TOPEKA Directors of the Kansas Bioscience Authority were bluntly criticized today by Agriculture Secretary Dale Rodman.
"We would not be here today if the KBA board had done their job properly," Rodman told members of the House and Senate Commerce committees in a joint meeting.
It was the second day of joint hearings by the committees since Monday's release of a 150-page audit report on the agency, which was created by the Legislature in 2004 to promote bioscience job growth.
Rodman, acting as Gov. Sam Brownback's point man, helped shape the scope of the months-long review, which is expected to end up costing more than $960,000 after the auditors, lawyers and others are paid. The audit looked at the authority's operations since its inception and auditors broadened their examination after consultations with the Governor's Office.
The resulting report has sparked a furor at the Statehouse as legislators have reviewed it and staged competing hearings with more discussions expected in the days ahead.
There already are stark disagreements among lawmakers over the audit findings or what to make of them, though the hearings have made it plain that few have read the full report.
Some legislators, mostly moderate Republicans and Democrats, quickly concluded that the audit revealed no problems at the agency that could not be blamed on former chief executive Tom Thornton.
"We paid $960,000 to recover $4,800," said Sen. John Vratil, a Leawood Republican who said he thought the audit had been a waste of time and money.
Thornton, according to the auditors, misused agency funds to pay for a trip to Cleveland for a job interview and then "scrubbed" his agency laptop of files after the audit started. They also reported on his office affair with an employee who later became his wife. The relationship helped create a "toxic environment" at the agency, they said.
Thornton, who now works at the Cleveland Clinic, has since reimbursed the authority about $4,800, covering essentially all the financial irregularities the auditors turned up.
The auditors also looked into a long list of allegations raised by lawmakers and others over the past year and concluded that the agency's finances had been well managed with close adherence to its policies and procedures.
Brownback officials and their allies in the Legislature have characterized the audit findings as scandalous and some have called for "cleaning house" at the agency.
Sen. Susan Wagle, a Wichita Republican, complained publicly that she thought the audit report had been "sanitized" before it was released.
Sen. Ty Masterson, an Andover Republican, said he was concerned that potentially serious problems were undetected by auditors because Thornton had destroyed files on his laptop and on an agency server.
Rodman told the committee he felt certain that "intellectual property" had gone missing with the files.
"There had to have been intellectual property taken," he said.
"Was that in the audit?" asked Sen. Tom Holland, a Baldwin City Democrat.
"No. They skated around that," Rodman answered, saying later after prodding by Holland: "I accept the audit. I don't accept all the statements."
Sen. Chris Steineger, a Kansas City Republican, reached for a Watergate analogy while sharing his consternation over the agency's administrative costs, which Rodman said amounted to 40 cents of every dollar invested.
KBA officials in a Dec. 28, 2011 letter to Rodman, responded to that charge - and a list of others - by saying overhead costs were 7 cents on the dollar if based on total investment commitments or about 20 cents on the dollar if based on investments actually paid.
The KBA response and the Dec. 19 Rodman letter that prompted it were both made public today at the hearing. They showed that the tensions between the administration and KBA officials preceded release of the audit report.
"I think it's obvious the governor is pursuing a scorched-earth, take-no-prisoners approach until he has control of the KBA," said KBA board chairman Dan Watkins after the hearing.
He said he was disappointed with Rodman's comments about the board, which he said "impugned the integrity and ethics of good people."
"We can't defend some of the actions of Tom Thornton," he said. But the reaction from legislators and the administration raised the danger of "wrecking a good institution. I think it's going to be difficult to find board members who would want to serve in this environment."
Rodman during the hearing said KBA had been essential to advancing the University of Kansas Cancer Center's effort to gain accreditation as a National Cancer Institute. He said it also had been key in the state's effort to get the National Bio- and Agro-Defense Facility located in Manhattan.
"It's a great system, if it's used right and managed right with the right people," Rodman told the committees.
"Ethical people," Wagle added.
Rodman later was asked by KHI News Service why the governor hadn't asked board members to resign since the administration was convinced they were a problem.
"It's now in the Legislature's hands," he said. "The governor wants to work with the Kansas Legislature and make sure taxpayer funding is used properly."
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