Ap­proval blamed on ‘mis­un­der­stand­ing’


Austin American-Statesman - - THE SECOND FRONT - A

an­ces in place.”

The 11 mem­bers of the agency’s over­sight com­mit­tee agreed Wed­nes­day to re­view Gim­son’s per- for­mance be­hind closed doors at their Jan­uary meet­ing, de­bated em­ploy­ing a con­sul­tant and, for the first time, said they will be­gin ask­ing for in­for­ma­tion about ap­pli­cants that might iden­tify con­flicts of in­ter­est.

The pub­lic melt­down of the agency comes just weeks be­fore the Leg­is­la­ture con­venes and af­ter the agency has dis­pensed al­most $841 mil­lion in 502 grants over the past three­and-half years. In 2007, Texas vot­ers ap­proved $3 bil­lion in bonds to fi­nance a 10-year ef­fort to find can­cer cures and treat­ments. Law­mak­ers are al­ready dis­cussing changes to en­sure the pub­lic’s trust in the tiny state agency, which is the na­tion’s sec­ond-largest source of money for can­cer re­search.

“It’s per­son­ally em­bar­rass­ing,” said Jimmy Man­sour, an Austin busi­ness­man who chairs the agency’s over­sight com­mit­tee. “I don’t un­der­stand how grants that should have been re­viewed ended up in front of us.”

Gim­son tried to as­sure him: “I’m con­fi­dent that all the checks and bal­ances have been put in place so this will never hap­pen again.”

He said the Pelo­ton ap­pli­ca­tion be­gan in May or June of 2010 with a phone call to Dr. Al­fred Gil­man, a No­bel lau­re­ate and the agency’s chief sci­ence of­fi­cer at the time. Gim­son said a 27-page busi­ness plan to de­velop an­ti­cancer drugs was emailed to the agency, although he de­scribed Pelo­ton as a “true startup” with no man­age­ment in place at the time. Jer­ald “Jerry” Cobbs, the agency’s com­mer­cial­iza­tion of­fi­cer at the time, “im­prop­erly” put the Pelo­ton ap­pli­ca­tion on a slate of ap­pli­ca­tions for ap­proval by the agency’s over­sight com­mit­tee, ac­cord­ing to an in­ter­nal au­dit.

The over­sight com­mit­tee ap­proved the ap­pli­ca­tion, think­ing it had been re­viewed by busi­ness and sci­en­tific ex­perts as re­quired by the agency’s pro­ce­dure.

Gim­son said the ap­pli­ca­tion ended up on the agenda be­cause of a “mis­un­der­stand­ing” be­tween Cobbs and Gil­man. He said he re­lied on Gil­man and Cobbs, not re­al­iz­ing the ap­pli­ca­tion was never re­viewed by ex­perts.

Gim­son said Pelo­ton had other op­por­tu­ni­ties if it didn’t re­ceive the grant that would al­low it to re­lo­cate to Texas: “We wanted to act quickly so as not to lose the in­vest­ment.”

The over­sight might never have been dis­cov­ered, how­ever, ex­cept for an­other con­tro­versy.

Ear­lier this year, Gil­man re­signed be­cause an ap­pli­ca­tion for a Hous­ton in­cu­ba­tor was re­viewed by the com­mer­cial­iza­tion group led by Cobbs but not by the sci­en­tific group that Gil­man di­rected. A com­pli­ance of­fi­cer hired in the wake of that flap re­viewed the agency’s 13 com­mer­cial­iza­tion grants and found that the Pelo­ton ap­pli­ca­tion was ap­proved with­out a re­view. Cobbs then re­signed.

Gim­son said he learned of the prob­lem with the Pelo­ton grant in early Oc­to­ber, but he didn’t bring it to the over­sight com­mit­tee’s at­ten­tion un­til last month — just days be­fore it ap­peared in the news.

“My in­tent was al­ways to bring this to the board,” Gim­son said. “I wanted to bring a so­lu­tion with the prob­lem.”

The so­lu­tion was to have Pelo­ton reap­ply for the grant, even though $3.2 mil­lion of the $11 mil­lion had al­ready been given to the com­pany.

Gim­son said he didn’t want to “prej­u­dice” Pelo­ton’s ap­pli­ca­tion be­fore it had com­pleted the re­view process. The com­pany reap­plied Nov. 15.

Tom Luce, a re­tired Dal­las lawyer who has been on the agency’s over­sight com­mit­tee for only a cou­ple of months, pressed for the closed­door re­view of Gim­son’s per­for­mance.

Luce said he wasn’t ques­tion­ing Gim­son’s mo­tives or in­ten­tions, but he said the board has to have con­fi­dence in the agency’s lead­er­ship.

“Frankly, I don’t have that (con­fi­dence) any­more,” Luce said. “If there are mis­takes of this na­ture, we should know

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