Howard Hughes: Patron Of Science?

Medical Research Institute Is America's Second-Largest Charity

Howard Hughes was once the richest man in the world. He was also one of the strangest -- a complete recluse for the last 20 years of his life.

For people of a certain age, the name Howard Hughes conjures up a host of images: daring pilot, Hollywood playboy, and head of a business empire.

Hughes died more than a quarter-century ago, but as Correspondent Lesley Stahl first reported last year, his vast fortune is still making a powerful impact on the world.

In suburban Washington, D.C., hidden behind trees so big and signs so small that even some neighbors don't know it's there, is the Howard Hughes Medical Institute, one of the richest and quietest charities ever created.

How large is the endowment? Tom Cech, the institute's president, says it's $11 billion, making the Hughes Institute the second-largest philanthropy in the country, behind Bill Gates' foundation.

The institute's mission: to unlock the secrets of life. It funds hundreds of the best biologists and geneticists in America.

Some of its great discoveries include: the genes responsible for cystic fibrosis; muscular dystrophy; a non-invasive test for colon cancer; the new drug that fights leukemia; breakthroughs in AIDS research; work that may lead to a cure for spinal cord injuries; and much more.

All of these discoveries were made by "Howard Hughes Investigators." There are 330 in the United States. They're the cream of the scientific crop and include seven Nobel Prize winners. Tom Cech won his own Nobel Prize for work on RNA.

How much does Howard Hughes spend a year funding all these projects? "It's about a million dollars per investigator per year. About $450 million a year," says Cech. "Who would have thought that the Howard Hughes fortune would end up supporting biomedical research?"

It's very likely that Hughes didn't mean for all of this to happen. And that's where the science story gets juicy.

"He was a playboy, he was a world-class pilot. He dated Bette Davis, Katherine Hepburn, Ginger Rogers, Ava Gardner, Rita Hayworth, in the same week," says author Richard Hack, who has written two biographies of Hughes.

Hollywood was his playground, but Hughes came to fame as a record-setting pilot, and it was his Hughes Aircraft Company that turned him into a billionaire. His most famous plane, the "Spruce Goose," was a giant wooden seaplane that flew just once, with Hughes at the controls. Despite that flop, Hughes Aircraft still became one of America's biggest defense contractors.

"The company originally started to make airplanes and then it maneuvered itself into guidance systems. So it was a very important element of the Air Force," says Hack.

But the world's richest man wasn't your average government contractor. He was combative and he bullied Pentagon officials. A newsreel from 1947 showed him lambasting a U.S. senator who had the audacity to challenge him.

By 1953, the temperamental Hughes had begun to withdraw from public view. His own executives at Hughes Aircraft often couldn't reach him, and he cut off contact with the Air Force.

The Air Force then delivered an ultimatum.

"It was at the Beverly Hills Hotel and the Secretary of the Air Force came and demanded to see Howard Hughes, who kept him waiting for an hour and a half," says Hack. "The secretary of the Air Force came in and said, 'You either put control of this company under somebody that I am going to tell you to hire, or we are removing every single contract from Hughes Aircraft.' He gave him 90 days."

What happened next? In exactly 90 days, Hack says Hughes created the Howard Hughes Medical Institute: "This was one wily move. By giving the new Institute 100 percent ownership of Hughes Aircraft, Hughes got out from under the Air Force ultimatum and built a giant tax shelter for the company's profits."

"Because it was a medical institute, it was all tax-free," adds Hack. "It was a charity. Even though they did no research. Plus, there were no personnel, and the only trustee was Howard Hughes."

When the IRS challenged the institute, it did begin to fund some research. But for many years, as Hughes retreated further into isolation and illness, more money went to him than to science.

Hughes died without a will in 1976, and the Institute was mired in years of litigation. Finally, in 1984, a court appointed new trustees, and they promptly sold Hughes Aircraft to General Motors for $5 billion. Suddenly, an institute created basically as a sham became the richest charity America had ever seen.

Hughes gives its investigators freedoms most scientists can only dream of. For instance, they're free of the crushing paperwork – a 30-page form, single-spaced - required to get money from the National Institutes of Health.

