Three physicians at UCI's world-renowned fertility clinic ran a renegade practice that operated with little oversight from the university and minimal attention by the doctors to basic issues such as patient consent and the tracking of human eggs, according to a confidential investigative report obtained by The Orange County Register.

The March 17 report, prepared by three University of California physicians, confirmed that in two instances - and perhaps as many as five - the clinic doctors took human eggs without consent, fertilized them and transferred the embryos to other patients.

After investigating allegations against Drs. Ricardo Asch, Sergio Stone and Jose Balmaceda, the report's authors concluded that the doctors had not involved patients in significant, life-affecting decisions, a pattern of practice that the authors described as "authoritarian."

UCI and medical center administrators also were criticized for failing to begin overseeing the Center for Reproductive Health three years sooner, when audits found there were lax cash controls and problems with insurance billing.

"Only when the whistle-blower investigation was initiated did the Medical Center and the Department of Obstetrics and Gynecology begin to oversee the practice," the authors wrote. "Their oversight should have been intensified long before the whistle-blower investigation because of the history and results of previous audits of CRH."

The university's second in command did not dispute those findings Saturday.

"We accept responsibility," said Dr. Sidney Golub, the university's executive vice chancellor. "In retrospect, it's clear we should have had a higher level of oversight. But there is a usual level of trust that faculty will behave according to the rules and will act in a responsible manner themselves."

Balmaceda's lawyer, Patrick Moore, described the clinical panel's report as "a hatchet job" that tarred all of the clinic's doctors with the allegations of embryo and egg abuse.

"There was no comment as far as I can recall to show any evidence pointing to Dr. Balmaceda ever having any knowledge that he was involved in a misdirected egg or embryo case," Moore said.

"All the clinical panel said was, 'We think it happened, so all three physicians are automatically responsible for that.' That, I think, shows that it was intended to be a hatchet job on the physicians."

Asch's attorney, Ronald G. Brower, said he could not comment on the panel's report because he had not reviewed it.

Among other things, investigators found evidence that:

Patients' eggs were given away without permission, and in at least one case fertilized against the patient's wishes.

Asch received cash from the sales of a foreign fertility drug he prescribed to his patients.

Asch left the operating room several times when patients were under anesthesia, behavior that results in patients taking longer to come out of anesthesia.

Asch and his partners blamed the clinic's problems on their staff, the report says. But the doctors conducting the investigation said they found the medical center employees "both individually and collectively, more credible than the ... physicians."

On the most serious charges -- the taking of patient eggs without consent -- the UC investigators found sufficient evidence that it occurred.

"We offered to the physicians that the allegations could be dismissed if they would permit us to interview the involved patients in their presence and confirm their consents," the report states. "However, the physicians chose not to pursue that course of action.

"The fact that the physicians were unable to locate the original charts for any of the patients alleged as unconsenting donors cannot be dismissed as coincidental," the report states.

Two patients described in the report told the Register two weeks ago that they never gave permission for their eggs to be given to other infertile couples. The Register has reported that the women who received those eggs bore children.

The doctor involved in the egg-harvesting procedures, records show, was Asch, the fertility pioneer who directed the UCI clinic from 1990 until resigning from the medical staff May 19.

The report's authors said there was substantial evidence and first-hand knowledge from the center's staff to suggest that two patients' eggs were taken without permission. There was also evidence that a third patient's eggs were taken; however, the investigators could not say with certainty whether those cases -- or two others that were reported by clinic employees -- occurred because the doctors said they didn't have patient records and refused to provide logs showing where the eggs went.

On dispensing unapproved drugs, the report said Asch sold a fertility drug that was not approved by the U.S. Food and Drug Administration. The report's authors said his explanations were not "supported, corroborated or accepted as credible."

The drug, HMG Massone, is similar to the widely used fertility drug Pergonal. UCI has said no patients were harmed.

Asch reportedly told the investigators that the vials of drugs he kept in the office had come from a patient who brought them in from Argentina for her own use, and who donated the excess to the center.

The fertility specialist also told the investigators that he didn't know about the cash paid to him by patients for the drugs and that he prescribed it only to two patients for humanitarian reasons. The investigators said Asch's explanations lacked credibility given evidence of a special filing system to keep track of the unapproved drugs and the cash due.

A medical assistant offered a more credible explanation of the drugs' origin, the report says: Asch bought them from a doctor in Argentina and carried them into the center on several occasions over a period of years.

"We find no credible evidence to support that HMG Massone was dispensed to patients for humanitarian reasons. ... In fact, the billing indicates that Dr. Asch charged patients the same amount for the HMG Massone as the FDA-approved Pergonal," the investigators wrote.

