Archive for Tuesday, January 24, 2012

Brownback hints at need for more KBA scrutiny; supporters say it’s not needed

January 24, 2012, 4:18 p.m. Updated January 24, 2012, 5:32 p.m.


— Gov. Sam Brownback on Tuesday hinted that the Kansas Bioscience Authority may need more oversight and his administration has withheld payment of $22 million to the agency.

But defenders of the KBA said more oversight of the economic development agency wasn’t needed.

The long-awaited audit of the KBA that was released on Monday found instances of document destruction, misuse of funds and questionable management practices by Tom Thornton, who resigned as the authority’s chief executive office in April.

Brownback said the audit’s findings were “deeply troubling” and he noted that the KBA doesn’t go through the same scrutiny of the budgeting process as other state agencies.

The money Brownback’s administration withheld is part of KBA’s annual appropriation of $35 million approved by legislators in the 2011 session.

The state revenue is typically paid to the authority in the fall of each calendar year. But it has been on hold while auditors conducted a forensic investigation of the KBA and its management.

The nearly $1 million audit by BKD Forensic and Valuation Services resulted in the return of about $4,700 in KBA funds that Thornton received for an airline ticket, purchase of an oil painting and overpayment of a car allowance.

Last year, Brownback’s administration pushed the KBA to get audited, saying there were many questions about how money was being spent, and the relationships between the authority’s leaders and companies that received funding.

But on Tuesday, auditors told state legislators that they were confident the KBA was making sound investments and that issues raised by the audit were being addressed. The auditors said they found no evidence of conflicts of interest in investments made by the KBA.

Senate Vice President John Vratil, R-Leawood, said he didn’t see a need for more legislation to regulate the KBA and would prefer legislators and the authority’s critics accept the audit and move on.

Balanced approach needed

The KBA was created in 2004 and tasked with using $581 million in tax funds over 10 years to expand bioscience research and business in Kansas.

Kansas Department of Revenue Secretary Nick Jordan, who as a state senator helped create the KBA, said there needs to be a balanced approach to the KBA.

He said it has succeeded because of its “entrepreneurial spirt,” but it also must be held accountable.

Last year, Sen. Susan Wagle, R-Wichita, and chair of the Senate Commerce Committee, held several meetings in which she criticized the KBA over salaries, expenses and investments.

But James A. Snyder, managing partner of BKD LLP, said the audit raised no major issues with the authority’s investment programs or conflict of interest policies.

“Generally, we find things to be pretty good with a couple of exceptions that are noted in the report,” he said.

Thornton erased documents

According to the audit report, Thornton used computer cleanup and drive wiping tools to clear his computer hard drive on April 21 and 22, 2011, after his April 13 resignation, and before returning the computer to the KBA on April 26.

He told auditors he cleared the computer because he had used the KBA-owned computer for personal use and it contained “personal financial and tax information, family photos and other information of a personal nature, some of which would be embarrassing if made public,” according to the report.

The audit also identified issues with compliance with the authority’s contract policy, finding 301 payments without a contract, including 102 payments that violated the KBA’s policy. Those payments totaled more than $570,000.

The audit also indicated former board member Angela Kreps may have been in “technical violation” of the KBA’s conflict of interest policy by voting on funding for KansasBio, a bioscience trade organization of which Kreps served as president.

The audit also found Thornton failed to inform KBA board members of a relationship with a KBA staff member, Lindsay Holwick, who would become his wife.

David Vranicar, who had been president of the KBA’s commercialization arm, has served as the authority’s interim president and CEO since Thornton left the authority and took a position with the Cleveland Clinic in Ohio.

Questions over CIBOR

Wagle also alleged that the Wichita-based Center of Innovation in Biomedical and Orthopedic Research had been promised $20 million from the board, but never received the full amount.

A separate auditing firm, Meara Welch Brown, also hired by the KBA, investigated that claim. The firm could not identify documents, records or correspondence where a commitment of $20 million had been made.

The Johnson County District Attorney’s Office has confirmed it was conducting a criminal investigation into the authority, but has not disclosed details of the investigation.

Brownback has asked for a moratorium on KBA spending and investment commitments until legislators decide if any changes are needed to the KBA.

