The May Report: 4/15/2011: Bulletin: Announced at 11:05am this morning: Tom Thornton has resigned effective immediately from the Kansas Bioscience Authority! To be replaced by David Vranicar who has headed up Heartland BioVentures, a division of the KBA. The investigations will continue, my sources indicate and who knows if Tom will be indicted or do time; And on a personal note, Tom, that was very nice of you to think of me on my birthday, a very nice present — how thoughtful of you! Let’s see: That’s Weinstein, Thornton and next to go, Howerton…

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TABLE OF CONTENTS

The Scoop section:

– Thornton out as Kansas Bioscience Authority CEO
– Senator accuses Bioscience Authority of shipping tax money out of state; agency chairman says program good for Kansas. A state senator leading a legislative investigation of the Kansas Bioscience Authority accused it of shipping million of tax dollars out of state, while the chairman of the authority and the head of its venture-capital program said it has generated millions of dollars of investment in Kansas business.

[Editor's note: May here. I'm not going to deny it. I can't say that this news makes me sad. Quite the opposite, but nonetheless, I like Tom. Clearly mixed feelings. He is a talented guy but he knows no limits. Watch this video and you will see part of the problem.

There have been only 117 views of this video as of a few minutes ago. But that should change.

On a purely intellectual level, Tom is making the same case that the VCs in Illinois make. Don't restrict our investment decisions to the state. But for Tom to be telling VCs in another state that they have no restrictions, that they can do with the KBA what they want, that the KBA must make the case for investing in Kansas firms even if it is the taxpayers of Kansas who are funding the deals -- well, to put it mildly, that can become and has become a political minefield.

If all the other things had been in order, if Tom had not been doing sweetheart deals, if the had not been giving money to his friends, etc., then such an argument might have the room to germinate and grow. But it was as I understand a direct contradiction of the statutory and legislative authority that created the KBA, and along with all the crap that went on, it is deadly. Much more to come, but I wanted to get this out.

In the YouTube video, Tom says that three of the eight venture firms they are committed to have offices in Kansas. The argument on the part of the folks in Kansas, like former governor Carlin, is that they have tried to attract venture money for years and they can't be too demanding. But that argument does not have much heft in tough times for state budgets. And when they fund an ethanol plant in St. Joseph, MO. instead of in Kansas, no wonder people are upset.]
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The Scoop section:
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Thornton out as Kansas Bioscience Authority CEO

www.bizjournals.com/wichita/news/2011/04/15/thornton-out-as-kansas-bioscience.html

Thornton out as Kansas Bioscience Authority CEO

Wichita Business Journal

Date: Friday, April 15, 2011, 11:05am CDT – Last Modified: Friday, April 15, 2011, 11:19am CDT

Tom Thornton of the Kansas Bioscience Authority speaks to the Rotary Club in Wichita. Thornton submitted his resignation Friday.

Further Reading
Kansas Bioscience Authority subject of criminal investigation
Kansas Bioscience Authority agrees to audit
Kansas Bioscience Authority picks BKD for forensic audit

Related News
Kansas Bioscience Authority picks BKD for forensic audit
Kansas Bioscience Authority agrees to audit
Kansas Bioscience Authority subject of criminal investigation
Lawmaker: Kansas Bioscience Authority ‘irrationally exuberant’ in spending
Kansas Bioscience Authority spends excessively, needs more oversight, lawmaker says
Thomas Thornton has resigned as president and CEO of the Kansas Bioscience Authority, the organization announced Friday.

KBA Chairman John Carlin said in a statement that effective immediately, David Vranicar has accepted the position of interim president and CEO. Vranicar has been leading the authority’s Heartland BioVentures division.

The resignation comes at a tumultuous time at the bioscience authority. The agency has come under scrutiny for issues related to its executives’ salaries, and it recently has become the subject of a criminal investigation.

Carlin’s statement makes no mention of the investigation.

Here’s more from Carlin’s statement, followed by a letter Thornton submitted to Carlin:

“The state can be rightfully proud of the organization Tom helped build. He assembled and guided a stellar team of professionals who represent an innovative, independent agency that is envied by many other states across the nation. Tom will remain in contact, which will be helpful to us in the transition process. We are grateful for his service and wish him well in his future endeavors.

