and the Gallo et al. CIPs). Yet there is no indication that the
       Casey et al. reference was considered vis-a-vis the about-to-be
       issued Gallo et al. blood test patent. Notations on the copy of
       the suspension letter indicate the letter was prepared on April
       22, 1985, over a month prior to issuance of the Gallo et al.
       blood test patent, yet the patent was permitted to issue with
       no apparent consideration to the implications of Casey et al.

       The May 28 issuance of the Gallo et al. blood test patent
       reportedly came as a great shock to the IP scientists and
       patent attorneys, along with the attorneys for Genetic Systems,
       Inc., U.S. licensee for the IP HIV antibody blood test. The
       attorneys, apparently, had been operating under the assumption
       that, since the IP application was submitted well before the
       application of Gallo  et al.,  the IP scientists were certain
       to be awarded the patent on the HIV blood test.

       There are indications that shortly after the issuance of the
       Gallo et al. patent, IP/GS patent attorneys contacted PTO to
       inquire about the IP application. What is certain is that on
       June 10, 1985, the examiner who had just passed Gallo et al. to
       issuance was presented with the IP blood test patent
       application by one of her supervisors, and told to expedite its
       handling.

       According to the examiner, when she reviewed the IP blood test
       patent application, she recognized that the IP application and
       the just-issued Gallo et al. patent were "directly related."
       The examiner said PTO recognized it had erred by missing the IP
       application during prosecution of Gallo  et al.:  "We screwed
       up." Importantly, the examiner said that had she become aware
       of the existence of the IP application during prosecution of
       Gallo  et al.,  she would have suspended that prosecution,
       examined the Pasteur application thoroughly, and,

           "... probably would have thrown them into an interference."

       But this did not happen, and the losers in the process were the
       real discovers of the AIDS virus and true inventors of the
       virus antibody blood test, Montagnier et al. Because of the
       failure of Gallo et al. in their duty of disclosure to PTO,
       because of PTO's own negligence in leaving the IP application
       untouched for years, and because of the incompetent examination
       of Gallo  et al.,  the PTO examiner, at the time she passed to
       issuance Gallo  et al.,  was not aware of the IP application
       nor even of the IP scientists' prior art. Because Gallo et al.
       received the patent on the HIV blood test, the IP scientists,
       although they discovered the AIDS virus long before Gallo  et
       al.,  although they created and used the HIV blood test long
       before Gallo  et al.,  were significantly disadvantaged, and
       were forced to shoulder the burden of petitioning for an
       interference. Even when the IP requested an interference, it
       was nearly nine months before the interference was granted, and
       over two years before the IP scientists finally were awarded a
       U.S. patent, in late 1987, nearly four years after they filed
       their U.S. patent application.

       C. The Initial Challenge

       On August 6, 1985, IP attorneys, plus attorneys for Genetic
       Systems, met with officials of HHS to formally register their
       objections to the Gallo et al. blood test patent. Dr. Raymond
       Dedonder, the then-IP Director, led the IP/GS delegation.
       Participants for the United States included Lowell Harmison as
       chair, Harmison's "Senior Assistant," Dr. Ann Rose, HHS
       attorney Darrel Grinstead, Thomas Byrnes (DOJ), NIH patent
       attorneys Leroy Randall and Thomas Ferris, NCI's Dr. Peter
       Fischinger and Dr. Berge Hampar, and Robert Auber of the Patent
       Licensing Program, National Technical Information Services
       (NTIS).

       Several sets of handwritten as well as more formal notes of the
       August 6 meeting exist. According to a memorandum prepared for
       HHS Secretary Margaret Heckler's Chief of Staff by the HHS
       Executive Secretariat's Tim Miller (present at the meeting),
       the "basic claim" of Dedonder et al. was that Gallo et al. "...
       either knowingly or mistakenly appropriated Dr. Montagnier's
       invention..." Further, according to Miller, the IP/GS
       delegation,

          "... made three oral  demands  which they say are necessary
          to avoid litigation over who should be credited with the
          HTLV-III patent and who should derive the commercial
          benefits:

       (1)  Recognition  that Dr. Montagnier of the P

       ****TEXT MISSING****

       VIII. HHS INITIAL RESPONSE

       A. The HHS Mindset

       The overriding tenor of the HHS response to the IP assertions
       and demands seems to have been one of instinctive defense of
       the U.S. claims, rather than concern as to whether those claims
       were valid. There was no effort on the part of HHS to mount an
       objective inquiry into the facts; instead, every effort at HHS
       was devoted to how best to defend the HHS patent and the HHS
       scientists. Whether or not they  warranted  defense, whether or
       not they could legitimately be defended -- these, apparently,
       were not among HHS' concerns.

       The prevailing attitude, indeed mind-set, was well-exemplified
       by Peter Fischinger, who played a crucial role during the early
       months of the French/American dispute. Fischinger described his
       reactions to the IP challenge to Subcommittee staff in these
       terms:

          "I was somewhat incensed, because the feeling was that
          'you've gotten the virus from us... and you might have
          stolen it or at best, you might have mixed it up'" (8/6/93
          Subcommittee staff interview; tape 4, side 2).

       Explaining his "incensed" reaction, Dr. Fischinger said:

          "Well, it was kind of extraordinary -- based on what I knew,
          I thought it was kind of a very significant contention ...

          "I thought there was a pretty good track record of discovery
          of the virus in Gallo's laboratory. And the fact that the
          two viruses might have been very close, but there was enough
          of a distinction that Gallo and Montagnier isolated the same
          sub-type of virus ... my feeling was, 'so what?'" (op cit.).

       Dr. Fischinger's further statements to Subcommittee staff
       showed the extent to which Dr. Gallo's assertions about his
       alleged "early isolates" of the AIDS virus, together with his
       assertions about his inability to grow LAV influenced his
       (Fischinger's) reactions to the IP challenge:

          "My whole attitude was he [Gallo], obviously -- and
          everybody else with him -- 'of course we didn't use LAV,' I
          mean, 'we couldn't even grow it. How could we?' ...

          "It could not have happened, and the fact that the two
          viruses were the same, there were other matched pairs ...
          The facts that I had, I was incensed, it was outrageous, an
          outrageous sort of a claim. I had a full sense that this was
          an independent isolation, verification, putting together the
          first definite association between the test and the disease
          ... I really felt that the U.S. team had a very significant
          claim and priority" (op cit.).

       Then-NIH Director Dr. James Wyngaarden confirmed this
       perspective to Subcommittee staff. Describing the HHS approach
       to the IP challenge, Dr. Wyngaarden said this:

          "... almost everyone at NIH really believed Bob was ...
          maybe not generous to the French but that he had the data
          himself, had done it himself. The feeling was very strong
          that the French were trying to muscle in, trying to take
          credit ... that Bob had earned ...

          "At the time, everyone in the system thought the French were
          trying to take credit for Bob's work, that they were putting
          more credit on Montagnier than was warranted. Everyone up
          and down the line felt that -- of course, we were relying on
          Bob's account of what he had done" (9/27/93 interview with
          Subcommittee staff).

       Queried as to how the entire HHS fact-finding process could
       have relied so heavily - nearly exclusively -- on Dr. Gallo's
       assertions about his research, Dr. Wyngaarden said this:

          "He can be very persuasive ... Bob is exceptional in his
          capacity to integrate information from lots of sources and
          integrate it into a persuasive, coherent statement of what
          it means ... His mind in my view is in a class by itself for
          that sort of thing" (op cit.).

       Reflecting his awareness of the potential pitfalls of so
       "persuasive" a presentation, Dr. Wyngaarden added this:

          "I gather he made some scientific claims in the 70s and 80s
          that hurt his reputation .... Usually the scientific process
          takes care of that -- if someone is out on a limb, someone
          else saws it off. It's not uncommon to overinterpret. You
          can be overwhelmed by it" (op cit.).

       NCI/HHS' mind-set was in evidence immediately after the meeting
       with the French delegation. HHS officials, still under the
       chairmanship of Dr. Lowell Harmison, met to plan their strategy
       for dealing with the IP challenge. According to Tim Miller's
       memorandum to Secretary Heckler, in the HHS officials' meeting,
       Peter Fischinger discounted the IP claim that Gallo et
       benefitted from their access to confidential information from
       the Pasteur scientists. According to Miller, Fischinger said:

          "... the key to the invention is not its isolation [the AIDS
          virus]; rather the key was the development of the 'cell
          line' necessary to produce the virus in large quantities..."

       Miller also recorded that:

          "Dr. Peter Fischinger believes we can develop evidence to
          show that Dr. Gallo had isolated the retrovirus on his own
          as early as February 1983, although he had not specifically
          identified the retrovirus at that time."

       B. Gallo and Popovic Respond

       The practical outcome of the HHS meeting was that the National
       Cancer Institute (NCI) was charged with conducting "an internal
       mission" to determine if any evidence existed to substantiate
       the IP claims. Peter Fischinger, quite clearly, had already
       made up his mind about the principal points of contention; yet
       Fischinger was placed in charge of the "internal mission,"
       which nominally included the NIH patent attorneys, but in
       reality was a solo mission for Dr. Fischinger.

       Pursuant to his mission, the day after the meeting of IP and
       HHS representatives, Dr. Fischinger wrote a memorandum to Dr.
       Gallo, describing the major points made by the IP
       representatives. Fischinger said the thesis of Robert Nowinski,
       the chief scientist for GS, was that:

          "... the basis for the filing of the U.S. patents for the
          blood tests was incorrect. The reason was that (the) key
          component of the test, i.e., the virus, was not of U.S.
          origin .... His thesis ... was that LAV and the HTLV-IIIb
          were actually one and the same, and that your laboratory
          somehow re-isolated the LAV and proceeded to deal with it as
          HTLV-III from then on" (8/7/85 Fischinger-to-Gallo
          memorandum).

       Dr. Fischinger described the objectives of his HHS-mandated
       mission, and he told Dr. Gallo what was needed from the LTCB:

          "NCI was to examine the events leading to the discovery of
          HTLV-III. In that context, the documents cited by Mr.
          Weisser (sic.) will be necessay (sic.) if available. These
          include all correspondence between your laboratory regarding
          the timing [of] the acquisition of LAV from France and the
          reciprocal transmission of HTLV-III and cells to the IP.

       Second, the documentation of the review process of the
       Barre-Sinoussi  Science  paper with input from the editors and
       other reviewers will be needed" (op cit., pp. 2-3).

       The final element of Fischinger's document request to Gallo is
       noteworthy. It shows how, at the very outset of his inquiry,
       Dr. Fischinger had determined to rely on the "other isolates"
       defense against the IP charge that Dr. Gallo used LAV for the
       LTCB blood test:

          "Third, please assemble adequate documentation from your
          laboratory data that you have isolated an HTLV-III agent(s)
          prior to the receipt of LAV. Standard virus differentiating
          criteria would be useful, such as electron micrographs,
          inability to immortalize T4 cells and negativity of
          reactions with antibodies to p19 or p24 internal proteins
          which identify HTLV-I or -II" (op cit., p. 3).

       Dr. Fischinger's memorandum to Dr. Gallo concluded with this:

          "Your response will be useful in determining the future
          course of actions of HHS. Obviously, because these
          allegations have a significant negative bearing on your
          personal reputation and scientific integrity, please feel
          free to discuss alternative actions which would rectify the
          thrust of the above-cited allegations" (op cit., p. 3).

       Dr. Fischinger's memorandum to Dr. Gallo was the starting point
       for a series of memoranda from Gallo and his staff to
       Fischinger, along with selected pages of data. The significance
       of the LTCB scientists' submissions and the resulting so-called
       "Fischinger report" cannot be overstated.

       In numerous instances, the memoranda were forwarded from NCI to
       HHS officials and to HHS and DOJ attorneys. In a number of
       instances, the contents of the memoranda were incorporated,
       often nearly verbatim, into official HHS and DOJ documents,
       including the Fischinger report. This report, initially
       provided to Lowell Harmison, was forwarded to HHS attorneys and
       later, to the Department of Justice, where it was represented
       as  the  definitive NIH/HHS statement of facts concerning the
       substantiation for the claims of Gallo et al. The
       August/September 1985 Gallo/Popovic memoranda, supplemented by
       interviews with Gallo, Popovic and other LTCB scientists, also
       were incorporated into briefs and pleadings filed by DOJ
       attorneys on behalf of the U.S. Government.

       (Notably, most of the Gallo/Popovic memoranda, along with
       Fischinger's August 7 memorandum and the "Fischinger report"
       itself, were withheld from the IP under FOIA. One memorandum --
       an August 23, 1985 memorandum from Fischinger to Gallo -- also
       was withheld, but unlike the other memoranda, was not included
       on the legally-mandated "Vaughn index" of putative FOIA-exempt
       documents, almost certainly due to its extraordinary
       sensitivity (see below).

       In short, the documents generated by the LTCB scientists formed
       the framework for the entire U.S. Government defense. But many
       important facts were not revealed by the LTCB scientists;
       numerous significant items of data were not provided by them to
       HHS and DOJ officials. Moreover, many of the assertions
       contained in the LTCB scientists' submissions could not be
       substantiated. Thus, the entire U.S. Government defense was
       constructed on a false and defective infrastructure.

       But incomplete and incorrect information emanating from the
       LTCB was not only problem with the HHS inquiry. From the
       beginning, the inquiry was directed away from the issues that
       were the real focus of concern, the issues on which Gallo et
       al. were most vulnerable, toward a number of irrelevant,
       "red-herring"  issues behind which HHS apparently hoped to find
       cover  (e.g.,  the LTCB's alleged "other isolates").

       It is clear from accounts of the August 6, 1985 meeting that
       two sets of issues, above all, were the real foci of concern:
       (1) what did Gallo and his colleagues do with LAV at the LTCB,
       in particular, could Gallo et al. document that IIIb/H9 was
       derived independently of LAV and (2) what HIV isolate did Gallo
       et al. use to make the LTCB HIV antibody blood test, and when
       was the blood test created? Curiously, neither of these sets of
       issues was posed by Dr. Fischinger to Dr. Gallo, in
       Fischinger's August 7 memorandum. Fischinger was asked by
       Subcommittee staff what questions he was trying to answer in
       his inquiry and why, for example, he sought from Dr. Gallo
       evidence of "HTLV-III" isolation "prior to the receipt of LAV."

       Dr. Fischinger's response revealed how, even at the outset of
       his inquiry, he believed he knew the facts:

          "I guess I was so convinced of the fact that the charge was
          so outrageous, and I thought, 'if you can show that you
          obviously had it (HTLV-III) -- if you got it and had it
          growing, it was fine, and you can develop a test with it,
          you really wouldn't have to do it [misappropriate the IP
          virus]" (8/6/93 interview with Subcommittee staff; tape 3,
          side 2).

       Dr. Fischinger agreed with Subcommittee staff that he felt he
       already knew the truth,  i.e.,  that the IP claims were false.
       Thus, Dr. Fischinger said, he believed his task with respect to
       the LTCB scientists was this:

          "Show me that these charges were kind of outrageous. That
          was my feeling at the time."

       What is remarkable about Peter Fischinger's indirect approach
       to his investigation is that documentary evidence shows Dr.
       Fischinger knew well that the indirect approach would not be
       adequate, recognized well what were the central issues in the
       dispute and what kinds of data Gallo et al. would have to
       provide to substantiate their claims. This is evident from an
       August 23, 1985 memorandum from Fischinger to Gallo. The
       sensitivity of its contents are seen in the fact that the
       memorandum was not produced by NIH to the Subcommittee until
       September 1993, more than 18 months after the Subcommittee's
       initial document request, well after the staff's interview with
       Dr. Fischinger, and only after numerous communications to HHS
       concerning document withholding, particularly at NIH.

       The August 23 memorandum specifically targeted the major issues
       embodied in the IP challenge, identifying them as, "three major
       areas of oversight" in Gallo's data/document production "which
       have to be completed." The "major areas of oversight" included
       issues about which Subcommittee staff questioned Dr.
       Fischinger,  e.g.,  the origins of "IIIb" and the development
       of the LTCB blood test. Dr. Fischinger downplayed the
       significance of these issues, yet his memorandum makes clear he
       recognized well they were central to the validity of the claims
       of Gallo et al.

       Dr. Fischinger's obvious awareness of the critical nature of
       the "major areas of oversight" makes it all the more remarkable
       that at the time Dr. Fischinger wrote the August 23 memorandum
       to Dr. Gallo, the first draft of the "Fischinger report,"
       including its conclusions, had already been completed. These
       circumstances demonstrate graphically that HHS was determined
       to proceed with its defense of Gallo  et al.,  no matter what
       the truth might be. (See below  for information on Gallo's
       response to the August 23 memorandum.)

       The LTCB information production process began on August 14,
       1985, when Dr. Gallo and his associates, particularly Mikulas
       Popovic, commenced the transmittal to Dr. Fischinger of a
       series of memoranda, some of them accompanied by selected
       laboratory notes, apparently intended to address the issues
       raised by Fischinger in his August 7 memorandum, and later, his
       August 23 memorandum.

       The inaccuracies and omissions in the LTCB documents were
       incorporated, often nearly verbatim, into key documents in the
       U.S. Government defense of Gallo et al. Examples of these false
       and misleading claims appear in the Executive Summary of this
       report. The most important such items from the Gallo/Popovic 
       August 1985 memoranda are as follows:

       Responding to Dr. Fischinger's requirement for "documentation
       from your laboratory data that you have isolated an HTLV-III
       agent(s) prior to the receipt of LAV," Dr. Gallo provided  no
       data  that met the stated requirements. Several samples were
       identified, including the suspect December 15, 1982 samples.
       But  no evidence  was supplied to show that any of these
       samples had ever been tested and found positive for HIV. In
       fact, no such evidence existed. (Gallo-to-Fischinger; August
       14, 1985).

       Concerning  the LAV samples received at the LTCB in 1983, Dr.
       Gallo said July LAV "... did not contain detectable virus"
       (Gallo-to-Fischinger; August 19, 1985). An appended memorandum
       by Dr. Popovic made no mention whatsoever of July LAV.

       Concerning September LAV, Dr. Gallo said only that, "Dr.
       Popovic reports he was able to detect RT..."
       (Gallo-to-Fischinger; August 19, 1985). Dr. Popovic, in his
       appended memorandum, described the September LAV sample as "a
       small amount of extracellular virus particles." Dr. Popovic did
       not mention any of the positive IFA results with LAV prior to
       December 1983. Popovic did mention the infection of Ti7.4 with
       LAV, but he dated it to December 1983, rather than October.
       There was no mention of the LAV infection of HUT-78. Dr.
       Popovic said the LTCB scientists had determined that LAV and
       "HTLV-III" "had cross reactive major proteins," but Dr. Popovic
       did not say when this determination was made. Most
       significantly, Dr. Popovic did not reveal that LAI/LAV was
       tested and found positive against the rabbit antiserum; neither
       did he or Dr. Gallo make any mention of the LTCB's molecular
       analyses of LAI/LAV, including the comparisons that showed LAI
       and IIIb were identical.

       Concerning the putative "pool" virus, Dr. Gallo made the
       following statement, contrary to all available evidence:

          "Material placed into the permanent cell line H9 and
          published in May 1984 to develop reagents and molecular
          clones was pooled from several patients who showed high RT
          activity in primary culture" (Gallo-to-Fischinger; August
          19, 1985).

       Dr. Gallo asserted, without substantiation, that the uniquely
       close relationship between IIIb and LAV, "... probably
       represents the similarity within the known range of variation
       of viruses isolated from different patients at different times"
       (Gallo-to-Fischinger; August 19, 1985).

       Besides their memoranda, Drs. Gallo and Popovic also submitted
       approximately 100 pages of data to Dr. Fischinger. The data
       pages were essentially useless. Numerous pages were illegible;
       on many pages, identifying information for individual samples
       had been removed, making it impossible to trace what was done
       with particular samples. Other pages contained no data, only
       lists of samples sent for,  e.g.,  RT or EM analysis. Most
       significant, the data pages included only one page that even
       mentioned "LAV." This page, dated "9/22/83," showed LAV was
       used to infect four cord blood cell lines. However, no pages
       containing results for these cultures were provided to Dr.
       Fischinger, neither were any data included from the LAI/LAV
       infections of the five permanent T-cell lines.

       As for the LTCB HIV antibody blood test, the data package
       contained  none  of Dr. Sarngadharan's ELISA data. Thus, Dr.
       Fischinger had no way to determine when the first LTCB blood
       tests were performed; neither was he able to recognize that the
       LTCB HIV ELISAs for two months were performed with antigen from
       a virus called "MOV," not with the patented isolate, "IIIb".

       Betsy Read-Connole gave important information to Subcommittee
       staff concerning how the data package was created for Dr.
       Fischinger. Read-Connole initially said she was "told to copy
       everything," but then she added, "I helped  select  it." Most
       important, according to Read-Connole,

          "We were told not to put the LAV stuff [in the August data
          package] ... they wanted the other stuff."

       Read-Connole said she did not know the origin of these
       specifications, neither did she know to whom the data were
       sent, once they were assembled.

