Big Pay for Cancer Foundation Consultants Draws Criticism

About half of the private money raised to help the beleaguered Texas cancer research institute in fiscal year 2011 went to administrative fees and overhead, benefitting the consultants who oversaw distribution of the funds, documents show.

The figures, contained in an annual report of the Cancer Prevention and Research Institute of Texas Foundation, are prompting more calls for reform and transparency.

The nonprofit foundation was set up to boost executive salaries and support operations at the cancer agency, known as CPRIT, but hundreds of thousands of dollars also went to the consultants who run the charitable organization, documents and interviews indicate. Of the $1.2 million raised, $610,000 went to host events, pay administrative and professional fees, conduct public affairs, and to “strategic communications” and “development,” the report shows.

Some $609,000 went to supplement salaries at CPRIT, and $14,605 paid for peer review meetings to vet projects. Compared with 2011, the ratio in the 2010 fiscal year was more tilted toward direct support of the agency, with almost $600,000 going for salary boosts and peer review meetings, while about $220,000 went to overhead and consulting, the 2009-10 annual report shows.

One of the major beneficiaries of the administrative spending at the foundation was Jennifer Lustina Stevens, executive director of the CPRIT Foundation. Stevens is a well-known Austin fundraiser and former campaign manager for U.S. Sen. John Cornyn, R-Texas. The foundation is run out of her Austin-based consulting firm, JHL Company.

Stevens’ spokesman, Marc Palazzo, said a lot of the money was used to defray costs and to hire lawyers and accountants, not just to pay Stevens' company.

“The $600,000 figure includes legal assistance, accounting services, event planning and all other administrative expenses, along with JHL's compensation for managing and staffing the foundation,” he said. 

But at least one critic finds the administrative fees excessive.

“It seems to be working out well for the director over there. It appears that she, as head of the CPRIT Foundation, is paying herself … an enormous amount of money,” said Andrew Wheat, research director at Texans for Public Justice, a liberal watchdog group that tracks the influence of money in politics.

Wheat called on the foundation to open its books to ensure there are no conflicts of interest and to allow the public to see how the money is being spent and whether foundation donors are getting special treatment from the state.

“How much of that money is coming from individuals or companies that are tied to CPRIT grants? That’s what I’m most curious about,” Wheat said.

The foundation refuses to disclose its donors and says it has no obligation to file tax returns with the Internal Revenue Service. While it’s a small part of the CPRIT story, the tiny foundation has gotten caught up in the media firestorm that has recently engulfed the cancer agency.

CPRIT is at the center of a controversy about how cancer research grants are being awarded in Texas, and whether politics and campaign contributions play a role in who gets them.

Travis County District Attorney Rosemary Lehmberg recently announced a criminal probe after reports surfaced that CPRIT had awarded $11 million to a company without the proper outside review. Over the last few months, a series of top officials, including a Nobel laureate and the agency’s executive director, have resigned.

CPRIT was approved by the Texas Legislature in 2007 after a high-profile public relations campaign that included Lance Armstrong, the now-disgraced cycling champion. That year, voters authorized giving the agency $3 billion to spend on cutting edge cancer research and treatments. It is second only to the National Institutes of Health in terms of the amount of money being spent on cancer research, according to The Associated Press.