“Effective immediately, David Vranicar has accepted the position of interim president and CEO. David had been the president of the Authority’s Heartland BioVentures division. He is uniquely qualified to guide the Authority and has demonstrated steady leadership within the organization since he joined the KBA in 2009. Vranicar earlier led the development of the initial comprehensive financial and business plans for the University of Kansas Cancer Center and worked at Marion Laboratories on numerous product licensing, joint marketing, and business development initiatives. Vranicar has a wealth of corporate development and operational experience in technology-based businesses.

“The KBA has accomplished a great deal over a relatively short amount of time. Just yesterday, Congress approved $40 million to fund the next phase of the $650 million National Bio and Agro-Defense Facility (NBAF) in Manhattan, Kansas. NBAF will be a major economic driver for this region and the State of Kansas. NBAF’s economic impact on Kansas will be significant, estimated at up to $3.5 billion in the first 20 years of the facility’s use. KBA investments have created 1,195 new jobs; $79.5 million in new wages; $212.6 million in new capital investment; $86.6 million in new research funding and $48.3 million in new equity investments-a $9 return for every dollar invested. With David assuming this leadership role, we have every confidence the agency will continue its trajectory in a seamless and transparent manner.

“We appreciate the support of Kansas Governor Sam Brownback, the Kansas Congressional delegation, the state legislature and our many strategic partners. We remain firmly focused on expanding our state’s research capabilities, promoting innovation, and encouraging company formation that will create high-paying jobs for generations to come.”

Here is the resignation letter from Thornton:

Dear Governor Carlin,

I am writing to offer my immediate resignation as President and CEO of the Kansas Bioscience Authority (KBA). I am willing to serve in my current capacity until a mutually agreed upon date and committed to working with you, the KBA board of directors and staff to ensure a smooth leadership transition.

It has been an honor and a highlight of my career to work with you and serve the KBA board and the citizens of Kansas. In four short years, we have realized the vision of the Kansas Economic Growth Act. Your conduct, in particular, has been a model of public sector governance and your actions will contribute to the state’s prosperity for years to come.

Even in this challenging economic environment, Kansas’ research base continues to expand exponentially. Under your leadership, we unified the state and won a major federal lab, positioning Kansas as an international center for animal health research and innovation. Kansas is now widely recognized as a national leader in other key bioscience clusters, like drug discovery and bioenergy. Our Heartland BioVentures initiative is helping Kansas entrepreneurs develop cutting edge products to fight cancer and address other health care challenges. Leading international companies and distinguished researchers are moving to Kansas. In addition, nationally recognized venture capital firms have established operations in Kansas and already have invested in our state.

The KBA is hailed across the country as a model for bioscience development and the envy of other states. Governor Carlin, you and your leadership, along with the rest of the board, have been the key to this success. In addition, your commitment to an open and transparent organization has made the KBA not only good stewards of public funds but also stewards of the public’s trust. Thank you for your guidance, direction, passion and support. I could not have hoped for a better experience. I wish you and the KBA staff all the best.

Ad astra per aspera,
Thomas V. Thornton

Read more: Thornton out as Kansas Bioscience Authority CEO | Wichita Business Journal
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Senator accuses Bioscience Authority of shipping tax money out of state; agency chairman says program good for Kansas. A state senator leading a legislative investigation of the Kansas Bioscience Authority accused it of shipping million of tax dollars out of state, while the chairman of the authority and the head of its venture-capital program said it has generated millions of dollars of investment in Kansas business

blogs.kansas.com/gov/2011/04/12/bioscience-authority-chairman-defends-hiring-auditor-without-governors-ok/

Senator accuses Bioscience Authority of shipping tax money out of state; agency chairman says program good for Kansas. A state senator leading a legislative investigation of the Kansas Bioscience Authority accused it of shipping million of tax dollars out of state, while the chairman of the authority and the head of its venture-capital program said it has generated millions of dollars of investment in Kansas business.

Wagle
Sen. Susan Wagle, R-Wichita, issued a news release linking to a YouTube video www.youtube.com/watch?v=gOqNg1dpddc&feature=youtu.be in which the authority’s chief executive officer, Tom Thornton, appears to assure attendees at a Wisconsin economic development conference that they do not have to invest in Kansas to obtain investment money from the authority’s Heartland BioVentures division.

“There’s no geographic restriction here,” Thornton said in the video. “We didn’t require these (venture capital) funds to actually invest in Kansas. I’ll say that very slowly. There’s no restriction whatsoever.

