Tuesday, November 27, 2007

Top California Official Orders Audit of State Stem Cell Agency

California State Controller John Chiang today ordered an audit of the $3 billion California stem cell agency, including its conflict of interest policy and compliance with state law.

Chiang made the announcement at the meeting of the Citizens Financial Accountability Oversight Committee, which is charged with reviewing the performance and finances of CIRM. Chiang, who is one of the state's top financial officials, is chairman of the committee.

Chiang also announced that he has sent a request to the state Fair Political Practices Commission that it investigate the attempt by John Reed, a member of the CIRM Oversight Committee, to influence a $638,000 grant to his research enterprise, the Burnham Institute. Reed has since admitted his action was a violation of the agency's conflict of interest policy.

Chiang said in a news release,
"Whether they are perceived or real blemishes, we must resolve any conflict of interest questions quickly so we can protect the important and powerful work that is taking place in stem cell research."
The controller, a Democrat who was elected statewide, also said,
"Considering the institute has already made grants to 23 research agencies and the treasurer has sold $250 million in bonds for additional research, it is imperative that the research financing move forward in an ethical and transparent manner. Immediate action is necessary to guarantee the institute is effectively overseeing grants, and that grant recipients are using state funds appropriately and in a manner consistent with the stem cell initiative."
Chiang said that the audit will include how grants are allocated, whether the institute provides adequate oversight once the grants are awarded and what performance milestones are in place.

At today's meeting, John M. Simpson, stem cell project director for the Foundation for Taxpayer and Consumer Rights, renewed his call for the resignation of Reed and Robert Klein, chairman of CIRM. Klein, an attorney, advised Reed to engage in his lobbying effort.

Simpson also called for more openness in the closed door review of the applications for $227 million in lab construction grants. That review begins tomorrow in San Francisco. Simpson said,
"As already demonstrated by Reed and Klein’s actions, the only way the public can have faith in the process that will dole out millions of taxpayer dollars is for there to be complete transparency, Apparently the stem cell agency is afraid that a university or research institution might be embarrassed if their application does poorly. What the overseers need to understand is that they are not running a private club. They are supposed to be stewards of public money. They need to act that way. When they don’t, there must be consequences."
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