Sunday, November 25, 2007

Conflicts and Klein: Fallout From Bad Advice

The role of Robert Klein, chairman of the California stem cell agency, in the Burnham grant affair largely escaped significant public scrutiny until Sunday's editorial in The Sacramento Bee.

One does not want to minimize the responsibility of John Reed, a notable scientist and accomplished executive, who privately lobbied the staff of CIRM to give a $638,000 grant to his organization(the Burnham Institute) while sitting on the board of directors of CIRM. But all of that came at the advice of the chairman of the agency, Robert Klein.

In the eyes of many, Klein is the virtual public embodiment of the stem cell agency, a role he relishes. He claims authorship of Prop. 71. He led the $30 million campaign for its passage, working the media and speaking on television shows in California and nationally. He is so knowledgeable that he can and does quote legal code citations from Prop. 71 in public meetings. Fortune magazine once called him a "super salesman" for human embryonic stem cell research.

John M. Simpson, of the Foundation for Taxpayer and Consumer Rights and longtime CIRM observer, says that Klein "brought great entrepreneurial spirit and energy and deserves great credit for getting Prop 71 passed and the agency launched."

All of which makes the impact of his advice to Reed even greater. The fallout is likely to ripple throughout the scientific community, the legislature and the media. And not much of the fallout is good.

Obviously their actions are a great embarrassment to both men, at the very least. But the impact on the California Institute for Regenerative Medicine will be considerable and long-lasting.

Klein has played into the hands of the foes of human embryonic stem cell research, who love to conjure up demons who fiddle with funding and abuse the public trust. They now can simply point to Klein and Reed as proof.

Putting the foes aside, the men's actions also raise qualms about the stewardship of $3 billion in public funds among those who are on the fence on the issue of stem cell research, as well as among some of its fervent supporters.

So far, CIRM has beaten off attempts by California lawmakers to intervene in the agency's affairs. Now legislators have a fresh and serious justification to probe into the agency's $29,000-an-hour research funding effort. Some may say a little friendly oversight from Sacramento is healthy but that is not the official view of CIRM's Oversight Committee.

The Reed/Klein affair has also come to light at a time when some are contending that human embryonic stem cell research is unnecessary in light of the recent research news about other ways to reap its benefits without the untidy matters associated with hESC experiments. Some are already questioning the necessity of CIRM's efforts.

Internally, Klein's action nurtures any latent suspicions among Oversight Committee members that a rival institution represented on the board might be favored privately in some fashion. That is a development that signals a weakened leadership position for Klein himself.

Klein's advice concerning the Burnham grant is not the first time he has demonstrated an insensitivity to issues that others perceive as important ethically or simply as a matter of propriety. He has taken the unusual step, for a state official, of operating his own private lobbying group on stem cell research. Earlier this year, that group took a $125,000 contribution from a northern California land developer. A short time later, Klein lobbied on behalf of a land deal backed by that developer. Part of that deal called for Klein to head a new nonprofit stem cell research organization that would be created as a result. Early on in CIRM's life, he refused to testify before a state Senate committee into the implementation of Prop. 71. Later, he organized an Internet campaign against a state senator who was seeking higher office. He called her an "ongoing threat" to stem cell research, although she had been the chief legislative advocate for stem cell research for years.

It is difficult to understand what led Klein, an attorney, to give Reed the bad advice. Whatever the reason, the Oversight Committee is riddled with conflicts of interest, something Klein should be keenly aware of. More than half of its members have links to institutions that could stand to benefit from the upcoming round of $227 million in lab construction grants. And it was the Oversight Committee itself that set the standards for those grants – not some detached, third-party organization.

The Bee (see item below) called for changes in the Oversight Committee. But Klein's crafting of Prop. 71 has made it virtually impossible to make even the best-intentioned changes at CIRM. The measure requires a super, super majority vote of the legislature and the signature of the governor to enact the tiniest alterations in CIRM's structure.

The only practical answer to the concerns about the conflicts – embodied vividly in the actions by Reed and Klein – is for CIRM to open up its operations. Publicly disclose the names of institutions seeking grants, publicly disclose the financial interests of scientific reviewers who make de facto decisions on grants. Even more openness would desirable, but these are relatively easy steps at this point.

On Sunday The Bee called for Klein and Reed to resign. While acknowledging Klein's contributions to CIRM, Simpson says, "Now, particularly given his propensity to treat it like his own fiefdom, it's time for him to move on." Last December, Klein indicated he would be leaving his post in 2008. That currently looks unlikely. The reason? His proposal for a biotech loan program as large as $750 million remains far from fruition.

It is probably not too soon, nonetheless, for the Oversight Committee to begin to think about succession, a matter that is critical to any business or organization, but particularly to an enterprise involved in the new frontiers of science and its finances. Sphere: Related Content

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