       Dr. Fischinger, apparently, did little more than glance at the
       data he was given by Gallo et al. When Subcommittee staff
       showed him the data pages provided in August 1985, Dr.
       Fischinger said this:

          "This is much more than I remember seeing. I don't think
          I've seen all of that" (8/6/93 interview; tape 3, side 2).

       Asked if he had reviewed the data pages one-by-one, and if he
       knew why he was given those particular pages, and not others,
       Dr. Fischinger's response was this:

          "There were others?"

       Dr. Fischinger was informed that among the pages he was given,
       there was only one page that even mentioned "LAV." Asked if
       this had struck him as odd, Dr. Fischinger said:

          "I don't think it would have struck me as odd, because
          again, my sense was, 'show me that you developed the test on
          your own, independently'" (op cit.).

       Yet when Dr. Fischinger was asked if he received and reviewed
       actual data related to the LTCB HIV blood test, his response
       was this:

          "I don't remember the specific development of the ELISA test
          in the laboratory."

       Attempting to explain his evident inattention to the LTCB data,
       Dr. Fischinger said,

          "A lot of it was very hard to understand, very difficult."

       Dr. Fischinger was asked if he asked Popovic or Gallo or anyone
       from the LTCB to interpret the data for him. Fischinger's
       response was revealing:

          "I tried to rely on some of the summaries of the data, as
          opposed to going through it page by page ... I think I
          remember sort of receiving sort of an occasional sort of
          summary of what happened, but I did not go with Popovic
          through this page by page."

       Because Dr. Gallo claimed to Subcommittee staff that in
       August/September 1985 he had no idea of the seriousness of the
       French/American dispute, Dr. Fischinger was asked if he
       attempted to instruct Dr. Gallo about the matter. Fischinger's
       response showed that he attempted to keep the focus of
       responsibility on Dr. Gallo:

          "Yes I did. In terms of the point, you have to get all the
          data ... in terms of what he had in hand. And then refine it
          for us, because of the difficulties of the notebooks. And I
          did tell him that he would have to stand or fall in terms of
          those data and that ... he would basically have to swear to
          the fact that that's what it is ... that if it ever came to
          a more significant sort of examination, that he would have
          to then go into a wealth of detail that wasn't feasible in
          that timeframe" (op cit.).

       Dr. Fischinger made clear that Dr. Gallo was his principal
       contact and source of information and the person ultimately
       responsible for the LTCB scientists' work. Asked if he
       consulted with Dr. Sarngadharan, who performed the ELISAs, made
       the HIV-specific rabbit antiserum, and performed the seminal
       protein analyses for the LTCB, Dr. Fischinger said this:

       My major  point of discussion was Bob. No question about that.
       In terms of him trying to organize or find some of the data,
       some of the things that were going on. I was listening to him
       as the point person ...

       I had a sense, at least from my perspective, there is
       laboratory data, Bob sort of swears that this is the way it is,
       and the laboratory data sort of generally support it, as
       opposed to no data. Then, that's going to be his, sort of,
       ultimate responsibility. That was my feeling. So, I would rely,
       myself, from a scientific point of view, in terms of what they
       did in the lab, he has the best knowledge, he should have the
       control of it" (op. cit.).

       Dr. Fischinger added this:

          "My feeling was that Gallo has to go, and demonstrate this,
          and he has to defend what he has done, he has kind of sworn
          to the fact that he did what he did, and the fact that this
          is something that could stand in terms of his own
          laboratory's merit. And he sort of claims it even in terms
          of specifics, and has an argument that I could sort of
          believe in that is strong enough, as opposed to my going --
          kind of a detailed, detective-type investigation, which I
          didn't do.

          I mean, that was clear. That wasn't done until sometime
          later. I said, 'Look, this is what you did. This is the
          summation of [what] you had and said in your laboratory data
          to prove it. And let's take it from there" (op cit.).

       C. The "Fischinger Report"

       Peter Fischinger's response to Lowell Harmison's directive to
       him to "examine the events leading to the discovery of
       HTLV-III" was a written report in the form of a memorandum,
       identified herein as "the Fischinger report." The report was
       prepared in a great hurry; an initial draft was prepared by
       August 21, two weeks to the day after Fischinger started his
       "inquiry."

       The final version of the Fischinger report was dated August 27.
       The report was routed through NCI Director DeVita, NIH Director
       Wyngaarden, and HHS attorney Darrel Grinstead. Grinstead's
       sign-off apparently occurred on or about September 9, a notable
       date because of several significant events that occurred prior
       to that time (see below ). The final version of the report
       comprised these elements: (1) an 8-page memorandum from
       Fischinger to Harmison, (2) an addendum titled "Further
       considerations Based on the Documents Sent to HHS by the
       Institut Pasteur Director, Dr. Dedonder," (3) an August 21
       memorandum from Gallo to Fischinger attesting to the accuracy
       of the information in document (4), and (4) a document titled
       "Background Information: U.S. Patent Applications."

       The Fischinger report was a compendium of irrelevant,
       misleading, and outright false claims; the report also
       reflected many significant omissions (see below ). The
       inclusion of numerous misleading elements in the Fischinger
       report is noteworthy, given that both Fischinger and Gallo
       signed statements attesting to the accuracy of the report and
       asserting that the statements in the report could be
       substantiated by laboratory data and records. Specifically, in
       a cover page for the "Background Information" document, Dr.
       Fischinger signed a statement that said this:

          "NCI requested specific documentation of data from Dr.
          Gallo's laboratory, and received about 100 pages of copies
          of laboratory notebooks, as well as abstracted summaries of
          these data. Although some of these data are cryptic and very
          difficult to follow, enough clarity emerged to make the
          enclosed comments."

       Dr. Fischinger added that "the resulting document," compiled by
       his office "... was next sent to Dr. Gallo to determine that it
       was accurate in both its content and interpretation." Dr.
       Fischinger  cited an "enclosed concurrence statement" signed by
       Dr. Gallo; the statement, in the form of an August 21
       memorandum from Gallo to Fischinger, said this:

          "The enclosed attachment 'Background Information, U.S.
          Patent Applications,' has been reviewed by me relative to
          the fidelity of specific information presented as well as
          the accuracy of its interpretation. These data are
          substantiated by entries in the notebooks, as well as by
          other records emanating from the Laboratory of Tumor Cell
          Biology, NCI."

       Dr. Gallo added this:

          "I stated previously, and I furthermore still believe myself
          to be the first inventor of subject matter covered by Patent
          Application #602,946, and the issued patent number
          4,520,113, which are critical to the realization of the
          blood antibody test which measures exposure to the
          HTLV-III/LAV virus."

       Following is a listing of the most significant problematic
       statements in the Fischinger report. In most instances, the
       extensive evidence demonstrating the inaccuracy of these
       statements has been discussed. Pertinent page references are
       noted as appropriate.

          (1) "The examination of data from Gallo's laboratory showed
              that in mid-December 1982, the first HTLV-III-type
              isolates had been identified from AIDS patients"
              (8/27/85 Fischinger-to-Harmison memorandum; p. 2.

              "The Gallo laboratory already had very analogous data
              from AIDS patients as early as December 1982 ... the
              Institut Pasteur observations corroborated analogous
              pre-existing data in the NCI laboratory" (op cit., p.
              7).

       The LTCB December 1982 data did not substantiate "HTLV-III-type
       isolates"; see above . Dr. Gallo himself repeatedly asserted he 
       made no claims of priority based on the 1982 data. Dr. Gallo's 
       data also were not analogous, much less "very analogous" to those 
       of the IP scientists. The IP scientists' data were considerably 
       more extensive and informative than the LTCB data. Moreover, the 
       IP scientists'  understanding  of their data was well advanced
       compared to that of Gallo et al. (see above).

       (2) "Based on the examination of raw and compiled data ...
           between June 1983 and September 1983, it can unequivocally
           be stated that the Gallo laboratory had more than ample
           isolates of typical HTLV-III which could have been used as
           prototype (sic.) infectious agents" (op cit., p. 3).

           "... 17 different retrovirus isolates were obtained from
           AIDS patients during that time ... Aliquots of some of
           these virus samples are still available. Therefore, the
           above isolates had the same criteria as the infectious LAV
           subsequently received at the end of September 1983" (op
           cit., pp. 3-4).

       The statement that the LTCB scientists had "ample isolates of
       typical HTLV-III" by September 1983 is untrue. The LTCB's
       putative "isolates" between June and September 1983 were,
       virtually all, not isolates but,  at the most,  occasional
       detections. More importantly, none of them was known at the
       time to be "typical HTLV-III." The great majority of them were
       never tested and found to be HIV.  None  was useful as a
       prototype, because none was grown in sufficient quantity to be
       useful (see above ).

       Also significantly misleading is the unqualified assertion that
       Salahuddin/Markham's "isolates" "had the same criteria as the
       infectious LAV subsequently received at the end of September
       1983." This statement is not correct. The data on both July and
       September LAV were considerably more substantial than the data
       on any of the Salahuddin/Markham "isolates." Both July and
       September LAV were tested and found positive by IFA against
       pre-AIDS patients serum and both were found positive for
       lentivirus by electron microscopy.  None  of the
       Salahuddin/Markham isolates "had the same criteria" (see
       above).

          (3) "... how complete or convincing was the French data in
              May 1983? What was described was reverse transcriptase
              (RT) activity in a single lymphadenopathy patient,
              without p19 and p24 HTLV-I cellular reactivity, and
              electron micrographs of budding particles from
              degenerating cells ... At that time , the French also
              considered their virus isolate to be a member of the
              HTLV family" (op cit., p. 2).

       Dr. Fischinger's statement  that the IP scientists, in their
       May 1983 paper, showed there was no "HTLV-I cellular
       reactivity," is noteworthy because it is true. The statement
       thus stands in marked contrast to repeated statements by Dr.
       Gallo, the most notable of which is the statement in Gallo's
       November 1986 declaration that,

          "... the Pasteur group reported a  major cross reaction
          with HTLV-I" (Emphasis supplied; 11/8/86 Declaration of
          Robert C. Gallo).

       Notwithstanding his accurate statement about the absence of
       HTLV-I reactivity, Dr. Fischinger asserted incorrectly that
       "the French also considered their virus isolate to be a member
       of the HTLV family." Dr. Fischinger either did not know about
       or deliberately withheld information concerning Dr. Gallo's
       role in rewriting the IP paper, including adding the assertion
       that LAV was a member of the "HTLV family" (see above).

          (4) "The receipt of the following materials from L.
              Montagnier is acknowledged by Gallo's laboratory:

          1. 20 micrograms of 'LAV proviral DNA' was received April
             1983. No viral DNA was present, only cellular DNA.

          2. Supernatant fluids of one patient's T cells, not with
             AIDS but with lymphadenopathy, were received in July
             1983, which did not contain any infectious LAV virus.

          3. In late September, a second sample supernate from T cells
             of the above patient was received and did contain the
             first infectious LAV. It was successfully transmitted
             only to normal T cells and a human cell line Ti7.4. Thus
             there was no logic for the motivation to use the Institut
             Pasteur derived LAV in any infection sequence for any
             purposes other than a comparative analysis" (op cit., p.
             4).

       The numerous false and misleading aspects of the above passage
       are readily obvious from the prior discussion of the LTCB's use
       of the IP virus. Most notable are the assertions that July LAV
       "did not contain any infectious LAV virus" and that September
       LAV "was successfully transmitted only to normal T cells and a
       human cell line Ti7.4." The claim that "no viral DNA was
       present" in the LAV DNA sent to the LTCB in April 1983 was
       seriously misleading and could not be substantiated. The  only
       claim that could be substantiated was the claim that no HTLV-I
       or -II DNA was present, as one would expect, because these were
       the only human retroviruses for which Gallo et al. could test
       the LAV DNA.

          (5) "Dr. Popovic later attempted to infect the parental
              uninfected H9 cells with the LAV isolate from the
              Institut Pasteur. The total amount of reverse
              transcriptase activity obtained (appr. 20,000 cpm) was
              inadequate to initiate an infection of continuous cells"
              (op cit., p. 8).

       The authenticity of the experiment cited by Fischinger is
       suspect on many counts (see above). The claim concerning RT
       activity is particularly questionable, for no RT data
       associated with the putative attempt to infect H9 with LAV are
       known to exist.

          (6) "... an innovative technique of pooling of several
              highly RT-positive samples was used to infect the H9
              subclone. Although under normal circumstances, pooling
              of isolates would be considered unusual, up to that time
              no one had been able to stably infect a continuous T
              cell line with HTLV-III despite repeated single isolate
              attempts" (op cit., p. 4).

       Only one of the samples allegedly used for the "pool"
       experiment was known to be RT+ at the time it was used. Several
       of the samples were never tested and others, when tested, were
       RT-. As for Dr. Fischinger's attempt to justify the "unusual"
       pooling methodology, on grounds that all previous single
       isolate attempts had failed, this statement fails to take into
       account the successful growth of LAI/LAV and LAI/MOV.

          (7) "The subsequent virus-releasing cell subline, designated
              HTLV-IIIb, has multiple DNA proviruses in it, based on
              hybridization and DNA sequence data. Two of these have
              been cloned and they are related but not identical.
              Neither of these proviruses is identical to LAV, and
              although they are close, they differ significantly by
              about 1-2% from LAV ... recent DNA sequence data show
              that exceedingly closely matched pairs of viruses have
              been isolated from different individuals. These pairs
              are as close as, or closer in relationship than LAV is
              to HTLV-IIIb" (op cit., p. 5).

       Dr. Fischinger's statements about the "IIIb" cell line embodied
       several interrelated, highly speculative, unsubstantiated
       assertions:

           the implication that the "IIIb" clones represented
           different "proviruses" derived from different samples
           placed in "the pool";

           the implication that the sequence similarity of the IIIb
           clones showed that independent isolates from different
           individuals can be much alike;

           by extrapolation, the assertion that sequence similarity of
           the IIIb "proviruses" to LAV -- misleadingly described by
           Fischinger as differing "significantly" -- permitted the
           possibility that "LAV" and "IIIb" were independent
           isolates.

       As for the "closely matched pairs .. as close as or closer in
       relationship than LAV is to IIIb," Dr. Fischinger did not
       specify the pairs to which he was referring, and there is no
       evidence that they actually existed. Dr. Gallo did publish on
       one isolate pair -- "MN" and "SL" -- (Wong-Staal,  et al.,
       Science,   229,  pp. 759-762. But Dr. Gallo later told OSI
       that,

          "... the close similarity of isolates MN and SL is now
          believed to be due to a mix-up of samples" (4/27/90 OSI
          interview; transcript p. 76).

          (8) "On detailed analysis of their more than 130 isolates,
              the conclusion is that there are not a few strains of
              HTLV-III/LAV but a continuum. Any one isolate has
              closely related 'relatives' (1 to 2% difference) and
              distantly related 'relatives' (more than 5% genomic
              diversity)" (op cit., pp. 5-6).

       The discussion of item 7 above demonstrates the dubious nature
       of the assertion that "any one isolate" has "closely related"
       virus relatives, where "closely related" is defined as "1 to 2%
       difference." Notwithstanding Gallo/Fischinger's claims, there
       was no reliable evidence that genuinely independent HIV
       isolates might be only 1 - 2% different in their genetic
       make-up.

          (9) "... the French could not develop an effective
              diagnostic test until more than one year after this
              publication [Barre-Sinoussi  et al.,  May 1983], and
              after Gallo's discovery as defined in the U.S. patent
              application #602,946" (op cit., p. 3).

           "... no effective action was taken by the French group to
           develop a meaningful diagnostic test" ("Background
           Information: U.S. Patent Applications"; p. 1).

           "Who first linked the correct virus unequivocally to human
           AIDS? Dr. Gallo's group had precedence in this area as well
           by more than two months ... the subsequent joint manuscript
           from the Centers for Disease Control (CDC)and the Pasteur
           group was numerically much less firm" (op cit., p. 2).

           "Even in July 1984, the LAV-containing test systems picked
           up only 41% of AIDS patients" (op cit., p. 9).

       The fact is that the IP scientists developed an effective,
       accurate HIV blood test long before Gallo et al. did so. The
       evidence is compelling that Dr. Gallo knew about this blood
       test when he filed the patent application for his own test (see
       above here and also here ).

       Dr. Fischinger's assertions relating to the CDC/IP paper (the
       July 1984 "LAV-containing test systems) were significantly
       misleading. The paper in question reported results for two
       kinds of LAV antibody blood tests. One test, a blood test
       technologically different from that of Gallo  et al.,  scored
       41 and 72 percent positive in AIDS and pre-AIDS patients,
       respectfully. However, the other test, comparable to the test
       of Gallo  et al.,  was fully as good as the LTCB test -- 70-95
       percent positive in AIDS patients; 95 percent positive in LAS
       or pre-AIDS patients.

       During the entire patent dispute, up to the present day, Drs.
       Fischinger and Gallo never cited the latter set of results.
       Rather, they and the U.S. Government attorneys as well
       invariably cited the former set of results, never mentioning
       the differences in the nature of the tests that produced those
       results. Nor did Gallo, Fischinger, or any of the U.S.
       representatives ever mention the CDC data, of which Dr. Gallo
       had personal knowledge, that showed the IP and LTCB blood tests
       performing equally well in detecting antibodies to the AIDS
       virus.

          (10) "To get the LAV ELISA operational, the Institut Pasteur
               and their U.S. licensees also had to adapt LAV to a
               continuous human leukemic T cell line. It is of
               interest that they eventually used the HUT-78 cell line
               which is a relative of the HT cell line developed by
               Dr. Gallo" (op cit., p. 10).

       These statements were entirely incorrect. The IP scientists did
       not use HUT-78 to grow the virus for their HIV blood test. The
       cell line of which they made principal use for their blood test
       was CEM. Moreover, contrary to Dr. Fischinger's assertion that
       HUT-78 and HT are "relatives," the fact is that HT is HUT-78.

       There is evidence that by the time Fischinger wrote his report,
       both Popovic and Gallo knew or had reason to know that HT was
       HUT-78. Based on Dr. Fischinger's August 23, 1985 memorandum to
       Dr. Gallo, it appears that Fischinger himself remained
       uncertain and was seeking information about the origins of
       HT/H9. Yet despite his uncertainty, Dr. Fischinger wrote
       unqualified assertions about the origins of "HT" into his
       report to Harmison, assertions that neither Fischinger nor
       Gallo could substantiate. In addition, it bears mention that
       this passage is but another instance in which Gallo, contrary
       to his latter-day denials, endorsed the claim that he
       "developed" the HT cell line.

          (11) "There is no evidence that material from any outside
               laboratory including the French, was used in generating
               the HTLV-IIIb virus" (op cit., p. 3).

          "It is clear from other sections of this document that LAV
          was not used in generating the HTLV-IIIb virus strain
          advertently or inadvertently" (op cit., p. 8).

          "It is acknowledged that Dr. Gallo reviewed the French, May
          1983, manuscript, and supported its publication, and that
          Dr. Popovic received the LAV isolate and signed the
          appropriate forms. However, because none of the above
          information or material was used in the generation of the
          U.S. inventions, the above acknowledgements are not germane
          to primacy of inventorship" (op cit., p. 4).

       The only reason there was "no evidence"  of the use of outside
       material in the isolation of IIIb was that Dr. Fischinger did
       not look for the evidence, and such evidence as he had, he
       failed to examine. In this regard, it is important to remember
       that approximately one year before Dr. Fischinger wrote his
       report, he (Fischinger) was told by Gallo -- not once but on
       two occasions -- that IIIb and LAV were genetically identical.
       Dr. Fischinger's assertion, one year later, that there was "no
       evidence" that LAV was the source of IIIb is directly
       contradicted by the documentary record, including documents
       generated by Drs. Gallo and Fischinger themselves (see above).

       It also must be noted that in his August 23, 1985 memorandum to
       Dr. Gallo, Dr. Fischinger made it clear that a "critical,"
       "major area of oversight" in the information Dr. Gallo had
       previously provided was Gallo's failure to describe "the exact
       sequences and timing of the events which led to the
       virus-producing line HTLV-IIIb." In light of these fundamental
       unresolved issues, Dr. Fischinger's unqualified, definitive
       assertions to Harmison and other HHS officials that LAV was not
       used for the LTCB blood test are impossible to fathom.

       D. Beyond the Fischinger Report

       1. The Grinstead Response:

       When the Fischinger report reached HHS, a telling exchange took
       place between Darrel Grinstead, Assistant General Counsel in
       the Business and Administrative Law Division of the HHS OGC,
       and Dr. Lowell Harmison. Grinstead reviewed and, on September
       9, 1985, signed off on the Fischinger report. But Grinstead,
       apparently, was not comfortable with an unqualified sign-off;
       consequently, on September 9, Grinstead wrote an extraordinary
       memorandum to Harmison.

