Perry Indictment Spotlights Bond-Financed Cancer Fund

perry-rick-2014-357.jpg

DALLAS — The state felony indictment of Texas Gov. Rick Perry covers actions he took against the Travis County District Attorney's office while investigators there looked into grants to his campaign contributors from a bond-financed $3 billion cancer research fund.

The Travis County Grand Jury Friday indicated Perry on charges of abuse of official capacity and coercion of a public official.

Perry said his June 2013 veto of $7.5 million of funding for the Public Integrity Unit of the Travis DA's office was meant to force District Attorney Rosemary Lehmberg, a Democrat, to resign after her arrest and conviction for driving while intoxicated.

The veto also cut off funding to the integrity unit as its investigators reviewed reports that campaign contributors to Perry, attorney general Gregg Abbott and Lt. Gov. David Dewhurst received grants from the Cancer Prevention Research Institution of Texas without proper authorization.

After Perry cut the funding, Travis County found the money to continue the investigation, though dozens of other cases had to be dropped due to lack of manpower.

In statements after the indictment, Perry said he was within his rights as governor to veto funding for the unit that was investigating him because Lehmberg had pleaded guilty driving while intoxicated.

Lehmberg won 74% of the vote in her 2012 primary and Republicans put up no candidate against her in the general election in the heavily Democratic County, with its seat in Austin. She doesn't plan to run for reelection.

According to reports, Perry continued to try to get Lehmberg to step down. Had she resigned, Perry could have named the county's first Republican DA and seized control of the PIU, which investigates state and local officeholders throughout Texas.

Even after Perry stripped funding for the agency that prosecutes state public corruption cases, his emissaries worked to swap Lehmberg's resignation for restoration of the money, several sources told the Texas Tribune.

The indictment came from an Austin grand jury led by special prosecutor Michael McCrum, a former federal prosecutor who was appointed by a San Antonio judge.

Perry issued a veiled threat to McCrum after the indictment.

"This farce of a prosecution will be revealed for what it is, and those responsible will be held accountable," Perry said, appearing to take aim at the special prosecutor.

As a federal prosecutor in San Antonio, McCrum oversaw the unit that focused on money laundering, public corruption and criminal tax fraud cases before beginning 14 years as a private attorney.

Cathy Bonner, a former cabinet member for Gov. Ann Richards who played a key role in creating CPRIT, accused Perry of seeking to obstruct an investigation that included him.

"Gov. Rick Perry vetoed this funding because he was under investigation for his role in CPRIT," Bonner told a House committee in June that was looking for ways to override Perry's veto. "Not anyone, not even the governor is above the law. Please don't let this investigation be stopped through this ruse. It's about our public bond money going into a private venture."

Texans for Public Justice, a public interest group in Austin, alleges that Perry potentially committed several criminal offenses in issuing the threat against Lehmberg and then following through by withholding the funds.

One part of the CPRIT case under investigation involves an $11 million grant to Peloton Therapeutics. The Dallas biotechnology firm proposal did not receive the required business or scientific review from CPRIT.

The Public Integrity Unit's investigation of CPRIT produced only one indictment against Jerald "Jerry" Cobbs.  That came in December, six months after Perry cut off the PIU's funding.

Perry, Texas's longest-serving governor, received $37 million over 10 years from just 150 donors, which adds up to over a third of the $102 million he had raised as governor through December 2010, according to the group Texans for Public Justice. Almost half of those donors received big contracts, tax breaks or appointments during Perry's tenure, the group said. Texas has no limits on campaign contributions.

For reprint and licensing requests for this article, click here.
Bankruptcy Healthcare industry Texas
MORE FROM BOND BUYER