CIRM Headed for Another Federal Lobbying Effort

After an abortive attempt in 2009, the $3 billion California stem cell agency is moving forward once again with a significant commitment – for CIRM – in the lobbying game in Washington, D.C.

Yesterday the directors' Finance Subcommittee indicated that it favored spending $180,000 during the coming fiscal year to hire a lobbyist, which would make CIRM one of the rare California agencies with its own federal advocate. The move comes at a time when Gov. Jerry Brown is slashing the Washington lobbying office for the entire financially troubled state from six persons to two.

The CIRM directors' committee did not have a quorum so it could not vote, said Don Gibbons, chief communications officer for CIRM, but he said that the committee informally supported the proposal by outgoing CIRM Chair Robert Klein and co-vice chair Art Torres, a former state lawmaker. The plan will go to the full board later this month in San Diego.

Two years ago, CIRM hired a flamboyant but well-connected lobbyist, Tony Podesta, for $240,000 for 10 months work. The latest public accounting shows that he was ultimately paid less than $21,000. Klein began that lobbying effort only after debate about mission creep at CIRM and whether CIRM could really make a difference on issues where it is only a tiny, tiny player.

In a memo made available to the public only yesterday, CIRM noted that the directors' Legislative Subcommittee on Monday voted to oppose patent "reform" legislation now before Congress. The battle over the bill involves some of the largest pharmaceutical companies in the world and has already resulted in millions of dollars in lobbying expenditures by affected enterprises.

The CIRM memo said the bill and other federal proposals

"...could have a substantial impact on CIRM’s mission, ranging from a bill that would fundamentally change U.S. patent law to a bill that would support regenerative medicine through funding for research and commercial development of regenerative medicine products and development of a regulatory environment that enables rapid approval of safe and effective products."

"In addition, the Sherley v. Sebelius litigation, regardless of outcome, is likely to lead to
additional efforts by opponents or proponents of human embryonic stem cell research to push legislation regarding federal funding for human embryonic stem cell research."

The memo continued,

"To ensure that the chair and vice chairs have the support necessary to keep abreast of new developments and to protect and advance CIRM’s interests, it is critical that CIRM have the support of a government relations firm in Washington, D.C."

The CIRM Chair Race: Candidate Thomas Touts His Public Finance Experience

In his first appearance before directors of the $3 billion California stem cell agency, bond financier Jonathan Thomas, a candidate for the chairmanship of the agency, stressed his professional background as an investment banker and attorney and his service on government boards.

Thomas sidestepped the issue of whether he was an advocate of the controversial dual executive arrangement at CIRM. The overlapping roles of the chair and president have been sharply criticized by the state's top fiscal officer, John Chiang, and the state's good government agency, the Little Hoover Commission.

In a statement to the directors' Evaluation Subcommittee on Friday, Thomas did not directly mention the dual executive situation. But in a comment referring to the other candidate for chair, Frank Litvack, Thomas said,

"Though some have sought to label us as favoring 'oversight' on the one hand versus 'hands-on' on the other, I believe that both of us would in fact look to exercise oversight and, in addition, to exercise all of the numerous statutory responsibilities set forth in the language of Proposition 71. The big question here isn’t about labels…it’s about who is best prepared to carry out these combined efforts."

Thomas is chairman of Saybrook Capital of Santa Monica, an investment firm specializing in distressed government bonds. CIRM's only real source of cash is California state bonds, rated the lowest in the nation.

Thomas elaborated on his connections with Advanced Cell Technology of Santa Monica, Ca., one of two companies in the United States with an hESC product in a clinical trial.

He said,

"As I proceeded through my career in law and finance, I took particular interest in stem cell research and looked for a company to work with in that arena. In 2000, I began tracking Advanced Cell Technology (or “ACT”), a then fledgling-company pursuing therapeutic products from embryonic stem cell research. After extensive review of their intellectual property portfolio and lengthy due diligence, I led an early round financing to cover the Company’s operating expenses. I have tracked ACT over the years and am familiar through it with the ups and downs typical of the biotechnology industry. Now, 11 years later, ACT has two of the three products derived from embryonic stem cell research currently in clinical trials. It will be interesting to see how things play out."

