That June, the Oregon Legislature passed a law that mandated state oversight of body donation programs, which had previously been unregulated. The new rules imposed standards for the safe and ethical handling of bodies by for-profit tissue banks that supply cadavers for surgical training.

But not every organization that traffics in donated cadavers fell under the rules. Lawmakers made sure local medical schools and hospitals, including Legacy, were exempt.

"We were essentially picking winners and losers," Rep. Jim Weidner (R-Yamhill) tells WW. "The hospitals were saying, 'Oh, no, we can't be regulated.' Their lobbyists did a very good job."

A year later, the body donation program at Legacy Research Institute is the target of an FBI investigation. Whistle-blowers have alleged Legacy officials violated the very standards the new state rules were intended to uphold. 

Legacy faces allegations it didn't keep proper records, didn't guarantee that bodies underwent proposed testing for communicable disease, and might not have informed families their relatives' bodies had been used for research (“Posthumous Legacy,” WW,  Aug. 27, 2014).

As a result, many families may not know their loved ones' remains were used in trainings, or if people training on cadavers may have been exposed to HIV, hepatitis and other diseases because the bodies weren't properly screened.

WW also has learned the FBI is looking into allegations Legacy officials prepared to shred documents sought by a federal subpoena. FBI officials decline to discuss the case, but they have confirmed to WW that Legacy is under criminal investigation. Legacy officials declined to answer questions about the investigation.

Legacy Health is a $1.4 billion nonprofit that operates six area hospitals, several clinics and research and education programs. The Legacy Research Institute is located in the Lloyd District. The institute launched a program in early 2013 to collect cadavers for its Legacy Institute for Surgical Education and Innovation.

Legacy's fledging body-acquisition program would have been overseen by the Oregon Health Authority. But legislators and lobbyists say 2013's House Bill 3345 was carefully shepherded by the state hospital lobby—especially Oregon Health & Science University—to ensure certain programs escaped state scrutiny.

Instead, the law applied only to two independent firms handling body and tissue donations—BioGift and MedCure, both based in Portland. The bill didn't cover hospitals and OHSU, known for its political clout in Salem.

"There was an understanding that if we included the universities, the legislation would stall," says John Cover, board chair of the American Medical Education and Research Association, which backed the bill. "There wouldn't be a snowball's chance of getting it through."

OHSU spokeswoman Tamara Hargens-Bradley declined to comment on the lobbying efforts. She says OHSU's cadaver donation program is subject to regulation by the Oregon Health Authority.

Not so, says Oregon Health Authority spokesman Jonathan Modie, thanks to the 2013 legislation. "The OHA doesn't have jurisdiction over hospitals since they are excluded," Modie says.

Rep. Mitch Greenlick (D-Portland), chairman of the House Health Care Committee, says lawmakers received complaints about for-profit body donation companies, but there was "not a shred of evidence" of problems involving hospitals and universities. (Greenlick is a former chairman of the Department of Public Health and Preventive Medicine at OHSU.)

"We solve problems," Greenlick says. "We don't make problems up. If there's no problem, we tend not to solve it. I could make up a thousand bills for things where there are no problems."

Greenlick says that could change: The revelations about the criminal investigation of Legacy could prompt him to look at the issue in the 2015 legislative session.

OHSU and Western University of Health Sciences in Lebanon run body donation programs. These programs accept the corpses of people who willed their bodies to science, or whose families have signed consent forms. The bodies are cremated after research, and the remains are returned to families. Their biggest competition for those corpses are BioGift and MedCure.

Legislation to regulate the operations of BioGift and MedCure was introduced by Greenlick's committee in 2011 and 2012.

Then-Rep. Patrick Sheehan (R-Clackamas) ran an advertising company that had BioGift as a client. In a February 2011 committee hearing, Sheehan objected to exempting OHSU and other hospitals.

"I would be every bit as interested in knowing what happened to Grandma if I was dealing with OHSU as I would with a private company," Sheehan said.

"OHSU, if you will your body and it's used in teaching, you get the body back," replied Rep. Jim Thompson (R-Dallas). "And some of these other programs…your feet might be in New York but your tongue is in Tahiti.” 

"It was a power grab," Sheehan says. "State agencies and university systems are very powerful, and they don't like having these little companies doing this."

Legacy Research Institute originally obtained cadavers from OHSU but had difficulty obtaining enough at a reasonable cost, according to sources familiar with the program. 

Legacy struck a deal for cadavers from Cascade Decedent Care, which has the same owner as Crown Memorial Centers, a Portland-area chain of funeral homes.

Whistle-blowers within the Legacy program began raising questions about the accuracy of record keeping, and whether the cadavers had been obtained legally and had undergone the proper health screenings.

Records show Legacy soon eliminated the whistle-blowers' jobs. One was let go May 8, the same day a federal grand jury subpoenaed Legacy for records related to its body donation program.

Other records obtained by WW also show at least one Legacy employee says she her bosses "gave me paperwork to shred from the body donation files" after Legacy received the grand jury subpoena. Two months later, Legacy eliminated that employee's job.