But KBA Board Chairman Dan Watkins of Lawrence disagreed.

He said the audit showed the KBA’s investment process was sound, and there were no significant findings of conflicts of interest.

“You can’t grow with moratoriums. We’ll operate within the authority of the Legislature as created unless the Legislature tells us differently,” he said.

He also said the audit report should clear the air regarding questions and allegations raised in the past year.

Wagle said the Legislature would spend a lot of time combing through the audit.


UNIKU 6 years, 3 months ago

MAY? MAY need more oversight? C'mooonnn! It clearly does. I don't EVER agree with Brokeback but entities like this that are getting state money are full of greedy gladhanders and need to be policed.

markoo 6 years, 3 months ago

Yeah, a cool $1,000,000 spent on an audit to find only $4,700 in misappropriated funds by the guy who resigned. Gosh. Really scorched the ground to find that bone, didn't we?

Yeah, it really does scream for more oversight......wait.....

xm75 6 years, 3 months ago

"...finding 301 payments without a contract, including 102 payments that violated the KBA’s policy. Those payments totaled more than $570,000."

Depending on if "those" payments were the 102 or the 301 the 570k figure could be even higher.

parrothead8 6 years, 3 months ago

Brownback called for an audit, which they consented to. The audit found no major problems, so now Brownback doesn't like the audit and wants the KBA to stop spending. Clearly, he's got an ax to grind.

Why bother even having the audit, Governor? You could have saved the taxpayers $1M.

Kathy Theis-Getto 6 years, 3 months ago

Last year, Sen. Susan Wagle............

say no more

Richard Heckler 6 years, 3 months ago

I want to see a list of salaries directly connected to this KBA? Where is the money going is the question?

Are the folks who organized the KBA now collecting tax dollar salaries as administrators? How sweet that might be...

bad_dog 6 years, 3 months ago

Kind of interesting Gov. B is now "hinting" rather than publicly declaring. A trial ballon so to speak, rather than the Hindenburg the rest of his proposals resemble. Perhaps the fact his proposals get swatted down faster than an upward arcing basketball in front of Jeff Withey created a bit of trepidation.

Hopefully he'll be back to warming the bench real soon.

Bob_Keeshan 6 years, 3 months ago

Brownback is desperate to get his hands on this money. He's already holding money in the treasury so he can pay off tax "advisors" like Laffer.

By "scrutiny", what Il Marrone means is patronage. What a crook.

By the way, it is being reported by others that Brownback and his staff were personally directing the audit. This according to the auditors.

Boston_Corbett 6 years, 3 months ago

Poor Les.

Nobody will respond to his letters. Nobody will take his meetings.


kansanbygrace 6 years, 3 months ago

Not nobody, BC. Les has presented some extremely bright ideas, and some of them have been put to work. Some of those contributions have improved the lives of a lot of people with very little cost.

And why is it you have nothing to offer?

Joe Blackford II 6 years, 3 months ago

KBA/KSU/MRI, a group of friendly co-cospirators out to make sure the KBA has funded KSU to appear to be a "safe & secure" research center for bio-terrorism.

The Biosecurity Research Institute, aka Pat Roberts Hall, has a budget of $1M/yr, which comes out of KSU's general operating funds. Employees of the BRI are not to speak of what they do, such as twiddling their thumbs for a couple of years prior to gaining accreditation as a BSL-3 lab.

Jurgen Richt, the USDA scientist from Ames, IA, was lured to the BRI with a $1M KBA handout. The ~7 researchers from the USDA tick lab in Laramie, WY, were transferred (at taxpayer's expense) to further add credibility to the BRI. The only research to be conducted there will be dependent upon further KBA or USDA contracts.

Having the BRI is "proof" KSU could be relied upon to operate the NBAF, a BSL-4 lab (zoonotic diseases transferrable to humans with no known treatments or cures).

Joe Blackford II 6 years, 3 months ago

The National Research Council study shows there's a 70% chance that Foot & Mouth Disease will be released in the NBAF's 50-yr lifespan, at a 2008 est. cost of $5 B to cull herds within 200 miles of KSU. Ask your representatives where that FEMA money will come from? Ask the Japanese if they'll be importing US beef while the herds are culled (think Britain's Mad Cow Disease & Europe's ban).