Thomas reiterated that he would divest his current holdings in the company, which has applied several times for CIRM funding but has never won a grant.

Thomas stressed his background in public finance, which he said is "an esoteric corner of the finance industry, different in many important and nuanced respects from finance in the corporate sector." He said he has served as an adviser to government bodies and served on the Los Angeles Harbor Commission and the Alameda Corridor Transportation Authority, both for seven years.

Thomas said,

"I am keenly aware of the State’s financial difficulties. If problems arise with getting allocations from the Department of Finance for enough bonds to meet the Agency’s cash flow needs, I am very familiar with the ins and outs of private placements as an alternative funding source and know all the individuals and institutions to make that happen.

"I have been through many bond elections. Should the Agency decide to pursue a second general obligation bond measure, I will be fully prepared to help lead that effort."

Responding to a request by the California Stem Cell Report, Thomas today provided the following copy of his remarks. He said our email request last week had been sidetracked by a spam filter into a spam folder.

Remarks by Jonathan Thomas to CIRM Evaluation Subcommittee 6-3-11

Litvack Envisions Oversight Role for CIRM Chair, Shoring Up 'Messaging' and Industry Ties

Frank Litvack

Los Angeles cardiologist/businessman Frank Litvack, a candidate for chair of the $3 billion California stem cell agency, says he regards the job as part-time and says that the chair should not be involved in day-to-day management.

His comments (see the full text below) were made Friday to the CIRM directors' Evaluation Subcommittee. Litvack said,

 "My  belief  is  that  the  chairman’s  role  is  best   accomplished  by  a  leader  on  a  part-­‐time  basis.    An  organization  that   has  two  chief  executives  carries  with  it  the  intrinsic  potential  for   serious  challenges."

By law (Prop. 71), CIRM has a dual executive arrangement with overlapping responsibilities for the chairman and the president. The arrangement has stirred controversy and criticism and has led to public disputes between the two executives in the past.

Litvack made the text of his remarks available at the request of the California Stem Cell Report. Jonathan Thomas, a Los Angeles bond financier and the other candidate for CIRM chair, did not respond to an identical request. (Thomas later said the request had been diverted by his email spam filter and sent the text on June 6. It can be found here.)   CIRM directors will vote later this month on the two men.

Thomas reportedly favors continuation of the current dual executive structure and is more inclined towards a fulltime role, along with a larger salary. The CIRM board earlier this spring identified a range of $137,500 to $400,000 annually for the job with no more than an 80 percent commitment.

Litvack said,

"The  role  of  the  president  is  daily  management.  He  or  she  must  be  free   to  pursue  this  role  without  encumbrance.  The  function  of  chairman,   on  the  other  hand,  is  not  day  to  day  management,  rather  it  is  to   articulate  the  vision  of  the  organization  and  represent  the   organization  to  outside  parties."

Litvack also said CIRM's most strategic imperative is "to get new products into the clinic."

He sketched out several initiatives for CIRM, including a "core expertise in pre-clinical and regulatory affairs." Litvack said,

"It (the agency)   may  consider  developing  a  publicly  available  repository  of  expertise   and  data  so  as  to  assure  that  each  new  IND  applicant  is  not reinventing  the  wheel  and  wasting  precious  time  and  money.     Stepped  up  collaboaration  with  other  organizations  devoted  to  the   promotion  of  innovation  and  translation  including  the  passionate   and  commited  disease  advocate  community,  the  clinical  researchers   as  well  as  with  FDA  and  other  regulatory  agencies  would  be  of   strategic  and  tactical  value.    CIRM  leadership  must  take  a  pivotal   role  in  facilitating  the  interactions  of  therapy  innovators  with   the  FDA.  While  CIRM  will  always  stand  for  safety,  however,  when  it   comes  to  critical  and  life- threatening  illnesses,  patients  should   have  a  more  active  role  in  their  therapeutic  options."

