Conflicts of Interest, CIRM and Transparency

Do conflicts of interest exist among the scientists who make the de facto decisions on hundreds of millions of dollars in California grants for research related to embryonic stem cells?

The answer? Yes.

Even the California stem cell agency acknowledges that fact. Because of conflicts, the agency regularly excuses some of the scientists who review the grant applications from participating in specific cases.

But CIRM stoutly maintains that the financial and professional interests of reviewers are not suitable for release to the public or applicants. The agency contends the reviewers are only making recommendations. However, the reviewers' decisions are almost never rejected by CIRM's board of directors. The agency also has turned down a recommendation by the state auditor that it seek an opinion from the state attorney general on whether it should publicly disclose the reviewers' interests.

Trust us, the agency says. We will police the conflicts and assure that no abuses occur.

Rarely do rejected applicants raise conflict issues publicly. No one wants to offend the world's largest source of funding for human embryonic stem cell research. In August, however, one scientist brought up the question of conflicts at a meeting of the CIRM board of directors.

Steven Kessler, a scientific director at Advanced Cell Technology of Los Angeles, was not happy with the response he received from CIRM staff on a letter he wrote concerning what he said was a conflict of interest on the part of a unnamed reviewer.

According to the transcript of the meeting, here's how Kessler summarized his position for CIRM directors:

"If a grant reviewer has a financial relationship with company "X"...that is, he's receiving funding from that organization or he's expecting royalty income from some company by virtue of having licensed technology to that company and that reviewer is sitting in on reviews from other for-profit organizations...and doesn't recommend those for funding, to us, from a business perspective, that's a conflict of interest."

Kessler said he had cited "numerous instances" of conflicts on the part of the reviewer, where there would be "every incentive to help impede the competition for the company that he has a relationship with.".

Kessler said,

"I was told that the way CIRM interprets its own conflict of interest policy, the example I gave you was not a conflict of interest."

At that point CIRM Chairman Robert Klein cut off Kessler, declaring that the directors needed to discuss the names for CIRM-funded labs before going to lunch.

Kessler's comments followed a discussion in which Klein and other directors expressed concern about reviewers quitting if they were subject to public complaints.

Klein said,

"To the extent that (applicants) are criticizing peer reviewers, which is sometimes common, we're going to lose our peer reviewers."

On Sept. 14, we asked CIRM for a copy of Kessler's conflict-of-interest letter. On Oct. 22, more than five weeks later and after repeated follow-up queries, the agency declined to release the letter.

Initially, Don Gibbons, chief communications officer for CIRM, said there was a question of redaction of material from the letter. Then he said our inquiry was lost by CIRM's interim general counsel. Ultimately, on Oct. 22, Gibbons said,

"Our interim general counsel has determined that the Kessler letter is part of the grant application process and as such is not a public document."

We asked for the legal reasoning behind that statement. On Oct. 29, Gibbons quoted interim counsel Ian Sweedler as saying,

"Applicants need to know that they can contact CIRM with information about potential conflicts, and that they can do that without leveling public allegations against a professional colleague."

Obviously conflicts of interest can at times involve judgment calls. CIRM also places a burden on its reviewers, all of whom come from out-of-state and cannot apply for CIRM grants. Marie Csete, now CIRM's chief scientific officer, commented last year on the situation when she was a reviewer prior to her employment at CIRM. Among other things, she said that she and the other reviewers were being asked to fund the work of their competitors.

CIRM's overriding concern has been the care and feeding of reviewers. We acknowledge that they need considerable attention. However, the main issue here is the stewardship of public funds and the integrity of a state government process involving billions of dollars. From its birth, CIRM has wrestled with problems spawned by the ballot initiative that created the research program. CIRM was deliberately cobbled together with built-in conflicts starting at the very top. The chief beneficiaries of CIRM's largess sit on its board of directors and set the rules for grants and control the process.

The bounty from CIRM is huge. Here is a list of CIRM recipient institutions (with grant totals) which have or had employees or representatives on the CIRM board of directors: Stanford, $94 million; UC San Francisco, $82 million; UCLA, $51 million; UC Irvine, $51 million; USC, $48 million; Sanford (San Diego) Consortium, $43 million; UC Davis, $36 million; UC San Diego, $33 million; UC Berkeley, $29 million; UC Santa Cruz, $17 million; Burnham, $18 million; Salk Institute, $16 million; Scripps, $9 million; UC Merced, $8 million; UC Santa Barbara, $7 million; UC Riverside, $6 million; Caltech, $2 million, and City of Hope, $2 million.

The built-in conflicts at CIRM are not likely to change, short of another ballot measure. They are enshrined in the state Constitution, a move by Prop. 71 writers who wanted to make CIRM immune to normal government oversight.

However, handing out billions behind closed doors with no outside scrutiny is a recipe for abuse. State ethics officials are already looking into the attempt by one CIRM director to influence CIRM staff on behalf of his institution. Should a major scandal erupt, it would ill serve the agency, the people of California and the cause of science.

If only to protect itself, the agency should comply with its repeated promise to adhere to the highest standards of openness and transparency and publicly release the statements of the economic and professional interests of its reviewers.

(Further note: Kessler also declined to release his letter to us. The CIRM grant review committee meets next Wednesday and Thursday in San Francisco to review applications for $66 million in public funds. The review sessions are closed but the public may comment on Wednesday morning.)