Editor's Note: This article was originally published on November 28, 2012, but it was updated to include corrections on November 30, 2012.

On Nov. 27, Gene Powell, the chairman of the UT System Board of Regents, announced the creation of the Task Force on Best Practices Regarding University-Affiliated Foundation Relationships. A move towards increased oversight of the appropriation of University and affiliated foundation funds is welcome. Recent controversies over compensation at UT System institutions, including the law school in Austin and the M.D. Anderson Cancer Center in Houston, demand corrective action.

Ronald DePinho, president of M.D. Anderson, came under scrutiny this summer after claims that the Cancer Prevention and Research Institute of Texas (CPRIT), a state entity charged with furthering innovation in cancer research, had awarded his institution $18 million in grant money without following its own peer review process. The bulk of the grant money went towards the Institute for Applied Cancer Science (IACS), which is headed by DePinho’s wife, Lynda Chin, and so-called “incubator projects” that would ostensibly serve earlier-stage programs.

The controversy arose following the resignation of Alfred Gilman, a Nobel laureate and CPRIT’s chief scientific officer. Gilman was outraged by the grant’s approval benefitting the project led by DePinho’s wife — the first award not subjected to both commercial and scientific review since CPRIT began. Gilman called the grant a “back door” submission, and in an email sent to top managers at CPRIT decried that as a result, “the citizens of Texas will be deceived; the integrity of science in Texas will be soiled.”

When voters approved legislation to establish the CPRIT in 2007, they expected the bond money set aside to fund research, not private business interests. That expectation is codified in the institute’s mission, which states, “All CPRIT-funded research will be conducted in state by Texas-based scientists and reflect CPRIT’s mission to attract and expand the state’s research capabilities and create high quality new jobs in Texas.”

Unfortunately, CPRIT failed in its enforcement of ethical practices in the distribution of state money. Its governing body, the 11-member Oversight Committee largely comprised of political appointees, did not fairly apply the rules of grant awarding. In bypassing appropriate oversight of DePinho and Chin, who may have had more business interests in seeing the grant approved than scientific ones, the committee compromised the integrity of its entire institution. DePinho, as a high-ranking official in the UT System, threatened the system’s reputation with his disregard for ethical procedures.

The Houston Chronicle published DePinho’s response to the criticism. In the article, he argues that the decision about how to review the IACS grant was simply a matter of opinion. He writes, “IACS is a game-changer — not a traditional research undertaking — that provides a robust pipeline for successful drug development … M.D. Anderson and Rice applied for the grant based on a request for proposals issued by CPRIT. Our final proposal presented a solid business strategy to enhance drug development and new company formation.”

But then in a live interview on CNBC, DePinho inappropriately extolled the success of his own biotech company.

DePinho said, “A company that I was involved in founding, Aveo Pharmaceuticals, one of the more successful biotechs … has exploited science driven drug discovery and it’s about to announce, or  has announced already publicly, and it will present in detail at ASCO, a very effective drug that has a superior safety profile for renal cell cancer, a major unmet need. So these are massive advances in our ability to do something about a disease that has long been very refractory.”

In a subsequently issued apology, DePinho wrote, “I am a public official in a position of trust, and I should never comment on any of my personal holdings or give investment advice.”

DePinho’s actions demonstrate the need for better oversight and serve as a warning for the rest of the UT System to remain vigilant. The M.D. Anderson episode exposes the real possibility of large-scale scandal. If the University wishes to remain at the forefront of cancer research, it must remain legitimate in the public’s eye. Just as the Livestrong Foundation was forced to sever ties with Lance Armstrong in the interest of remaining a credible player in the battle against cancer, the UT System must distance itself from these muddled affairs by taking corrective action and moving forward. The creation of the task force was a necessary step, although further disciplinary action against DePinho should be explored.

The resignation of Gilman, a  prestigious scientist, could have been avoided. It is imperative that UT take serious, direct action to avoid similar missteps in the future. The implementation of the highly anticipated medical school in Austin should not be sullied by a similarly egregious lack of oversight.

This article has been corrected to address the following: The original Nov. 28 article misspelled Ronald DePinho's name, and incorrectly said that M.D. Anderson was awarded a $20 million grant. The amount was $18 million,  not $20 million. The Nov. 28 editorial incorrectly said the $18 million grant went towards the formation of the Institute for Applied Cancer Science. The grant was intended to go towards, not towards the formation, of IACS. The editorial incorrectly stated that the IACS was a commercial enterprise. The incubator proposal was a commercial enterprise, not the IACS.