By Patricia Kilday Hart
December 15, 2012
Cathy Bonner should have been thrilled when the Cancer Prevention and Research Institute of Texas opened its doors. A cancer survivor herself, Bonner had spearheaded the campaign to persuade the Texas Legislature - and Texas voters - to commit $3 billion in publicly backed bonds to find a cure for cancer. The Austin businesswoman's two parents succumbed to the disease; it also claimed her dear friend and former employer, the late Gov. Ann Richards.
"When Ann died, I'd just had it with cancer," said Bonner. "I had this concept that we could do what California did for stem cell research" by committing bonds for scientific studies. It was not an easy sell in fiscally conservative Texas, but the politically astute Bonner outmaneuvered her opponents in the 2007 legislative session. Voters signed off on the idea the same year.
But the elation of her political triumph quickly gave way to foreboding. "I disagreed when they decided we had to get private money to supplement Dr. Gilman's salary," she said, referring to Alfred Gilman, the Nobel laureate who served as the cancer agency's first scientific officer. "I knew that was going to be problematic."
After all, if Gilman knew his salary was coming from private sources, whom did he consider his boss? The taxpayers of Texas, or the foundations, pharmaceutical companies and private philanthropist who contributed to the CPRIT Foundation, which supplemented his remuneration?
Tapping private dollars
For the past six months, we've been treated to a steady stream of stories questioning the oversight of grant awards at what should have been what Bonner calls "the center of the universe" in the fight against cancer. First, Gilman resigned in protest of a $20 million award that bypassed a carefully established scientific review process; it was later revealed that an $11 million grant was awarded to a Dallas firm in which one of Gov. Rick Perry's political donors had invested without review by appropriate agency committees.
Despite careful efforts by the Legislature, the agency has become infected with the dreaded and deadly Big C: cronyism, the cancer that snuffs out trust in government.
And one carrier appears to be the CPRIT Foundation, established to tap private dollars to supplement the public agency. Dallas philanthropist Peter O'Donnell, who has generously contributed to the University of Texas and to CPRIT, at one time invested in Peloton Therapeutics, which was awarded an $11 million grant without normal review.
Oversight hindered
As CPRIT Foundation spokesman Marc Palazzo told the Chronicle's Eric Berger and Todd Ackerman last week, private foundations proliferate throughout state government. As he put it, "It has long been public knowledge that a portion of those funds has been used to supplement the salaries of senior executives at CPRIT. This practice is modeled after those used by multiple other Texas state entities."
Palazzo is right: Private foundations exist throughout state government. And in many cases, their existence shields state officials from public scrutiny.
Last week, the New York Times reported that Texas leads the nation is granting tax breaks as an economic development tool. The news­paper noted that Perry frequently takes corporate recruitment trips underwritten by a nonprofit known as TexasOne, which is financed by large corporations and consultants, including politically active Dallas tax consultant Brint Ryan.
According to the Times, Perry's office approved "enterprise zone" awards worth millions of dollars every year to 222 companies between March 2008 and June 2012. Of those, 82 were clients of Ryan's tax consulting firm.
Fun fact: Both Texas­One and the CPRIT Foundation are managed by Austin public affairs consultant Jennifer Stevens.
A private foundation also loomed large in a scandal that rocked the UT School of Law last year.
Dean Larry Sager was asked to resign after it became known he had obtained a $500,000 "forgivable loan" from the school's private foundation, which he never disclosed to UT's administration. He also obtained foundation money to provide salary supplements for favored professors, creating deep disparities in compensation among the faculty.
Legal blessing
Now, the state auditor, the Travis County District Attorney's Office, and the Texas Attorney General's Office are conducting investigations into the cancer institute and its foundation.
Several embattled cancer institute officials have resigned, creating an opportunity for the cancer institute to make a fresh start. A former M.D. Anderson administrator, Margaret Kripke, was named chief scientific officer.
Would her salary be supplemented by the private foundation, as Gilman's was?
"Under the law creating the Cancer Prevention and Research Institute, the agency may supplement the salary of the executive director and other senior institute staff members. Funding for a salary supplement may come from gifts, grants, donations or appropriations. CPRIT's chief scientific officer does receive a supplement to the base salary," CPRIT spokeswoman Ellen Read wrote in an email.
I'll take that as a yes.