Litvack also discussed the need to "shore up" CIRM's "messaging" and its relationship with industry. He said, "

The  public  is  waiting  to  hear  what  is  being   done  with  their  money.    Patients  are  waiting  to  hear  when  exactly  it   is  that  science  will  deliver  what  they  have  been  waiting  for."

As for industry, which has been unhappy with its meager share of CIRM largess, Litvack said,

"The  cell  therapy  industry  is  nascent, and  the  capital  markets  have   not  recently  been  kind  to  it.   CIRM  needs  to  shore  up  its  commercial   relationships,  as  most  new  therapies  will  require  the  private  sector  ."

Here is the full text of Litvack's comments on Friday.
Remarks by Frank Litvack to the CIRM Evaluation Subcommittee 6-3-11

Researcher Alert: Fresh Opportunities Looming for CIRM Cash

Drawing nearly all the attention nowadays at the California stem cell agency is selection of a new chairman, but real work is also going on.

That is not to underestimate the importance of the decision, but the trains still have to keep running at CIRM headquarters in San Francisco.

Next Monday, for example, the directors' Science Subcommittee will meet to consider matters that all potential grant applicants should be watching.

One involves a possible mechanism that could be used by some applicants to advance their cause with information not in the grant application. Its main purpose seems, however, to give reviewers a chance to dig deeper into a grant proposal. Another proposal before the committee would extend the more than $90 million "new faculty" grant program into another round. A third would create an "opportunity" fund controlled by the CIRM president. A blue-ribbon panel last fall recommended the idea.

No details were available on any of this on the CIRM web site as of Monday night, only four business days before the subcommittee meeting.

The agenda item on the grant application information was the most fulsome, but only said,

"Discussion of process for obtaining supplemental information from applicants for Clinical Trial and Disease Team grant rounds, including an opportunity to obtain information during Peer Review, subject to later staff confirmation, of additional information not presented in the application."

Even less information was offered up concerning the faculty program and the opportunity fund. However, in March , CIRM President Alan Trounson told CIRM directors,

"The Governing Board could create an 'Opportunity Fund' to be used by the President to rapidly provide continuation funds for projects identified by VP, R & D and members of the Clinical Advisory Panel as having been highly successful and their plan to move forward is compelling and competitive as assessed against defined criteria. This process would accelerate existing promising and competitive CIRM projects and reduce the amount of time spent writing proposals and in review. CIRM already has mechanisms to discontinue or cut back projects that are not making progress. This additional tool would allow CIRM to accelerate projects that are beating expectations."

Interested parties can participate in the discussion at telephonic locations in San Francisco, Irvine(2), La Jolla, Healdsburg and Stanford. Specific addresses can be found on the agenda.

CIRM Posts Key Information in More Timely Fashion

The California Stem Cell Report has grumped mightily about the lackdaisical posting of important public information about matters that are to come before the directors of the $3 billion California stem agency.

Today, however, we are pleased to report that CIRM performed much better in advance of last week's meeting. Agency staffers should take some pride in that accomplishment.

We are referring to the posting on the CIRM web site of information that provides background, justification, dollars and cents and more on the matters that the 29 directors must act on. Without that information well in advance of a governing board meeting, the public, scientists, biotech businesses and policy makers are basically shut out by CIRM.

Normally we try to follow the posting of the background information on a daily basis. However, we were at sea until Sunday March 6. When we logged on to the CIRM web site at that time, we were pleasantly surprised to find a passel of information for the March 10 meeting.

As we examined the documents, they appeared to have been posted primarily March 3 and 4. To double check, we asked Melissa King, executive director of the governing board, about the dates.

She replied,

"Most, if not all, of it was up by Friday, 3/4. I was pushing for that."

While not all the important information was there, such as CIRM Director Jeff Sheehy's proposal on the role of the chair, most of the major stuff was available to the California public and CIRM stakeholders. It represents a step forward for CIRM. We hope the effort will continue into the future.

From Salary to Leadership: Results on CIRM Survey on Criteria for New Chair

The California stem cell agency has unveiled the results of a survey of its directors concerning their own performance and desired criteria for a new chair of the $3 billion research effort.

