Swords into Neurons

When Howard Hughes formed the medical institute that bears his name in 1953, some saw it as a scheme to shelter income from his newly formed Hughes Aircraft Company from the clutches of the Internal Revenue Service. Hughes was reportedly no great fan of the IRS, and altruism aside, the opportunity to deprive the government of tax revenue from his aircraft business seemed too good to pass up, the story goes.

But if the motives of the late aviator and industrialist were more cynical than benevolent, the end result has nonetheless been one of the most dramatic examples of public benefit resulting from commercial enterprise. As we discuss in our research institution profile [see p8], HHMI has recently teamed up with the National Institute of Biomedical Imaging and Bioengineering (NIBIB) to fund interdisciplinary graduate programs that link the biomedical sciences with physical sciences and engineering. For academic institutions involved with neural engineering and related fields, this can only be good news. At a time when many biomedical engineering departments are lamenting the departure of the Whitaker Foundation, the HHMI/NIBIB initiative may represent a potential substitute.

It’s worth examining how this largesse came about. Not long after the formation of HHMI, the IRS began to scrutinize the financial relationship between Hughes Aircraft and its sole stockholder, HHMI. The government’s interest was particularly keen during the Reagan years, when Hughes Aircraft (which never made aircraft, by the way, but did make radar and fire control systems for military fighters) blossomed into one of the nation’s top four defense contractors. At issue was whether a sufficient level of Hughes profits were being devoted to medical research to maintain HHMI’s status as a public charity, as opposed to a foundation. The tax implications of being deemed the latter would have been substantial to HHMI. The institute’s unique strategy of hiring investigators at other research institutions rather than providing grants helped bolster its case that it was not a foundation.

Whether or not the IRS pressure was a reason for selling Hughes Aircraft is a subject of some debate. But either way, the institute—and all of biomedical research—received a great windfall in 1985 when the sale fetched $5 billion. Since that time, HHMI has been at the forefront of medical research, employing 11 Nobel laureates and investing over $500 million annually in research and grants. And it will soon move into its first research campus of its own, a 760,000 square foot facility that will emphasize technology-driven biomedical research.

The movement of HHMI from pure science into engineering and technology is one of the most promising developments in our field. It also represents a most fortuitous transformation from military technology to public good.

James Cavuoto
Editor and Publisher