California's $12 Billion Stem Cell Agency and Fresh Ruckus over Conflicts of Interest

The appointment of a new member to the governing board of California's $12 billion stem cell research program triggered additional comment and criticism today concerning conflicts of interest at the agency. 

The matter involves Larry Goldstein, a well-known scientist at UC San Diego, who has received $22 million from the California Institute for Regenerative Medicine (CIRM), the formal name for the stem cell agency. Goldstein's employer has received $232 million. 

Marcia Darnovsky
CGS photo

"Conflicts of interest at CIRM have been a major concern since the agency was founded, as pointed out by observers including the Institute of Medicine (IOM) and the Little Hoover Commission, California's independent oversight organization," said Marcy Darnovsky, executive director of the Center for Genetics and Society in Berkeley, Ca., which has long opposed CIRM.  

"Proposition 14, which just last fall gave CIRM another $5.5 billion of public funding, should have been a chance for the agency to turn over a new leaf, but it made none of the changes that could have addressed the agency's built-in conflicts or other structural problems.

"Now CIRM has accepted a board member who has personally received some $22 million in CIRM grants, and whose institution has received far more. It appears that CIRM will continue to flout basic principles of good governance, despite being a public agency wholly funded by public dollars. This is a real and ongoing problem."

Last September, Capitol Weekly, California's respected government and political news service, carried an analysis of CIRM awards and their relationship to board members. It showed that 80 percent of the $2.7 billion awarded by CIRM has gone to institutions with links to past and present members of the CIRM board. 

The agency's 35 directors are barred from voting on specific awards to their institutions. However, they set the rules, scope and direction for the awards.

UC Davis stem cell scientist and blogger Paul Knoepfler, who supports the stem

Paul Knoepfler
UCD photo

cell agency, said in a comment this morning carried on the first item on this subject on the California Stem Cell Report,  

"I'm sure that Larry will do an excellent job on the board, and he brings a unique depth of knowledge on stem cell research. However, along the lines of what Aaron said as quoted in the piece, at the very least the appointment presents some challenges of perception of the agency."

Knoepfler's reference is to Aaron Levine, a Georgia Tech biomedical research policy expert who served on the IOM panel that conducted a $700,000 study of CIRM and recommended major changes in its governance and conflict of interest procedures. Levine told the California Stem Cell Report, 

“Larry Goldstein is, in many ways, an inspired choice for the CIRM board. He is a well-regarded stem cell scientist and former CIRM grantee with administrative experience and demonstrated interest in public policy. On the other hand, CIRM has, at the very least, a perception problem with conflicts-of-interest and appointing a former grantee to the board so soon after the passage of Proposition 14 seems to suggest that this challenge will persist.”

“More broadly, conflict of interest concerns reflect the structure of the CIRM Board dating back to Proposition 71 in 2004 and the broader challenge facing many organizations of recruiting interested, qualified, and independent board members. CIRM has taken a number of steps to help address conflicts of interest since the IOM report was published many years ago, but I would have liked to see the board structure adjusted as part of Proposition 14 to introduce more independence into the oversight structure and further address these concerns.”

CIRM was running out of money last year and was set to close its doors until voters approved Proposition 14, which provided $5.5 billion more and significantly expanded the scope of the agency. 

CIRM had an opportunity to deal with conflict of interest concerns during the formulation of the ballot measure in discussions with the sponsor of the measure, Robert Klein, a millionaire developer in Palo Alto. Klein also directed the writing of Proposition 71 in 2004 and served as CIRM's first chairman after writing into the initiative qualifications for the chair that applied uniquely to him.

The California Stem Cell Report asked Klein this morning whether he had made a recommendation to any party that Goldstein, who is co-chair of a scientific advisory panel to Klein's stem cell advocacy group, be appointed to the CIRM board. Klein replied in an email this morning:

"No. I learned of the appointment after the fact. Dr. Goldstein will be an outstanding board member. Given that he has closed his lab at UC San Diego and he is no longer conducting stem cell research, his extraordinary research record on neurodegenerative diseases and his experience in previously competing for CIRM grants will provide the board with important insights in advancing the search for therapies that are devastating to the brain, the body’s neurological system, and many other disease areas. 

"The State of California’s stem cell therapy development efforts and science generally will benefit greatly by Dr. Goldstein’s sacrifice of the remaining years he could have conducted scientific research, in favor of this new commitment to public service on the CIRM board, that will benefit patients everywhere." 

Lawrence Goldstein in lab at Sanford
Consortium, UCSD photo

Goldstein is barred by CIRM rules from applying for grants. The agency said yesterday that Goldstein has stepped away from his research with the exception of one project. 

(Update: CIRM told the California Stem Cell Report on Monday that it was speaking for Goldstein in its comments. Goldstein confirmed that in an email and did not respond otherwise.) 

It is technically possible today to make changes in the law dealing with conflicts at CIRM and the composition of its board. However, those would require a super, super-majority vote (70 percent) of both houses of the legislature and the signature of the governor, a politically difficult task.