Members of the Cancer Prevention and Research Institute of Texas’ oversight committee were grilled Tuesday by a House panel that asked about their involvement with an affiliated foundation’s decision to rebrand itself and cut ties with the beleaguered institute amid the Legislature’s ongoing efforts to reform the institute.
“It’s the biggest cluster of a mess that I’ve ever seen and what I’m trying to understand is the decision to change the name, the rebranding,” said state Rep. Carol Alvarado, D-Houston, the co-chairwoman of the House Transparency Committee. “I’m getting conflicting answers about who knew what.”
Legislators authorized the creation of the CPRIT Foundation in 2009 to supplement the salaries of CPRIT’s executive director and chief scientific officer. Amid lingering conflict-of-interest concerns, the CPRIT Foundation rebranded itself as the Texas Cancer Coalition in March. Jennifer Stevens, the executive director of the former CPRIT Foundation, said last week at a House Transparency committee hearing that the nonprofit plans to wind down operations and stop supplementing the salaries of CPRIT officials within 60 days.
At the same hearing, Kristen Doyle, the institute’s legal counsel, told the House committee that the foundation did not notify the institute of its plans to rebrand and dissociate itself from the institute.
Lawmakers questioned why the institute was not informed of the nonprofit’s plans to rebrand, as many of the former CPRIT Foundation’s board members also served on the CPRIT oversight committee, including Jimmy Mansour, the chairman of the CPRIT oversight committee, Joseph Bailes, the vice chairman of the oversight committee and Barbara Canales, a former oversight committee member.
Mansour said that before he resigned from the nonprofit’s board in March, he had discussed with Stevens the idea of expanding the CPRIT Foundation’s mission to support additional cancer advocacy groups, while continuing to honor the organization’s obligations to the institute. He clarified that the decision to rebrand the organization occurred after he resigned from the foundation board, and he did not authorize Stevens or the nonprofit board to pursue those changes.
“I was under the idea that this was the beginning of the process,” he said. “I was not alarmed, because there was really nothing in my opinion to be alarmed about."
“How can we expect public trust to be reaffirmed,” said Rep. Charles Perry, R-Lubbock, adding, “if we leave people who were on the old board on the new board, who were there and either didn’t catch it or didn’t notice” that problems were occurring at the institute.
In response to a recommendation by state auditors, there are no longer any individuals that serve on both the foundation board and the CPRIT oversight committee.
On Monday, the attorney general’s office sent a letter to the Texas Cancer Coalition, directing it to set aside $327,600 to give to the institute after paying for allowable expenses to wind down operations. That is $106,540 more than the nonprofit estimated it would have left to give to CPRIT. The majority of the expenses that the AG’s office didn’t approve — $84,200 — are invoices for a company owned by Stevens for services that have occurred or will occur after the foundation changed its name.
State Rep. Dan Flynn, R-Canton, said he personally requested that Stevens appear at Tuesday’s hearing, but she did not attend.
“I have never heard anyone even hint at the idea that we’re going to spend all this money in wind-down,” said Doug Allison, a Corpus Christi lawyer recently appointed to the Texas Cancer Coalition who appeared in place of Stevens. He said that donations to the foundation should not be considered public money, because the foundation’s board legally changed the status of the nonprofit from a government-affiliated foundation to a standalone, independent foundation in October.
“You can argue that it’s not public money … but the donors gave it thinking they were supporting the institute,” Perry said. He said the institute should have stopped spending money when it rebranded so that it could determine how much it owed the institute.
Both Mansour and Bailes said the intention of changing the nonprofit’s legal status was to allow the board to broaden its membership, so that when they resigned the board could replace them with members that did not also serve on the institute’s oversight committee. And they both said they were not aware of the nonprofit’s plans to rebrand.
CPRIT has been embroiled in controversy over the last year. After the institute disclosed that an $11 million commercialization grant had been approved without proper review, the Travis County district attorney opened an investigation to determine whether the actions of CPRIT employees were criminal. Although the district attorney’s office has cleared the oversight committee members from blame, an investigation of three former CPRIT employees is ongoing.
The institute’s problems were compounded in January when a state audit revealed three grants totaling $56 million were approved without proper peer review and the institute gave $6.8 million in advanced payments to CTNeT, a statewide clinical trial network, which has since filed for bankruptcy.
Other oversight board members said Tuesday that they were also aware of the nonprofit’s plans to change the organization’s mission, but that they did not know those plans included rebranding the nonprofit and cutting ties with the institute.
Mark Watson, a CPRIT oversight committee member from San Antonio, told the committee that Stevens contacted him in November to help organize a fundraiser for the CPRIT Foundation.
“I was very concerned about the attitude of the foundation,” said Watson, adding he declined to help with the event. He said the foundation notified him at the beginning of this year that it planned to pursue a new mission, but not that the organization planned to change its name. “I felt like they were absolutely going in the wrong direction and it was something that was going to be detrimental to the future of CPRIT,” Watson said.
Citing the testimony of other board members, Canales — who voted in favor of rebranding the nonprofit while she was still on the board — emphasized that others were aware of the organization’s plans to change its mission.
“I’m sorry Mrs. Doyle didn’t know about it. It would have been smarter in hindsight if she had … but that’s not my fault and that’s not the foundation’s fault,” said Canales.
The Senate approved Senate Bills 149 and 150 to reform CPRIT on Wednesday by restructuring the CPRIT’s leadership staff. The reforms would prohibit committee members from serving on the board of a nonprofit affiliated with the institute and add restrictions to prevent conflicts of interest between a nonprofit that supplements the salaries of CPRIT officials, the institute and grantees.
The measures now move to the House, and if approved, the Legislature could add financing for the institute in the 2014-15 budget during the budget bill conference.
At the hearing, House members expressed a willingness to reform the institute — rather than throw it out entirely — and indicated they were still searching for the best measures to ensure the problems at the institute did not reoccur.
“I’m not ready to throw this away at all,” said Flynn. “It’s the responsibility of us to be sure that we put together something so that we can go forward, because it is a worthy cause.”