“The bet is that Heartland BioVentures can … develop and present credible investment opportunities to these venture funds that will effectively be superior to and command more capital than whatever they would have gotten from some other region.”

Wagle said Thornton’s comments and policy “are in direct opposition to the intent of the Legislature in creating the authority. Our goal is to create new jobs and foster economic growth in Kansas, not Illinois, not Wisconsin, and not any other state.”

She also said Thornton’s choice of words shows a cavalier attitude toward about $50 million in public funds – a little less than one tenth of the money the state has committed to the authority’s mission of making Kansas a center for biotechnology research.

“He calls it a ‘bet,’” Wagle said. “That’s a heck of a gamble with taxpayers’ money.”

Carlin
Thornton was unavailable for comment, but authority board Chairman John Carlin and David Vranicar, the president of Hearltand BioVentures, defended the agency’s use of capital investments and said Wagle doesn’t appear to understand the plan and how it benefits the state.

Vranicar said that in 2009, the authority board authorized BioVentures to invest as much as $50 million with eight venture-capital firms from around the country.

To get the money, the firms had to meet a list of conditions, including that they supply at least five times as much investment capital themselves as the amount they get from the state; they have to open an office in Kansas and they have to agree to make a good-faith effort to seriously consider investing in Kansas businesses.

The authority then works as a kind of matchmaker between the venture capital firms and emerging Kansas businesses that need investors to fund their plans.

Of the original eight venture capital firms identified, three carried through and gained commitments from Heartland BioVentures for a total of $20 million.

Together, the three firms have invested about $22 million in Kansas businesses since the beginning of 2010, Vranicar said. That amount is expected to grow as the venture capital firms are exposed to more Kansas business and research opportunities, he said.

Vranicar and Carlin both said the authority had to go out of state to attract the venture capitalists’ interest in Kansas, because the lack of such firms in the state holds back young businesses with ideas to develop.

Carlin, a former governor, said he had been trying to spur venture capital firms to get interested in Kansas since the mid 1980s.

Also today, Carlin defended his board’s decision to go forward with hiring its own auditor to look into alleged financial irregularities at the authority, despite demands from Wagle and Gov. Sam Brownback for a more independent selection process.

Carlin said that if there are problems in the agency – and he’s not yet convinced there are – it’s the board’s responsibility to uncover and deal with them.

“We as much as anybody want to get to the bottom of it,” he said.

The authority is currently under a criminal investigation by the Johnson County District Attorney’s Office and a legislative investigation by members of the Senate Commerce Committee that Wagle heads.

District Attorney Steve Howe has not revealed the basis for his probe, but lawmakers have questioned the authority’s salary and bonus structure, its overall spending, its travel, its investment strategies and the hiring of employees and consultants with ties to the agency’s chief executive officer, Tom Thornton. Authority officials have denied any wrongdoing.

On Monday, the authority sent a letter to the governor, legislative leadership and prosecutors, informing them that the agency had retained BKD LLP, a national accounting and investment counseling firm, to conduct a “forensic” audit of operations.

A forensic audit is generally defined as a detailed examination of an organization’s financial activities, designed to produce a report that can be used in a court of law.

The authority has undergone annual, but less detailed, financial audits since it was formed by legislative action in 2004. Those audits have not uncovered any wrongdoing by the agency, officials have said.

Both the governor’s office and Sen. Susan Wagle, the chairwoman of the Commerce Committee, panned the authority board’s decision to go forward with an audit on its own.

Brownback had requested that he and Attorney General Derek Schmidt select the auditor and determine the scope of the investigation.

Wagle called the authority’s decision to hire its own auditor “a PR stunt,” saying it puts people who should be investigated into position to influence the investigation.

Carlin replied today that those concerns are groundless. He said the full board voted to hire an auditor and he personally selected BKD with advice from legal counsel.

“Staff had no involvement whatsoever,” he said. The authority will “work directly with the governor and legislative leaders” and the audit firm will investigate any allegation they choose to bring, he added.

He said BKD is the same auditing company used by the National Center of Innovation for Biomaterials in Orthopaedic Research, a consortium sponsored by Wichita State University and Via Christi Health that is seeking to commercialize medical use of advanced composite materials developed in the university’s aerospace research labs.

Lawmakers began looking into the operations of the Bioscience Authority after CIBOR scientists complained the state agency was shortchanging them on a five-year, $20 million research funding commitment. Authority officials have said they never promised CIBOR that much money.

