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.