       Grinstead's memorandum is exceedingly important. It shows that
       Grinstead, the HHS attorney who would soon occupy a key role in
       HHS' defense of Gallo  et al.,  had significant reservations
       about the claims of Gallo  et al.,  reservations that were on
       point and well-founded. Notwithstanding those reservations,
       Grinstead and other HHS officials gave tacit or explicit
       endorsement to the Fischinger report, which thereby came to
       represent the official HHS position concerning the claims of
       Gallo et al.

       In his September 9 memorandum to Lowell Harmison, Darrel
       Grinstead said he had reviewed and initialed the Fischinger
       report. Yet at the same time, Grinstead's (at best) tepid
       observations about the report made clear he was not
       enthusiastic about its contents. Here is what Grinstead said:

          "... I think Dr. Fischinger's report is a useful analysis of
          the scientific and legal issues that appear to have been
          raised by the French ... Of course, our ultimate conclusions
          regarding the legal issues in this matter will require
          further examination of additional facts that may be
          presented by the French and by other components of this
          Department."

       Grinstead made clear that, given the outstanding facts,
       although he was signing off on the Fischinger Report, he did
       not regard this as the end of the matter:

          "... my initialing of this report should not be interpreted
          as an indication to you, Dr. Mason, or other officials in
          the Department that I am fully comfortable that the
          Department would prevail if the French were to proceed to
          press their claims through litigation."

       Grinstead itemized the points on which he believed sufficient
       information was lacking:

          "Our inability to reach such a conclusion does not stem from
          any inadequacies in Dr. Fischinger's report but rather from
          our lack of information regarding the details that the
          French may have to support their claims and from our lack of
          expertise to fully understand the complex scientific issues
          that have been raised."

       Grinstead concluded his memorandum with a telling observation,
       the observation of a major deficiency in the U.S. Government's
       attempt to substantiate its claims:

          "One of the factual issues that has not been fully
          explicated is the development by NCI of the patented
          invention, i.e., the test kit, prior to the date of the
          French patent filing in the European Patent Office in
          September of 1983."

       There are several important aspects to the statements by Darrel
       Grinstead. The first is Grinstead's explicit specification of
       the "invention" as "the test kit," i.e., not the virus, not the
       cell line, but the blood test itself. The second important
       element is Grinstead's specification that Dr. Gallo, in order
       to establish priority vis-a-vis the invention, would have to be
       able to show development of the blood test "prior to ...
       September of 1983."

       Yet Lowell Harmison told the Subcommittee he did not even
       recall seeing Grinstead's memorandum. When Harmison read Darrel
       Grinstead's memorandum, in 1993, Harmison said the issues
       raised by Grinstead were further examined by HHS, but Harmison
       was unable to identify when, how, or by whom this examination
       was conducted, nor with what results.

       Shortly after the IP filed suit against the U.S. Government in
       the U.S. Claims Court, notwithstanding his concerns and even
       though no additional supportive information had accumulated
       concerning the claims of Gallo  et al.,  (indeed, substantial
       damaging information had accumulated; see below ), Darrel
       Grinstead transmitted the Fischinger report to DOJ,
       representing it as  the authoritative HHS account of Dr.
       Gallo's research. Thomas Byrnes, the DOJ attorney who was lead
       counsel for the U.S. defense of Gallo  et al.,  told
       investigators that in pursuing that defense, he relied heavily
       on the report.

       2. Malcolm Martin's Information:

       During the first week of September 1985, several significant
       events occurred that should have broken wide open the HHS
       defense of Gallo et al. These events, occurring within the
       space of just a few days, included the emergence of hard
       evidence, originating within HHS itself, that demonstrated (1)
       the strong probability that LAV and HTLV-IIIb were genetically
       identical, IIIb having been derived from LAV and (2) that
       Pasteur was not only the discoverer of the AIDS virus, but
       also, unquestionably, the inventor of the HIV antibody blood
       test.

       The revelation of this evidence should have given rise to a
       searching examination of the evidence supposedly supporting the
       claims of Gallo et al. But from the beginning, HHS officials
       had committed themselves to one thing only -- defending the
       blood test patent of Gallo  et al.,  and by extension,
       defending the claimed international political and scientific
       preeminence of the United States and Dr. Gallo. Facts like
       those revealed in early September posed a serious threat to the
       patent and the associated financial and reputational benefits;
       consequently, the HHS officials who were confronted with these
       facts ignored and, in some instances, actively suppressed them.
       This section of the report describes how this occurred.

       During the first week of September 1985, the Fischinger report
       was receiving final sign-offs, even though, astonishingly,
       Gallo/Popovic's answers to the "three major areas of oversight"
       identified in Peter Fischinger's August 23 memorandum had not
       yet been received. Although the Fischinger report was an
       accomplished reality and HHS was on the brink of informing the
       IP that HHS had found its claims were groundless, Lowell
       Harmison decided to canvass scientists in other HHS agencies
       for information they might have bearing on the validity of the
       claims of Gallo et al. The reason for Dr. Harmison's decision
       remains unclear. The absence of all but a few Harmison
       documents (most of Dr. Harmison's documents vanished when he
       retired from HHS), together with Dr. Harmison's near-complete
       amnesia for key events, make it nearly impossible to determine
       why the belated canvassing was undertaken. But accounts from
       other participants make clear both what happened during the
       contacts with Harmison and what happened -- more accurately,
       what did not happen -- as a result.

       Two information-gathering trips were taken by Dr. Harmison and
       PHS attorney Richard Riseberg. The first trip, on September 5,
       1985, was to the NIH campus. The second trip, the following
       day, was to CDC headquarters, in Atlanta. At NIH, Harmison and
       Riseberg met with a group of NIH scientists, including NIAID
       laboratory chief Dr. Malcolm Martin. According to Dr. Martin's
       account to OSI, he did not know why he was invited to the
       meeting; he was merely "told to show up." Presumably, Martin's
       invitation had much to do with his authorship of the March 1985
       Cell  review, plus his coauthorship of an about-to-be-published
       article for  Science  demonstrating the unique genetic identity
       of LAV and "IIIb" among numerous other HIV isolates and
       debunking the "geographical proximity" arguments of Gallo et
       al. (Benn  et al.,   Science,   230,  1985, 949-951).

       Dr. Martin told OSI about the discussions at the NIH meeting:

          "Initially it was very open-ended: 'What is a viral
          variant?' I remember that question being asked. After
          discussing what a viral variant is, the question was -- 'is
          HIV a variant of HTLV-I?' ... it went on for about three
          hours. When it was all done Harmison asked the group, 'do
          any of you have any information that you think is relevant
          to the origin of HTLV-IIIb or LAV?' I said, probably
          foolishly, 'yes.' I focused then on genetic variation of the
          virus at that time. I told him that we were in possession of
          some information that raised some concerns in our minds
          about that ..." (8/8/90 OSI interview; annotated transcript
          pp. 22-24).

       The information to which Dr. Martin referred was the data from
       Dr. Martin's analyses of LAI/LAV, the analyses that showed the
       presence of the Hind-III polymorph in the virus Dr. Martin
       received from Dr. Montagnier in April 1984. According to Dr.
       Martin, Dr. Harmison asked him to write a memorandum describing
       his results and their meaning. Dr. Harmison promised Dr. Martin
       the memorandum would be treated "administrative confidential."

       What actually happened was that Dr. Martin wrote two memoranda
       to Dr. Harmison. Dr. Harmison picked up both memoranda in
       person; neither memorandum was routed through official
       channels. The memoranda were not produced by NIH to the
       Subcommittee until nearly two years after the Subcommittee's
       initial document request; the memoranda were  never  produced
       from any official files at HHS. Apparently, the memoranda were
       never placed in these files, or once placed there, they
       subsequently were removed. In short, as far as HHS' official
       records are concerned, it was as if the Martin-to-Harmison
       memoranda had never existed.

       The first of the two memoranda, dated September 6, 1985,
       included a substantial number of scientific papers and
       abstracts (including several by Gallo et al.) and related
       attachments. The memorandum, titled "Discovery of the AIDS
       Virus," was a wide-ranging one, encompassing (1) Dr. Gallo's
       early view that AIDS was associated with HTLV-I; (2) what Dr.
       Martin called "obfuscations" concerning the alleged
       relationship of the AIDS virus to HTLV-I; (3) a brief
       description of Martin's LAI/LAV experiments that revealed the
       existence of the Hind III polymorph and the coincidence of
       these results with the "IIIb" results of Gallo et al.

       Dr. Martin concluded his September 6 memorandum with a
       reference to the Benn et al. paper, about to be published in
       Science.  Martin summarized the paper's findings as follows:

          "... with the exception of HTLV-III and LAV, seven North
          American and three Zairian AIDS virus isolates are all
          different from one another" (September 6, 1985
          Martin-to-Harmison memorandum; p. 3).

       Dr. Martin's closing lines describing the conclusions of Benn
       et al. were these:

          "We offer no explanation for the similarity of HTLV-III and
          LAV, but informed virologists will certainly draw certain
          obvious conclusions" (op cit., p. 3).

       According to Dr. Martin's account to Subcommittee staff, Dr.
       Harmison asked him for clarification/elaboration of the
       information in the first memorandum concerning the apparent
       genetic identity of LAI/LAV and LAI/IIIb. This led to the
       second Martin-to-Harmison memorandum, dated September 11. This
       memorandum, accompanied by several pages of data from Martin's
       laboratory, added other important details relating to the
       genetic comparisons of the IP and LTCB viruses, including the
       fact that, in addition to the Hahn et al.  Nature  paper
       showing virus variants identical to those in LAI/LAV also
       present in LAI/IIIb), the Gallo laboratory had published a
       second pertinent paper (Shaw  et al.,   Science,   226,  1984).
       According to Dr. Martin, the Shaw et al. paper described,

          "... a molecular clone (HXB2, Figure 1) derived from
          HTLV-III [IIIb] stocks which contained the aberrant Hind III
          site in question. This clearly indicates that the Hind III
          variant is present in HTLV-III [IIIb] preparations" (op
          cit., p. 2).

       Dr. Harmison did not keep his word to Dr. Martin that his
       (Martin's) memoranda would remain
       "administrative/confidential." The contents of the memoranda
       were shared with a number of NCI/NIH officials and scientists,
       including Dr. Gallo. Among the individuals who reviewed Dr.
       Martin's data, Dr. Fischinger and Dr. J. E. Rall, the then-NIH
       Deputy Director for Intramural Research, found Dr. Martin's
       data impressive. Dr. Rall reportedly said "Mal's arguments are
       very hard to get around." Dr. Gallo himself told OSI that Dr.
       Martin's data convinced him both that there had been a
       "contamination" of the IP and LTCB viruses and that the
       "contamination" had occurred at LTCB, i.e., the LTCB virus
       originated with the IP virus, and not the reverse.

       Yet within a few weeks, HHS dismissed Dr. Martin's work and
       suppressed every trace of Martin's correspondence with Lowell
       Harmison. And within little more than a year, DOJ attorneys
       would strenuously argue in court assertions such as these:

          "... HTLV-III is not LAV by another name" (Defendant's Reply
          to Plaintiff's Opposition to Defendant's Motion to Stay
          Discovery, U.S. Court of Claims; 5/19/86; p. 4);

          "Continuing research revealed that LAV and HTLV-III were two
          different isolates of the AIDS virus" (Brief for Appellee,
          U.S. Court of Claims; 11/13/86; p. 4);

       The DOJ attorneys also asserted that the IP suit for breach of
       contract was,

          "... founded on the untenable scientific theory that LAV and
          HTLV-III are exactly identical" (Brief for Appellee; p. 40).

       3. CDC's Information:

       At the CDC meeting in Atlanta, on September 6, 1985, Lowell
       Harmison and Richard Riseberg met with several administrators
       and AIDS researchers, including Drs. Walter Dowdle, James
       Curran, and Frederick Murphy. Dr. Donald Francis, who by this
       time had left Atlanta to work in California, participated in
       the meeting by telephone. Despite the importance of the
       Harmison/CDC meeting, only the scantiest records of the meeting
       exist. Notes of a CDC staffer, headed "Meeting with Lowell
       Harmison re: French suit for antibody test royalties," include
       references to Jean-Claude Chermann's February 1984 trip to CDC,
       during which, by common account, Dr. Chermann's data convinced
       the CDC scientists that LAV was the cause of AIDS. Shortly
       after this meeting, the CDC scientists contacted Assistant
       Secretary of Health, Dr. Edward Brandt, to tell him they were
       "convinced French LAV was the virus." The meeting notes also
       reference the CDC comparative serology study, as well as the
       Gallo/Francis meeting at the IP on April 6, 1984.

       Dr. Donald Francis, participating in the meeting by telephone,
       made his own notes, in his telephone log. Francis' notes for
       the September 6 meeting included the following entries:

          "Lowell Harmison -- conf. call Dowdle, Murphy, Curran,
          Riseberg. DF -- gave the whole BOW [ball of wax] about
          French, about Gallo trying to steamroll, about possibility
          LAV = HTLV-III...

          Harmison: 'caution -- call administratively confidential.'"

       The first public revelation of the Harmison/CDC meeting
       appeared in the  Chicago Tribune,  in a December 31, 1991 story
       headlined, "In bid to claim AIDS test, U.S. concealed
       evidence." The  Tribune  report included accounts of several
       CDC participants showing how substantial a presentation the CDC
       scientists made. Quoting CDC scientist Dr. Frederick Murphy and
       others, the  Tribune  story said this:

          "'A lot was said about the CDC data. There was a full trip
          through the record, the chronology, with no holds barred.
          All the data were described.

          'They wanted to know who shared what with whom when,'
          recalled Dr. James Curran, who currently heads the CDC's
          AIDS research program. 'I remember going through my own
          notebooks. We told the lawyers anything about this that we
          had. I certainly didn't hold anything back in my files.'

          Dr. Donald Francis, the CDC official who had worked most
          closely with Pasteur and who had by then been transferred to
          California, remembered being asked to 'copy all my files'
          for Harmison.'"

       Dr. Francis sent Dr. Curran, who transmitted them to HHS, a
       vivid letter expressing his views about Gallo's scientific
       conduct, along with a package containing some of his (Francis')
       notes, his correspondence with the IP scientists, and copies of
       a number of CDC/IP collaborative papers.

       Dr. Francis spoke candidly in his September 5, 1985 letter,
       which was especially significant because of Francis' long-term
       dealings with both the LTCB and IP scientists. Francis began
       with this:

          "I am not familiar with the legal issues being addressed by
          the French litigation, but there are really important
          ethical scientific issues that the Public Health Service
          should consider before putting up a strong defense" (9/5/85
          Francis to Curran letter; p. 1).

       Francis elaborated on his concerns:

          "I am sure that I am not alone in believing that Bob Gallo
          exceeded ethical bounds in his dealings with the French. If
          this litigation gets into open court, all of the
          less-than-admirable aspects will become public and, I think,
          hurt science and the Public Health Service. The French
          clearly found the cause of AIDS first and Dr. Gallo clearly
          tried to upstage them one year later" (op cit., p. 1).

       Francis itemized what, in his view, were "the major questions
       that could come out in public":

          "1. Is HTLV-III actually derived from a culture of LAV? LAV
              was certainly sent to Gallo's lab. The nucleic acid
              sequences of the two isolates (LAV and HTLV-III [IIIb])
              are identical ... No other isolates are identical. Could
              this occur by chance? Probably not.

          2. Did Dr. Gallo practice good scientific ethics regarding
             this subject?  Science  must build on the work of others.
             Gallo was certainly aware of the French work. He reviewed
             their first paper, co-edited a book with the earliest
             serologic description and was consulted by phone and in
             person on multiple occasions. Yet, he was very reluctant
             to acknowledge their work in his papers and in his
             presentations. In fact, he actually depricated (sic.)
             their work. The major question is: did he, in fact,
             suspect that the two viruses were the same? Before his
             press conference and his papers he knew the highly
             unusual morphology of the two isolates was the same. He
             knew that CDC supplied sera from patients reacted to
             ELISA antigens in a similar manner..."

       Francis continued:

          "Even with the knowledge that they were the same virus, he
          actively prevented the comparison which is required by
          ethical scientific practices. He was very reluctant to send
          his virus to Paris. He was reluctant to send it to CDC and
          only did so after making us promise not to use our
          comparative assay (RIA) which was the only one available at
          the time."

       Dr. Francis concluded his letter with this:

          "With these serious violations of normal practices, we
          should caution the PHS regarding the defense of the NCI
          stance."

       As for the materials Dr. Francis appended to his letter, it was
       a remarkable collection, comprising published papers, CDC/IP
       correspondence, and Francis' own telephone notes and draft
       letters. The contents of these documents, which substantiated
       and elaborated the themes of Dr. Francis' September 5 letter,
       should have produced an immediate understanding at HHS that
       there were significant concerns about the claims of Gallo et
       al. But the entire Francis package, together with the other CDC
       documents, like Malcolm Martin's data, was simply ignored by
       HHS.

       4. "Major Areas of Oversight":

       Before describing the fate of the Martin/CDC evidence, it is
       necessary to examine a memorandum, dated September 6, 1985,
       purportedly written by Mikulas Popovic, to Dr. Gallo. The
       Popovic-to-Gallo memorandum, a vitally important one, was
       ambiguously titled "Origin of H9 Cells." In fact, the
       memorandum covered far more than the "origin of H9 cells." In
       addition to a discussion of Popovic/Gallo's rationale for
       renaming HUT-78 "HT," the memorandum contained an account of
       the purported "isolation" of "HTLV-IIIb," as well as
       information on key dates pertaining to Dr. Sarngadharan's
       earliest work with HIV serology.

       The greatest significance  of the September 6 memorandum,
       unrecognized until the Subcommittee's investigation, is that
       the memorandum contained the responses of Gallo et al. to Peter
       Fischinger's August 23 memorandum, the memorandum in which
       Fischinger required Gallo to provide information concerning
       "three major areas of oversight which have to be completed."
       These "major areas of oversight," as detailed by Dr.
       Fischinger, were as follows:

       -- "The derivation of the H9 cell line traced to its parental
          origins, i.e., the patient."

       -- "The exact sequence and timing of the events which led to
          the virus-producing line HTLV-IIIb that is now in current
          use. This is considered to be is  (sic.)  very critical  ...
          We need an oral description as well as copied pages from
          relevant notebooks.  We would like a written statement from
          Dr. Popovic, and whoever else partook in the development of
          the HTLV-IIIb line, that LAV was never used in any
          connection  in that complex infection sequence which led to
          the isolation of the HTLV-IIIb line (emphasis added)."

       -- "It is important to define the first time when ELISA's or
          Western blots were attempted with any HTLV-III-type isolate
          and human patient sera."

       The September 6 Popovic-to-Gallo memorandum responding to
       Fischinger's queries, contained a number of false and
       misleading statements. According to Dr. Popovic, Dr. Gallo
       personally edited Popovic's draft of the September 6
       memorandum. A copy of the memorandum exists with edits in Dr.
       Gallo's hand.

       Among the more significant inaccuracies in Dr. Popovic's
       September 6 memorandum are the assertions that:

          -- "Since primary non-cultured HUT-78 cells are not
             available, we cannot make a definitive conclusion whether
             the designated HT cells are identical with the original
             HUT-78 or not."

       Dr. Popovic's premise was not correct. Primary HUT-78 cells
       were available. Dr. Popovic made no effort to contact Dr. Adi
       Gazdar, whose cell line HUT-78 was, neither did Popovic seek
       HUT-78 from the ATCC. Had Dr. Popovic sought HUT-78 from either
       source, he would have readily been able to "make a definitive
       conclusion" about the identity of H9 and HUT-78. Indeed, that
       is what happened in 1988-89, when by order of the NIH Director,
       the testing was finally done.

          --  "Months  after our publication Montagnier with CDC
              published production in a cell line for the first time.
              They used BJAB, a B-cell line heavily contaminated with
              squirrel monkey retrovirus."

       As noted above , Gallo/Popovic's claims that the IP cell line
       was contaminated with a squirrel monkey retrovirus were
       entirely without foundation. Dr. Gallo finally admitted this to
       Subcommittee staff, in the Summer of 1993.

       -- Most important of all, the September 6, 1985 Popovic/Gallo
          response concerning the "isolation" of IIIb both contained
          several significant misrepresentations and was a significant
          evasion of what Dr. Fischinger had asked. The memorandum
          cited the use of at least one sample that, according to LTCB
          records, was not available at the LTCB at the time of its
          alleged use for the "pool" experiment. In addition, what is
          most noteworthy is what Dr. Popovic said about his use of
          the IP virus, relative to his "isolation" of IIIb:

          "The development of H9/HTLV-IIIb was almost entirely
          confined to the tissue culture room 6B03A  where no LAV was
          ever used"  (emphasis in original; op cit., p. 2).

