Politics & Government

Kansas Bioscience Authority officials' raises, bonuses scrutinized

TOPEKA — While most state workers face salary freezes and pay cuts this year, the Kansas Bioscience Authority will give all its employees raises.

Agency documents show that every employee who worked for the KBA for all of fiscal 2010 will make 4 to 15 percent more in 2011.

A number of employees also received large bonuses in 2010 — in addition to a pay structure in which 12 of the 21 employees make $100,000 or more a year.

Agency documents also show that the KBA has spent substantial sums on travel, lodging and meals.

The Senate Commerce Committee requested the KBA's pay and expense records and has called for an audit of its finances.

But the KBA's pay scale has some influential defenders — including a former governor and Republican and Democratic leaders in the House and Senate — who say the state has to pay top dollar to get top talent and maximize return on its investment in biosciences.

Top raises

Of the eight employees who worked through the 2010 fiscal year and remain with the agency, the biggest raise in base salary, both in dollars and percentage, went to Bradley Kemp of the KBA's cancer project.

His salary rose from $109,324 in fiscal 2010 to $126,000 for 2011, an increase of $16,676 or 15.2 percent, the documents show.

The next-largest raises, $15,000 each, went to CEO Thomas Thornton and chief financial and operating officer Janice Katterhenry.

Thornton's base pay went up from $250,000 to $265,000, and Katterhenry's from $160,000 to $175,000. It was a 6 percent increase for Thornton and 9.4 percent for Katterhenry.

Lindsay Thornton, the KBA's director of special projects and Thornton's wife, also got a 5.5 percent raise — $5,625 — from $101,875 to $107,500.

Except for Kemp, all received bonuses in 2010, led by Thomas Thornton's $100,000. Katterhenry got $24,000, and Lindsay Thornton got $5,000.

Other employees' 2011 raises were in the 4 to 6 percent range.

Commerce Committee Chairwoman Susan Wagle, R-Wichita, called the salaries and raises "very flagrant in a time of need," as state government is working on deep cuts to close a budget gap estimated at nearly $500 million in 2012.

The House has passed a bill to freeze most employees' pay for the rest of this fiscal year, with 7.5 percent cuts for legislators, department heads, judges and most other employees who make more than $100,000.

Wagle and other lawmakers, primarily from the Wichita area, began investigating the KBA's spending on salaries, benefits, travel and entertainment after scientists at the Wichita State University Center for Innovation in Biomaterials for Orthopaedic Research complained they had been shortchanged on the KBA's support for their work.

CIBOR is working to find medical uses for composite materials developed for the aircraft industry.

Lawmakers have said the KBA promised CIBOR $20 million over five years; Thornton has said his agency didn't commit to any funding beyond a first-year grant of $4 million.

Who sets salaries

The KBA board sets the salaries for Thomas Thornton, Katterhenry and David Vranicar, president of the agency's Heartland Bioventures subsidiary. Thornton sets salaries for the rest of the agency's employees, he said.

The board paid $26,535 to Chicago-based Buck Consultants to help guide its decisions on executive compensation.

The consultant surveyed 17 similar nonprofit organizations, and Thornton's pay was set at the 75th percentile for the comparison group, according to agency testimony.

Former Gov. John Carlin, the KBA's board chairman, said that's the right pay for the job the state's expecting.

"We recognized... that in order for us to do a good job with what you've given us the opportunity to do, that we had to pay salaries to attract the talent and retain the talent to get the job done," he told the committee.

He said Thornton's experience doing similar work for Illinois, and contacts he gained as an aide to former U.S. House Speaker Dennis Hastert, were key to Kansas landing the National Bio- and Agro-Defense Facility, a $650 million federally supported counter-terrorism lab to be built in Manhattan.

Thornton had a similar explanation for the salaries he sets.

"If you're going to grow the biosciences, you need really capable, talented people," he said. "You need doctors, you need people who have been in pharmaceuticals, you need people with Ph.D.' s after their names."

The KBA claims that for every dollar the state invests, more than $9 come back to Kansas in economic activity.

According to the agency's testimony, the KBA committed $217 million to projects and spent $45.4 million through June 2010. The results include 1,195 new jobs, $212 million in capital investment and $86.6 million in new research funding.

"I just think we're seeing the very beginning, the kind of tip of the economic iceberg that's coming along because of what the KBA has done in the last few years," Thornton said. "We're going to see now when these researchers come in, they bring students, they attract companies, they get additional dollars, federal money flows in and suddenly you've got a dynamic like you have in Silicon Valley and in San Diego and in Research Triangle Park (North Carolina) and Route 128 (Massachusetts). I think that's an investment in the future that this Legislature has made and that we can all be proud of."

Other expenditures

Carlin also defended other expenditures that Wagle and her committee members questioned.

Last year, the KBA spent $85,068 on travel and meetings, and $184,939 for marketing, according to its written committee testimony.

Committee members questioned some of the expenditures, including $2,445 for limousine rentals for a legislative tour and a $1,014 stay at a Ritz-Carlton hotel in Key Biscayne, Fla.

"We approve that level (of spending) if it's appropriate for what's being done," Carlin said. "We deal with those who travel in those circles and consequently from time to time, yes, we have to do something that a lot of us Kansans, including myself, would say, 'Yeah, you know, that's a little beyond what should be necessary.' But the reality is we want to be successful, continue to grow even beyond the success we've had with the opportunity you've given us."

He said the board doesn't want to get in a position of having to say "we're not getting the return, we're not getting the investment, but we saved a lot of money because we cut it tight."

Four legislative leaders — Senate President Steve Morris, Majority Leader Jay Emler, Minority Leader Anthony Hensley and House Minority Leader Paul Davis — held press conferences Friday to praise the KBA and express concern that controversy over spending could jeopardize the national biolab project.

Wagle was unconvinced.

The committee has requested a legislative audit of the KBA, and Wagle said she wants a detailed review that includes individual receipts. Spending records provided so far have been listed in summary form with few details attached.

"We oversee money," Wagle said. "We care about how taxpayer dollars are spent. And the taxpayers care about how it's spent. They don't want it spent frivolously.

"We want the Bioscience Authority to be successful and we want to continue, we want to grow from here," she added. "But there's some problems here. There's some things the taxpayers see as lavish. The expenses are lavish, the dining is lavish, the salaries are lavish, the bonuses are lavish, and we're here cutting budgets."