The revolving door and related
conflict of interest issues remain open at the $3 billion California stem cell
agency despite the pledge by its new president, Randy Mills, to refrain from
taking a job with a recipient of the agency’s largess for at least a year after
he leaves.
Mills’ action last week came in
response to the controversial appointment of the agency’s previous president,
Alan Trounson, to the board of StemCells, Inc.(SCI), just seven days after he left the agency. The firm was awarded $19.3 million while
Trounson was its top executive. Last year, members of the SCI board
received as much as $99,000 in stock and cash.
Mills’ move applied only to himself
and excluded other members of the agency’s staff. He said they should not be
denied the ability to seek employment with businesses or research organizations
that the agency has funded.
John M.
Simpson of Consumer Watchdog of Santa Monica, Ca., said,
"The high profile Trounson Affair focuses attention on CIRM’s potential revolving door problem that the agency needs to deal with. Randy Mills' pledge not to take a job with a company funded by the agency for at least a year after leaving is a good step. There should be such a formal policy covering all employees. “Serious thought should also be given to the implications of employees leaving for jobs with non-profit entities that CIRM has funded and what safeguards are necessary.”
State laws do exist to deal with revolving
door situations, but some consider them weak. (See here for an explanation of
the laws.) Trounson’s appointment is an example of the circumscribed nature of
the laws. Mills said the agency's “severely” limited investigation into the
appointment did not show any illegal activities. Simpson said a more rigorous, independent investigation was needed.
Mills’ move did send a clear message
about his own views on some ethical matters and set a tone that should be
helpful at the agency. Some employees might also view it as an example to
emulate.
Playing a role in the revolving door concerns is the financial future of the agency. It is facing its effective
financial demise in 2017 when funds for new awards are scheduled to run out, according
to longstanding calculations by the agency itself. Last week Mills cast that financial picture
in a more optimistic light. (The California Stem Cell Report will have more on
his analysis in the next few days.)
Nonetheless, as the money runs out
and there is no assured refinancing in sight, some employees are naturally
going to be considering other employment. Three employees have departed or
announced they are leaving since Mills was named. The move of Natalie DeWitt,
who was a top aide to Trounson, was already reported by the California Stem
Cell Report. DeWitt went to work for researchers at Stanford who have received about $5 million from the stem cell agency.
Elona Baum, general counsel and vice
president for business development , this month left her $298,000-a-year job to take a position at
Coherus Biosciences of Redwood City. The company yesterday refused to disclose her
job title or whether she had already started work. Kevin McCormack, senior
director for public communication for the agency, said he did not know her job
title. He said the company “has no funding from us or any other
business with us.”
The Coherus Web site says the company was founded in 2010 and is “the leading biologics platform company
developing biosimilar(generic) therapeutics for global markets.”
The third employee scheduled to leave is Celeste
Heidler, financial services officer. McCormack said she is retiring. The agency
has posted an opening for her position.
McCormack said it has not been determined whether Baum’s
position will be filled. In addition to
legal matters, she played an important role in relations with the biotech and
stem cell industry.
Consumer Watchdog’s
Simpson said more needs to be done to clear the air concerning the
Trounson appointment.
In response to a query, he said,
“There must also be a deeper probe into Trounson’s relationship with StemCells Inc, and it its executives and directors. Margaret Prinzing’s report, a small step in the right direction, only looked back as far as May 1. Trounson’s relationship with StemCells Inc. since at least the beginning of 2012 should be examined and the investigation should be conducted by an entity not as closely tied to the agency as the Remcho, Johansen & Purcell firm. I think the Citizens Financial Accountability Oversight Committee, chaired by the state controller would do a good job."
The committee is the only state
entity charged with oversight of the stem cell agency. The governor and
legislature have no legal ability to control its operations since it was
created by a ballot initiative that specifically spelled out that they had no
role.
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