James Harrison of Remcho, Johansen and Purcell of San Leandro, outside counsel to the board, said in a memo to the board,

"The survey reveals that members have a wide range of views, especially in connection with the allocation of responsibilities between the chair and vice chairs, the board, and the president, and the appropriate time commitment and salary for the new chair. The survey also suggests, however, that members are more aligned with respect to the desired attributes and skills for the chair. For example, ten members identified the ability to collaborate as the most important attribute for chair. In addition, ten members concluded that advocacy skills are critical for a new chair, while 12 members indicated that leadership skills are also important. "

Only 20 members of the 29-members of the board and/or alternates responded to the survey last week. CIRM did not specify the number of alternates who participated. The results were posted yesterday, just two days before tomorrow's meeting of the directors' Governance Subcommittee. The panel is in the process of determining criteria for a new chair to present to the full board, probably in March. Results of the survey can be found here and here.

Some of the questions and responses spoke to the problem of overlapping responsibilities of the chair and the president, which are locked into law by Prop. 71. In the past, those ticklish issues have sometimes surfaced in public.

Based on the survey, board members seem to prefer more delegation and less operational activity on the part of the chair.

One board member, who was not identified, wrote,

"CIRM has 'grown up' enough that we can now clearly define responsibilities. The chair should oversee and guide, and empower the president to be the true CEO of CIRM. Judicious interventions will be more effective than micro-management."

On the question of how much time is needed to peform the chair's job, responses varied from 20 percent to fulltime. One unidentified board member wrote,

"While the designated effort is 50 percent, the role of the chair has been expanded so that the actual time probably exceeds 100 percent. This makes for confusion between the chair, president and others. The board chair's role should be to oversee the governing board, not manage CIRM. This percent effort should not exceed 50 percent."

Salary suggestions ranged from $50,000 to $550,000, depending on the time commitment.

Salaries are a hot button with the public, and the top scales at CIRM have triggered concern from various parties in the past.

Harrison's summary of the survey said,

"One member cautioned that, given the state's current economic circumstances, the chair's salary should be kept at a minimum level, while another member expressed the view that the board must be prepared to compensate the chair appropriately if it wishes to attract a great leader. One member added that limiting the compensation paid to the chair would enhance public trust and another member stressed that the board should look for candidates who do not require a high salary."

The survey identified "advocacy" as the most desired "skill" in a new chair. "Leadership/vision" ranked third with scientific expertise third. In the "attributes" category, the top, desired attribute was "collaborative/consensus builder" with "leadership/vision" and "knowledgeable/intellectually curious" coming up two and three.

As for the board's self-assessment, 90 percent agreed that that "CIRM lives up to its mission." (The survey had a choice of yes, sometimes or no on the statements.) A significant percentage of respondents indicated some areas of concern. Fifty percent agreed that the board is "too influenced by the views of the president and/or other management staff." Only 25 percent said "yes" to the statement "board members have appropriate input into the preparation of the agendas. While 65 percent said they "feel comfortable raising and discussing dissenting or contrary opinions," 35 percent said they agreed only sometimes with that statement.

Still missing from the Governance's meeting agenda for tomorrow are proposed changes in CIRM's governance policies, which could include issues related to the chair.

The public will have a chance to participate in tomorrow's sessions at locations in Sacramento, San Francisco, Los Angeles, La Jolla, Irvine and Calistoga. Specific addresses can be found on the agenda.

Public, Researchers, Industry Left in Dark on CIRM Chair Selection Criteria

The California stem cell agency was admonished in December by the state's top fiscal officer concerning its performance in attempting to elect a new chair to head the $3 billion enterprise.

More transparency and openness are needed, said State Controller John Chiang, chair of the only state panel specifically charged with overseeing CIRM finances.

That advice is going unheeded this week. With only two days left before a key meeting concerning selection of a new chair, left in the dark is the California public – not to mention biotech companies, researchers, patient advocates and state policy makers, and all of the stakeholders in stem cell research.