       Dr. Popovic's statement completely evaded Dr. Fischinger's
       request for a formal statement that he (Popovic) did not use
       the IP virus for the isolation of "IIIb." Dr. Popovic did not
       provide the assurance Dr. Fischinger sought. Moreover, what Dr.
       Popovic did say was significantly problematic, on several
       counts:

       Dr. Fischinger asked for a blanket statement that LAV "was
       never used in any connection ... in the infection sequence"
       that resulted in IIIb, but what Dr. Popovic said was merely
       that the isolation of  H9/IIIb  took place in a room where no
       LAV -- allegedly -- was used. By Dr. Popovic's own account, the
       H9/IIIb cell line was not developed until at least mid-January
       1984. Thus, Popovic's response failed to account for the first
       two months of the reported existence of IIIb, which took place
       in a room (6B22) where LAV was frequently used.

       Dr. Popovic's statement that "no LAV was ever used" in Room
       6B03A (of Building 37) is subject to question. By Popovic's own
       account, he thawed LAV and used it (late January/early
       February, 1984) for his "host range" experiment. So far as is
       known, at this time, Popovic's only laboratory space was 6B03;
       so if the "host range" experiment really was carried out, it
       almost certainly was done in 6B03.

       Dr. Popovic qualified his response to Dr. Fischinger's question
       by the phrase "was  almost entirely  confined to" rather than
       "entirely confined to," thus indicating Popovic was leaving
       himself some leeway in his response. The words "almost
       entirely" should have alerted Dr. Fischinger to the possibility
       that Dr. Popovic was unable or unwilling to give an
       unconditional assurance that he did not use LAV in "isolating"
       IIIb.

       Dr. Popovic failed to give Dr. Fischinger a straightforward
       affirmation that he (Popovic) did not use LAV to isolate IIIb.
       The curious statement Dr. Popovic did make, concerning the room
       in which H9/IIIb allegedly was isolated, was so clear an
       evasion that Dr. Fischinger should have recognized it at once
       and sought the reason for Popovic's evasiveness. There is no
       indication Fischinger did anything of the sort.

       -- "The first antibody against HTLV-III was obtained by Dr. M.
          Sarngadharan on December 13, 1983, and the first ELISA was
          performed by him on January 6, 1984" (op cit., p. 2).

       It is important to note that Dr. Fischinger's August 23 query
       about the LTCB HIV blood test was itself deficient. Dr.
       Fischinger failed to ask the identity of the HIV isolate used
       for the LTCB blood test; Dr. Fischinger also failed to ask for
       and inspect any laboratory notes relating to the blood test.

       Drs. Popovic and Gallo did not supply any information on the
       identity of the isolate, which as previously described, was
       LAI/"MOV," neither did they reveal that the serum they used as
       the AIDS standard for their initial ELISAs was from patient
       BRU. Moreover, the information Popovic/Gallo did supply was
       incorrect and misleading in several significant respects,
       particularly in regard to the claim that "the first antibody
       against HTLV-III was obtained ... December 13." There is no
       known basis for this claim. Development of the rabbit
       hyperimmune antiserum, a polyclonal antibody, was not even
       initiated until December 29; the antiserum was not available
       for use until February 24, 1984. As for the ELISAs, the January
       6 date appears to be correct, but what Popovic/Gallo failed to
       tell Fischinger was that the LTCB ELISA did not work
       satisfactorily until the end of January 1984.

       Given Dr. Fischinger's very limited knowledge of the facts (not
       to mention his evident determination not to know them), it is
       unlikely he would have recognized the misrepresentations in the
       September 6 Popovic/Gallo memorandum. Dr. Fischinger could and
       should have recognized well the memorandum's evasions of his
       questions. But there is no indication Fischinger did recognize
       the evasions or, if he did, that he did anything about them.

       5. Disposition of the Martin and CDC Information:

       As for the CDC and Malcolm Martin materials, the former items
       made their way to HHS and ultimately to DOJ, but very
       belatedly. The Francis-to-Curran letter, together with the
       appended documents, was sent by Richard Riseberg to Darrel
       Grinstead, but not until January 24, 1986, four and one half
       months after the letter was written. Once the Francis materials
       reached Grinstead, they apparently went nowhere. Grinstead told
       Subcommittee staff he did not know if the Francis materials
       were transmitted to DOJ; the Subcommittee staff's review of the
       DOJ files of attorney Byrnes revealed none of the Francis
       documents. But the documents obviously resided at HHS from 1985
       to 1992, when they were officially provided to the
       Subcommittee.

       In November 1992, when he was interviewed by Subcommittee staff
       and shown the Francis materials, James Curran's response
       revealed his frustration at HHS' evident disdain for CDC's
       information:

          "We at CDC  never  tried to encourage the United States to
          support the Gallo patent. They had Don's stuff -- they had
          it all this time" (11/19/92 interview).

       What  was  found at DOJ was extremely significant, i.e., a copy
       of the CDC computer print-out of the comparative serology data
       -- the data showing the equivalent performance of the IP and
       LTCB blood tests. Subsequent to the Subcommittee's discovery of
       the computer print-out in the DOJ files, DOJ officials refused
       to make attorney Thomas Byrnes available for a Subcommittee
       staff interview. Consequently, it was not possible to determine
       when and how Mr. Byrnes obtained the CDC data, whether he
       understood their significance, why he failed to act on the
       obvious implications of those data, and most important, why he
       continued to submit legal pleadings whose contents was refuted
       by materials in his own files.

       Concerning Malcolm Martin's memoranda and data, one important
       question that remained unanswered for years was what, if
       anything, Harmison did with those items before they vanished
       from the official record. Finally, in late 1992, when Dr. Gallo
       gave up documents from his laboratory, documents withheld from
       the Subcommittee since early in the year, the answer was
       revealed, for almost as soon as he received the memoranda from
       Malcolm Martin, contravening his assurances to Martin that he
       would keep the materials confidential, Lowell Harmison sent
       copies of the memoranda, together with (at least) the data
       attached to the September 11, 1985 memorandum to Peter
       Fischinger. Fischinger in turn, sent them directly to Dr.
       Gallo.

       Evidence of these events came from a package of documents
       provided to the Subcommittee from the LTCB in November 1992,
       well after Dr. Gallo had affirmed in writing that he had
       provided all documents responsive to the Subcommittee's
       document requests. Among these documents was a copy of Martin's
       September 11, 1985 memorandum to Lowell Harmison, accompanied
       by Martin's laboratory data. Martin's name had been deleted
       from the top of the memorandum, but as described below%%, Dr.
       Gallo obviously knew the memorandum's source.

       Penned across the top of the September 11 Martin memorandum, in
       Peter Fischinger's hand, was this note written to Dr. Gallo:

          "This information was transmitted to us from Dr. Harmison
          OASH to help you formulate a precise answer. PJF."

       Someone, most likely Gallo, marked the contents of the
       memorandum as he read it. Two passages of the memorandum were
       underscored by hand, the two key passages that told Gallo what
       Dr. Martin had found:

          "... we concluded that  at least two viral variants  were
          present in the LAV virus stock we had received from Dr.
          Montagnier in  late April 1984"  (emphasis added by reader).

          "Two viral variants" and "late April 1984." These were the
          critical items that told Dr. Gallo, who hardly needed to be
          told, that (1) his virus was genetically identical to the IP
          virus and (2) his virus was derived from the IP virus and
          not the reverse (because Malcolm Martin's LAV was obtained
          from Paris well before Gallo sent IIIb to Montagnier).

       Rather than convening an independent panel of experts or
       otherwise attempting to deal responsibly with Malcolm Martin's
       data and the information obtained from CDC, HHS turned once
       again to Dr. Gallo. Peter Fischinger wrote yet another
       memorandum. In this September 10, 1985 memorandum, Dr.
       Fischinger told Dr. Gallo that based on discussions "...
       emanating from our compilation of your data," a letter had
       already been sent to the Institut Pasteur,

          "... stating that the position and the resulting claims of
          the Institut Pasteur were not supportable" (9/10/85
          Fischinger-to-Gallo memorandum; p. 1).

       Dr. Fischinger's memorandum did not mention Lowell Harmison's
       trips to NIH and CDC, rather the memorandum described a
       scenario (that apparently did not occur) in which, according to
       Fischinger, his report was sent to HHS agencies other than NCI
       engaged in HIV research, so that:

          "... any other intra-departmental concern, which would be
          incongruent with the position outlined by NCI, would be
          voiced and answered" (op cit., p. 1).

       Fischinger told Gallo that, as a result of this "critique"
       process:

          "There was some consensus on a number of issues. However,
          several additional concerns (were) raised which related to
          both the flow of HTLV-III-oriented research in your
          laboratory and referred to the possibility that there might
          have been a common origin of the presently analysable LAV
          and HTLV-IIIb virus stocks" (op cit., p. 1).

       Dr. Fischinger asked Dr. Gallo to respond to several questions,

          "... raised by the NIH/HHS legal counsel in order to arrive
          at a final departmental position."

       The questions in Peter Fischinger's September 10 memorandum are
       noteworthy, both because of their avoidance of the central
       issues raised by the CDC scientists and Malcolm Martin, and
       because of the "coaching" they reflected. The first four
       questions, aimed at encouraging Dr. Gallo to elaborate on the
       putative "continuity" of his work, while at the same time
       denigrating the IP work, were as follows:

          "1. Since you demonstrated in November-December 1982, the
              presence of a virus which clearly did not seem to be
              HTLV-I or II, why was this fact never mentioned in your
              many ensuing publications over the next year?
              Ostensibly, all of the papers mention the HTLV-I
              association with AIDS, but none address the fact that
              you were aware of the existence of other agents which
              were of the HTLV-III type.

          2. Would it be possible to establish a flow of continuity of
             your thinking and experiments in your laboratory on the
             non-HTLV-I isolates from your first idea to May 1984? Had
             you abandoned the experiments searching for a non-HTLV-I
             agent between December 1982 and June 1983?

          3. What was the progression of your thinking and experiments
             leading to the successful HTLV-III ELISA tests? When did
             you and/or your contractors first apply the ELISA
             technology to human AIDS/ARC sera in conjunction with an
             HTLV-III type isolate? Did the Biotech contract use your
             input and technology to develop their August 25 [1983]
             patent application, which appears to claim to have had a
             generic ELISA test for all HTLVs, including those in
             AIDS? Did Biotech work with any of the early HTLV-III
             transmissible isolates in 1983?

          4. According to some researchers, the first clear linkage of
             LAV to AIDS was accomplished by Dr. Chermann at the Park
             City, Utah meeting in February 1984, rather than your May
             4 Science  papers. Would you comment on the extent and
             the surety of information presented at that meeting by
             the French team?" (op cit., pp. 1-2).

       The fifth question Fischinger posed -- the question pertaining
       to Malcolm Martin's LAV experiments -- was prefaced by a
       lengthy introduction, a nearly verbatim excerpt from Martin's
       September 6 memorandum to Lowell Harmison. Fischinger
       recognized well the seriousness of Martin's data and their
       implication. Fischinger said this to Gallo:

          "Because of the scientific nature and the nonscientific
          implications and seriousness of the next concern, the
          allegation below is presented in almost verbatim form. The
          scientist's name is not mentioned" (op cit., p. 2).

       Following the excerpt from Malcolm Martin's memorandum that
       described the molecular identity of the IP and LTCB viruses,
       Dr. Fischinger concluded his memorandum to Dr. Gallo with this
       series of questions:

          "Could you discuss the possible origins of such a common
          'contaminant' virus? Based on known sequence differences of
          LAV and HTLV-IIIb, can one  jump to conclusions  (emphasis
          added) of  identity  (emphasis in original) of this second
          species in the LAV and HTLV-IIIb stocks, based  only on
          (emphasis added) restriction endonuclease patterns? Have you
          seen more than one virus in any of your &#62; 100 isolates
          if you did not purposely infect with virus from more than
          one individual?" (op cit., p. 3).

       Fischinger's concluding instruction to Gallo also was highly
       revealing, implying as it does a clear admonition that Gallo
       was not to "rock the boat" with his response:

          "The Department requests a prompt reply to these questions
          so the previously outlined position is satisfactory  to the
          Office of the General Counsel" (emphasis added; op cit., p.
          3).

       6. Dr. Gallo's Response:

       Dr. Gallo's September 23, 1985 reply memorandum to Peter
       Fischinger was a key document in the French/American dispute.
       The memorandum was sent to the Department of Justice, where the
       attorneys representing the United States Government in defense
       of Gallo et al. incorporated a number of the memorandum's
       assertions into U.S. Government pleadings. Both Fischinger's
       September 10 request memorandum and Gallo's response memorandum
       made their way to the Office of the Director, NIH, and to a
       number of HHS officials and attorneys. The memorandum is
       notable both for its candor on one key issue, i.e., "early
       isolates" (see above ) -- candor dramatically at odds with Dr.
       Gallo's statements on the same issue on other occasions -- and
       for its extravagance, exaggeration, and clearly wrong
       information on other key issues.

       The latter such statements included the following:

          (1) "Remember, at this stage [March 1983 to the Fall of
              1983] the Pasteur group had one claim of one virus and
              they reported that it was significantly cross-reactive
              with HTLV-I ..." (emphasis in original; op cit., p. 2).

          "In the May 1983 papers (sic.)  Montagnier  and co-workers
          stated their virus was an HTLV.  They showed a
          cross-reaction-with HTLV-I. Clearly the virus was human
          T-l ymphotropic virus, as they said" (emphasis in
          original; op cit., p. 5).

       As described above , these incorrect perceptions of the AIDS
       virus as related to the leukemia virus were Dr. Gallo's own,
       not those of the IP scientists.

       (2) "It was not until our November 1983 breakthrough on mass
           production of HTLV-III were any specific reagents made
           enabling us to link the virus to the cause of AIDS" (op
           cit., p. 1).

       This statement failed to reveal that the LTCB's November 1983
       "breakthrough" was achieved with "MOV," and not with "IIIb,"
       with H4 and not H9. More importantly, the statement clearly
       implied that HIV-specific reagents were created in November
       1983 or very soon thereafter, when in reality, the first such
       reagent was not prepared until late-February 1984.

       (3) "We did our first test in December 1983 with bona fide
           mass-produced HTLV-III ... We did not test sera by ELISA
           with non -mass-produced viruses because quite obviously the
           results would be crappy. The Pasteur group elected to do
           so; ie., they used the few virus particles transiently
           released on the dying primary blood T-cells and that is why
           they got such inclusive results" (op cit., p. 2).

       There are a number of misleading aspects to the above passage,
       which addresses one of the central issues in the blood test
       patent dispute. The LTCB ELISA was not even attempted until
       January 1984, and it was not until the end of January that the
       test reportedly performed satisfactorily. Moreover, as noted
       above, the initial LTCB ELISAs were all performed with LAI/MOV,
       which Dr. Gallo described as "mass-produced HTLV-III."

       As for the assertion that the IP's blood test results were
       "inconclusive," the IP results, in fact, were fully as good as
       those of Gallo et al. (see above).

       (4) Attempting to rebut the Martin/CDC assertion that the IP
           results, as of the February 1984 meeting at Park City,
           Utah, constituted "the first clear linkage of LAV to AIDS,"
           and thus, predated the LTCB data published in May 1984, Dr.
           Gallo said this:

          "Even if the above three points did not matter, the
          conclusion would still be erroneous since 1) I had already
          lectured at the Pasteur Institute in Paris in January 1984
          and told a very extensive audience I was sure we had the
          cause of AIDS by numerous virus isolates plus wide
          seroepidemiology with 90 to 100% linkage to ARC and/or AIDS
          depending on which of many already completed studies we
          quoted. In a private meeting with Dr. Chermann and
          Montagnier I gave many of these details. 2) Also in January
          1984 I called Jim Curran and requested a large panel of CDC
          sera ... to be sent to me 'blind' (all our testing was and
          still is done with coded sera). I told him then I  was sure
          we had the cause of AIDS and that it  might  be the virus
          identified in the lymph node patient by the Montagnier
          group. Obviously, to tell Jim Curran this meant that we
          already had the data and simply wanted to convince him. Sera
          were sent some weeks later. At the beginning of March 1984
          Jim Curran, my collaborator Dr. Sarngadharan, and myself met
          for lunch at LaMiche in Bethesda. The code was broken and
          verified our conviction. It was also at this time that I let
          NCI officials know: a) the etiology was conclusively solved
          and b) we had developed a real blood test for this virus.
          No one in the world ever made these claims before this time"
          (emphasis in original; op cit., pp. 3-4).

       At least three major events are misrepresented in the above
       passage, both with respect to the timing of their occurrence,
       and with respect to what took place. In every instance, the
       events were purported to have occurred earlier than they
       actually did, in one instance, by a matter of several months.
       Specifically:

       (a) Dr. Gallo visited Paris and lectured at the Institut
           Pasteur in April, not January 1984 (see above); Dr. Gallo
           met with Dr. Francis as well as other scientists, and
           during this meeting, Dr. Gallo saw the CDC comparative
           serology data indicating LAV, like "HTLV-III," was the
           cause of AIDS.

       (b) Dr. Gallo telephoned Dr. Curran in mid-February 1984, after
           he (Gallo) heard Chermann at the Park City meeting, not in
           January. Dr. Gallo could not have told Curran during the
           telephone call he was "sure" he had the cause of AIDS. At
           the time the call was made, Gallo et al. still had no
           HIV-specific reagents and still had not performed what
           Gallo himself would describe as the "critical" serology
           (see above; 5/10/90 MOV Submission to OSI; p. 2).

       (c) Dr. Gallo and Dr. Curran did not meet at the Bethesda
           restaurant "at the beginning of March." The meeting took
           place on March 12 (see above). Moreover, during this
           meeting, Dr. Gallo learned that the IP LAV blood test
           performed as well as the LTCB's test in detecting viral
           antibodies in AIDS and pre-AIDS patients.

       (5) Dr. Gallo attempted to deal  with the obvious implications
           of Malcolm Martin's data, what Gallo termed "the
           unfortunate innuendo," using several different arguments:

           (a) "Our laboratory had multiple isolates from the
               beginning and we were the first to discover
               heterogeneity among isolates from analyses of the
               genomes of some of these (published first, in fact, in
               1984 from data originated in December 1983)" (op cit.,
               p. 4).

       Concerning the LTCB's putative "multiple isolates," Dr. Gallo
       said this:

          "... we  isolated, mass produced in H9 cells, patented  and
          published on a major variant HTLV-III-RF (Haitian isolate),
          very different from LAV, at exactly the same time, making
          all this crap irrelevant. In addition, last month (August
          1985) we published in the  Proceedings of the U.S. National
          Academy ofScience  on  one hundred and one  different
          isolates of HTLV-III/LAV. This paper was submitted for
          publication six months ago. Now the number of isolates
          approaches 200" (emphasis in original; op cit., p. 5).

       The facts are otherwise. Gallo et al. did not isolate RF "at
       exactly the same time" as LAV; RF was not cultured at all until
       November, 1983. It was not co-cultured with HUT-78 cells until
       mid-December, and this event occurred because the RF primary
       culture was "dying rapidly." The LTCB scientists did not
       attempt to infect H9 with RF until June, and as noted
       previously (see above ), they had to repeat the infection in
       July; they did not patent RF at any time. The false claims
       relating to the PNAS paper have already been elaborated in
       detail above (see above).

       Besides the previously-discussed irrelevance of the LTCB's
       alleged "other isolates" to the issue of whether or not LAV and
       IIIb were identical, the above passage is noteworthy for the
       false claim that Gallo et al. possessed molecular data
       "originated in December 1983." There is no basis for this
       claim, as Gallo admitted to Subcommittee staff in July 1993.

       (b) Dr. Gallo identified three instances in which HIV isolate
           pairs had been found that allegedly were as close as or
           closer to each other than were LAI/LAV and LAI/IIIb. Two of
           these instances were recounted only anecdotally by Gallo;
           no substantiation for the claims is known to exist. As for
           the third instance, the instance of MN and SL, this
           instance later was ascribed by Dr. Gallo to a "mix-up of
           samples" (4/27/90 OSI interview; transcript p. 76).

       (c) Dr. Gallo's response to Fischinger's query, "Have you seen
           more than one virus in any of >100 isolates if you did not
           purposely infect with virus from more than one individual?"
           is not comprehensible. However, it is notable that: (1) Dr.
           Gallo admitted the presence of the same multiple virus
           variants in both LAI/LAV and LAI/"IIIb"; and (2) Dr. Gallo
           acknowledged that the variants in both LAV and IIIb could
           represent "polymorphic variants generated in vivo." Yet Dr.
           Gallo still invoked the geographic proximity argument, in
           an effort to make the case that LAI/LAV and LAI/IIIb,
           although they shared two identical viral variants, could
           still be of independent origins:

          "If LAV and HTLV-IIIb are similar because they are derived
          at the same period of time from New York at a time only
          shortly after the virus entered the U.S., then all the
          polymorphic variants would also be expected to be highly
          related."

       Dr. Gallo's implied argument that geographical and temporal
       proximity could have accounted for the identity of LAV and IIIb
       is both factually and logically flawed. In the first place,
       there was no evidence showing that "IIIb" was "derived from New
       York." Some of the samples allegedly used for the IIIb "pool"
       came from New York, but several did not, and as Gallo himself
       stated,

          "... it is hard to know which or how many viruses [if any]
          actually took."

