Assemblyman, Wife Cleared in Probe of Lupus Organizations

The state attorney general has found nothing improper in the handling of finances by two lupus research organizations, one of which is headed by Assemblyman Tom Bane (D-Tarzana) and the other by his wife, Marlene.

Yeoryios Apallas, a deputy attorney general who oversaw the investigation, said Wednesday there was no misuse of funds by either the National Lupus Erythematosus Foundation, a nonprofit organization headed by Bane, or the three-member state Lupus Appropriations Board, on which Marlene Bane serves as chairman.

But Apallas said the attorney general’s office has asked Bane to dissolve the foundation because it “has been inactive for some time now” and to distribute the remaining funds, more than $200,000, to lupus research. Bane said Wednesday that he is dissolving the foundation.

Bane said he was pleased but not surprised by the conclusion of state officials who examined the records of the foundation, which was founded in 1957.

The attorney general’s office is responsible for ensuring that funds raised by nonprofit groups are used for their stated purpose. Prosecutors were prompted to launch the investigation in June after receiving a letter from Dr. Daniel J. Wallace, a medical adviser to the American Lupus Society’s Southern California chapters and the Lupus Foundations of America.

Wallace maintained that Bane’s foundation “provides no services for lupus patients, supports no ongoing research and has no speakers program.” In addition, people listed as board members said they had not been contacted for a meeting or other foundation matters in more than a decade.

Apallas said that as of now, only Bane and his wife, Marlene, are serving on the foundation’s Board of Directors. He said the attorney general’s office has recommended that Bane fill a majority of the seats on the board before final decisions are made on disbanding and distributing the remaining funds.

Wallace had also challenged the propriety of $801,473 in grants that the three-member state Lupus Appropriations Board made to Dr. Raymond L. Teplitz, a longtime friend of the Banes and a contributor to the lawmaker’s campaign committee.

Apallas said there was “no misuse of funds” in connection with the grants to Teplitz. He determined that Teplitz is an “able, conscientious researcher who did top-quality work” on lupus. Teplitz was not available for comment.

In a suit on behalf of taxpayers, lupus support groups in June charged that more than $1 million in state funds appropriated for lupus research has been illegally diverted to non-lupus projects. The suit against Bane, his wife and other members of the Lupus Appropriations Board is pending in Superior Court in Van Nuys, according to Debra Wegman, a lawyer for the lupus groups.

Wegman questioned whether Teplitz conducted lupus research, saying, “It’s a little difficult for me to accept that there was no impropriety when $800,000 in Lupus Appropriations Board money went to cancer research.”