Lawmakers Wonder Whether Trust in CPRIT Can Be Restored

The embattled Cancer Prevention and Research Institute of Texas was put under the microscope Tuesday as the Senate Finance Committee grilled the institute’s leadership on findings by state auditors and questioned whether public trust in the institute could be restored.

“I find it amazing given something as crucially important to the entire world as cancer research that an entity in its management of public monies could so shake the faith of the Legislature that there’s little justification not to just pull the plug on this and start again,” said state Sen. Kel Seliger, R-Amarillo.

State auditors testified that they found problematic relationships between CPRIT’s management, CPRIT’s commercialization review council and donors who contributed to the CPRIT Foundation, a nonprofit association that supplements the salaries of CPRIT’s leadership. They also identified three grants that were approved without proper review for a total of approximately $56.3 million.

“I am certainly disappointed in having those problems that have been identified, but I do believe it’s a stronger, healthier" organization and can be much better moving forward, said Jimmy Mansour, chairman of the CPRIT oversight committee. He emphasized that CPRIT is basically a “start-up,” as it was founded in 2009, and that the institute’s processes have improved along the way. He urged legislators not to dissolve the institute, but rather to “take the experience, as painful as it is right now and build on it for a stronger CPRIT.”

The proposed 2014-15 biennium budget halts new funding for CPRIT grants, but the institute will still have $10.3 million remaining from the 2012-13 biennium. The Legislative Budget Board recommended transferring $5.9 million of the institute’s funds to the Department of State Health Services to administer the state’s cancer registry, while leaving the remainder to continue financing previously approved grants.

Among the grants auditors questioned was a $25 million grant to CTNeT, a statewide clinical trial network established with CPRIT money to accelerate the commercialization of cancer treatments. Texas' Constitution requires grantees to match state funding with additional revenue, but CTNeT did not have an additional revenue source. Instead, the audit found, CPRIT allowed the nonprofit to report money spent on other cancer research projects at M.D. Anderson to satisfy the matching requirement, which the audit saw as a violation of the state constitution. CTNeT folded shortly after the state’s audit was released.

“I assume the unique nature — never been done before — justified, from their perspective, moving the [CTNeT] application forward,” said Kristen Doyle, the institute’s general counsel, when questioned by Sen. Royce West, D-Dallas, on why the CPRIT oversight board would approve $25 million — the largest CPRIT grant — to a company before it existed.

“It seems to me like with all this money and attention on the table, there was a little bit of a cavalier attitude,” said state auditor John Keel. Even though some monitoring procedures were in place, Keel said, the overall management environment at CPRIT was alarming to auditors. For example, CPRIT did not have a person in charge of ensuring the grant review processes were compliant with state law.

“I believe it was the responsibility of the executive director and the oversight committee itself to ensure these policies were in place and followed,” said Keel. He later said, “No system is better than the people responsible for managing it.”

Mansour explained that CPRIT's policies give power to peer review councils in order to limit political interference in grant decisions.

“The way that CPRIT is set up, is the power and decision-making rests in the golden standard of reviews, in peer reviews,” said Mansour. He explained that grants that had been vetted and approved by peer reviewers were presented to the board in “slates” of multiple grants, and the board only had the power to veto the entire slate by a two-thirds vote.

When Bill Gimson, the former executive director, presented the $11 million Peloton grant in the first slate of commercial grants in 2010, Mansour said, “nobody on the [oversight] committee thought to ask the question, well has that grant been reviewed?”

The former chief commercialization officer had recommended the Peloton grant — which is currently being investigated by the Travis County district attorney — to the oversight board before it received peer review. Since then, the institute has “evolved our award process,” said Doyle, so that the oversight board is presented with written evidence that the grants have been properly reviewed.

“My concern is that the oversight committee has failed to function properly and people in key management positions have either willingly or knowingly or with wanton disregard just bypassed the safeguards that were put in place,” said Sen. Tommy Williams, R-The Woodlands, the chairman of the finance committee. “It’s much harder to cure that at the top than it is at the bottom, where you have a well-defined process going on.”

Earlier in the day, Sen. Jane Nelson, R-Flower Mound, and Rep. Jim Keffer, R-Granbury, the legislative founders of CPRIT, laid out the first draft of a bill to reform the institute that included most of the state auditors’ recommendations, such as restructuring CPRIT’s leadership, establishing a compliance program to ensure all laws are followed, ensuring that each grant undergoes rigorous review and prohibiting a series of actions between CPRIT employees, grantees and donors to the CPRIT Foundation that could easily lead to conflicts of interest. It also directs the CPRIT Foundation to publicly report its financial information, among other reforms.

“I’m not giving up on this,” said Nelson, emphasizing that the state’s mission to cure cancer was approved by Texas voters in 2007 and continues to be important.

Sen. Wendy Davis, D-Fort Worth, also presented CPRIT reform legislation on Tuesday, Senate Bill 386, which offered additional ideas on how to eliminate conflicts of interest at the agency. For example, Davis’ bill would remove the attorney general and the state comptroller from the CPRIT oversight committee and move the "sunset" review date from 2021 to 2015.