       There was even less substantiation for the assertion that LAV
       and IIIb were "derived ... at a time only shortly after the
       virus entered the U.S." The first AIDS cases in the United
       States were reported in 1981, while LAV/BRU and the putative
       "IIIb" samples were obtained in 1983. Considering the well
       known, extraordinarily rapid mutation of the AIDS virus, it was
       rank speculation to assert that by 1983, isolates as alike as
       the IP and LTCB viruses could be anything other than commonly
       derived.

       In addition, the implied assertion that LAV and IIIb could be
       independent and still contain "polymorphic variants ... highly
       related," could not hold water. What Malcolm Martin's data
       showed was that not only the dominant virus in LAV and IIIb was
       identical, but the secondary virus was identical as well.
       Moreover, the viral variants were present in the two putative
       independent isolates in substantially the same proportions.
       What Dr. Gallo was trying to argue was that two independent
       events produced two identical products, in the same relative
       quantities, an argument that was scientifically and logically
       incredible.

       Elsewhere in the memorandum to Fischinger, Dr. Gallo invoked
       the argument that the variant viruses in IIIb could be
       associated with the pooling of several patient samples, in the
       process making vague allusions to a possible appropriation of
       "his" virus by the IP:

          "As an alternative interpretation of point 4: There are
          several proviruses in the H9/HTLV-IIIb cell line. We stated
          in our paper we used samples from several patients.
          Montagnier used only one patient. When analyzing virus from
          a single patient  at any one fixed time  we found only one
          form. How did Montagnier get more than one form?") (op cit.,
          p. 5).

       (d) Still attempting to refute Malcolm Martin's data and
           conclusions. Dr. Gallo said this about September LAV:

          "We received an extraordinarily small amount (11,000 CPM
          reverse transcriptase) of Montagnier's virus September 24,
          1983. Mika developed the clone H9 in early November 1983.
          Can anyone possibly imagine mass production of this amount
          of virus in five weeks?" (op cit., p. 5).

       This statement contains the notable inaccuracy that H9 was
       created in "early November 1983," an error of two and one-half
       months. Equally significant is the implied assertion that it
       would have been impossible for Popovic, in November 1983, to
       productively infect a permanent cell line with September LAV.
       In fact, that is precisely what Dr. Popovic did. Dr. Gallo knew
       this. He wrote, in the Popovic paper, that LAV grew in H4. Dr.
       Popovic knew it well. He told OSI that LAV grew "very well" in
       permanent cell lines. Dr. Fischinger could have known it, had
       he only asked for the LTCB's LAV data. But Fischinger did not
       ask, and Gallo/Popovic did not tell. Thus the falsehoods about
       the impossibility of productively growing September LAV lived
       on.

       (e) Finally, concluding the September 23 memorandum, Dr. Gallo
           said this: "... once we characterized HTLV-III (by December
           1983) we  never  claimed anywhere that it was closely
           related to HTLV-I" (op cit., p. 6). The dubious quality of
           the claims about the relationship of "HTLV-III" to -I and
           -II has already been discussed. Even more problematic is
           the claim in the above passage that the LTCB scientists had
           "characterized HTLV-III" by December 1983. Dr. Gallo
           acknowledged to Subcommittee staff that this claim could
           not be substantiated. Even LAV, by far the best
           characterized isolate at the LTCB by December 1983, could
           not credibly be described as "characterized ... by December
           1983," in the usual meaning of the term.

       7. Dr. Gallo's Explanations:

       Considering the significance of the Popovic/Gallo
       August/September 1985 memoranda to the subsequent U.S. defense
       of Gallo  et al.,  and the clear evidence that those memoranda
       contained numerous misstatements and reflected numerous
       material omissions, it is instructive to see how Dr. Gallo
       views his own role in these matters.

       During his July 1993 interview with Subcommittee staff, Dr.
       Gallo was asked about the documents he transmitted to Peter
       Fischinger, during Fischinger's brief "investigation," and
       about the "Fischinger report" itself. Faced with the statement
       he signed affirming the accuracy of the statements contained in
       the report and affirming that they were supported by data, Dr.
       Gallo acknowledged, "Yes, I signed it." But Dr. Gallo added,

          "I didn't read it [the report] as carefully as you might
          think."

       Attempting to explain his claimed indifference to his
       attestation of the accuracy of the report, Dr. Gallo said this:

          "I didn't even know what was going on. They didn't tell me
          about the meeting with the lawyers that day" (7/22/93
          Subcommittee staff interview).

       In fact, Dr. Gallo  was  told about the "meeting with the
       lawyers," in Peter Fischinger's August 7 memorandum to him.
       Shown this memorandum, in July 1993, Dr. Gallo responded,

          "Oh well, you're right. But it doesn't change my mood too
          much. My first involvement with the story was not medical or
          scientific" (op cit.).

       Dr. Gallo described the basis for the information he
       transmitted and the statements he made to HHS as "a memo from
       Mika" that summarized his (Popovic's) experiments. But, said
       Gallo:

          "You just give up science-- you can't look at every last
          thing. He told me in a memo. Mika said he got temporary
          growth [of LAI/LAV] in HUT-78" (op cit.).

       Otherwise, Dr. Gallo said, "I don't know what I relied on." Yet
       Dr. Gallo also said, concerning his sources of information,
       that he "would have" relied on Popovic, Read-Connole ("on
       specific things") and Sarngadharan. Dr. Gallo said:

          "I probably called a meeting. Boy, I don't know. Maybe I
          called him [Dr. Popovic] back up on the phone. I don't know"
          (op cit.).

       Dr. Gallo added this:

          "Lowell (Harmison) must have talked to me about this. At the
          very beginning I was just meeting him. If problems occurred,
          I'd see him -- more and more. He'd come visit me many times.
          He's been in the lab and he's talked to people in my lab
          many times without my being there" (op cit.).

       (This statement by Dr. Gallo directly contradicts Dr.
       Harmison's sworn testimony concerning his contacts with Gallo;
       see below.)

       Concerning who selected and assembled the data he provided to
       Dr. Fischinger, Dr. Gallo said this:

          "Mika would refuse outright. He doesn't like administrative
          ... This would be Ann [Slisky] or Prem [Sarin]" (op cit.).

       Dr. Gallo described his attitude in responding to Fischinger's
       questions in August and September of 1985; he attempted to
       account for the several incorrect statements in his September
       23, 1985 memorandum to Peter Fischinger. Concerning the claim
       that "... we did our first test in December 1983 ...," Dr.
       Gallo acknowledged this could not refer to the LTCB ELISA.

          "I wasn't thinking about a patent. I don't know. If the
          ELISA was in January, this must be immunofluorescence. But
          it would be small in amount, and non-definitive" (op cit.).

       Responding to questions about the claims in the memorandum that
       "... we isolated, mass produced in H9 cells, patented and
       published ..." on RF "... at exactly, the very same time ..."
       Dr. Gallo admitted that "'mass produced' is not the right
       phrase," but he argued it was proper to say he had "patented"
       RF, merely because it was one of the examples shown in a table
       of one of the patent applications.

       In sum, concerning the statements in the memorandum about "RF,"
       Dr. Gallo said,

          "No one should care about this ... It could have been true;
          we could have mass produced it at Frederick" (op cit.).

       As previously described, there is cause to question what could
       have been done with RF. Even allowing for the possibility that
       RF possibly could have been "mass produced," this does not
       change the reality that it  was not,  contrary to what Dr.
       Gallo claimed in his memorandum to Dr. Fischinger.

       Even Dr. Gallo boggled at the statement in the memorandum that
       he had "characterized HTLV-III" by December 1983. The best Dr.
       Gallo could do in defending the statement was to say, "It would
       have been mostly serological." But serological studies do not
       constitute virus characterization; the statement written in the
       memorandum was not true.

       Finally, offering an account of his emotional state as he wrote
       the September 23 memorandum, an attempted explanation for the
       extraordinary statements the memorandum contains, Dr. Gallo
       said this to Subcommittee staff:

       "I'm sky-high writing this thing. It's the first time my
       integrity is being doubted. I was infuriated ... My emotions
       were to get this out of my life ... I responded with
       fulminating anger" (op cit.).

       E. Key Players at HHS

       HHS' September 6, 1985 rejection of the IP demands did not
       close the door entirely on discussions with IP representatives.
       Further correspondence between Mac Haddow and Professor
       Dedonder, during September and October 1985, led eventually to
       discussions in Washington between HHS (with attorney Darrel
       Grinstead playing a leading role) and one of the U.S. firms
       representing the IP's interests, Weil, Gotshal & Manges. But
       even as the attempted negotiations moved ahead and, eventually,
       collapsed, both sides were preparing for the possibility of
       litigation.

       To understand HHS' actions in 1985 and thereafter, it is useful
       to examine what key players told the Subcommittee staff they
       believed they were doing, and why, relative to the
       French/American dispute. Several themes emerged from the
       statements of these individuals, including prominently, denial
       of responsibility, even on the part of officials who, according
       to the documentary record, clearly played key roles in the
       HHS/U.S. response to the IP challenge.

       Concerning the substance of the U.S. response, it is clear that
       the overriding concern at HHS was never  "should  we defend the
       Gallo patent?'; rather, at all times the concern was how to
       defend the patent. No one, it appears, asked the question,
       "What is the truth about the claims of Gallo et al.?" No one,
       it appears, ever asked, "What is the right thing to do?"
       Indeed, from the testimony of some witnesses, it became clear
       that even when HHS began to suspect Gallo's claims could not be
       substantiated, HHS still was determined to actively defend
       those claims for as long as possible, by whatever means
       possible, while at the same time negotiating a settlement that
       would be as favorable as possible to HHS and the United States.

       C. McLain Haddow:

       The individual who first described the HHS stance with
       particular clarity was C. McLain Haddow. Haddow played an
       active role in the dispute in 1985. As Margaret Heckler's Chief
       of Staff, Haddow communicated frequently with IP officials,
       denying strongly the validity of the IP claims. Yet in 1990 and
       thereafter, Haddow asserted he had been suspicious of the
       claims of Gallo et al. all along. Haddow spoke out first to the
       Chicago Tribune,  where he was quoted on March 18, 1990 as
       follows:

          "'There was a point where it became very clear to me that
          the NIH people were not being truthful,' Haddow recalled.
          'These people would sit down for one meeting and then in a
          subsequent meeting the stories were different ... They
          weren't even smart enough to get their stories straight
          before they talked to me,' he said. 'How in the world could
          they get through a court proceeding?'" (p. 16).

       Because Mac Haddow is a convicted felon, his testimony might be
       subject to some question.  However, much of Haddow's
       information was independently confirmed by documentary
       evidence, as well as testimony of other witnesses, including
       one of Haddow's top assistants, a career civil servant of
       unchallenged integrity.

       Haddow recounted to Subcommittee staff meetings and telephone
       calls with Gallo. Haddow recalled one meeting in which Gallo
       adamantly recited his claims, and becoming heated, pounded the
       table and asserted Haddow was trying to deprive him of a Nobel
       prize.  According to Haddow, when Gallo left, Haddow's
       assistant remarked of Gallo, "He's lying through his teeth."
       Haddow's assistant substantially confirmed Haddow's account,
       telling investigators that Gallo provided "personal assurances
       of the integrity of his work," including the fact that, he
       said, the LTCB scientists always kept LAV separate from the
       LTCB's own cultures.  But, according to Haddow's assistant, "it
       was difficult to believe him."  Haddow's assistant recalled
       making a remark, "He's lying," or "Something's rotten in the
       state of Denmark," or similar.

       According to Haddow, the HHS attorneys believed they could
       sustain a defense for some time, based on Gallo's strong
       statements and the fact that he had the support of the entire
       NIH leadership. But the HHS attorneys were not confident that
       HHS would win if it came to a showdown.

       Haddow's assistant said there was:

          "... a general impression that we wouldn't win, because
          Gallo lacked documentation to show there was no use of the
          French virus, and thus could not refute the main French
          accusations" (10/92 interview with the HHS OIG).

       According to Haddow:

          "... so our attorneys recommended, the Department attorneys,
          perhaps in some conflict with the NIH attorneys, recommended
          that we fold, that we roll over but play it out until we saw
          how strong the French were on it but our strategy was play
          it out as strong as we could but if we got to the point
          where we knew we were going to court that we should roll
          over and accept a reconciliation and settlement of this
          problem. The French attorneys, the attorneys representing
          the French government, didn't know how weak our case was and
          they never discovered it. We were able to craft an agreement
          that probably disadvantaged the French, but it was because
          we hid our weakness fairly effectively" (BBC interview;
          broadcast in "Taking the Credit," May 11, 1992).

       In an interview with  The New York Times,  Haddow echoed both
       his statements to the BBC, as well as the account of his former
       executive assistant. According to the  Times:

          "The officials at Health and Human Services 'believed that
          Gallo was incorrect when he said he did not use the French
          virus,' Mr. Haddow said. 'There was some question about the
          significance of the use, but they were aware that it had
          been used in some fashion. Their recommendation was to play
          it out as best we can, and if we can get a settlement where
          we share the credit, let's do it'"  (The New York Times,
          6/25/92).

       (2) Dr. James Mason:

       Dr. James Mason dealt with the French/American dispute from a
       unique perspective. At the time of the April 1984 HHS press
       conference, Mason was serving as Director of the Centers for
       Disease Control. As CDC Director, Dr. Mason presided over an
       agency that attempted behind the scenes -- largely
       unsuccessfully -- to prod HHS into giving rightful credit to
       the prior discoveries of the IP scientists.

       Dr. Mason actually put his job on the line by speaking out with
       the truth. But during the blood test dispute, as Acting
       Assistant Secretary of Health (ASH), Dr. Mason was more
       subdued, possibly because, as he told the Subcommittee staff,
       in 1985, he "was led to believe we had a very strong case"
       (9/10/93 Subcommittee staff interview). In this regard, Mason
       said he relied on individuals such as Lowell Harmison and
       Darrel Grinstead for his information about the dispute. Mason
       acknowledged to Subcommittee staff that rather than accepting
       the assurances of his subordinates, he should have investigated
       on his own whether the claims of Gallo et al. were defensible.
       "It would have been a good idea to do that," he said. But Dr.
       Mason did not.

       According to Dr. Mason, despite what he was told about the
       "very strong case" of Gallo  et al.,  he was concerned with the
       issue of fairness to the IP vis-a-vis the patent royalties.
       Mason in fact was in the forefront of those who urged Secretary
       Heckler to continue to negotiate with the IP representatives,
       to determine if an equitable agreement could be reached.

       Dr. Mason told Subcommittee staff that because of the repeated
       assurances he was given about the U.S. Government's "very
       strong case," he was greatly surprised when he learned the
       Government had entered into a settlement agreement with the IP.
       (Mason returned to his permanent position as CDC Director by
       the end of 1985, long before the agreement was signed in March
       1987.)

       Mason said that sometime after the settlement was signed, he
       encountered Robert Charrow, a key player in HHS' response to
       the dispute, beginning in 1986. Dr. Mason said he asked Charrow
       why, if the U.S. case was so strong, the United States
       Government had agreed to a settlement in the dispute. According
       to Dr. Mason, Charrow responded with this:

          "'Gallo's laboratory notebooks were in such disarray, we
          were not sure we could defend the position'" (op cit.).

       (3) Darrel Grinstead:

       Prior to Robert Charrow's arrival on the scene, Darrel
       Grinstead was the top HHS attorney dealing with the
       French/American dispute. Grinstead's perspective on the
       dispute, as described to Subcommittee staff and substantiated
       by the documentary record, diverged sharply from that of Lowell
       Harmison on several fundamental issues. Most notably, Grinstead
       said the two central legal issues in the dispute, in his view,
       were 1) the isolation of the virus and 2) the reduction to
       practice of the HIV antibody blood test. Grinstead 's belief
       that the isolation of the virus was a central issue is
       noteworthy, particularly in light of Lowell Harmison's adamant
       insistence, which HHS maintains to this day, that the discovery
       of the virus was immaterial to the French/American dispute.

       Mr. Grinstead also displayed a pervasive absence of any sense
       of responsibility for HHS' actions. But meeting notes and
       correspondence contemporaneous with the dispute make clear that
       Grinstead was importantly involved in virtually every meeting
       and event, particularly during the first half of the dispute.

       Grinstead at least was candid in his description of what HHS
       was attempting to accomplish in the dispute:

          "I think there was a motivation to come up with support for
          the patent."

       Grinstead said he believed the monetary aspects of the dispute
       were "trivial" to HHS. Far more important, he said, was
       "scientific pride," which Grinstead called "positive pride".

       Asked who gave him the minimum terms for a resolution of the
       dispute, Grinstead said he did not remember what he was told
       about terms, and,

          "I wouldn't tell you even if I did -- it was between client
          and attorney."

       Asked who his client was, Grinstead responded that Lowell
       Harmison was "my most regular client." Grinstead added that
       Harmison "... had been the driving force from the beginning."

       Mr. Grinstead acknowledged he was the principal patent attorney
       at HHS at the time of the French/American dispute; his
       responsibility, Grinstead said, was to,

          "... determine if our position in court is defensible"
          (9/22/92 Subcommittee staff interview).

       Yet Grinstead actively rejected any investigative role for
       himself or his office; Grinstead said he "expected the
       information to come to me." Grinstead also claimed it did not
       occur to him that the Gallo patent actually was in jeopardy. He
       asserted it was "not unusual to have to rely on the client for
       information," but he stressed that the "outside counsel,"
       Cushman, Darby, & Cushman, hired by HHS in the summer of 1986
       to handle HHS defense in the PTO interference,

          "... would have to see the data. I agree it was important to
          verify data. Cushman, Darby was supposed to do that" (op
          cit.).

       But the Cushman, Darby attorneys told Subcommittee staff they
       looked at very little data; what they did examine they
       generally did not understand. The data submitted to PTO in
       support of the Gallo et al. "Preliminary Statement" is a
       notable example. Yet, according to Grinstead,

          "To the extent I had concerns about Gallo's reliability, I
          was very reassured by the DOJ and Cushman, Darby work" (op
          cit.).

       Grinstead said that, when questioned, Gallo and his people "had
       perfectly good explanations" for their statements and actions.
       Grinstead said if at any point, he had felt Dr. Gallo was
       lying, he (Grinstead) would have gone to the HHS General
       Counsel and told him, "We have a problem." But, said Grinstead,
       "that never happened."

       Yet according to Darrel Grinstead, Dr. Gallo told him the first
       sample of LAV was "not useable," and the second sample, "did
       not help us." Grinstead said he remembered going to Dr. Gallo's
       laboratory on several occasions, partly for "education about
       the science," in which, said Grinstead, "I relied heavily on
       Gallo." Grinstead said that, among other things, he looked at
       scientific papers and other documents Gallo showed to him.
       Grinstead said he never attempted to trace any of these
       documents to putative primary data. Not surprisingly, according
       to Grinstead,

          "Nothing came to my attention that indicated there was cause
          for concern" (op cit.).

       In fact, there were a number of items of information that did
       not come to Darrel Grinstead's attention, that certainly should
       have done. According to Grinstead, he was not told about the
       Harmison/Riseberg trips to NIH and CDC, neither was he told
       about the Malcolm Martin memoranda. And, incredibly, according
       to Grinstead,

          "To this day, I do not remember knowing Pasteur had a blood
          test" (op cit.).

       (4) Dr. Lowell Harmison:

       By common account (except his own), the leader of the HHS
       effort during the early phases of the French/American dispute
       was Dr. Lowell Harmison. NIH and HHS officials and attorneys
       unanimously described Harmison as "the lynchpin" of the HHS
       defense, "the chief individual," "the man running the show."

       During the Subcommittee's July 22, 1993 hearing, Dr. Harmison
       was questioned at some length concerning his role in the
       French/American dispute. Several themes were evident in
       Harmison's testimony. These themes included (1) the assertion
       that the provenance of the virus was irrelevant to the dispute
       and (2) the assertion that PTO was the proper/sole authority
       for dealing with the dispute.

       What was most striking about Dr. Harmison's testimony, curious
       for one so centrally involved, were his pervasive denial of
       responsibility and his inability or unwillingness to describe
       what he did and why, relative to the dispute.

       Dr. Harmison denied it was his job to investigate the claims of
       Gallo et al.:

          "I was interested in determining the policy issues that were
          part of that particular issue to understand that at a policy
          level. I was not in there to check notebooks and laboratory
          notes. That is the kind of thing that was independently
          pulled out and provided to the Patent Office, to provide an
          objective, clear, independent assessment ...

       "And if they couldn't substantiate the claims and the data,
       that was their issue, and if the infringement showed
       infringement, the patent would have been declared invalid. That
       is not a role, in my opinion, for health people such as
       myself... (7/22/93 Subcommittee hearing; transcript p. 34).

       Dr. Harmison acknowledged he asked Dr. Fischinger to examine
       the claims of Gallo  et al.,  yet he (Harmison) said he did not
       remember discussing the Fischinger report with Fischinger or
       with James Mason, the person to whom Harmison reported, who
       delegated the day-to-day handling of the dispute to him.
       Harmison said he read the Fischinger report, but when asked
       what it said, his answer was only this:

          "I said the report is very clear, and I am not repeating
          verbatim what the report said. The report clearly
          articulated the nature of the NCI work that was the
          foundation for the patent" (op cit., pp. 134-136).

