Lawmakers on Thursday condemned grant policies at the Cancer Prevention and Research Institute of Texas that left room for potential conflicts of interest, and criticized a lack of transparency at the CPRIT Foundation, a nonprofit that supplements the salaries of some of the institute’s leaders.
“I don’t feel there’s anything criminal. I don’t feel there’s anything underhanded going on in this effort. But what we have seen is unacceptable,” state Rep. Jim Keffer, R-Eastland, who sponsored the legislation to create CPRIT in 2007, said at Thursday's meeting of the House Appropriations Committee. “... We’ve got to take a breath to make sure checks and balances are in place so we don’t have this discussion ever again."
In 2007, Texas voters approved a constitutional amendment that gave lawmakers the authority to sell bonds worth $3 billion over 10 years, money to be used to promote cancer research, cancer-fighting commercialization projects and cancer prevention projects in Texas. The future of the institute is uncertain, as the Texas attorney general, Travis County district attorney and state auditor’s office are all investigating whether CPRIT officials broke the law in their distribution of grant funds.
The investigations began after CPRIT's oversight committee publicly disclosed an internal report that found an $11 million grant to Peloton Therapeutics had been approved without scientific review. After the disclosure, the media discovered potential conflicts of interest involved with that grant.
“We wanted to be on the cutting edge of getting in front and dealing with cancer. My dad died of cancer, my brother was just diagnosed with cancer,” said Rep. Sylvester Turner, D-Houston. “But we want an organization with integrity, not a slush fund.”
Gov. Rick Perry, Lt. Gov. David Dewhurst and House Speaker Joe Straus have called on the CPRIT oversight board to place a moratorium on new CPRIT grants. "It is important that we restore the confidence of the Texas taxpayers who approved this important initiative before new funds are dispersed," they wrote in a Wednesday letter to the oversight board.
The chairman of the oversight committee, Jimmy Mansour, who was not present at the hearing because of a death in his family, issued a statement saying he agreed with the call for a moratorium. Still, it is unclear whether the $85 million in new grants that the oversight board approved earlier this month will be halted. Contracts have not been signed with those grantees.
The letter from Perry, Dewhurst and Straus "was not issued until after our board meeting. If anybody from leadership had given the oversight committee direction … I can guarantee you that we would have stopped dead in our tracks,” said Barbara Canales, who is on both the CPRIT oversight board and the CPRIT Foundation board. That slate of grants was the first to undergo review from the institute's newly hired compliance officer, Canales said, assuring lawmakers, “There is not a question in my mind that these grants have received the proper review.”
The Legislature authorized the creation of the CPRIT Foundation in 2009 to supplement the salaries of the institute's executive director and chief scientific officer, an effort to help the state attract top talent. The foundation is not allowed to accept donations from CPRIT grantees.
Dallas philanthropist Peter O'Donnell, whose initial investment helped create Peloton Therapeutics, has given $1.6 million to the CPRIT Foundation, according to The Dallas Morning News.
“What we could use is some help from you, to help us, to help the foundation, do the best job possible to identify whether there could be conflicts,” said Canales, explaining that the foundation could only compare its donor list to the list of grant recipients after the grants were approved by the oversight board.
Lawmakers also discussed whether CPRIT should be in the business of issuing commercialization grants.
The Legislature needs to look closely at what percentage of CPRIT’s grant funding goes to “commercialization, essentially start-ups, versus research and prevention,” said Rep. Craig Eiland, D-Galveston. “The commercialization will come after they do the research."
Kristen Doyle, general counsel for CPRIT, said that about 13 percent of its grants had gone to start-up companies to commercialize research. She explained that funding commercialization projects is essential to bringing new cancer treatments to market, because those companies conduct testing and clinical trials to get the approval of the Federal Drug Administration.
“It sounds like a deep dark money pit, when in fact, that’s the only way the research" gets to the market, said Rep. Susan King, R-Abilene.
On Thursday, lawmakers also expressed concern that Jerry Cobb, the former chief commercialization officer who improperly placed the Peloton Grant on the oversight board’s agenda, was not present at the hearing. Neither was Dr. Al Gilman, the institute's former chief scientific officer, nor Bill Gimson, the executive director who recently submitted his resignation. They said additional hearings would be held to ask those individuals “very serious questions.”
Earlier this month, Gimson explained how the Peloton Therapeutics grant was approved in a letter to Keffer and Sen. Jane Nelson, R- Flower Mound. The letter can be read below.