In correspondence to the authority, Brownback said sees CIBOR as a must-fund item for the agency, along with the National Bio and Agro-Defense Facility under development at Kansas State University in Manhattan and the National Cancer Center at the University of Kansas in Lawrence.

“Make no mistake – these three initiatives should, must and will be supported, advanced and realized,” the governor wrote in his letter to authority and university officials.

The authority is funded with a 15-year, $580 million commitment of taxpayer money. Although it is subject to public disclosure laws, its operations and records do not fall directly under gubernatorial nor legislative supervision.

The original legislation creating the authority gave its board broad independent powers and a mandate to operate more like a private business than a government agency.
By Dion Lefler Posted April 12, 2011 at 12:53 p.m. Filed under Uncategorized
Permalink « East Wichita had best voter turnoutIntrust Bank Arena gives Sedgwick County a $1.1 million check »
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ganttdk 2 comments collapsed Collapse Expand
If Carlin wants to run KBA as a private business then the KBA shouldn’t take public money.
A Like Reply 04/12/2011 01:32 PM 5 Likes F
Hemogoblin 1 comment collapsed Collapse Expand
Heck, I wish more agencies were run like a private business. Instead of a bunch of chair moisteners that can never be fired.
A Like Reply 04/12/2011 01:39 PM in reply to ganttdk 1 Like F
Value 2 comments collapsed Collapse Expand
Brownie’s last PORK add-on was for the KBA while he was a Senator. I believe it was $50 Million, no strings, no accountablity.
A Like Reply 04/12/2011 01:47 PM 3 Likes F
IchabodHornetJayhawk 1 comment collapsed Collapse Expand
Mh best guess is they want a Koch sponsored director…nothign more, nothing less.
A Like Reply 04/12/2011 08:24 PM in reply to Value 2 Likes F
DevilsAdvocate 2 comments collapsed Collapse Expand

www.bkd.com/media/News/...

And DevilsAdvocate “said BKD is the same auditing company used by” KU which failed to find that Kassie Liebsch, KU ticket systems analyst since 2005, was involved in the “ticket scandal.”

Then the brains @ KU promoted Liebsch to manager of the KU ticket office. Before the Feds pointed out she helped set up the scandal, Liebsch plead GUILTY & was sentenced to 37 months.

Way to go Carlin, an experienced teat-puller if there ever was one!

I’m guessing there’s a small circle of KBA/NISTAC/KSU/NBAF teat-sucklings* who have spread this falsehood about the NBAF being safe . . .

* suckling = an unweaned Kansan who plans to make a fortune off NBAF.

A Like Reply 04/12/2011 02:05 PM 6 Likes F
Tippycanoe 1 comment collapsed Collapse Expand
He is protecting the person he installed to run the show. As someone said the appointment of the auditor is a PR stunt.
A Like Reply 04/12/2011 08:31 PM in reply to DevilsAdvocate 2 Likes F
Politico 1 comment collapsed Collapse Expand
If they have nothing to hide what are they afraid of?
A Like Reply 04/12/2011 03:22 PM 7 Likes F
cooperpete 4 comments collapsed Collapse Expand
Hmm…Former Democratic Governor Carlin is head of this organization, and he’s getting flack from Brownback and Wagle…this investigation smells fishy!
A Like Reply 04/12/2011 04:02 PM 0 Like F
ganttdk 3 comments collapsed Collapse Expand
And the CEO is Tom Thornton a Republican. I think in these hard time we need to be questioning where every public dollar is spent. The KBA’s attitude of they are a private company goes against the fact they are funded with our taxes.
A Like Reply 04/12/2011 04:15 PM in reply to cooperpete 4 Likes F
cooperpete 2 comments collapsed Collapse Expand
OK, but if it’s determined that the KBA is clear and Wagle is wrong, she should be voted out because she will have destroyed the credibility of the agency. Of course Wagle creates problems everywhere she shows her head and the voters keep electing her, so I’m not hopeful.