The agenda for Thursday's meeting of the directors' Governance Subcommittee contains little more than hints at what it is to be considered. The lack of information makes it difficult – to put it mildly – for interested parties who have other business on their plates besides CIRM to come up with thoughtful and constructive comments.

The subcommittee is scheduled to consider a survey of directors' preferences on recommended criteria for the person who is to replace outgoing chairman Robert Klein next June. It is also scheduled to consider changes in the agency's internal governance policies. That's all the information available this morning to the public on the CIRM web site, although the agenda does not even actually mention the survey. No results of the survey, no recommended criteria, no proposed course of action, no language on on the changes in governance -- much less a justification -- are available to the taxpayers of California, who are paying for CIRM's operations.

Unfortunately, CIRM's performance this week on this matter is no exception. The agency has a dismal record when it comes to providing the public with access to information on what its directors are to consider. It comes late or not at all. Often no justification is presented for proposed actions. The issues are not minor. They involve the agency's most important actions and determine its current and future direction.

In six years, CIRM has never offered an explanation for what is a de facto of policy of secrecy. But the agency has laid down a record on openness and transparency that is nearly impossible to defend when CIRM goes to the people again and asks for another $3 billion.

Has CIRM Funded Stem Cell Research that Bush Would Have Banned?

When California voters approved creation of an unprecedented, $3 billion stem cell research program more than six years ago, they were told the money would go to finance research that then-President George Bush had banned.

Has that actually happened? Yes, but mainly no, according to a research paper published in Nature Biotechnology in December 2010.

In the first-ever such analysis of CIRM grants, Aaron Levine, assistant professor in the School of Public Policy at Georgia Tech, reported that through 2009 only 18 percent of California's dollars went for grants that were "clearly" not eligible for federal funding.

Levine's finding has implications for another, multibillion-dollar bond ballot measure that CIRM Chairman Robert Klein has proposed. The campaign for such a measure would have to address the question of whether the promises of the 2004 ballot initiative that created CIRM have been fulfilled.

CIRM does not offer on its web site figures that can be compared to Levine's calculations. The agency does present some statistics about the amount of funding for embryonic stem cell research, but makes no effort to break out the percentage of grants that would not have received funding during the Bush years.

Levine's numbers on California were part of a broader look at state funding of stem cell research in recent years. He reported that by the end of 2009, six states had awarded nearly 750 grants totalling $1.25 billion. California accounted for $1 billion of the total. Per capita funding amounted to about $1 in Illinois and nearly $28 in California.

In all of the states, percentages were low for research that was clearly ineligible for federal cash under the Bush standards. Levine wrote,

"Most state hESC funding appears to have supported research also eligible for federal funding during the Bush Administration. This finding is surprising, given the explicit intent of several state programs to preferentially support science not eligible for federal funding, but likely reflects the nature of the grant proposals state agencies received, particularly given the number of grants states awarded to scientists relatively new to the field of hESC research.

Levine continued,

"Several factors could explain the relatively small share of grants that went toward clearly ineligible research. Some scientists who wished to pursue this research may have been unable to access the raw materials or acquire the intellectual property rights required to do so. Alternatively, these findings could simply reflect scientific interest. The discovery of induced pluripotent stem cells may, for instance, have reduced scientific interest in the derivation of new hESC lines. Finally, these findings may reflect a preference on the part of scientists to use well-established and well-studied hESC lines. This last explanation may be particularly relevant for new scientists entering the field of hESC research, as using recognized cell lines may give their initial research efforts greater credibility."

In California, another factor enters into funding for Bush-banned research, particularly given the 2004 campaign promises. CIRM makes overt decisions about what to fund. Its RFAs spell out what is acceptable and non-acceptable. The agency could have specified that it would not fund any research that would be eligible for federal funding. But whether that would have been "good science" is another question. CIRM also spent nearly $271 million on new labs at many of its directors' research institutions, diluting the percentage that would be construed as financing Bush-banned research.

We are querying CIRM concerning Levine's statistics.