Asch also kept patients anesthetized while he attended to other activities, an allegation supported by Dr. Steven Barker, chairman of UCI's anesthesiology department, the report says.

Barker told the authors that he instituted a policy that none of Asch's patients would be put to sleep until Asch "was in the operating room, in his green and ready to begin the procedure." He did so, he said, after Asch left a patient under anesthesia and disappeared for a while. Another anesthesiologist told Barker of a similar incident, as did the operating-room nurse, the report's authors said.

Barker, who often worked in the fertility clinic, said Saturday that the report makes the allegation sound more serious than it is. Still, he thought the policy he instituted was prudent.

"In general, it is not a great idea to have patients under general anesthesia waiting for surgeons or anyone else while nothing is happening," Barker said Saturday. "It is not particularly safe, or rather, not good to be under anesthesia when you don't need to be. The longer you are under anesthesia, the longer it takes to wake up."

To minimize time under anesthesia, he said, "is just good medicine."

The report repeatedly portrays the clinic as a place where patients' needs were not always the primary concern.

The center's doctors neglected key aspects of their practice, leaving consent forms and documents for tracking human eggs to be developed and instituted by their staff, the report notes.

On the consent issue, Moore said that Balmaceda had fulfilled his obligation to fully inform patients about the risks and benefits of all procedures.

If documentation of that consent was lacking, he said, it was because UCI employees who worked at the clinic failed to perform "the administrative function" of filling out the proper paperwork.

"Physicians never see those informed consent forms," he said.

But the doctors were clearly in control of the eggs, the report states.

"Critically, (patient) consents were not routinely reviewed or made available to the embryologists, so the responsibility for directing eggs or embryos into either research protocols or for donation to other patients was that of the physicians," the report states. "The actual egg and embryo data has not been made available to us, but several of the transcribed sheets indicate (three) instances where eggs were not inseminated, but used instead for other purposes, without the documented consent of the patient."

The report was based on reviews of about 28 patient charts, interviews with 24 people, including the doctors, documents from the center, the medical center, its obstetrics and gynecology department, the UCI College of Medicine and the university's internal audit department.

Investigating the whistle-blowers' allegations were Dr. Stanley Korenman, associate dean of UCLA Medical Center, Dr. Mary Martin, director of UC San Francisco's in-vitro fertilization program, and Dr. Maureen Bocian, director of UCI's division of human genetics and birth defects.

None of the doctors could be reached for comment Saturday.

The authors said they did not find evidence that medical center administrators were inattentive to the egg allegations when they first surfaced.

An audit of the center's cash-control procedures and security was conducted by university auditors in December 1991 and January 1992, but, the report says, "there is no evidence that allegations of misappropriation of eggs was reported to the auditors."

The issue was first raised during a second audit of the center's billing and insurance practices. The audit -- conducted in November and December of 1992 -- found that one employee falsified insurance billings and stole cash from the center. During interviews with auditors, the employee alleged that Asch had taken patients' eggs without their consent, but provided no names, the report says.

"The internal auditor did not consider the employee who reported the allegation as credible because of her actions in connection with the insurance billing fraud and her demands to receive a letter of recommendation if she was terminated or she would come forward with information on the allegation," the report states. "The internal auditor viewed this as an attempt to blackmail Dr. Asch with a false accusation."

Asch raised the specter of blackmail last week when his attorney alleged that the doctor was being targeted by an extortionist. On May 24, his attorney said that a $300,000 extortion attempt by a mysterious "Dr. Malcolm X" was the force behind a series of stories in the Register about the center and its doctors.

The panel's report said that in 1992 an auditor discussed the egg-theft allegations and insurance-billing irregularities with Mary Piccione, the medical center's executive director, Dr. Walter Henry, the former dean of the College of Medicine, Regents' Deputy General Counsel John Lundberg and Asch.

The egg allegations were not included in the final report "due to the lack of evidence," the report states.

UCI officials said last week that they first learned of the egg allegation in September from a whistle-blower's attorney. The Register has reported that the allegations were made to the internal audit department in July and that a department chairman at the hospital confirmed that in August the chancellor's office was aware of the charges.

The Register reported Thursday that UCI employees who complained about illegal drug sales and unauthorized transfer of patients' eggs at the fertility clinic said they were pressured to keep quiet.

UCI recently paid nearly $850,000 to three employees who reported allegations of wrongdoing against the center. One employee was placed on leave after filing a complaint and requesting protection under state laws that make it a crime to retaliate against people who report government wrongdoing. The university said it settled the claims to protect patient confidentiality.

Register staff writer James V. Grimaldi contributed to this report.