By John Shiffman

WASHINGTON (Reuters) - Since retiring from the U.S. Army in 2000, Dr. John Henry Hagmann has helped train thousands of soldiers and medical personnel in how to treat battlefield wounds. His company, Deployment Medicine International, has received more than $10.5 million in business from the federal government.

The taxpayer-funded training has long troubled animal rights activists, who contend that Hagmann’s use of live, wounded pigs to simulate combat injuries is unnecessarily cruel.

But an investigation by Virginia medical authorities alleges that pigs weren’t the doctor’s only training subjects.

During instructional sessions in 2012 and 2013 for military personnel, Hagmann gave trainees drugs and liquor, and directed them to perform macabre medical procedures on one another, according to a report issued by the Virginia Board of Medicine, the state agency that oversees the conduct of doctors.

Hagmann, 59, is accused of inappropriately providing at least 10 students with the hypnotic drug ketamine. The report alleges Hagmann told students to insert catheters into the genitals of other trainees and that two intoxicated student were subjected to penile nerve block procedures. Hagmann also is accused of conducting “shock labs,” a process in which he withdrew blood from the students, monitored them for shock, and then transfused the blood back into their systems.

The report alleges that Hagmann also “exploited, for personal gain and sexual gratification” two participants who attended a July 2013 course at his Virginia farm.

The allegations against Hagmann have not been previously reported. They are administrative in nature, detailed in a 15-page dossier compiled by two assistant attorneys general for the board. The group temporarily suspended Hagmann’s license in March. A hearing is set for June 19 before the full medical board, which could revoke Hagmann’s medical license. During the hearing, Hagmann and state lawyers are expected to present their respective cases, which may include testimony from students or other witnesses.

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In a statement Hagmann provided on Friday to Reuters, he said: “The mechanisms and protocols utilized in the training all comply with standard practices for training medical students and are, in fact, utilized in medical schools in Virginia.”

Hagmann said the “claims of sexual misconduct cause me the most anguish. Absolutely no ‘sexual gratification’ was involved and there is no evidence of such.”

Hagmann said “the courses and procedures in question were all reviewed and approved” by officials at the Uniformed Services University of the Health Sciences, a government-run medical school that trains and prepares health professionals to support the military.

The university disputes that. “The procedures used during the training were not authorized by USU faculty,” said Sharon Holland, a spokeswoman for the Uniformed Services University.

Holland said a student there raised concerns about Hagmann’s training in July 2013. “The moment the department and USU leadership were informed that these events occurred, the institution immediately suspended the relationship with Dr. Hagmann, his course, and his company,” Holland said. “We launched an investigation and those findings prompted a report to the Virginia Medical Board.”

Holland said the university also alerted the Defense Criminal Investigative Service, a law enforcement agency that oversees the Department of Defense. A spokesman for the service was not immediately available for comment Monday.

Cynthia Smith, a U.S. Army spokeswoman, said she could not comment on the case because the records were not readily accessible. But, she added, “We certainly don't condone that type of behavior.”

“DIABOLICAL MAD SCIENTIST”

Medical health professionals familiar with trauma training say they were stunned to hear about Hagmann’s techniques. Virginia state lawyers, investigating complaints by some students who attended the sessions, wrote in the report to the state’s medical board that “these procedures were not undertaken or provided in good faith for medicinal or therapeutic purposes.”

One doctor who offers trauma training, Harvard Medical School professor David King, said that “some of what is described in these allegations is wildly unheard of and perhaps unsafe.”

Dr. Howard Mell, a spokesman for the American College of Emergency Physicians, said he could not comment on any specific case. But speaking generally about “shock labs,” Mell said subjecting students to such problems during training would be absurd.

“I treat people in the ER everyday for things I have never experienced,” said Mell, a Cleveland doctor who trains emergency medical workers and police officers. “I certainly don’t need to experience shock to know how to treat it. If that logic was true, men couldn’t be obstetricians.”

Hagmann said that the Virginia board is applying the wrong standard in assessing his conduct: He said that his trainees are "students," not "patients" as the board calls them, and therefore he may have them perform procedures on one another as part of the educational process.

He told Reuters the allegations are amplified by “animal rights advocates or those with an anti-military agenda.”

Hagmann has drawn fire from animal rights groups for years because he is a leading practitioner of “live-tissue training,” which involves teaching students by using wounded live animals as patients. Often, pigs are the subjects.

