DALLAS — A $3 billion bond-funded cancer research program that granted funds to a firm backed by donors to Texas Gov. Rick Perry is under investigation by the state attorney general’s office, and the executive director of the program has resigned.

William “Bill” Gimson announced his resignation Monday in a letter to the oversight committee of the Cancer Prevention Research Institute of Texas.

Calling the last eight months “extremely difficult” for those working at CPRIT, Gimson wrote that “I have also been placed in a situation where I feel I can no longer be effective.”

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.

Gimson’s resignation follows that of former chief commercialization officer Jerald Cobbs, who reportedly placed an $11 million grant to Peloton Therapeutics of Dallas on the oversight board’s agenda without a scientific or business review. The committee approved the award on June 18, 2010.

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 Perry’s urging, Texas voters overwhelmingly approved a constitutional amendment in 2007 establishing CPRIT and authorizing the state to issue $3 billion in bonds to fund programs and services. The Texas Public Finance Authority issued $347 million of general obligation bonds for the CPRIT program in July 2011.

The $11 million grant from CPRIT to Peloton Therapeutics was described as “flawed” by the Texas Attorney General’s Office, which agreed to investigate the grant at CPRIT’s request after a Dallas News investigative story detailing the research grant transactions. Attorney Gen. Greg Abbott, a Republican who has joined Perry in opposing President Obama’s health care initiative, is one of 11 members of the CPRIT Oversight Committee.

The investigation will “include — but is not limited to — any financial interest CPRIT staff or any other individual may have had in the Peloton grant award,” wrote Daniel Hodge, first assistant attorney general.

Cathy Bonner, a former cabinet member for Gov. Ann Richards who played a key role in the idea of creating CPRIT, told the News that Abbott’s office should not do the investigation.

“He’s part of the Oversight Committee,” Bonner noted. “This investigation needs to be done by the Public Integrity Unit at the [Travis County] district attorney’s office, or the U.S. attorney’s office, or by the FBI.”

CPRIT is also seeking an emergency audit from the accounting firm of Deloitte, a move that requires Perry’s approval. 

In a Dec. 3 letter, Texans for Public Justice, a public interest group that monitors state officials, asked the U.S. Attorney’s office in San Antonio to investigate possible connections between campaign contributions and grant-making by state agencies, including CPRIT, the Texas Enterprise Fund and the Texas Emerging Technology Fund.

“At the least, these connections between grant recipients and the state’s political leaders raise serious conflict-of-interest issues,” TPJ Director Craig McDonald wrote. “At worst, they could cross lines of legality.”

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