In response to your comments, what do you mean by “attitude”? And wasn’t this agency created to operate in this manner and funded by our Republican Legislature??
A Like Reply 04/12/2011 07:56 PM in reply to ganttdk 0 Like F
Tippycanoe 1 comment collapsed Collapse Expand
If KBA is “clear” how in the world can their credibility be destroyed. Perhaps Bronwback and Wagle but not KBA. I wouldn’t book a bet on KBA just yet.
A Like Reply 04/12/2011 08:29 PM in reply to cooperpete 0 Like F
Herodotus 2 comments collapsed Collapse Expand
John Carlin is an honorable man, as well as someone you can rely upon to do a job well. As I see it, he is attempting to address the questions that have been raised in a reasonable, proper fashion, while, at the same time, maintaining the independence of the KBA from outside interference. It is best for Kansas that this todo be settled soon and without damaging the KBA, which has an important role to play in Kansas’s economic future.
A Like Reply 04/12/2011 04:08 PM 0 Like F
DevilsAdvocate 1 comment collapsed Collapse Expand
NIce line of KBA manure, as in KSU can safely run the NBAF, based upon the security protocols utilized by the KSU Colonels who enabled their employee, Dr. Bruce Ivins, to become the ONLY SUCCESSFUL BIO-TERRORIST on U S soil = THE ANTHRAX MAILER.

Google: Ivins Franz NBAF & you’ll find there’s been a long coverup of the collusion between KSU, KBA & Midwest Research Institute (now MRIglobal).

You telling us that Carlin didn’t know Dr. Franz, a fellow KBA board member, was Dr. Ivins’ commander w/lax safety & security protocols?

Franz spends KBA $ while VP of MRI = ethical violation in my books, since MRI is a USAMRIID contractor (Franz’s former command) & has plans to become an NBAF contractor. KSU’s NISTAC got $ from KBA & has given MRI offices@ its HQ. How many conflicts of interest does Carlin allow/board member?

DEVILSADVOCATE IS NO HERODOTUS . . . . .

Herodotus has sometimes been labeled ‘The Father of Lies’ because of his tendency to report fanciful information.
A Like Reply 04/12/2011 08:12 PM in reply to Herodotus 1 Like F
IchabodHornetJayhawk 1 comment collapsed Collapse Expand
This whole Bioscience controversy is the Right wing Christian element’s effort to stop research that might be against their religious views, such as stem cell research or research in to possible environmental causes to warming or damage to our environment. It is their anti science, pro creationism theology that for them is at stake if we fund science research. They would far rather our state not be in the forefront of science. Creating cures for illness, understanding our world and possibility helping humankind to them must always take a back seat to their narrow understanding of God. I guess they cannot accept that God created scientists and to God, every thing under heave has a purpose. Guess they have not fully read all the Bible themselves. Heck, I thought months before he got elected he and Senator Roberts fought pretty hard for the Federal Government to choose Kansas, specifically K-State, to be the selected center. You have gone a long way, Sam…down.
A Like Reply 04/12/2011 08:21 PM 3 Likes F
joady_guthrie 1 comment collapsed Collapse Expand
John and Tom appear to be faux ‘blues bros’ as they seem to ‘think’, they ‘are on a mission from God’.

Recently Tom was invited to appear before committee at the Statehouse, he was unavailable as he was with his kids on spring break. I am certain that lots of people were working when they would have liked to be on holiday. As Tom is an employee of ‘we the people’, he needs to start behaving like an employee as opposed to someone that holds themselves above the rest of us.

Carlin likes to refer to KBA staff with ‘rare skills’, ‘special talents and experience’, etc. Did they actually create jobs for Kansans or are the KBA staff just a bunch of overpaid carpetbaggers? Surely there are capable audit firms in Kansas. Why go out of state?

Carlin is a former dairy farmer and he knows all to well how to milk the system. He also has vast expertise in how to choose betwen heifers and cows.

NBAF is a PORK barrel and should be kept on Plum Island.
NBAF is an accident waiting to happen!

KBA promises hi-tech, high paying jobs. At what cost? And how much corruption, greed and pollution go with it?

There are much easier ways to create real jobs for real people than to waste tax dollars. The average Kansan would very much appreciate a good job based on real world values and sustainability.
A Like Reply 04/12/2011 11:09 PM 1 Like F
rustymutt 1 comment collapsed Collapse Expand
Can someone just fire this Tom dude? He’s as arrogant as it gets and needs to go.
A Like Reply 04/13/2011 09:08 AM 0 Like F

Read more: blogs.kansas.com/gov/2011/04/12/bioscience-authority-chairman-defends-hiring-auditor-without-governors-ok/#ixzz1JZDs7wro
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