       Asked if he personally inquired into the basis for the
       conclusions contained in the Fischinger report, Harmison said
       this:

          "I think looking behind, that came from people in the
          various members of the institutes who came to the meetings
          on a regular basis and expressed opinions and positions and
          attitudes on these efforts. That explains -- that is the
          integrity of the scientific and the personnel involved in
          the process. You are asking me to comment on their
          integrity?" (op cit., p. 137).

       Dr. Harmison repeatedly asserted that the PHS AIDS Executive
       Task Force was the body that reviewed and ruled on the
       adequacy/significance of key documents related to the
       French/American dispute,  e.g.,  the Fischinger report and
       Malcolm Martin's memoranda. Concerning the Fischinger report,
       when asked if he provided the report to independent experts who
       could evaluate it, Lowell Harmison responded,

          "That was not something that was a part of my responsibility
          ... I think the Task Force and the other members that would
          have gotten the report in its normal distribution was a part
          of looking at that result."

       Dr. Harmison also said that Dr. Fischinger "presented the
       essence" of his report to the Task Force." But there is no
       evidence that any members of the Task Force ever saw the
       Fischinger report, much less that the Task Force discussed the
       document and/or the merits of Dr. Gallo's claims. The Task
       Force minutes contain only one cryptic reference that appears
       to pertain to the French/American dispute, during the Fall of
       1985:

          "Dr. Harmison, reporting on  Science,  briefed the members
          on issues relevant to the patent filed by the Department in
          connection with the test for HTLV-III antibody" (9/9/85
          minutes of the PHS AIDS Task Force; p. 5).

       Dr. Harmison also denied speaking to Dr. Gallo about the
       matters at issue in the French/American dispute, a denial
       starkly at odds with Gallo's own testimony (see above). Dr.
       Harmison invoked the bureaucracy's "chain of command" as the
       reason he allegedly did not speak to Dr. Gallo:

          "I personally, in this matter, did not, as I recall, speak
          to Dr. Gallo, because this was a matter of not inserting
          myself between his immediate levels of supervision, and I
          worked with Dr. Fischinger ..." (op cit., pp. 43-44).

       It bears mention that Dr. Harmison's concerns about "inserting
       himself" into "immediate levels of supervision" clearly did not
       inhibit his direct dealings with such individuals as Peter
       Fischinger and Malcolm Martin. Indeed, Dr. Harmison went to
       extraordinary lengths to keep Dr. Martin's superiors out of the
       Martin/Harmison exchanges. Yet, Dr. Harmison told the
       Subcommittee this:

          "... this was something which I guarded very carefully, the
          importance of having the levels of supervision that were
          involved that we are working with the laboratory to collect
          information to have the dialogue. And it was not my area. I
          wasn't responsible for going in and talking to a given NIH
          researcher. This was the responsibility of the system...

          "I think I am pretty astute, not jerking around and jumping
          over levels of management" (op cit., p. 152).

       Dr. Harmison's denials  of direct contacts with Dr. Gallo are
       belied by at least one vitally important, direct exchange of
       documents between the two (see below , for further discussion
       of this matter). When he was questioned about these documents,
       Dr. Harmison said he did not remember them.

       Dr. Harmison's claimed lack of recall for critical events in
       HHS' response to the blood test dispute was particularly
       pronounced as regards Malcolm Martin's input. Asked if he
       recalled the NIH meeting and Malcolm Martin's statements about
       the identity of the IP and LTCB viruses, Dr. Harmison said, "I
       do not" (p. 104). Asked if he recalled receiving Malcolm
       Martin's memoranda, Harmison said, "No, I don't" (p. 104).
       Asked if he requested Martin to assemble articles and other
       materials relating to his views of the work of Gallo  et al.,
       Dr. Harmison responded, "I don't remember" (p. 105). Asked if
       the information in Martin's memoranda bore any significance to
       the IP charges against Dr. Gallo and his colleagues, Dr.
       Harmison responded, "In my view, very little, if any" (op cit.,
       p. 112).

       Dr. Harmison even claimed lack of recall concerning his own
       job, as in this exchange:

          Q: Do you remember what your job was?

          A: I think I was involved in the policy and the science of
             it.

          Q: You were involved in the policy. And how were you
             involved in the policy?

          A: I think the records that you have collected should
             express that.

          Q: I am asking you. You are here to help us. Please tell us.

          A: I have said, there were discussions with people as a
             normal part of the process of meetings --

          Q: Who presided at these discussions?

          A: I may have presided. It may have been the AIDS Executive
             Task Force.

          Q: You may have? Do you remember whether you presided? Do
             you remember if somebody else presided? Do you remember
             if nobody presided? Do you not remember if anybody
             presided?

          A: I don't remember.

          Q: Do you remember there were discussions?

          A: I think this is a very circular point. I have explained
             my policies and how I did things (pp. 121-123).

       Concerning one key point, Dr. Harmison repeatedly asserted to
       the Subcommittee that the IP scientists,

           "... didn't have a blood test until much, much later" (op
           cit., p. 129).

       Yet, Dr. Harmison could not identify any basis for his clearly
       incorrect assertion. When Dr. Harmison was asked if he was
       aware of when the IP scientists and Gallo et al. actually
       created and began working with their respective HIV antibody
       blood tests, his response was this:

          "I am not going -- I don't recall with respect to that date.
          That is to me not relevant. I don't recall, if I knew" (op
          cit., p. 175).

       Pressed about his statement that the respective dates were not
       relevant, Harmison responded,

          "I said I can't recall. To me it is irrelevant because I
          can't recall it" (op cit., p. 175).

       F. The Negotiations

       The IP/HHS negotiations got underway in mid-November. Within
       three weeks of the initiation of the talks, HHS and IP
       representatives were discussing the elements of a possible
       agreement, as embodied in a document titled "Possible Points of
       Agreement to Resolve Pasteur/HHS Dispute." These elements
       included:

          issuance of a joint statement recognizing contributions of
          both the IP and LTCB scientists

          licensing of Genetic Systems to market its blood test in the
          United States

          an agreement by the IP to drop all current and future legal
          proceedings.

       1. Bad News From the HHS Attorneys:

       The United States' willingness in early December 1985 to
       discuss terms of a possible settlement, in the face of
       (allegedly) a strong case may have been due to, in part, the
       results of an exercise set in motion on November 19, 1985, by
       Lowell Harmison. On this date, Harmison commissioned a review
       by outside legal counsel of the strength of the Gallo et al.
       patent, particularly the prospects for the patent in the event
       PTO declared an interference with the Montagnier et al.
       application. Three opinions were obtained, two from outside
       patent counsel, one from NIH patent attorney Leroy Randall. The
       opinions were not encouraging to HHS. The most favorable of the
       opinions, that of outside counsel Sheridan Neimark, was also
       the most superficial, uninformed opinion of the three.

       Neimark, who had no prior involvement with the work of Gallo
       et al.,  made clear how rushed and limited his review had been:

          "Because of the shortness of time and the necessity for me
          to present my answers to a series of questions by the close
          of the business day on November 26, 1985, it was not
          possible to study this matter as thoroughly as I would have
          liked to do."

       Elsewhere in his opinion, Neimark referred to "our short study
       of less than one week."

       Even more significant, it was evident from Neimark's opinion
       that he relied heavily on Dr. Gallo for information to
       substantiate his (Neimark's) opinion; in the opinion, Neimark
       referred to a "lengthy telephone conversation with Dr. Gallo."

       Concerning whether the IP would be able to "copy the claims" of
       Gallo et al. and thus be able to provoke an interference,
       Neimark said this:

          "These questions are very difficult to answer at present ...
          I am inclined to believe that Institut Pasteur cannot make
          the claims of the Gallo patent ... However, this does not
          end the matter, because it would be possible for the Patent
          Office to structure an interference based on claims which
          differ from the Gallo et al. patent claims ... The examiner
          could decide what the invention is, and draft one or more
          claims of his own which he feels would cover the invention
          and which could be made by both parties."

       (In fact, this is exactly what happened. In April 1986, when it
       declared an interference between Gallo et al. and Montagnier
       et al.,  PTO defined the invention that was in dispute and then
       identified the claims of each party that corresponded to that
       invention [see below]).

       Neimark said he considered it "very unlikely" the IP would
       prevail if an interference were declared, but should this
       happen, said Neimark,

          "... we cannot at this point say what would be left of the
          Gallo et al. patent."

       Neimark cited the telephone conversation with Dr. Gallo in
       discussing the prospects for Gallo et al. "swearing behind" the
       IP. Notably, Neimark identified as the "earliest date" behind
       which Gallo et al. would have to swear, not the September 1983
       filing date of the IP blood test patent application, but the
       May 20, 1983 publication date of the Barre-Sinoussi et al.
       Science  paper.

       Neimark said Gallo et al. could swear behind Montagner et al.:

          "... either by proving that the invention was made before
          that date by reducing the invention to practice (which may
          be difficult to do), or by showing conception of the
          invention coupled with due diligence from a time earlier
          than May 20, 1983 through April 23, 1984."

       Neimark cited his conversation with Gallo:

          "... he advised us that his work on this invention started
          in the summer of 1982 and that such work included a
          conception of the invention, and that there has been
          continuous and daily diligence six or seven days per week,
          every week, since that time."

       Neimark said Gallo et al. would have to prove due diligence,

          "only to a date prior to September 15, 1983, the earliest
          date to which the Institut Pasteur team would probably be
          entitled."

       But importantly, Neimark said there were two circumstances
       under which IP might be able to obtain an earlier date:

          "... Institut Pasteur might be able to obtain a[n] earlier
          date if they could prove the introduction of their invention
          into the United States at an earlier date; second, they
          would be able to attempt to prove an earlier date on the
          issue of derivation, i.e., that the Gallo et al. team
          derived their invention from the Institut Pasteur team."

       Here, contrary to Lowell Harmison's claims, was a strong
       assertion that the identity of the virus used by Gallo et al.
       and the fate of the Gallo et al. blood test patent were
       inextricably intertwined. But Neimark asserted the burden of
       proof on Pasteur in proving derivation would be "very great."
       Without substantiation, Neimark said this:

          "... the evidence seems strong that Dr. Gallo's team did not
          put the sample or samples received from France to any use
          relative to the invention."

       Lowell Harmison, of course, knew better; he knew well that at
       least one respected NIH scientist, Malcolm Martin, could offer
       proof that derivation did occur -- that the LTCB scientists
       did  "put the samples received from France to use relative to
       the invention." Thus, even the most favorable of the legal
       opinions provided to HHS in November 1985 must have been deeply
       disquieting to Lowell Harmison and others who had been made
       privy to the data from Malcolm Martin's laboratory, not to
       mention the data from Gallo's own lab!

       The other two legal opinions supplied to Lowell Harmison were
       rendered by attorneys with more knowledge of the work of Gallo
       et al. John Roberts, who rendered one of the opinions, was the
       senior partner in the law firm that prepared both the LTCB
       blood test and cell line patent applications, plus numerous
       subsequent LTCB applications. Roberts' opined that,

          "... the broadest definition in the claims of the [IP]
          British application could overlap the U.S. claims."

       However, according to Roberts, the IP claims,

          "may contain an inherent flaw which makes them unpatentable
          (and therefore not capable of being used in interference
          proceedings) ..."

       i.e., the IP patent application did not indicate,

          "... the need for or inclusion of an immortalized cell
          line."

       Roberts was wrong in his judgment of a possible "inherent flaw"
       in the IP blood test patent application. Within a few weeks of
       the preparation of Roberts' opinion, PTO would rule in the
       Montagnier et al. application that a permanent cell line was
       not  necessary for the HIV antibody blood test.

       Another of Roberts' determinations, one that was largely
       correct, was that the IP,

          "... British application supports copying U.S. claims 1, 5,
          6, 7, 8, and 9 ... U.S. claims 2-4 and 10 have no basis in
          the British disclosure ... and therefore should not be
          subject to interference proceedings."

       In fact, when PTO finally declared an interference between
       Gallo et al. and Montagnier  et al.,  all but one of the Gallo
       et al. claims was included. But Roberts' determination that six
       of the ten Gallo et al. claims  were  subject to an
       interference would itself have been a daunting prospect for
       HHS, since the IP application predated the Gallo application by
       several months and the feasibility of Gallo et al. "swearing
       behind" Montagnier et al. was in considerable doubt.

       The third legal opinion provided to Lowell Harmison came from
       the head of the NIH Patent Office, attorney Leroy Randall.
       Randall's opinion debunked a favorite HHS argument against the
       IP blood test, i.e., that it was (allegedly) not commercially
       viable and thus, was not patentable. Roberts made clear that
       arguments about the commercial utility of the IP blood test
       were unlikely to be successful in derailing the IP application.
       Said Randall,

          "... the holdings have generally been that research purposes
          are sufficient for patent ..."

       Concerning whether or not the IP would be able to copy the
       claims of Gallo  et al.,  Randall offered a potentially
       devastating scenario:

          "It would appear difficult for Pasteur to copy our claims to
          the envelope (p41) protein, and the test based thereon.
          However, Pasteur  does appear to be able to copy our claims
          directed to 'HTLV-III or fractions thereof' ... It would
          therefore appear that our claims directed to the envelope
          protein (p41) would remain ours, following any interference"
          (emphasis added).

       The latter half of this passage is interesting, focusing as it
       does on what would "remain ours," following an interference at
       PTO. The obverse, of course, was what would not "remain ours,"
       i.e., what HHS might lose following an interference. In this
       regard, what Leroy Randall apparently concluded, in
       late-November 1985, was that although Gallo et al. might retain
       their claim to a blood test based on the envelope protein
       (claim 3 of the 10 Gallo et al. claims), they would not retain
       their other blood test claims. That Randall rendered this
       opinion in the Fall of 1985 is extraordinary, given that the
       U.S. Government later would argue that Pasteur's blood test was
       inherently defective and Gallo et al. were entitled to the
       entire patent, because the LTCB blood test relied on the
       envelope protein.

       Randall's opinion concerning the IP scientists' priority
       vis-a-vis the majority of the blood test claims was clearly
       prophetic. Not only was the IP named "Senior Party" in the PTO
       interference, which encompassed all but one of the Gallo et al.
       claims, by the Summer of 1986, the Gallo et al. claims in a
       number of blood test "CIP" patent applications were repeatedly
       rejected by PTO, on grounds that they were anticipated by the
       prior art of Montagnier et al. (see below).

       2. IP's Quest for Information:

       At the same time that HHS was weighing the legal prospects for
       Gallo  et al.,  the IP attorneys were making efforts to obtain
       information about the LTCB scientists' use of LAV. IP attorneys
       at the law firm of Townley & Updyke prepared a massive FOIA
       request to be filed at HHS and the Department of Commerce, but
       IP's Weil, Gotshal attorneys sought to obtain the documents
       relating to use of LAV via a more informal route. In meetings
       with Mac Haddow, the Weil, Gotshal attorneys agreed to provide
       HHS a copy of the IP's United States patent application. In
       return, according to a November 26, 1985 Riseberg-to-Fischinger
       memorandum:

          "... Mr. Haddow agreed to supply Pasteur's lawyers, by
          November 29, with copies of existing materials documenting
          what happened to the two shipments of LAV provided to NCI by
          Pasteur in 1983."

       The contents of the documents provided to the IP attorneys
       purportedly "documenting what happened to the two shipments of
       LAV" are revealing; they show vividly how vitally important
       information was deliberately withheld from the IP.

       Riseberg's memorandum to Fischinger indicated Fischinger had
       told him "certain key individuals" would be "away from Bethesda
       through at least November 29," for this reason, Fischinger
       agreed to,

          "... provide Grinstead with a partial package by November
          27, with the remainder to be collected as soon as possible."

       In reality, it appears only one delivery to the IP attorneys
       was made. This delivery comprised two memoranda -- one written
       by Dr. Gallo to Lowell Harmison, one written by Dr. Popovic to
       Dr. Gallo -- together with eight pages of laboratory notes
       purportedly representing the LTCB's experiments with LAV, none
       of them provided to Peter Fischinger for his "investigation."

       Both the Gallo and Popovic memoranda  were dated November 26,
       1985, the same date as the Riseberg-to-Fischinger memorandum.
       Both memoranda mention the short notice given for submission of
       the LAV records. Dr. Gallo's memorandum to Lowell Harmison made
       clear Gallo understood well the nature of the request:

          "Attached is the information which has been requested on
          experiments performed with the supernatant samples of 'LAV'
          sent to this laboratory. This information was prepared
          quickly since we had less than 48 hours notice that it was
          needed."

       The remainder of the Gallo-to-Harmison memorandum comprised a
       lengthy complaint about what Gallo apparently perceived as the
       inequities of the blood test dispute, in which, according to
       Gallo, he was "constantly subject to responding to their
       accusations..."

       Dr. Popovic's memorandum to Dr. Gallo was more substantive,
       containing a number of important elements, several of which
       were demonstrably incorrect or incomplete. Also significantly
       incomplete was the scanty collection of data pages appended to
       Dr. Popovic's memorandum. The data pages appended to Dr.
       Popovic's memorandum consisted almost entirely of protocol
       pages (i.e., pages describing methods, rather than results of
       the LAV experiments) or pages reporting exclusively  negative
       experimental results. The one data page that reported positive
       results for an LTCB LAV experiment -- the vitally important
       October 6 IFA experiment that produced positive results against
       BRU serum for a cord blood culture of July LAV -- had been
       photocopied in such a way that the results were entirely
       illegible. In fact, it is impossible even to discern from the
       page that it includes results from an experiment using LAV.

       Even more significant is what was not appended to Dr. Popovic's
       memorandum. Among the LAV data pages not appended to the
       memorandum, and thus not provided to Lowell Harmison, Mac
       Haddow, or the IP attorneys were the following:

          the September 20, 1983 data pages from the notebook of Dr.
          Prem Sarin, reporting positive RT results for one of the two
          cord blood cultures infected with July LAV;

          the October 3, 1983 letter from Matthew Gonda to Mikulas
          Popovic reporting the LTCB's first identification of the
          suspected AIDS virus as a "lentivirus";

          the October 21, 1983 notebook pages of Elizabeth
          Read-Connole showing the infections of five T-cell lines
          with LAV;

          the several pages dated between October 21, 1983 and January
          13, 1984 showing the repeated positive results with the two
          successful LAI/LAV permanent cell lines, HUT-78/LAV and Ti
          7.4/LAV. Particularly noteworthy among the omitted pages are
          the December 14, 1984 letter from Matthew Gonda to Dr.
          Popovic, reporting "productive lentivirus infection" of the
          two LAI/LAV cell lines and the December 14, 1983 IFA data
          from Read-Connole showing positive results for the same two
          cell lines, when tested against BRU serum.

       Also noteworthy among the data pages not appended to Dr.
       Popovic's memorandum were the November 9, 1983 RT results from
       Dr. Prem Sarin, showing that three of the five LAI/LAV T-cell
       lines were RT positive. Dr. Sarin's RT data were  never
       provided to the IP attorneys.

       -- the January 13, 1984 freezer log indicating that freezes of
          both the LAI/LAV cell lines existed on this date (this log
          was never provided to the IP attorneys);

       As for Dr. Popovic's November 26 memorandum, it is a curious
       blend of clearly incorrect and partially correct statements.
       The very subject of the memorandum is provocative -- "Review of
       Memo of August 19, 1985, to Dr. Howard Streicher" -- suggesting
       someone had questioned the accuracy of Popovic's earlier
       memorandum. Although it purportedly was a "review" of the
       earlier memorandum, the November 26 memorandum perpetuated and
       expanded on several of the falsehoods in the earlier
       memorandum, asserting, for example, that Popovic's July LAV
       experiments had been entirely unsuccessful. Thus, in the
       November memorandum, Dr. Popovic said, concerning July LAV,
       that:

          "Using this sample, we did not succeed in transmitting the
          virus into cells. We conducted these experiments twice with
          consistently (sic.) negative results."

       Concerning September LAV, in the November 26 memorandum Dr.
       Popovic provided vital new information, never-before-revealed
       (so far as is known), to HHS officials. Yet, Dr. Popovic
       stopped well short of the whole truth. Concerning September
       LAV, Dr. Popovic said this:

          "In this case, we did succeed to transmit the virus in cord
          blood T-cells assayed on October 6th and 18th, 1983 ..."
          (note:  Popovic and Gallo later would tell OSI the October 6
          experiments were performed with July LAV; in the 1991 Guo et
          al. letter to  Nature,  Gallo and his associates said that
          the September LAV samples were not used for LTCB experiments
          before "late October" 1983).

