Tightening the Revolving Door at the California Stem Cell Agency

Directors of the California stem cell agency next week will consider a proposal aimed at partially addressing revolving-door and conflict-of-interest problems at the $3 billion research enterprise.

The proposal comes in the wake of a wave of unfavorable publicity this summer that embarrassed the agency when its former president, Alan Trounson, was named to the board of a stem cell company only seven days after he left the state research effort.

The Newark, Ca., firm, StemCells, Inc.,  is the recipient of $18.4 million in awards from the California Institute of Regenerative Medicine (CIRM), as the agency is formally known.  The news surprised the agency and prompted its new president, Randy Mills, to sign an agreement that he would not accept employment from a CIRM grant or loan recipient for at least a year after he left the agency.

Michael Friedman
CIRM photo

In a memo to CIRM board members yesterday, Mills said he was offering a new proposal on revolving door matters after CIRM Director Michael Friedman, president of the City of Hope, made such a suggestion in July.

Mills wrote,

“Under the proposed policy, CIRM team members (employees) would remain free to pursue other employment opportunities, including with CIRM-funded institutions. To prevent inadvertent violations of California’s conflict of interest laws and to ensure the integrity of CIRM’s decision-making process, however, the policy would request that CIRM employees notify CIRM legal counsel when the employee begins employment discussions with a CIRM grantee or current applicant. CIRM’s legal counsel will maintain the confidentiality of this information and advise the employee of the steps he or she needs to take to remain in compliance with the law. Thus, the policy balances the privacy interests of CIRM employees with the need to protect the integrity of  CIRM’s decisions.”

Mills said,

“As Dr. Friedman recognized, CIRM has a highly talented team. It is therefore understandable that California institutions, including those that receive CIRM funds, would be interested in recruiting them. Currently, there is no prohibition on CIRM team members accepting employment from CIRM funded institutions, however I believe additional clarity regarding this topic would help avoid potential conflict of interest occurrences.”

The board will act on the proposal at its meeting in Berkeley next Wednesday.

 Our comment: The proposal will not eliminate revolving door problems at the nearly 10-year-old agency as it winds down its funding and employees may want to seek other employment.  The proposal contains ambiguities that make it difficult to adhere to, such as the question of when employment discussions begin. It also does not contain any indication of the consequences for violation of the policy. However, coupled with the Mills’ personal declaration on future employment and the deplorable situation involving Trounson, the new policy helps make it clear that actions such as Trounson’s do not measure up to what is now expected at CIRM.  Mills has also produced a fresh perspective on CIRM’s future finances that would stretch them out to 2020 instead of 2017, another action that removes an incentive for employees to consider seeking employment elsewhere.