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AUSTIN, Texas (Reuters) - The Texas cancer research institute championed by Lance Armstrong is in crisis, with a criminal investigation under way and state lawmakers moving this week to dramatically slash its funding.
As Armstrong's troubles mount over his reported admission to Oprah Winfrey of doping during his cycling career, the unraveling of the Cancer Prevention and Research Institute of Texas he helped establish is another setback.
The nation's second largest source of cancer research money behind the National Institutes of Health, the Texas institute is under fire for approving millions of dollars in grants without properly reviewing applications.
The institute's problems are unrelated to the disgraced cyclist. Republican state Representative Jim Pitts said Tuesday that the institute is a separate entity from Armstrong.
"He was just a big part of it," Pitts said. "He was a good advertiser for that and promoter."
Armstrong, who survived testicular cancer, in 2007 lobbied at the Texas Capitol and hit the campaign trail on a bus dubbed "Survivor One" to urge Texas voters to support bonds for a $3 billion cancer research initiative.
The measure established an institute to distribute up to $300 million in grants a year for 10 years. Voters approved the bonds and state officials say that, by last month, the state's cancer institute had awarded more than 500 grants, funded 11 companies seeking to fight cancer and attracted dozens of scientists to Texas.
The bonds were a highly unusual way to fund ongoing expenses in Texas, said Eva DeLuna Castro, a senior budget analyst at the Center for Public Policy Priorities in Austin. But the plan pushed by Armstrong and Republican Governor Rick Perry "was going to make Texas the showcase of the nation," she said.
At the 2007 election-night victory party at an Austin hotel held by supporters of the cancer initiative, a side-show featured photos of the famous cancer survivor and cycling champion signing autographs for children.
Armstrong has since been stripped of his seven Tour de France titles and the cancer research institute has been told by state leaders to stop issuing grants.
The institute's trouble surfaced last year. In May, its chief scientific officer, Nobel laureate Dr. Alfred Gilman, announced he was resigning, taking issue with a $20 million grant that was not reviewed by science experts, according to the Dallas Morning News.
The institute disclosed in November that it made an $11 million award to a company called Peloton Therapeutics without giving the application a required scientific review, the newspaper reported. The institute's executive director, Bill Gimson, resigned in December.
The Travis County District Attorney's Office has launched a criminal probe of the institute, said Gregg Cox, director of the public integrity unit. Texas Attorney General Greg Abbott has opened a civil investigation, according to a letter from his office.
"Hopefully we can get this agency straightened out," said Pitts, the likely chairman of the state House Appropriations Committee.
The biennial Texas legislative session began this month and draft versions of the two-year budget issued by the House and Senate this week set aside $10 million for the agency, down from nearly $600 million in the previous two-year period.
Pitts said that was because Perry and other state leaders in December called for a moratorium on cancer grants until concerns about the organization are addressed. State budget writers are likely to give the agency more money before the end of the legislative session, which continues through May, Pitts said.
The draft budget proposals "reflect the Legislature's concern and its need for assurance that this agency has firm controls in place so that state money is used as intended," institute interim director Wayne Roberts said.
State Senator Jane Nelson, a Republican author of the legislation that created the institute, said she is concerned that the proposed funding cuts send the wrong message and could jeopardize the work Texas has done to let the world know it is funding cancer research.
"We need to continue to fund that project. It's too important," she said.
Nelson said she will be watching the Winfrey interview with the man who worked behind the scenes to personally coax the project through obstacles.
"Whatever's going on with the bicycle stuff, Lance Armstrong has done tremendous things to raise money and focus attention on cancer," Nelson said on Tuesday. "I still am very grateful for him."
Reporting By Corrie MacLaggan. Editing by Andre Grenon