       Yet, Dr. Popovic did make some significant, albeit imperfect
       revelations:

          "We successfully transmitted LAV into permanent cell lines
          in December 1983. The positive immunofluoresence was scored
          on December 14, 1983, in Ti7.4 ... This cell line was used
          for comparative studies with H9/HTLV-IIIb (protocols will be
          provided at a later date from Drs. George Shaw and Beatrice
          Hahn). Attempts to transmit LAV ... to H9 cells and other
          clones of HT cell line on February 13, 1984, gave negative
          results ..."

       There are several significant points to be made about these
       statements by Dr. Popovic:

       The mere admission of the successful transmission of LAV to
       permanent cell lines is significant, but Dr. Popovic's dating
       of this event to December 1983 is fully two months later than
       it actually occurred.

       Dr. Popovic specifically indicated that LAV was transmitted to
       more than one permanent cell line ("We successfully transmitted
       LAV into permanent cell lines in December 1983"), yet Popovic
       described the experiments with only one line, Ti7.4. An obvious
       question was what other cell lines were used to grow LAV, and
       with what results. But there is no indication Lowell Harmison
       or anyone else at HHS pursued these important questions.

       Dr. Popovic's revelation that Ti7.4/LAV was compared with
       HTLV-IIIb is a very significant one. The fact that, according
       to Popovic's memorandum, the comparison experiments were
       performed by Drs. Shaw and Hahn confirms that the comparisons
       were molecular/genetic. Almost certainly, the experiments
       described by Popovic in his memorandum are the experiments that
       (as described above) were performed in the late Spring/early
       Summer of 1984, showing that the IP and LTCB viruses were
       identical. But Dr. Popovic provided no information about the
       outcome of the LAV/IIIb comparisons, referring merely to
       "protocols" yet to be provided by Shaw and Hahn. No "protocols"
       showing the use of September LAV for molecular comparisons were
       provided to the IP. Consequently, the IP was left in the dark
       about what kinds of genetic comparison experiments were
       performed with September LAV, at what time, and with what
       results.

       Dr. Popovic invoked the putative February 13, 1984 "host range"
       experiment to substantiate his claim that LAI/LAV could not be
       grown in H9 and other clonal cell lines derived from "HT." As
       previously discussed (see above), this experiment is highly
       suspect, on many grounds.

       Deficient as it was, the November 26 package of data was
       transmitted to the Weil, Gotshal attorneys on December 6. The
       transmittal letter, from Darrel Grinstead to attorney Nancy
       Buc, described the enclosures as:

          "... documents responding to your request for laboratory
          notes and other information relating to use of the LAV
          samples provided to the Department by Dr. Luc Montagnier to
          scientists at the National Cancer Institute in 1983."

       Grinstead's letter specifically noted that:

          "Because some of the scientists who may have worked with the
          samples are not immediately available, I cannot assure that
          these are all of the extant documents that respond to your
          request. However, as soon as the remaining scientists who
          worked with these samples are available and can search their
          records we will provide you the remaining documents, if
          any."

       But no additional documents were provided, and with the
       initiation of the IP's civil suit for breach of contract, the
       matter moved to a new arena.

       IX. THE FRENCH/AMERICAN DISPUTE: LITIGATION

       A. Overview of the Proceedings

       By mid-December, the IP attorneys apparently had decided they
       had no choice but to proceed with formal litigation to obtain
       redress for the wrongs they believed had been done. Eventually,
       the IP would initiate four separate legal actions: a lawsuit in
       the United States Court of Claims alleging breach of contract;
       a patent interference proceeding at the USPTO; a tort claim
       alleging damages in the amount of $200 million; and a lawsuit
       under the Freedom of Information Act (FOIA). All four
       proceedings were ended pursuant to the terms of the March 1987
       settlement agreement, but while they were still active, the
       proceedings involved three law firms for the IP, with the
       United States represented by the Department of Justice, HHS'
       top attorneys, and two outside law firms hired by HHS to
       augment its expertise.

       The first legal action, the breach of contract suit filed in
       the U.S. Claims Court on December 12, 1985, attracted
       considerable media attention. Lowell Harmison professed
       surprise that the IP had gone to court; Harmison was quoted as
       saying he was "a bit amazed" to learn of the lawsuit (12/14/85
       AP story, "French Sue Over AIDS Research." In a masterpiece of
       irony/sarcasm, Harmison also said this:

          "I think there has been a very sound and constructive
          dialogue between the parties over time, and everyone
          involved has been extremely concerned about the sensitive
          matters being raised" (op cit.).

       Dr. Gallo, characteristically, was more outspoken. According to
       a December 14, 1985 AP story, Dr. Gallo reportedly said this:

          "'... the French exaggerated their contributions ... We
          helped them a lot more than they helped us.' In an interview
          with  The New York Times,  Dr. Robert Gallo of the National
          Cancer Institute said the French didn't receive a patent for
          their work 'because they didn't have a working blood test.'"

       In a December 16, 1985 story in the  Wall Street Journal,  Dr.
       Gallo was said to have "hotly denied the French charges" that
       he used the IP virus. Further, according to the  Journal,
       Gallo,

          "... called their bid for royalties and damages [the IP
          scientists'] 'irrational' and 'obscene.'"

       The  Wall Street Journal  further reported that the central
       theme underlying the IP lawsuit was the allegation that,

          "... Dr. Gallo misappropriated the French virus and
          presented it in his work, which later was patented."

       Attempting to rebut this charge, Dr. Gallo drew on all the
       arguments he had been practicing during the previous year.
       Thus, according to the  Journal:

          "Dr. Gallo refutes this, saying that the LAV and HTLV-III
          strains, although related, aren't identical, differing by 2%
          of their genetic building blocks. Besides the single LAV
          sample was too small to be of practical use, he argues;
          moreover, he had isolated 48 virus samples of his own on
          which to base his publications and patent."

       The Executive Summary of this report contains a representative
       compendium of the more outrageous false and misleading claims
       proffered as part of the defense of Gallo et al.

       Concerning the process of the legal actions, following is an
       overview of each:

       1. Lawsuit in the Court of Claims:

       The complaint filed by the IP in the U.S. Claims Court was
       centered on the charge that Gallo et al. used the IP virus to
       make the LTCB HIV blood test, and thereby contravened the terms
       of the noncommercialization transfer agreement (the "contract")
       signed by Mikulas Popovic on September 23, 1983. HHS officials,
       to this day, argue that the actual identity of the virus Gallo
       et al. used to make their blood test is inconsequential. But
       the reality is that the identity of the virus was at the very
       center of the Claims Court suit. This is the reason U.S.
       Government attorneys argued so strenuously in the court that
       the viruses were indisputably distinct. But HHS officials knew
       there was good reason to believe the LTCB's putative prototype
       virus was the IP virus; these officials must have understood
       that their defense of the Claims Court suit was a very
       precarious one indeed.

       According to the IP complaint, the LTCB scientists' use of LAV
       to make their HIV blood test and the subsequent patenting,
       manufacture, and sale of that test:

          "... constitute breach of the express contract wherein
          defendant agreed to use the LAV strain received exclusively
          for biological, immunological and nucleic acid study
          research purposes, and agreed not to use said specimen for
          any industrial purpose and not to disseminate the virus
          without the prior written consent of Pasteur" (Institut
          Pasteur v. United States of America, Case No. 730-85; p. 9).

       To redress the "great damage" claimed to have been done, the IP
       Claims Court complaint sought the following:

          "... the Court should order, adjudge and decree that
          plaintiff was the first to isolate the viral agent of AIDS
          named and known as LAV or HTLV-III ... and to recognize the
          significance thereof in the development of methods of
          detection of AIDS and pre-AIDS conditions, and accordingly
          that plaintiff is entitled to all rights and benefits which
          legitimately flow therefrom";

          "... that defendant be directed and ordered to pay all
          future royalties pursuant to any said license agreements
          over to plaintiff";

          "That plaintiff be awarded its damages, an amount which
          plaintiff cannot presently ascertain but which exceeds one
          million dollars ...";

          "That this court order, adjudge and decree that defendant
          correct all applicable records concerning the discovery,
          research and development relating to the viral agent of AIDS
          named and known as LAV or HTLV-III ... and regarding the
          recognition of the significance of said viral agent in the
          development of methods of detection of AIDS and pre-AIDS
          conditions" (op cit., pp. 11-12).

       The U.S. Government's response to the IP Claims Court suit
       combined obfuscation with denial, braggadocio, and outrage. The
       U.S. Government attorneys denied that Mikulas Popovic had
       authority to sign a contract on behalf of the United States.
       They insisted that,

          "Neither of these inventions [the Gallo et al. blood test
          and cell lines] depended on or is derived from LAV" (6/11/86
          Defendant's Motion for Summary Judgment; p. 8).

       The U.S. attorneys further asserted that,

          "The full story of defendant's scientific accomplishments
          has been told in the scientific literature ..." (op cit., p.
          10).

       And the attorneys attacked the IP's misappropriation charge as,

          "... an outrageous attempt to impugn the reputations of one
          of the world's foremost virologists and his coworkers"
          (11/13/86 Brief for Appellee; p. 5).

       During the first half of 1986, HHS and IP submitted to the
       court a series of motions, countermotions, and other legal
       pleadings associated with the Claims Court suit. The arguments
       during this period concerned substantive issues as well as a
       number of procedural issues, most notably, the issue of
       "discovery," which became intertwined with the IP attorneys'
       FOIA requests, to the detriment of the IP case (see below).

       In May 1986, the Judge in the Claims Court case raised the
       question of the Court's jurisdiction, i.e., whether a valid
       IP/LTCB contract actually existed and, if so, if it fell within
       the scope of the Contract Disputes Act (CDA). The CDA
       stipulates that a prerequisite for Claims Court jurisdiction is
       the presentation of a certified claim to the relevant U.S.
       Government agency and a decision (or failure to decide) by that
       agency.

       In July 1986, the judge ruled that the LAV contract did fall
       under the CDA. Because the IP had not previously submitted a
       claim to HHS, the judge declared the Claims Court did not have
       jurisdiction over the matter, and he dismissed the IP
       complaint. But the IP appealed, and in March 1987, just days
       before the signing of the settlement agreement, the Court of
       Appeals ruled in IP's favor. The Appeals Court ruled that on
       multiple grounds, the Claims Court erred in its finding that
       the CDA was applicable to the IP/LTCB LAV transfer agreement.
       Accordingly, the Appeals Court reinstated the lawsuit and
       remanded it to the Claims Court for consideration of whether a
       breach of contract actually did occur. The signing of the
       settlement agreement, however, ended the Claims Court suit.

       (2) Interference Before the USPTO:

       The first discussions between the IP attorneys and PTO
       concerning the Gallo et al. patent recorded to have taken place
       occurred in August 1985. The first formal request that PTO
       declare an interference between the IP application and the
       Gallo et al. patent was made in early October 1985. Yet it was
       not until April 29, 1986, that PTO finally granted the IP
       request (see Appendix A for details about the delay).

       When the interference finally was declared, it embodied several
       elements that augured well for the IP case. First, Montagnier
       et al. were named "Senior Party," while Gallo et al. were named
       "Junior Party;" this was a formal recognition of the IP's
       priority in filing its patent application.

       Second , and more significant, were (1) the contents of the
       interference count (PTO's definition of the invention) and (2)
       PTO's determination that all pending claims of Montagnier et
       al. and importantly, all pending claims of Gallo et al.  save
       one  corresponded to the invention that was the subject of the
       interference. The definition of the invention, as formulated in
       the interference count, was as follows:

          "A method for the detection of antibodies in samples of the
          body fluids of patients with Acquired Immune Deficiency
          syndrome or pre-AIDS which comprises contacting antigenic
          material selected from the group consisting of HTLV-III,
          LAV, IDAV1, IDAV2 and antigenic fractions thereof with said
          samples and measuring the formation of antigen-antibody
          complexes by an immunoassay selected from the group
          consisting of strip radioimmunassay based on Western Blot
          technique, enzyme-linked immmunosorbent assay, indirect
          immunofluorescence assay and radioimmune precipitation
          assay."

       The interference count, which contained no mention of a
       permanent cell line and no limitation to the envelope protein
       GP41, made clear that in PTO's eyes, the disputed invention was
       the HIV antibody blood test, pure and simple. The count,
       together with PTO's determination that the Gallo et al. "cell
       line" claim  did not  correspond to the count, was a clear
       repudiation of the claim of HHS/Gallo  et al.,  a claim still
       made today, that the LTCB blood test was fundamentally
       different from -- and superior to -- the blood test of Institut
       Pasteur, because the test of Gallo et al. was based on virus
       grown in a permanent cell line. Clearly, according to PTO, the
       invention was the blood test itself; the source of the virus,
       whether from successive passages of short-term cultures or from
       permanent cell lines, was irrelevant.

       PTO's determinations concerning the interference were widely
       seen as favorable to the position of IP. In London, the  Times
       said the PTO determinations,

          "... appeared to give the Pasteur a prior right, and an
          out-of-court settlement looked likely."

       In the United States, Colin Norman wrote in  Science  in May
       1986, that PTO's determination that IP was the senior party in
       the interference was a "key determination that favors the
       French application." Norman also said that the decision about
       the content of the interference count,

          "would also seem to favor the French application by
          narrowing the case to a determination of which group has
          precedence in patenting the detection technology alone."

       PTO rules prescribe the process of an interference, the main
       elements of which are motions for judgment and oppositions to
       those motions by the two sides. Each such motion is required
       not only to be submitted to PTO, but also to be delivered to
       the opposing party. The filing of motions is supposed to be
       governed by strict deadlines; in the Montagnier/Gallo
       interference, the initial deadline for filing of preliminary
       statements and motions was set for July 29, 1986. But Gallo et
       al. did not meet the deadline; in fact, the U.S. Government, on
       behalf of Gallo  et al.,  filed numerous requests for
       extensions of the PTO deadlines.

       The first such request sought to delay the initial deadline
       from July 29 to September 29, 1986. The IP opposed this request
       for extension, which PTO nonetheless granted. The contents of
       the June 30, 1986 HHS motion for extension of time are very
       revealing. They show the heavy reliance the U.S. Government
       placed on Dr. Gallo in preparing its motions. Thus, in its June
       30, 1986 motion, the U.S. Government argued at some length that
       the extension was necessary to ensure Dr. Gallo's personal
       involvement in preparing the Government's case.

       The June 30 motion stated that:

          "Dr. Gallo has been out of the country on official travel
          from May 21, 1986, until at least June 27, 1986 ...
          Moreover, Dr. Gallo's current schedule for the months of
          July, August, and September includes substantial time away
          from his laboratory." (pp. 3-4).

       Further, according to the U.S. Government motion:

          "The complex nature of the subject matter of this
          interference and the voluminous experimental work which led
          to the development of the patented invention also require
          the personal participation of Dr. Robert C. Gallo ...  Only
          Dr. Gallo is thoroughly familiar  with the records relating
          to these developments and with the details of any
          communications with Institut Pasteur" (Emphasis added; op
          cit., p. 3).

       The U.S. Government motion also mentioned in very general terms
       "new information" that, again, was said to require the personal
       involvement of Dr. Gallo:

          "Recently, a preliminary investigation has revealed new
          information which may have an important bearing on the
          contents of the preliminary statement to be filed by Gallo
          et al. and which may necessitate the filing of one or more
          preliminary motions ... Further and more extensive
          investigations are needed to assess fully the significance
          of this information. Again, the  personal assistance of Dr.
          Gallo is of the utmost importance  in pursuing these
          investigations" (emphasis added; op cit., pp. 4-5).

       Eventually, on October 14, 1986, the parties to the
       interference submitted their respective motions for Judgement.
       Gallo et al. submitted four such motions, plus several
       "Contingent Motions." Montagnier et al. submitted a single,
       broad motion for Judgment. Each side then submitted an
       "Opposition" to the other party's Motion(s) for Judgment. The
       Montagnier et al. Motion for Judgment and the U.S. Government's
       "Opposition by Gallo et al. to Motion of Montagnier et al. for
       Judgment...," submitted on November 18, 1986, were vitally
       important documents in the French/American dispute. Dr. Gallo's
       sworn declaration was appended to and extensively incorporated
       into the text of the U.S. Government Opposition.

       To comprehend the significance of these documents, and the
       statements they embodied, as well as the strength of the IP
       case, it is necessary to comprehend why the opposition and
       declaration were written, i.e., to what they were responding,
       namely, the principal arguments in the Motion for Judgment of
       Montagnier et al. The IP arguments were straightforward, i.e.,
       that the claims of Gallo et al. were "unpatentable to Gallo et
       al.  on the following grounds:

           "... anticipation by or obviousness from prior public
           knowledge of the LAV virus and its use in the detection of
           antibodies to that virus in blood samples"

           "...obviousness from the above-described prior public
           knowledge relating to LAV in view of the LAV virus itself
           which was prior art to Gallo et al...."

           "...a culpable breach of the duty of disclosure defined by
           37 C.F.R. section 1.56 in failing to disclose adequately to
           the U.S. Patent and Trademark Office (PTO) the
           above-described prior art" (Motion of Montagnier et al. for
           Judgment; p. 1).

       The Montagnier et al. Motion give particular emphasis to the
       failure of disclosure on the part of Gallo et al. The IP Motion
       noted that:

          "... the prosecution history of the Gallo patent is devoid
          of any substantive consideration of the effect of the well
          publicized French work on LAV on the patentability of Dr.
          Gallo's claims" (op cit., p. 6).

       Further, according to Montagnier et al.:

          "It appears from the records of the involved applications
          that the PTO's lack of awareness of the substantial identity
          of the LAV and HTLV-III viruses and of the significance of
          earlier public disclosures relative to LAV resulted in the
          improvident issuance of the Gallo patent in the first place.
          That lack of awareness appears to have been the direct
          result of a failure on behalf of representatives of DHHS to
          apprise the PTO during pendency of the Gallo application of
          the existence and significance of prior art describing the
          LAV virus and its use to detect antibodies to the virus in
          blood" (op cit., p. 6).

       Montagnier et al., cited particularly the following items not
       disclosed to PTO by Gallo et al.:

         Montagnier's presentation at the July 1983 NCI Task Force
         meeting;

         Montagnier's presentation at the September 1983 CSH meeting;

       the July and September 1983 LAV shipments from the IP to the
       LTCB.

       (Unbeknownst to Montagnier et al., shortly before the
       submission of the interference motions, the PTO examiner was
       citing some of these very elements as prior art against the CIP
       applications of Gallo et al. [see below ]).

       For their part, Gallo et al. attempted to argue in their
       Motions for Judgment that the LTCB and IP blood tests were
       different inventions because Montagnier et al. did not specify
       the requirement that the blood test antigen be obtained from
       virus grown in a permanent cell line and because the Montagnier
       et al. blood test focused on the p24 (core) protein rather than
       GP41 (the envelope protein).

       Gallo et al. went further, charging that the IP blood test was
       "fatally defective" and "not useful." Gallo et al. even
       alleged, contrary to the LTCB's own data from the Spring of
       1984 (see above), that,

          "... Montagnier's p25 protein might not even be a viral
          protein" (Motion by Gallo et al. for Judgment ...; p. 2).

       It was in their "Opposition" to the Motion for Judgment of
       Montagnier et al. that Gallo et al. strayed farthest from the
       facts. The U.S. Government attorneys faced a severe challenge
       in the Opposition; they had somehow to account for the reality
       of a substantial body of IP prior art, and for the clear
       failure of Gallo et al. to disclose that art to the PTO.
       Attempting to deal with these issues, Gallo et al. sought to
       assert that (1) Gallo's work predated that of Montagnier et al.
       and (2) Gallo did not believe the IP virus was the same as his
       virus, neither did he know the IP virus was the cause of AIDS.
       Therefore, by implication, the U.S. Government argued that
       Gallo et al. were not obligated to disclose the IP scientists'
       work nor the LTCB's own work with the IP virus to PTO.

       The arguments that Gallo et al. proffered to support these
       tenets were as follows:

         The "disclosures" of Montagnier  et al.,  including the
         transmittal of LAV virus to the LTCB,

          "... are not prior art against Gallo. Priority evidence
          which Gallo will submit in these proceedings will antedate
          the Montagnier disclosures ... Gallo can and will show dates
          of invention at least as far back as December, 1982"
          (emphasis added; Opposition by Gallo et al. to "Motion for
          Judgment of Montagnier et al. p. 2; Appendix; p. 1).

          "... Gallo correctly felt that nothing in Montagnier's
          publications in 1983 or the LAV samples was prior art to
          Gallo who clearly was in possession of more information
          regarding his invention than Montagnier disclosed. The LAV
          samples added nothing to what Gallo had already learned from
          his own isolates containing novel retroviruses, which
          subsequently were named HTLV-III. Likewise the publication
          by Montagnier in May, 1983 and his presentation at Cold
          Spring Harbor in September, 1983, did not in any sense teach
          Gallo anything more than he already knew. Clearly, in the
          circumstances, there was no need for Gallo to disclose the
          Montagnier 'disclosure' to the Examiner" (emphasis added; op
          cit., Appendix; p. 20).

          "At no time prior to the filing of the Gallo application,
          was it appreciated by anyone that LAV and HTLV-III were the
          same or even similar viruses" (emphasis added; op cit.,
          Appendix; pp. 21-22).

