DALLAS – Texas Gov. Rick Perry’s veto of funding for the unit that prosecutes state corruption will not derail the investigation of a $3 billion cancer research bond program that could involve the governor’s office, the lead investigator said Thursday.

The Travis County Public Integrity Unit, established by state law in 1982 and fully funded by state appropriations, is investigating possible insider deals involving the Cancer Research and Prevention Institute of Texas. At least one of the CPRIT grants went to a private corporation founded by a Perry donor without proper review.

Gregg Cox, who runs the state-funded unit under Travis County District Attorney Rosemary Lehmberg, told the Texas House Appropriations Committee that the case was too high profile for the office to drop, even without the state funding that pays the salaries of the unit’s 35 employees.

“It’s an offense that occurred in Travis County, so it has to be prosecuted here,” Cox told the committee.

However, the public integrity unit would not be able to handle all the 225 pending felony cases on the unit’s agenda if $7 million in funding is not restored, Cox said. Most or all of the staff would likely be laid off Aug. 31, the end of the fiscal year, he said.

If the remaining attorneys at the Travis County DA’s office continue to prosecute statewide insurance fraud and public corruption as required under existing law, other cases in the county will face delays, Cox said.

After hearing testimony from Cox and other witnesses, the committee postponed a vote on a measure to override Perry’s veto until rules on overrides in a special session could be clarified.

The sponsor of the measure, Rep. Sylvester Turner, D-Houston, pointed out that the Public Integrity Unit is still required under law to investigate crimes against the state and public corruption but will lack the funding to do so after the veto.

“I think we have to be very, very careful that we say to any prosecutor or any DA that unless your actions are satisfactory to us we are going to defund you,” Turner said. “We’re walking on some very dangerous ground here.”

The PIU was created by state law in 1982 to investigate and prosecute criminal activity involving state government, insurance fraud, motor fuels tax fraud and workers’ compensation fraud.

While public corruption cases such as the money-laundering conviction of former U.S. House Majority Leader Tom DeLay get big headlines, “that is a very, very small number of the cases where we do investigations ourselves,” Cox said.  “Maybe three or four per year.”

Perry said he issued a line-item veto of funding for the Public Integrity Unit after Lehmberg the governor’s demand that she resign after pleading guilty to driving while intoxicated.

“Despite the otherwise good work of the Public Integrity Unit’s employees, I cannot in good conscience support continued state funding for an office with statewide jurisdiction at a time when the person charged with ultimate responsibility of that unit has lost the public’s confidence,” Perry said in statement.

“This unit is in no other way held accountable to state taxpayers, except through the State budgetary process. I therefore object to and disapprove of this appropriation.”

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 the committee in testimony Thursday.  “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. TPJ is seeking a criminal investigation of Perry’s actions.

“Threatening to take an official action against her office unless she voluntarily resigns is likely illegal,” said Craig McDonald, TPJ Director.

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.

After the Dallas Morning News began an investigation of the grant and Peloton’s ties to Perry through its founders campaign contributions, top officials at CPRIT stepped down and the foundation that supports the organization shut down.

The Texas Legislature in the regular session considered cutting off the $3 billion of bond funding for CPRIT but agreed to restore funding after changes were made in the organization.

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