December 8, 2013
A former top official of the state cancer agency has been indicted on charges accusing him of fraud in connection with the awarding of an $11 million grant.
Jerry Cobbs of Houston, the Cancer Prevention and Research Institute of Texas' former chief commercialization officer, is accused of withholding information that the grant had not undergone required review, Travis County prosecutors said Friday. The indictment referred to Cobbs' "intent to defraud."
In a news release about the indictment, prosecutors said Cobbs' failure to provide appropriate information "caused the improper award of the grant."
Prosecutors declined to answer questions about Cobbs' motive, such as whether he reaped any financial reward. The cancer agency had awarded the recipient $3.2 million of the $11.04 million grant before stopping payment upon learning its process had been circumvented.
Cobbs turned himself in Friday and was released on $85,000 bond. If convicted, he could face 5 to 99 years in prison or probation of up to 10 years and a fine of up to $10,000.
Cobbs' attorney, Alan Williams, did not respond to phone calls left by the Houston Chronicle Friday.
M.D. Anderson post
From the agency's inception until he resigned under pressure in November 2012, Cobbs led efforts to turn Texas laboratory discoveries into commercial products. He previously served as the assistant director of technology development at M.D. Anderson Cancer Center.
Prosecutors said the grand jury's indictment of Cobbs, returned Tuesday, concludes its yearlong investigation into potential criminal wrongdoing at the agency, which came under fire in 2012 and 2013 for a series of mishandled grants. A civil investigation being conducted by Attorney General Greg Abbott's office is ongoing.
The $3 billion, taxpayer-supported agency was approved by voters in 2007 and launched in 2009, tasked with awarding $300 million in cancer-fighting grants annually. A 2013 state audit found it had awarded three grants, totalling over $56 million, without proper review.
Democrats seized upon the indictment Friday and used it as a campaign tactic against Abbott, the front-runner for the GOP gubernatorial nomination and a member of the cancer agency board when the grant was awarded. The 2013 Legislature removed the entire board.
"The elephant that remains in the room is how Attorney General Abbott sat on the board and was complicit as these illegal acts took place," Texas Democratic Party Executive Director Will Haller said in a statement. "Texans deserve to know how such corruption occurred as Greg Abbott was supposed to oversee the process. It is time for answers."
State Sen. Wendy Davis, the front-runner for the Democratic gubernatorial nomination, added that "the indictment of a former (agency) official confirms that Greg Abbott has betrayed Texas taxpayers by failing to show up to even one (agency board) meeting."
A spokesman for Abbott declined comment "due to the ongoing nature of the prosecution."
The grant that resulted in Cobbs' indictment was awarded in 2010 to Peloton Therapeutics, a Dallas-based biotechnology start-up company, for what the agency said at the time was "recruitment, relocation and formation." The grant was one of the first four commercial grants awarded by the agency.
Approval process
In November 2012, an agency audit found the Peloton application was included in a slate of commercialization awards that staff recommended for the board's approval, even though it hadn't been reviewed by commercial or scientific reviewers. The board, seemingly unaware of the lack of review, rubber-stamped the slate.
Bill Gimson, then the agency's executive director, blamed Cobbs for the problem, though the agency's website says it is the job of the executive director to submit the slate of grant applications for final approval. Gimson said he merely passed on Cobbs' recommended slate, assuming all had undergone the required review.
Cobbs has never told his side publicly.
The news release said the grand jury heard testimony and evidence from Gimson, agency general counsel Kristen Doyle, former agency board member Charles Tate and Robert Ullrich, a former commercialization review council chairman.
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