, Port Arthur, Texas


December 5, 2012

Texas cancer agency exec: Mistakes led to grant

AUSTIN — The chief executive of Texas’ embattled $3 billion cancer-fighting agency on Wednesday defended his job while explaining to a state board how a private company improperly received $11 million in the second questionable award to embarrass the agency this year.

Bill Gimson, the Cancer Prevention and Research Institute of Texas’ first and only executive director, took blame for Dallas-based Peloton Therapeutics receiving the lucrative taxpayer-funded grant even though the company’s proposal was never scrutinized. He chalked it up as an honest mistake and said there was no evidence that agency staff stood to personally benefit financially from Peloton.

But one member of the agency’s governing board — made up entirely of political appointees of Gov. Rick Perry and others — requested that Gimson face a job review.

CPRIT’s problems began in May when questions arose over a separate $20 million grant that was also insufficiently reviewed, and led to dozens of agency peer reviewers resigning in protest.

Tom Luce, a Dallas attorney appointed to the board this year, said the board had counted on Gilman to make sure rules were followed.

“I’m certain they felt like they were relying on you (to have) sufficient processes in place to assure something like this did not happen,” Luce said.

CPRIT has spent the year mired in criticism and intensifying scrutiny after debuting in 2009 to widespread acclaim. The unprecedented state-run agency is home to the nation’s second largest pot of cancer-research money, behind only the National Institutes of Health, and has awarded nearly $700 million.

An internal audit uncovered the irregularities surrounding Peloton’s award in 2010. The agency says the company was unaware its 27-page proposal was never reviewed, and company executives have declined comment.

All grants must ultimately be approved by the agency’s governing board. Gimson said Peloton’s proposal wound up in front of that panel because Jerry Cobbs, the agency’s former chief commercialization officer, mistakenly thought he was submitting a request to perform “due diligence” on the company. Instead, believing that Cobbs was recommending Peloton for funding, the board voted in 2010 to give Peloton $11 million, according to Gimson.

Gimson did not explain why Cobbs never corrected the board’s action. Cobbs resigned from the agency last month, and attempts to reach him have been unsuccessful.

Gimson told board members Wednesday that the lapse in checks and balances occurred during the agency’s infancy, when rules were still being put in place.

“It was a procedural nightmare,” Gimson said.

According to the agency’s internal audit, emails between Cobbs and former chief science officer Dr. Alfred Gilman about Peloton are no longer available. Neither a report from the agency’s compliance officer nor a letter Gimson wrote to lawmakers this week explains why.

Peloton has so far received $3.2 million from the state. The rest of the funding had been frozen pending a review of the company’s application.

James Mansour, a major political donor to Perry whom the governor appointed as chairman of the oversight board, said the Peloton discovery has been “embarrassing.” He said he would have difficulty approving the company for funding without more assurance that Peloton does not have ties to agency officials.

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