Saturday, June 27, 2009

Excerpts Hoover Commission Investigation of CIRM

Here are some excerpts from the report by California's Little Hoover Commission, the state's good government agency, on the California stem cell agency. First, from the cover letter by Daniel W. Hancock, chairman of the bipartisan commission.

“In the California Institute for Regenerative Medicine, California has made an investment in innovation that is envy of the world. Known as CIRM, the institute is the product of Proposition 71, which promised voters they could turn California into the global epicenter of biotechnology. The institute since has directed more than $700 million toward scientific exploration, in the process, leveraging an additional $900 million in private and institutional money that has built new facilities, lured scientists to California and spurred growth in the state’s life-sciences industry.”

“The Commission found that CIRM’s governance structure is not adequate to protect taxpayers’ interests or serve its own ambitious goals. The Legislature must take this opportunity to reform CIRM’s governance structure to ensure that it can deliver on its mission of developing cures for the benefit of all, as well as provide transparency and accountability for California’s taxpayers who will be paying off the bonds.”

He continued:

“The 10,000-word proposition (that created CIRM) laid out highly specific qualifications and detailed operational duties for its chairperson. Its very specificity prevents CIRM from evolving, institutionalizes inefficiencies and hobbles its ability to transition to new leadership.”

“CIRM’s 29-member oversight committee includes representatives from institutions that have benefitted from grants the committee approved. This structure, along with overly long terms and the inability to nominate its own leaders or hold them accountable, fuels concerns that the committee never can be entirely free of conflict of interest or self-dealing, notwithstanding a court ruling that established the legality of such a structure. Legal is not necessarily optimal,”

Here are excerpts from the body of the report:

On conflicts of interest
“Criticism that CIRM’s governing board remains an insiders’ club undermines the legitimacy of the agency. Some 80 percent of the funds to date have been awarded to institutions with representatives on the ICOC...(T)he frequent occurrence of members recusing themselves because of conflicts of interest shows a structural defect in the governing board.”

“The detailed provisions of the ballot initiative, which placed the governing board outside of the normal scope of accountability compared to other state agencies and boards, provided stability, diversity and the political protection to get the agency up and running. But today, only five years later, Proposition 71 already looks like a relic of another era.”

Personality Driven
“The actions and personal style of ICOC chair Robert Klein have been at
the core of many of the criticisms of the stem-cell agency, and have made
him a lightning rod for calls for more accountability. That he is a
component of much of the discussion is unavoidable as he drafted,
championed and donated money for Proposition 71 and now serves as
the paid, part-time chairman of the governing board. His passion and
leadership made Proposition 71 a reality, and his financial and political
skills helped CIRM survive its early challenges. At the same time, the
media have chronicled how Mr. Klein has alienated members of the
Legislature and at least one newspaper has called on Mr. Klein to

“An agency governance structure that features key positions built around
specific individuals does not serve the best interests of the mission of the
agency or the state of California, however well-qualified the individuals
may be. Such a situation distorts accountability and succession
planning and could, in the event of an abrupt departure of the
individual, leave the agency leaderless for an extended period. A more
efficient and balanced board is possible and more appropriate as CIRM
matures. For CIRM to prosper and sustain itself, such changes are

CIRM's Adversarial Defensiveness
From Donna Gerardi Riordan, former director of programs at the California Council on Science and Technology, “By excluding legislators from participating in the creation and design of CIRM, the framers of Proposition 71 were short-sightedly taunting the state’s most powerful
and skillful political players,”


“CIRM has adopted a co-CEO leadership structure between the board chair and the agency president. The board chair oversees several daily administrative duties at CIRM, which gives the chair a dominant role over other members, creates potential conflict with the CIRM president and blurs the lines of accountability.”

More Open Grant Review Process

“CIRM leadership has argued that fewer institutions would apply for
funding if their identities became known and they were not successful.
CIRM, however, should continually strive to improve the openness of its
process. Based on Connecticut’s experience of disclosing all applicants
without negative consequence, CIRM should conduct a pilot project to
evaluate if a more open process would inhibit researchers from coming
forward and applying for CIRM funds. In an upcoming grant round, all
applicants should be identified retrospectively. Disclosing names of
unsuccessful applicants as well as individual reviewers will allow the
public to better track CIRM’s funding processes for fairness and bias.
Judging by the apparent willingness of rejected applicants to identify
themselves and their organizations in public appeals to CIRM, it is
questionable whether the current lockout of applicant identities poses a
real concern. The burden is on CIRM to demonstrate otherwise.”

CIRM's Future

“The rapidly changing political and scientific environment raises questions about whether the organization is flexible enough to adapt to the field it is supposed to lead....
  • “How will CIRM know when its job is done?
  • “What happens when CIRM runs out of money?
  • "Is the mission of Proposition 71 best served by transforming CIRM into a self-sustaining operation?"

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