DALLAS — The $3 billion bond-funded Cancer Prevention Research Institute of Texas faces a criminal investigation over an $11 million grant to a company backed by a major campaign contributor to Gov. Rick Perry and Lt. Gov. David Dewhurst, according to the Travis County District Attorney’s public integrity unit.

The criminal investigation was announced on the heels of a more general inquiry by Texas Attorney General Greg Abbott, whose representative serves on the oversight board that approved the grant. Abbott’s investigation was requested by CPRIT, but influential Dallas philanthropic leader Cathy Bonner, one of the original proponents of CPRIT, called for the DA to intervene.

“The ultimate insult is to ask the same people that have been charged with overseeing these valuable research funds to investigate themselves,” Bonner said in a prepared statement.

The public integrity unit of the Travis County DA’s office “is beginning its investigation not knowing “what, if any, crime occurred” at CPRIT,” said Gregg Cox, director of the unit.

The investigation centers on potential insider deals with taxpayer funds to benefit contributors to Perry’s and Dewhurst’s campaigns. Perry, the state’s longest serving governor, has appointed scores of agency board members since George W. Bush left the office in 2000. Allegations of cronyism in state grant-making have dogged him over the years.

Perry was the chief advocate of the $3 billion bond program for cancer research, which was approved by voters through a constitutional amendment in 2007. 

CPRIT has faced growing scrutiny since May when Dr. Alfred Gilman, chief scientific officer and a Nobel Prize-winner, resigned saying that grants were being made without adequate scientific review.

Executive Director William “Bill” Gimson announced his resignation Monday in a letter to CPRIT’s Oversight Committee that noted the turmoil at the agency.

CPRIT on Tuesday named Dr. Margaret L. Kripke to replace Gilman as chief scientific officer.

CPRIT’s $300 million in annual grant awards represents the second largest funding source for cancer-related research in the U.S.

The agency raised $347 million from taxable general obligation bonds issued through the Texas Public Finance Authority on July 26, 2011. The bonds were rated triple-A by Moody’s Investors Service and Fitch Ratings and AA-plus by Standard & Poor’s.

CPRIT has acknowleged that an $11 million grant to Peloton Therapeutics of Dallas was approved by the oversight board June 18, 2010 without a scientific or business review.

Peloton investor Peter O’Donnell of Dallas has contributed more than $440,000 to Governor Rick Perry and Lieutenant Governor David Dewhurst since 2000, according to a report in The Dallas Morning News. The two top Texas officials control most appointments to CPRIT.

At an appearance at CPRIT in October, Perry did not address the controversy during brief remarks to a ballroom of scientists and researchers.

CPRIT leaders have repeatedly denied that politics guided funding decisions.

However, Bonner said that the legislation creating CPRIT was never intended to benefit private companies and individuals.

“CPRIT has lost its focus on saving lives and has become a private playground to make certain people rich,” Bonner said. “I am outraged and the 61% of Texans who voted for the amendment are outraged too.”

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