       Dr. Gallo's declaration was appended to and liberally
       incorporated into the U.S. Government opposition. The most
       blatant of the numerous false and misleading statements in the
       declaration, include these claims -- discussed elsewhere in
       this report:

       Prior to the filing of the Gallo blood test patent application,
       neither Gallo nor any of his colleagues believed LAV and
       "HTLV-III" were even substantially the same virus (see above);

       Prior to the issuance of the Gallo et al. patent, Dr. Gallo saw
       no evidence that the IP virus was the cause of AIDS (see
       above);

       July LAV contained no useful virus (see above);

       September LAV grew only "transiently" in T-cell lines (see
       above);

       Dr. Popovic "discovered" H9 in November 1983 (see above);

       The LTCB scientists possessed EMs of HIV as early as February
       1983 (see below).

       Concerning his declaration, apparently by way of explanation,
       Dr. Gallo told OSI, "... there was a lot of semantics in this."
       When Gallo was confronted with one false statement after
       another, his attorney, Joseph Onek, offered this for him:

          "I should point out that, of course, this is a statement
          like any affidavit, but I am sure was prepared largely by
          lawyers, not by Bob ..." (8/3/90 OSI interview; transcript
          p. 153).

       As noted previously, the lawyers' position, plain and simple,
       was that they, "didn't know enough to lie" (see above).

       The PTO interference proceeded through motions, oppositions to
       motions, and replies to oppositions before it -- like the other
       legal proceedings -- was terminated by the 1987 settlement.

       (3) Tort Claim:

       The tort claim by the IP against the U.S. Government is the
       least-known of the IP actions during the French/American
       dispute. Submitted on April 24, 1986 by the law firm of Townley
       & Updike, the claim was based on allegations of:

          "... tortious and malicious conversion of Pasteur's
          property, i.e. samples of the virus LAV and other scientific
          and biological materials, as well as willful
          misappropriation of Pasteur's valuable trade secret
          information" (Swire-to-Bowen; 4/24/86).

       The IP complaint, which sought $200 million in damages, said to
       consist of lost profits to the IP, further alleged that:

          "... various agents of the Department converted and
          misappropriated same [LAV, etc.] in order to gain for the
          United States and/or themselves scientific recognition,
          valuable patent rights and other pecuniary rewards
          rightfully belonging to Pasteur" (op cit.).

       HHS responded to the IP tort claim with a few sentences. In a
       letter dated October 23, 1986, HHS attorney Timothy White wrote
       to IP attorney James Swire the following:

          "The claim of Institut Pasteur is denied. The evidence of
          record does not substantiate that the alleged injury was due
          to the negligence, wrongful act or omission of a federal
          employee. Moreover, the claim is excluded from coverage
          under the Federal Tort Claims Act,  see, e.g.,  28 U.S.C.
          section 2680(h)."

       No additional information was provided to the IP concerning the
       basis for deni

       X. THE SETTLEMENT (AND THEREAFTER)


       In the Fall of 1986, the momentum for a negotiated settlement
       of the French/American dispute accelerated. At the same time,
       charges and countercharges continued at PTO and in the U.S.
       Claims Court. One individual who played a unique role in the
       discussions leading to the settlement was Dr. Robert Windom,
       the then-recently-appointed Assistant Secretary of Health.

       Dr. Windom told Subcommittee staff that President Ronald Reagan
       personally ordered U.S. officials to seek a settlement of the
       dispute. To this end, IP and HHS representatives exchanged
       visits in the Fall of 1986. Shortly after these visits, the
       settlement discussions became more deliberate, with more senior
       attorneys on both sides taking more leading roles.

       Dr. Windom's perspective on the French/American dispute, as
       described to Subcommittee staff, is revealing; it shows how
       senior officials operated with only a modicum of the "facts,"
       selected misrepresentations fed to them by others who clearly
       knew better. In this regard, Dr. Windom told Subcommittee staff
       his principal sources of information were Drs. Harmison and
       Fischinger, with lesser roles for Drs. Wyngaarden and DeVita.

       Dr. Windom singled out Dr. Harmison as "very helpful," one who
       "knew the science very well." Dr. Windom also said he
       personally knew very little about the charges being litigated
       before PTO and the Claims Court:

          "I really did not know what was being alleged ... I probably
          was not given the fundamentals" (Subcommittee staff
          interview; 10/30/92).

       Confirming he was "not given the fundamentals," Dr. Windom told
       Subcommittee staff he was never told the IP had developed an
       HIV antibody blood test before Dr. Gallo did so. Subsequently,
       while conditionally acknowledging the prior existence of an IP
       blood test, Dr. Windom said, "... but we marketed it first."
       Because of these considerations, Dr. Windom said, he thought
       the French were getting better than they deserved" in the 1987
       settlement. When challenged as to why -- in light of the
       alleged superiority of the U.S. case -- the United States had
       any interest in negotiating a settlement, Dr. Windom responded
       with this:

          "There were some uncertainties -- some points could be
          interpreted -- it was gray, not black and white."

       A. Terms of the Settlement

       When it was finally consummated, in March 1987, the
       French/American settlement embodied agreements concerning the
       blood test patents, the pending litigation, patent royalties,
       and scientific events. Drs. Montagnier and Gallo agreed to call
       themselves "co-discoverers" of the AIDS virus. They
       collaborated in a jointly-authored "Chronology of AIDS
       Research" that supposedly reflected the most significant
       contributions of the IP and LTCB scientists. The chronology was
       introduced with this disingenuous claim:

          "... from the beginning there has been a spirit of
          scientific cooperation and a free exchange of ideas,
          biological materials and personnel between Dr. Gallo's and
          Dr. Montagnier's laboratories. This spirit has never ceased
          despite the legal problems and will be the basis of a
          renewed mutual cooperation in the future"  (Nature,   326,
          1987, p. 435).

       Dr. Gallo was adamant concerning the necessity for an
       agreed-upon scientific chronology as part of the settlement
       agreement, apparently believing he could claim by fiat what he
       could not substantiate by data. Numerous memoranda and related
       documents show that Dr. Gallo insisted there could be no
       settlement without a scientific history, one that supposedly
       would be the definitive account for all time. Dr. Gallo
       repeatedly cited the 1987 chronology (and a similar, narrative
       chronology coauthored by Montagnier and Gallo in  Scientific
       American  in 1988) to OSI as  the  authoritative accounts of
       his work. These chronologies, which contained a substantial
       number of suspect claims concerning the work of the LTCB
       scientists, obviously, did not end the scientific controversy.

       As for the blood test patents, working in conjunction with PTO,
       the two sides agreed that both the LTCB and IP patents would
       remain in place (the IP patent issued in late 1987). The names
       of each side's scientists were added to the other side's
       patent, under the fiction that an inadvertent error was made in
       listing the inventors, when the patent applications were filed.

       The two sides also agreed to donate the bulk of the royalties
       from their blood tests to a foundation established as part of
       the agreement. Only one-quarter of the combined donated
       royalties were committed for AIDS research; HHS and IP received
       the remaining three-quarters, with no strings attached, in
       equal shares. This arrangement was altered, in July 1994, to
       provide a larger royalties share to the Institut Pasteur,
       ostensibly because HHS belatedly realized that since the 1987
       settlement, the IP had not received an equitable share. Dr.
       Gallo's use of the IP virus for the LTCB blood test was given
       only passing mention by HHS.

       B. Unraveling of the Settlement:

       Even as the terms of the French/American settlement were
       hammered out, the underpinnings of the settlement were being
       eroded. Investigative journalists continued to pursue the
       questionable claims of Gallo et al. One article, Steve Connor's
       February 1987 article in  New Scientist  -- "AIDS: Science
       Stands on Trial" -- actually threatened to derail the
       settlement negotiations. Shortly thereafter, also in 1987, the
       first edition of Randy Shilts' memorable  And the Band Played
       On  was published. Other books and articles followed, both in
       the United States and abroad, culminating in the November 1989
       expose in the  Chicago Tribune  by journalist John Crewdson.

       Meanwhile, research was underway that itself had significant
       potential to demolish the settlement's underpinnings. The
       results of this research were described in a remarkable
       exchange of correspondence between Dr. Gerald Myers, a leading
       HIV geneticist, and several NIH scientists and senior
       scientific administrators, including Dr. Gallo and Drs. Anthony
       Fauci, Director of the NIH National Institute of Allergy and
       Infectious Diseases (NIAID) and Director of the NIH Office of
       AIDS Research, and Dr. Samuel Broder, Director, NCI..

       Dr. Myers was and is Director of the Los Alamos HIV Sequence
       Data Base and Principal Investigator of a contract funded by
       NIAID. The existence of the "Myers documents" was made known to
       the Subcommittee by a source outside of NIH, in late 1993.
       Despite numerous document requests to NIH, the Myers documents
       were not previously provided to the Subcommittee. Not only were
       the documents withheld from the Subcommittee, their existence
       was not disclosed to OSI, to ORI, nor to the HHS/OIG. The
       documents, directly relevant to the investigations of all these
       entities, bore on the still-unresolved central issue of the
       entire case, i.e., the possible misappropriation of the
       Institut Pasteur (IP) virus, LAV. The significance of the
       information contained in the Myers documents, as well as
       details of events instigated by the documents, are described in
       the following.

       Just one week after the settlement agreement was signed, Dr.
       Myers wrote to a number of HIV scientists, principally at
       NIAID, including officials close to NIAID Director Anthony
       Fauci. Dr. Myers described results of some of his recent
       analyses of the IP and LTCB prototype viruses as follows:

          "Literally a 'double fraud' took place when the H9
          cell-derived isolates [clones] -- HXB2, BH10, BH8, BH5,
          HXB3, PV22 ... were declared to be i) independent from LAV
          (BRU) and ii) derived from blood pooled from several
          patients. The probability of either account being true is
          very small by this analysis, and I predict that it will
          become smaller with each U.S. isolate sequenced in the
          future ...

          ... it is the astonishing and unforeseen variation of the
          virus which exposes the fraud ... I suggest that we have
          paid for this deception in more than the usual ways.
          Scientific fraudulence always costs humanity ... but here we
          have been additionally misdirected with regard to the extent
          of variation of the virus, which we can ill afford during
          the dog days of an epidemic let alone during halcyon times."
          (4/8/87 Myers-to-LaMontagne et al. letter; p. 4).

       Dr. Myers' April 1987 letter was closely held in the succeeding
       years. The potential of its information for demolishing the
       premises of the settlement agreement was evident. Dr. Myers
       later made clear the difficulties he encountered in trying to
       avoid the patent dispute. Writing in April 1989 to Dr. Fauci,
       Dr. Myers said he had encountered two problems "unavoidably
       entangled with the dispute about the discovery of HIV." Dr.
       Myers said his analyses,

          "... immediately drew attention to the close similarity of
          the IIIb and LAV sequences,"

       and that his "tree" analyses,

          "... were generated at precisely the time ... the U.S. and
          French were settling the legal disputes that had arisen."

       Dr. Myers told Dr. Fauci that he (Myers) and his Data Base
       colleagues,

          "... agreed that the database would steer absolutely clear
          of the issue but that we would not suppress scientific data"
          (4/12/89 Myers-to-Fauci memorandum; p. 1).

       But Dr. Myers' scientific/ethical concerns remained. In his
       April 1989 memorandum to Dr. Fauci, Dr. Myers said this:

          "... I remained deeply disturbed about the claim made for
          the IIIb viruses -- that they derived from pooled blood of
          several patients. It was very difficult in 1987 to convince
          many researchers that the AIDS viruses mutated inordinately
          rapidly. The IIIb interpretation gave the false impression
          that the virus was more stable than other signs were
          indicating" (4/12/89 Myers to Fauci memorandum; p. 2).

       Dr. Myers told Subcommittee staff he had hoped and believed the
       issues raised by his data would be resolved "within the
       tradition" of the scientific process. Despite his best efforts,
       this did not occur.

       By the Fall of 1988 , Dr. Myers' data had not only confirmed
       that LAV and IIIb were genetically identical, but that IIIb was
       derived from LAV, and not the reverse. Dr. Myers believed it
       was his ethical and scientific obligation to share this
       information with Dr. Gallo. Accordingly, in September 1988, Dr.
       Myers wrote to Dr. Gallo, summarizing for him the results of
       the most recent HIV Sequence Data Base analyses and telling him
       the following:

          "From our earliest tree analyses, it was patently evident
          that the LAV and IIIb viruses had to have had a recent
          common ancestor .... By including all of the available gene
          sequences in a single analysis for the IIIBs, it is actually
          possible to define the branching order of the variants to a
          high degree of statistical precision.  There is no doubt but
          that it shows the LAV source of the IIIB viruses:  the NL43
          clone of the BRU isolate is the oldest sequence; the
          published BRU follows it; the IIIBs follow thereafter...."
          (emphasis added; 9/20/88 Myers-to-Gallo memorandum; p. 1).

       By the spring of 1989, Dr. Myers and his Data Base colleagues
       had accumulated important new data showing LAV and IIIb were
       situated squarely in the middle of the "sibling" cluster of
       sequences, all pairs of which, with the alleged exception of
       LAV and IIIb, were known to be derived from the same person.
       According to Dr. Myers, Dr. Gallo at this time, at the urging
       of his closest colleagues, including Drs. Mikulas Popovic and
       Flossie Wong-Staal (herself an editor of the HIV Sequence Data
       Base), was prepared to "throw in the towel" and admit that IIIb
       originated with LAV. Dr. Gallo prepared an ambiguously worded,
       but still compelling statement that was to be published in the
       April 1989 issue of the Data Base. The statement read, in
       pertinent part:

          "Can we conclude ... that HTLV-IIIb and LAV BRU did indeed
          originate from the same individual? If that is indeed the
          case, it would only have resulted from a mix-up in my
          laboratory when the LAV from Luc Montagnier was temporarily
          growing along side the other isolates we had obtained. We
          certainly cannot rule this out, particularly since we and, I
          am told, many other investigators have often experienced the
          phenomenon of laboratory contamination of HIVs ....

          "I do ... think that it is necessary as a result of the data
          compiled in this book to acknowledge the distinct
          possibility that HTLV-IIIb and LAV BRU are the same isolate"
          (4/17/89 Gallo draft statement).

       Dr. Gallo's statement was never published in the HIV Sequence
       Data Base. According to Dr. Myers, on the eve of its
       publication, the statement was precipitously withdrawn by Dr.
       Gallo who told Dr. Myers he had "discussed the matter with the
       lawyers" and they advised him not to publish the statement (the
       "lawyers" were not identified to Dr. Myers, and there is no
       confirmation that any such advice actually was given).

       According to Dr. Myers, Dr. Samuel Broder also objected to the
       publication of the Gallo statement in the Data Base, on grounds
       that the Data Base "is not peer reviewed." In fact, the
       findings published in the Data Base are peer reviewed by an
       exceptional group of editors, including at the time Drs. Howard
       Temin, Walter Fitch, and James Mullins.

       Dr. Myers said Dr. Broder telephoned him and in addition to
       voicing his concerns about peer review, raised questions about
       the strength of Dr. Myers' data. Dr. Broder reportedly asked
       Dr. Myers to "write down some of my thoughts." Dr. Myers
       responded in an April 24, 1989 memorandum. Dr. Myers sent Dr.
       Broder a copy of the April 1989 Myers-to-Fauci memorandum,
       cited above. Myers told Broder that although he and his
       colleagues had earlier remained silent,

          "... new questions are rapidly emerging in relation to viral
          sequences that just happen to be in the territory of the
          1987 dispute. Bob Gallo's problem is whether to go ahead and
          speak out now, when he can take some initiative or to wait
          until he could be placed into a more passive and reactive
          position" (4/24/89 Myers-to-Broder; p. 1).

       Myers further said, "Is there any evidence on Gallo's side? Not
       really" (op cit., p. 1).

       The Myers/Broder discussions took place after Dr. Gallo backed
       out of the commitment to publish the previously described
       acknowledgement. According to Dr. Myers, a fall-back plan was
       then developed, according to which Dr. Gallo was to make the
       admission that IIIb originated with LAV "on a natural
       occasion,"  i.e.,  in the text of a scientific paper on a
       broader subject. Dr. Gallo failed to keep this commitment, and
       the promised paper containing Dr. Gallo's admission was not
       published. Dr. Myers said he was never given any explanation
       for the failure to publish the paper.

       Dr. Myers' findings and conclusions must be considered in
       context of Dr. Gallo's previous actions as well as his
       (Gallo's) failure to disclose Dr. Myers' findings to OSI. As
       previously described, as early as the summer of 1984, Dr. Gallo
       knew, based on data from his own laboratory, that LAI/LAV and
       LAI/IIIb were genetically identical. After failing in the
       effort to convince Dr. Montagnier to admit responsibility for
       contaminating LAV with "IIIb," Dr. Gallo changed tactics and
       began to claim, in numerous scientific fora, that LAV and IIIb
       actually were genetically distinct. Dr. Gallo further
       maintained, adamantly, that LAV could not have "contaminated"
       his cell lines because "it was physically impossible to grow
       LAV."

       Another part of the story propounded by Dr. Gallo and his
       closest associate, Dr. Flossie Wong-Staal, was that the several
       clones of IIIb, obviously very similar in genetic make-up, were
       derived from multiple independent samples allegedly used for
       the "pool" experiment. By extrapolation, using this argument,
       Dr. Gallo attempted, among other things, to make the case that
       the striking similarity of LAV and IIIb did not obviate the
       possibility that they actually were independent isolates.

       The rapid mutation and resulting heterogeneity of the AIDS
       virus are now widely recognized as posing significant obstacles
       to the development of effective strategies for prevention and
       treatment of AIDS. Dr. Myers' concerns about the delay in
       scientists' recognition of HIV heterogeneity -- a delay caused
       in part by what Dr. Myers termed the "double fraud" associated
       with Dr. Gallo's account of the origins of "his" virus -- are a
       poignant reminder of the damage that resulted from the "fraud."

       It also must be noted that Dr. Gallo's testimony to OSI
       concerning these matters was substantially less than
       forthcoming. Despite having agreed, just one year earlier, on
       the need for a public acknowledgement that IIIb and LAV were
       genetically identical, and an acknowledgement that IIIb was
       derived from LAV and not the reverse, Dr. Gallo in 1990 made
       numerous misleading statements to OSI of which the following
       are only a few examples:

          "With time and more sequences available the relative
          similarities of this pair (LAV and IIIb) remains unusual but
          not unique" (4/8/90 "Opening Scientific Statement" to OSI;
          p. 5).

          "... I would conclude that there can't be a conclusion today
          ... I don't think we can make any conclusive statement ....
          Also, please keep in mind that though I said if this
          possibility or probability exists ... I didn't tell you
          where it [contamination] happened with certainty also. I
          believe that question is open, no matter what information
          you may have, and I believe that question [where the
          contamination took place] could be solved in the immediate
          future" (4/11/90 Gallo OSI interview; transcript p. 72).

       Elaborating on the "Paris contamination" theory, thoroughly
       discredited by Dr. Myers' data, Dr. Gallo's attorney asserted
       this to OSI:

          "... IIIb was sent to Paris in May of 1984. It could be that
          what they then tested ... was a contaminant. It's at least
          possible."

       Dr. Gallo then added:

          "The other direction" (4/11/90 interview; transcript p. 75).

       Dr. Gallo also, once again, made explicit the linkage between
       his "other isolates" claims and the LAV/IIIb identity:

          "I have felt it's an irrelevant question, for the most part
          ... scientifically, ethically, medically and historically,
          because there are so many other isolates and if anybody had
          half as many in tissue culture within the next year I would
          be surprised, so I've never felt it to be an important
          question. It's only in this context of the questioning that
          I'm getting here that it becomes important or for politics
          that have been played in newspapers ..." (4/11/90 interview;
          transcript p. 71).

       Yet, less than a week before he made these statements to OSI,
       Dr. Gallo wrote a letter to Dr. Myers, in which Dr. Gallo said:

          "I have wanted to tell you for some time -- that you were
          certainly right, and I should have listened to you ... as
          early as 1984 I told her [a reporter for the journal
          Science]  IIIB could be a contaminant of LAV. Because of
          everything else we did and because of other isolates and
          because of the help I gave Montagnier early on, I just could
          not believe anyone would really care" (4/5/90 Gallo-to-Myers
          letter).

       Dr. Gallo described his allegedly nonchalant attitude toward
       the genetic identity of the IP and LTCB viruses in more vivid
       terms to OSI:

          "I'm interested in a vaccine and in curing the disease. I'm
          interested in basic science and how the virus works. Do you
          think I'm going to get back there in the mud of whether IIIb
          and LAV came from this lab or the other lab when I have all
          kinds of other isolates and things are moving like a bullet?
          And I want to be worried about that, and did it happen in my
          lab, or their lab ... I mean, who bloody cared?" (4/11/90
          OSI interview; transcript p. 82.

       Dr. Gallo's characteristic utterances speak volumes, and are an
       apt note on which to end this staff report.

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