Wednesday, December 01, 2010

Closed-Door Portola Valley Plan to Install Bernstein as New Chair of CIRM

Engineered by outgoing Chairman Robert Klein, a closed-door plan is reportedly afoot to restructure the management of the $3 billion California stem cell agency to have it run directly by a new executive chairman, Alan Bernstein, now head of HIV Global Vaccine Enterprise of New York.

It is unclear how the current agency president, Alan Trounson, would fit into the proposed new arrangement. But one CIRM board member, Jeff Sheehy, said,
“The president obviously loses out.”
The plan was first reported today by Ron Leuty of the San Francisco Business Times. Leuty described the effort as “backroom politics.” He also characterized Bernstein as “unqualified” in an apparent reference to the legal requirement that the CIRM chairman be a “patient advocate.”

Leuty quoted Sheehy, a candidate for vice chair of the agency, as describing the dealings as a “horrible process” that was far from open.

Based on what Leuty wrote and what Sheehy and others told the California Stem Cell Report here is what has occurred.

On Sunday, a dinner meeting was held at a Portola Valley restaurant attended by Klein, Sheehy and CIRM board members Ted Love and Robert Birgeneau, the chancellor of UC Berkeley and who has rarely attended a CIRM board meeting. Birgeneau, however, is a former colleague and friend of Bernstein. Also in attendance were Art Torres, co-vice chairman of the board, and Bernstein, both of whom have been nominated for chairman, along with the board's outside counsel, James Harrison of Remcho, Johansen & Purcell
of San Leandro.

Sheehy said that a scenario was proposed at the meeting that would make Bernstein an “executive chairman” and effectively CEO of CIRM. To qualify Bernstein legally as a patient advocate, Klein would appoint Bernstein to the board of Klein's private stem cell lobbying group, Americans for Cures, which shares quarters in the building that houses the offices of Klein's Palo Alto real estate investment banking firm.

Sheehy told the California Stem Cell Report,
“Given that (CIRM board)members can't even put an item on the agenda without the chair's consent, and we can't remove the chair (no provisions for removal in Prop. 71), and that many members are from institutions that receive funds from CIRM, and that the legislature and constitutional officers have very little control over CIRM, Bernstein will become California's stem cell czar, effectively controlling $2 billion in state funds.”
Sheehy said the proposal also jeopardizes the integrity of the patient advocate positions on the 29-member board. He said,
“By making the patient advocate qualification--which is taken from the language for qualifications that all 10 ICOC patient advocates are appointed under--infinitely malleable, this move makes all patient advocates vulnerable to replacement by a scientist.”
We asked Harrison about the legality of the Sunday meeting, given the state's open meeting laws. He replied, “Because the meeting involved far fewer than a majority of the board, it was not subject to” the state's meeting laws.

We then asked Harrison about the possibility the session could turn into an illegal serial meeting if the participants talked with other board members. Harrison replied,
"We've advised the board members to refrain from discussing the nominations with other board members."
Information about the meeting has been communicated to at least one other board member, who warned us that we did not have all the information about the Portola Valley deal. But the person was unwilling to share anything further.

An agency spokesman told the San Francisco Business Times that he would have no comment.

Bernstein was nominated for chairman by Republican Lt. Gov. Abel Maldonado in a letter dated Nov. 30. We were told this afternoon that CIRM asked that the letter, which is a public record, be withheld until tomorrow. State Treasurer Bill Lockyer, a Democrat, is expected to announce his nominations tomorrow along with Gov. Arnold Schwarzenegger.

The board is expected to take up the nominations Dec. 15 at Stanford.

Here is Maldonado's nominating letter.
Lt. Gov.'s CIRM Chair Nomination Letter

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