The story of Florencio

A man named Florencio López-de-Silanes was recently forced out of his job as the prize-winning head of the Yale University's International Institute for Corporate Governance.

López-de-Silanes was so highly regarded, according to a recent account in the Wall St. Journal, that he was a governance consultant for the World Bank and helped train foreign corporate directors. López-de-Silanes, however, resigned from his position at Yale after he allegedly double-billed the school for about $150,000 in business travel expenses, according to the Journal.

What does this have to do with California's newest agency, the Institute for Regenerative Medicine?

It has to do with money, trust and temptation, and the public's business.

Some Californians are concerned about how the stem cell agency is handling its affairs. “Trust us” seems to the official position at this point, although it is no easy task to get new bureacratic body breathing.

Dana Parsons, a columnist with the Los Angeles Times, may reflect some of the public unease. Earlier this week she (or is it he?) wrote that while she was not in full buyer's remorse about Proposition 71, she was feeling a tad edgy.

“It's just that they're dealing with huge amounts of money and huge amounts of hoped-for results. Just as surely as that formula provided the passion for the initiative, it could create pressure to do things too quickly or too much behind closed doors,” Parsons said.

So Parsons called James Warsaw, a “highly honorable” Southern California man who made his fortune in a family sports merchandising business and who supported Proposition 71. Parsons asked for reassurances about CIRM's conduct so far. “I'm reassuring you,” Warsaw said. That was good enough for the columnist.

It certainly does seem to be an appropriate time to trust the new agency, given its newness and start-up travails. That said, the first step in building trust is to create procedures that will ensure that the public's interest is fully protected.

The CIRM oversight committee is filled with accomplished, intelligent and principled people. They will be overseeing the dispensation of $3 billion – an amount that could tempt a saint. Open meetings, open records and strong ethical regulations will go far in avoiding future problems that could sap the agency.

As we know, sometimes even the best people do bad things. Ask Florencio López-de-Silanes.
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