"The paperwork for a government grant is sort of like filing out your tax forms," says Cech. "In contrast, we want to free up people to think about their science, not think about filling out forms."

Hughes investigator Doug Melton, at Harvard University, is thinking about a cure for juvenile diabetes. He's working with stem cells from human embryos.

"And I can think, as I do most every waking moment of the day, 'How am I gonna get those cells to become insulin-producing cells?' And the Hughes makes that possible," says Melton, who wouldn't have gotten a federal grant at all for his research.

In 2001, President Bush imposed his stem cell ban, in which he tried to balance the objections of opponents of abortion against the wishes of scientists to work with collections of stem cells, called lines.

"He drew this line at saying, 'Well, if someone else has already created these stem lines, then it's OK for you to use them, but don't create any new ones,'" says Cech.

But critics say that's morally ambiguous, and that the president is trying to have it both ways. Is Cech taking a swipe at the president's policy?

"It's either ethical or it's not ethical. We decided that was not a place that we were comfortable," says Cech. "And we don't think it's unethical. Therefore, we think that we have not just an opportunity to engage in this research, but perhaps a responsibility."

Since the president's ban applies only to researchers using federal grants, Hughes, as a private institution, is free to plow ahead.

Using leftover embryos from a Boston fertility clinic, Melton has, in the last year, created nearly a dozen entirely new stem cell lines.

"We're trying to figure out how to tell them what to do. In our case, we want them to become these insulin cells," says Melton.

Hughes' money is also being used to solve all kinds of arcane scientific puzzles. For instance, Hughes has been funding Dr. Huda Zoghbi's lab at the Baylor College of Medicine since 1996.

"I'll tell you a very scientific story that would have never happened if not for Hughes," says Zoghbi, who was interested in really understanding how balance and coordination are controlled in humans. She had the first go, looking in fruit flies, then in mice. That took years, and because it wasn't focused on curing a specific ailment, nobody else was likely to pay for it.

"That really has nothing to do with disease. It's far out from disease, and hardly anybody - when we started this study in 1995 - would be attracted to funding something relevant to a fruit fly to study in a mouse and in a human," says Zoghbi.

"So we found the gene and it turned out to be a very important gene. It turned out to be the gene that's essential for the little hair cells in the inner ear that allow you to hear and allow you to know where your head position is when you close your eyes. We would have never known how important it is and know nothing about it, if not for funding from Hughes and that, I think, has paid off in a big way."

Hughes also allows its scientists to change course. When Melton first got funding 10 years ago, he was studying the development of frogs. Then, his infant son was diagnosed with juvenile diabetes.

"I stopped working on frogs and asked my colleagues to join me in working on the problem of how to make cells that are absent in juvenile diabetics," says Melton. "The Howard Hughes Medical Institute was perfectly fine with that. I told them what I was gonna do. They said, 'Sounds interesting to us. Go for it.'"

Melton believes that the NIH would not have been as accommodating. And now, Melton has since become one of the leading diabetes and stem cell researchers in the world. Unfortunately, his daughter contracted diabetes last year, so Melton says he is very committed to trying to solve this problem.

Is the Hughes Institute encouraging investigators to take risks?

Cech says yes: "To take risks in the sense, not just of doing something that has a low probability of succeeding, but in terms of thinking about the big problems, such as, you know, 'How does memory work?' and, 'How does the brain accomplish decision-making.'"

"It'd be wrong to pretend that I was in any way like Galileo. But it is true that the Medici Family supported investigators like Galileo, to allow them the freedom to explore things which they couldn't otherwise do," says Melton. "And that's how I like to think of the Howard Hughes Medical Institute. It allows us the freedom to explore things that we wouldn't otherwise do."

As the Institute supports more and more explorations like Melton's, history may begin to remember Howard Hughes differently, not just as a bizarre billionaire, or just as a pilot and a playboy, but as a great, if accidental, patron of science.

A few months ago, Doug Melton formally published 17 new stem cell lines created in his Hughes-funded lab. He's now making them available for use by other medical researchers.

And through financial management that would make its founder proud, the Hughes Institute's endowment is now up over $12 billion dollars.