Tuesday, December 16, 2014

Former California Stem Cell CEO Zach Hall on Conflicts of Interest and Last Week's CIRM Board Voting

Conflict of interest issues have long been a difficult issue for the California stem cell agency, and so it was last week.

The matter involved a proposal to reduce the indirect cost funding rate for both businesses and nonprofit institutions from as high as 20 percent to 10 percent of an award. That recommendation quickly ran into objections from Donna Weston, who is chief financial officer at Scripps and also a member of the board (the ICOC). She and seven other representatives of nonprofit entities all voted to keep their institutions from losing the cash. The rest of the board members voting also went along, on a 17-0 roll call at the Thursday meeting.

During the session, the California Stem Cell Report queried James Harrison, general counsel to the agency, about whether the votes by the nonprofit representatives involved a prohibited conflict of interest. Harrison, who was at the meeting, replied via email,
"No, it is a standard, so it is exempt." 
The item drew the attention of Zach Hall, who served as the first president of the agency.  Here is the text of what he had to say in an email to this writer: 
“As a former President of CIRM and Vice-Chancellor for Research at UCSF, I have what I hope is a constructive comment about the issue of conflict of interest and CIRM indirect cost rates.   
      James Harrison's response to your question about conflict of interest of ICOC institutional representatives who vote on their own indirect costs may be correct by the rules of CIRM, but this voting arrangement constitutes a fundamental conflict by any reasonable standard. Institutional representatives on the ICOC are now disqualified from voting on CIRM grant applications from their own institution. In these instances, most of the money – the direct costs – goes to the investigator, rather than to administrative or infrastructure costs, and, in any case, the total amount is small compared to the overall institutional budget. In contrast, indirect costs rates are much more important for the institution, as they apply to all CIRM grants that an institution receives and all of the money goes to the administration for research support. Because it is so important, research institutions spend tens or hundreds of thousands of dollars to negotiate the best possible indirect cost rate with the federal government. In contrast, for CIRM grants, institutional representatives do not negotiate but actually vote on the size of their own indirect cost rate. By sitting on both sides of the table, they undermine the integrity of the whole process.
      As a former administrator at a California university, I know how important the indirect cost rate is for a research institution. I thus strongly support a rate of 20% on CIRM grants, a rate which is still below the cost of research support at most institutions. Nevertheless, I believe it is a mistake to allow institutional representatives to vote on the rates. This kind of conflict of interest, permitted by the current rules, is exactly what has provoked repeated criticism of the CIRM board structure. In my view, research institutions should make their case to the board and to the public, like any other recipient of CIRM funds, but their representatives should then be disqualified from voting. To increase the confidence of the public in the process, they might consider removing themselves voluntarily from the vote, if not compelled by law.”
Sphere: Related Content

No comments:

Post a Comment