State probe of University of Utah operations likely after Huntsman Cancer Institute upheaval

State officials are likely to probe operations within the University of Utah in the aftermath of the firing and reinstatement of Mary Beckerle as CEO at the Huntsman Cancer Institute.

Utah House Speaker Greg Hughes said late Tuesday that lawmakers already had reason to look into the U. after reports of a donation by billionaire physician Patrick Soon-Shiong that was subsequently paid back to one of Soon-Shiong's companies.

But those concerns were magnified, the Draper Republican said, by the "unfair treatment" of Beckerle and turmoil at the Huntsman Cancer Institute over the past week.

"I hold her in high regard and have witnessed, just as a bystander, the kind of personal interest she takes in the patients at the Huntsman Cancer Institute," Hughes said.

Beckerle was reinstated Tuesday after being fired via email a week before, reportedly with no stated reason. In announcing her return, U. President David Pershing said she would now report directly to him, instead of Vivian Lee, CEO of U. Health Sciences.

In March, a report by the news organization STAT revealed that billionaire philanthropist, biotechnologist and surgeon Soon-Shiong had donated $12 million to the U. in 2014 through his charitable foundations.

But a contract outlining terms of the $12 million gift led to the bulk of the funds — $10 million — being paid to NantHealth, a subsidiary company founded by Soon-Shiong.

Soon-Shiong has denounced the reports as "false." But the arrangement was questioned by tax experts, while a NantHealth representative argued that U. researchers were free to choose any company that would comply with the genome sequencing standards outlined in the $12 million gift.

Lee praised Soon-Shiong's donation at the time, noting the businessman's commitment to advancing worldwide health.

Jon Huntsman Sr., whose charitable giving helped found the Huntsman Cancer Institute, has publicly blasted Pershing and Lee over Beckerle's termination, while alluding several times to Lee's role in the Soon-Shiong deal.

Huntsman said Tuesday that his family's desire for Beckerle and the Huntsman Cancer Institute to report directly to Pershing, rather than to Lee, was not related to Soon-Shiong's donation.

But he added that individuals in the health care industry had assumed Beckerle's removal was related to lingering questions from the NantHealth payments.

"[Beckerle] didn't know anything about it," Huntsman said of the Soon-Shiong donation. "As we all know, there was absolutely no cause" for Beckerle's firing.

Lee has repeatedly declined to comment to The Salt Lake Tribune.

On Monday, before Beckerle's reinstatement, state Auditor John Dougall said he, too, was curious about the situation at the U.

He said that an audit could be warranted in the future.

"We haven't identified anything we specifically need to look at, at this point in time," Dougall said. "But we'll continue to gather information that people might have to determine whether there is something that is appropriate for us to go look at or not."

Hughes said the backlash over Beckerle's removal highlights the blurry dividing lines between the U. and the institute. The speaker said he was surprised and unaware that school administrators could unilaterally fire the center's director and CEO.

"I did not know that was possible," Hughes said. "I think that was concerning to me."

In announcing Beckerle's return, Pershing said the U. would also draft a new memorandum of understanding on the relationship between the U. and Huntsman Cancer Institute.

No investigation or audit has been requested by lawmakers, Hughes said. But he added that inquiry by the Legislature is likely, either through conversation with administrators or potentially a formal review.

"There are ways that we can look before we leap," he said. "Before we jump into something like an audit, we ought to be asking some important questions."

bwood@sltrib.com

Twitter: @bjaminwood