Under pressure from animal rights groups, the U.S. military has reduced live-tissue training. But groups including People for the Ethical Treatment of Animals have called for an outright ban, long complaining to the Pentagon about DMI’s “senseless shooting and stabbing of live animals,” said Justin Goodman, PETA’s laboratory investigations director.

“We are absolutely disgusted to learn that the company’s cruel, violent and abusive behavior apparently targets service members as well,” Goodman said.

Earlier today, PETA sent to U.S. Secretary of Defense Ashton Carter a summary of an undercover video it says it took during a 2013 training session by Hagmann’s company. The group also asked the Pentagon to cease contracting with DMI. Goodman said the video depicts gratuitous violence against the wounded pigs, and racist and sexist jokes by course instructors.

PETA posted the video, which includes graphic violence, at http://youtu.be/qXwN8ItF3fE

U.S. Rep. Hank Johnson, an Armed Services Committee member who has introduced legislation to ban live-tissue training, said he was disturbed by the video and charges leveled against Hagmann by the Virginia Board of Medicine.

“It seems like this is a renegade contractor visiting abuse on military personnel and live animals,” said Johnson, a Georgia Democrat. “It’s mind-boggling. It’s like a diabolical mad scientist at work in a horror movie.”

AMONG PIONEERS IN TRAUMA

In the Army, Hagmann practiced emergency medicine for two decades. He rose to the rank of lieutenant colonel and co-authored an influential combat treatment manual.

After retiring, Hagmann founded DMI – also known as Deployment Medicine Consultants. It is based in Gig Harbor, Washington. Following the Sept. 11, 2001 terrorist attacks, demand for his courses grew and DMI emerged as a preeminent trauma-response trainer. The majority of DMI’s government contracts are with the U.S. military – in particular, Army and Navy special operation units.

“The mission of DMI is to train you to save lives in the combat environment, no one matches our ability to do this,” the company says on its website. “We are the single largest trainer of US military forces in operational medicine throughout world, and our record for excellence stands unchallenged.”

To demonstrate the positive impact of his training, Hagmann provided to Reuters testimonial emails from two former students. One, deployed in North Africa, wrote last month: “You forever changed my approach to combat medicine… Please know you have made a tremendous impact in countless lives.” Reuters could not immediately reach the former students for comment.

Such testimonials stand in stark contrast with the board of medicine’s report.

In one case detailed by investigators, Virginia authorities allege that Hagmann boasted to a student “about his proficiency with rectal exams” and took the student to a warehouse on his property. There, the report claims, the two “continued to consume beer” and Hagmann asked the student “about the effect (the student’s) uncircumcised penis had on masturbation and sexual intercourse.” The student told investigators “that he was inebriated and felt that he could not refuse Dr. Hagmann’s request … to examine, manipulate and photograph his penis.”

In his statement to Reuters, Hagmann connected his comments on circumcision to his live-tissue trauma training course this way: “The debate on the value and impact of circumcision is a current medical and social issue. The historical link between circumcision and masturbation is a fact dating since Victorian England and is still a current topic subject to scientific research.”

The Virginia medical board report also says Hagmann conducted what board investigators described as “ketamine labs,” “alcohol labs,” and “cognition labs.” The labs, officials wrote, “involved the dosing of ketamine and consumption of alcohol, at times in combination or in quick succession, so that he (Hagmann) could assess the effects of these substances on their cognition.”

During a July 2013 course in North Carolina, authorities say, participants were provided eight shots of rum in 10 minutes. About an hour later, they were allegedly injected with ketamine. Officials allege that one intoxicated participant received a penile nerve block, a type of anesthesia. When other students stepped in to prevent a second intoxicated student from receiving the procedure, the report says, Hagmann volunteered himself, and students performed a penile nerve block on him.

"I have been working in trauma centers for 30 years and I have never done a penile nerve block," said Dr. Mark Brown, an emergency room physician in Lancaster, California. "And why would you ever mix alcohol and drugs? It's very puzzling.”

Hagmann told Reuters the medications were all dispensed properly. He also said that procedures performed by students on other students are acceptable.

“For a future or current medical care provider,” Hagmann said, “having practice in a safe, controlled, voluntary setting has a huge value and benefit in improving self confidence and self image.”

(Story corrects spelling of company name: Deployment Medicine International)

(Reporting By John Shiffman.; Edited by Blake Morrison.)