CIRM Releases Bank Info That It Once Withheld

The California stem cell agency late today released information on a $250,000 contract with Square 1 bank that the agency previously had refused to disclose at the request of Square 1.

The move was prompted by inquiries from the California Stem Cell Report about the withholding of the information, which is public record and should have been released earlier.

Don Gibbons, chief communications officer for CIRM, said in an email,

“After your inquiry, we contacted Square 1 to see if they would reconsider their request to treat the pricing information as confidential, in the interest of public disclosure. Square 1 has agreed that we should produce an unredacted copy of attachment B to the contract, but they would like to note that they sought to protect the pricing information because they do regard it as proprietary (i.e., it is not known to their competitors and could give them a competitive advantage), but that they will waive their objection to producing the information in the interests of transparency. The unredacted document is attached.

“CIRM staff initially redacted the pricing information at Square 1’s request, but we remain responsible for deciding whether to honor such requests. We could have asked Square 1 to waive its request before we produced the document. In retrospect, we should have slowed down and taken the time to do that.”

CIRM is to be commended for pushing forward with its effort to release the information. Square 1 did the right thing as well, even though it contends the information should be proprietary. We wrote earlier about the implications for CIRM in connection with failing to comply with state public record law.

John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., was harshly criticial of the earlier censorship of the Square 1 contract. Following the release of the information, he said,

“I'm glad CIRM is doing the right thing. I hope the staff learns something from this experience.”

One of the downsides for many businesses in dealing with the state is that it does require disclosure of information that many business would like to keep out of the public gaze. But there can be great benefits as well. In the case of Square 1, this initial contract gives it a leg up on competitors in terms of securing much a more lucrative, long-term contract with CIRM for its fledgling, $500 million biotech loan program.

The current contract will serve as a baseline for future arrangements. Square 1 and CIRM staff will be working together to smooth out the process and build relationships that will be valuable in the future. The linkage between Square 1 and the $3 billion stem cell agency, the world's largest source of funding for human embryonic stem cell research, will also enhance the bank's prestige and ability to secure additional profitable business.

It is also likely that the fee structure, as now disclosed by CIRM, will be modified in future arrangements, which will require a new, public bidding process.

The redacted contract can be found here. The newly released information can be found here.