Sunday, October 07, 2007

CIRM Says No to Auditor's Conflicts Concerns

Elaine Howle, the California state auditor, knows a great deal about the mischief that goes on in state government. And make no mistake about it, mischief does occur even when the multibillion dollar battle ground is in public and the economic interests are on full display.

She also knows that the mischief can grow even greater when the doors are closed and the financial interests of the major players are hidden from the public, such as in the case of grants awarded by California's $3 billion stem cell agency.

So Howle (photo above) recommended last spring that the California stem cell agency, with its $3 billion research effort, do more to ensure that its conflict of interest code is followed. Her suggestion was rather modest considering the stakes: CIRM should ask the state attorney general for an opinion about whether the men and women who make the basic decisions on hundreds of millions in dollars in grants should be required to publicly disclose their economic interests.

CIRM's answer to the state auditor came last month: No.

"It is not appropriate," said the agency in letter to Howle. The letter came only 10 days before one institution withdrew its request for $2.6 million, a pitch that was approved by grant reviewers in secret last March without turning up the fact that the applicant was tied to an international scientific flap.

Richard Murphy, interim president of CIRM, wrote to the state auditor,
"We have given careful consideration to your recommendation and have decided it is not appropriate to implement at this time. In almost three years of operation and approval of four rounds of grants, the recommendations of the CIRM working groups have never been routinely and/or regularly adopted by the ICOC. Until the time that such a pattern is detected, the question you suggest we raise with the attorney general is entirely hypothetical, and is therefore not appropriate for submission. We will, however, continue to monitor approvals for such a pattern and will reconsider our decision if one emerges."
Murphy has some interesting lines of reasoning here, ones that clearly had the influence of a skillful attorney.

One part of his response refers to "routine and regular" actions. Another says the whole matter is hypothetical, implying that hypothetical possibilities are not worthy of public action. Let's examine CIRM's contentions.

First, should hypothetical situations to be ignored by government agencies? The possibility of contracting small pox or polio is hypothetical. Does that mean that children should not receive vaccinations against those diseases? Or that the government should not require them to be vaccinated in certain situations? The possibility of a terrorist boarding a plane with a bomb is hypothetical. Does that mean inspections of passengers boarding aircraft should cease?

The point about PUBLIC disclosure of the economic interests of grant reviewers is to prevent serious problems. A scandal involving conflicts-of-interests among persons who make critical judgments on the requests for hundreds of millions of dollars in taxpayer funds could be crippling to the stem cell agency. It is in the agency's best interests to inoculate itself against that possibility. It is most certainly in the public's best interest.

As for the routine ratification of reviewer recommendations, the Oversight Committee, which has ultimate legal authority on grant approval, has modified the reviewers' recommendations from time to time. We are sure that CIRM's able legal staff has counted the occasions and is prepared to make the case that the Oversight Committee does not routinely give grants a rubber stamp.

However, from seeing the board in action and reviewing transcripts, we come to a different conclusion, although we have not yet counted and assessed each individual vote. Reviewers are making de facto decisions. Most grants are routinely approved with little discussion by the Oversight Committee. Only a relative handful have been changed by that group.

Asking for a formal opinion from the attorney general is a serious matter. Such opinions have the force of law, for most purposes. CIRM would not want to seek such an opinion if it were uncertain of a favorable result. It is also fair to say that unless something changes, CIRM is not likely to ever detect a pattern of "routine and regular" approval of reviewer recommendations. To do so would open the agency to other legal perils, such as lawsuits alleging that the Oversight Committee is failing to perform its duties as required by law.

(The CIRM response on this matter is part of a document filed as part of the six-month response to the entire state audit. The response is not available on the Internet. If you would like a copy, please send an email to


  1. Anonymous11:05 AM

    Mr. Jensen,

    I greatly appreciate your diligent coverage of the CIRM and it's board, the ICOC. However, this post missed the boat. The issue of requiring public
    disclosure of the economic interests of the Grants Working Group scientific reviewers is a complex one, but I firmly believe we have the policy right.

    First, they complete conflict of interest forms that are more extensive than those used by ICOC members. We must recuse based on economic conflicts of interests. Reveiwers must recuse for personal as well as economic conflicts. For instance, a grant applicant may have been a mentee of or co-author on a recent paper with a reviewer, but no economic interest exists
    that would recuse the reviewer according to state law. However, our rules require recusal for the reviewer due to that personal relationship.

    The conflicts are collected and held by CIRM staff and available to outside auditors, so they can be reviewed and have been in the recent state audit of CIRM. No violation was found.

    Second, the reviewers are not decision-makers. Their scores and recommendations are purely advisory. I have a different take on the ICOC
    process as has John Simpson of FCTR, who praised us at one of our exhaustive ICOC grant meetings for NOT being a rubber stamp, but for diligently going through the applications one by one and deciding to approve or not.

    If I wish to purchase a car, I go to Consumer Reports and see what they say about the manufacturer and model--they don't buy the car, I do. But it is good due diligence to get an objective outside expert opinion before I make my decision. That's the the role of the scientific reviewers.

    In addition, the peer review process with its procedures are the way science is evaluated in this country. The federal government, non-profit funders and the state uses this method to evaluate scientific grant applications. We have stricter conflict of interest policies than most.

    Finally, your reference to smallpox vaccinations was apropos. The decision to inoculate thousands of Americans after 9/11 was opposed by the Institute of Medicine and foolhardy given that the only known stores of smallpox that exist in the world are accounted for--possessed by the U.S., and Russia.

    The fear based decision to inoculate based on a HYPOTHETICAL threat has needlessly caused deaths. (note the NYT articles below). I do not predict the same in this instance, but draconian overkill for a hypothetical problem could severely slow the grantmaking process and delay needed therapies and cures.

    Jeff Sheehy
    ICOC member

  2. Jeff -- Thanks for your comments. My apologies if I was unclear about the need for vaccination against hypothetical threats. Let me review my points. Polio is a hypothetical threat. Vaccination against it has saved perhaps millions of lives and prevented untold misery. Smallpox is or was a hypothetical threat(I am not talking about terrorist activity). Vaccination against it over decades long ago has also saved untold lives. In fact, a host of other preventive measures against hypothetical threats are required by state law throughout the nation. (
    Taking steps to prevent a scandal in the California stem cell agency is a wise action, particularly in the face of the recommendation of the state auditor. Should a scandal occur, the justification that CIRM behaved no differently than other scientific agencies is not going to fly. We all know there are conflict-of-interest problems at the NIH. The current method of peer review is less than perfect. And we all know that handing out taxpayer money in secret is a recipe that encourages mischief. Let's not give the foes of stem cell research any new cudgels.