BSL-4 research has been (supposedly) made much more secure under the heading of "dual use research," as the US Army Medical Research Institute of Infectious Diseases found their 19-year employee, Dr. Bruce Ivins, not only developed an Anthrax vaccine (for which he & 2 other USAMRIID employees received the Decoration for Exceptional Civilian Service, DoD's highest civilian honor, in 2003), but he supposedly mailed Anthrax in Sept 2001 = killing of 5 Americans & evacuating the Capitol. He committed suicide in Aug 2008, before the FBI could prove its case. The KSU Colonels, his superiors, maintain he could not have been the Anthrax Mailer. Possibly the actually successful bioterrorist will be transferred to the NBAF?

Joe Blackford II 6 years, 3 months ago

"The Dual Use Research Program is a focal point for the development of policies addressing life sciences research that yield information or technologies with the potential to be misused to threaten public health or national security."

"The NSABB is a federal advisory committee chartered to provide advice, guidance, and leadership regarding biosecurity oversight of dual use research, defined as biological research with legitimate scientific purpose that may be misused to pose a biologic threat to public health and/or national security."

Voting memeber of the NSABB include:

David R. Franz, D.V.M., Ph.D., KSU/KBA/DHS/MRIGlobabl = the KC, MO, outfit the KBA gave $200 K for the study "NBAF GOCO Strategy" (think = MRIGlobal could run the NBAF as a Govt-Owned, Contractor Operated lab; Franz runs an MRI lab for USAMRIID, his former command).

Paul S. Keim, Ph.D. (Acting Chair) = his lab was hired by the FBI to conduct cutting-edge research to prove the Anthrax Mailer used anthrax spores from Col/Dr Franz' lab, USAMRIID.

Joe Blackford II 6 years, 3 months ago

The Amerithrax investigation was the FBI's most expensive, not sure they're saying how many $ Millions.

Jobs for Kansans at the NBAF?

Not likely. "Dual Use Research" = scientists must hold a Top Secret - Sensitive Compartmented Information security clearance. Those take months, maybe years, to complete. It's more likely MRI will transfer workers from its USAMRIID lab. Plum Island's last couple of directors have been former USAMRIID military officers. USAMRIID has been moved to a much more "safe & secure" TS-SCIF campus since the 2001 Anthrax Mailings. I'm sure Plum Island's USDA researchers all had to have TS-SCI investigations, or be fired.

How about all those construction jobs?

Contractors' employees will need to have TS-SCI security clearances too. It's likely they'll be the same contractors who built the new "campus" for USAMRIID.

Evaluation of the Health and Safety Risks of the New USAMRIID High Containment Facilities at Fort Detrick, Maryland

Don't take my word for any of this. Google for yourself. Become informed. The politicians of Kansas have bought & sold us a "pig-in-a-poke" which may one day wipe Kansas agriculture off the map.

jazzfan 6 years, 3 months ago

This is so ridiculous. Brownback should be ashamed of himself. $1 million bucks for this audit?! It seems like it was more politically-motivated than anything. What's next, gold-plated toilets for the governor's mansion? How about spending money more wisely, Gov.? It's not like we're rolling in it right now.

quetzal 6 years, 3 months ago

I am not surprised that the Gov and Sen. Wagle are withholding $22 million from the KBA. Despite the results of the audit showing all investments were in good standing, with no conflicts of interest, and the financials all checking out perfectly, it would only make sense to keep questioning the organization, right? Oh wait - that's not what this is about. It's about more control under the Gov's hat. I got it now - I forget how this political game works.

Jeff Dean 6 years, 3 months ago

Sam is against anything with the word SCIENCE in it.

kso119 6 years, 3 months ago

This wasn't just an audit, this was a forensic audit and the forensic audit determined that KBA's investments were sound. KBA board chairman, Dan Watkins, stated today that the forensic audit met the administrations goals of examining all questions raised about the KBA and it's affairs. This is a witch hunt.

kso119 6 years, 3 months ago

Brownback wants the KBA so he can spread the money around like peanut butter to his friends. Thornton;s approach was much more about investments that create jobs and accountability. The forensic audit shows this. So the distinction is clear, do we want growth or Brownback's political payoffs?

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