CIRM's Financial Practices to be Reviewed Next Week

A new creature spawned by Prop. 71 will pop onto the public scene for the first time next week in San Francisco.

It is the Citizens Financial Accountability Oversight Committee. The six-member panel is charged with reviewing and making recommendations on CIRM's "financial practices and performance."

Prop. 71, approved nearly two years ago, indicated the committee should prepare an annual report. So far, none has been forthcoming.

At its San Francisco meeting Sept. 14, the first major order of business is a proposal to avoid disclosing the financial interests of its members. It is not clear how the exemption disclosure request came to be on the committee's agenda. The proposal would excuse committee members from filing financial disclosure statements on the grounds that the group has no decision-making authority and has a budget of less than $150,000. State regulations provide for possible exemptions in such cases.

It is apparent from Prop. 71 that the committee can only make suggestions to CIRM and has no power over it, other than public pressure. Presumably its budget is less than $150,000.

The next item calls for consideration of "recommendations" by the committee, none of which have been prepared for public consumption at this point. On the table is the audit paid for by CIRM and the controller's review of that document. Nothing truly scandalous emerged from those reviews, although there was a flap when CIRM's auditor refused to provide copies of information to the controller's office. The accountability panel will not be considering the audit by the California auditor general, which has not yet been released.

State Controller Steve Westly, who is friendly to the stem cell agency, chairs the committee. The proposition calls for appointment of other members who have "medical backgrounds and knowledge of relevant financial matters."

They are:

Richard Siegal, a Westly appointee, philanthropist and patient advocate for Graves Diseases and glaucoma. He also heads what the controller's office only describes as a "private multimillion dollar national energy firm." The firm is Palace Exploration Co. which bizneworleans.com, describes as "a privately held (New York) company engaged in the exploration and production of oil and gas in the continental United States, the Gulf of Mexico, Western Canada and the North Sea. It has been owned and operated by the chairman and his family since its acquisition in 1983, and owns interests in more than 1,400 producing oil or gas wells." Siegal and his wife, Gail, gave $44,600 to Westly's campaign for the Democratic gubernatorial nomination this year, according to Common Cause.

Myrtle Potter, an appointee of CIRM Chair Robert Klein. Potter is a former vice president of Genentech. More recently she was a cofounder of the Chapman Development Group, which operates large-scale residential and commercial development, among other things. In 2003 and 2004, she was named to Fortune magazine's list of the "Top 50 Most Powerful Women in Business."

Daniel S. Brunner, an appointee of treasurer Phil Angelides. The controller's office lists Brunner as "general counsel, (Governor's) Office of Special Health Care Negotiations." However, that appears to be an old occupation. Through January of 2005, he was executive vice president of First Health of Sacramento, Ca., which manages health care services for businesses. Common Cause does not show major contributions from Brunner to Angelides, who defeated Westly in the race for the Democratic gubernatorial nomination.

John Hein of Fair Oaks, Ca., an appointee of Assembly Speaker Fabian Nunez. Hein was executive director of Communities for Quality Education at the time of his appointment. He also served as the chief lobbyist for the California Teachers Association in Sacramento. We are inquiring concerning his current employment.

Jim Lott, an appointee of Senate President Pro Tem Don Perata. Lott is executive vice president of the Hospital Association of Southern California and has an "extensive and productive history in influencing health policy in California." Lott was a former legislative staffer and is chair of the LA Care Health Plan.

Here is a link to the controller's bios on the committee members. Here is a link to the state regulations providing for an exemption on the disclosures (see sec. 18751 C 3).

Below is the text of the section of Prop. 71 creating the committee.