Levine also reported that the state stem cell research efforts appear to have drawn new scientists into the field, with the largest impact occuring in California. He wrote that 42 percent of those funded in this state appeared to be fresh to the field.

In addition to the Nature Biotechnology piece, Levine has created an online database of state grants that he plans to update regularly. In an email to the California Stem Cell Report, he said,

"While CIRM already makes this information readily accessible, some of the other state programs do not and I hope this database will facilitate comparisons among the various programs and prove to be a useful tool for people interested in state stem cell programs. "

Stem Cell Directors Meet Next Thursday to Deal With Klein Replacement

A key group of directors of the $3 billion California stem cell agency meets in just four business days to consider one of the more important matters facing the unique research enterprise.

The Governance Subcommittee will take up the criteria that directors would like to see in the next chair of the agency – the person who would replace Robert Klein, the longstanding (since 2003 or so) presence behind CIRM. Klein has announced that he will retire as chair in June.

The directors' subcommittee is scheduled to convene next Thursday to act on a survey of board members concerning their preferences for a new chairman, preferences that would be in addition to the legal requirements. Directors are hamstrung by law in their choice of a new chair. They must pick from candidates nominated by four statewide officials: governor, treasurer, controller and lieutenant governor. That requirement is part of Prop. 71, which created the stem cell agency and which was written by Klein and a handful of his associates.

So far, the public is in the dark about the results of the survey of directors and other details that the subcommittee is scheduled to consider. The agenda says only that "criteria and parameters for chair of CIRM’s governing board and process and timeline for consideration of nominees for chair of CIRM’s governing board" are on the table. Also on the agenda is what may be a related matter, but its significance is masked by its cryptic language, which consists of only seven words: "Consideration of amendments to Internal Governance Policy."

CIRM directors are taking a fresh look at selection of a new chair in the wake of the unseemly affair last December that resulted in a spate of negative news stories when Klein attempted to hand pick his own successor.

At the time, state Controller John Chiang, head of the only state entity specifically charged with overseeing CIRM finances, said in a letter to the board that the chair selection process was "fundamentally flawed" and should be restarted in a way that is open to the public.

He wrote,

"The ICOC has a responsibility to the taxpayers of California to conduct its business in an open and transparent manner."

Next week's meeting of the subcommittee will be held at public sites in the following cities: Los Angeles, Sacramento, San Francisco, Irvine and Calistoga. The specific addresses can be found on the agenda. Of course, written comments can be submitted to the board in advance of the meeting.

California Stem Cell Agency Already Has Posted Some Statements of Economic Interests

The California stem cell agency was Johnny-on-the-spot last week when its directors approved posting statements of economic interest on the CIRM web site.

Moments after the vote, Don Gibbons, chief communications officer for the agency, emailed the California Stem Cell Report, pointing out that the statements of the top executives were already up. They can found at this location or by searching the CIRM site on the term "form 700," the number of the state form used, or "economic interests."

Statements are available today from the chairman (Robert Klein), the two vice chairs(Art Torres and Duane Roth), president(Alan Trounson), vice president of operations(John Robson), general counsel (Elona Baum), executive director of scientific activities (Patricia Olson) and Gibbons.

Gibbons said the statements from all the 29 directors will be posted soon. Expense claims for directors and executives will be posted beginning in April.

If you would like to see statements of economic interest sooner, you can find them here. They were posted on the Internet by the California Stem Cell Report last summer after CIRM had failed to act on the unanimous recommendation from the Citizens Financial Accountability Oversight Committee that the statements be made available online. The panel is the only state body specifically charged with overseeing CIRM finances. It made its recommendations 12 months ago.

The CIRM form 700s can be found more easily than those of the top aides to Gov. Jerry Brown. Indeed, his web site does not even have a search function. Former Gov. Arnold Schwarzenegger began posting the forms and expense claims for his top staff and appointees following a flap about conflicts of interest and expense claims. It is not clear whether Brown will post the statements. A handful of other state officials are also posting the statements online.

The $3 billion stem cell agency differs significantly from other state agencies and contains built-in conflicts of interests dictated by Prop. 71, which created the agency in 2004. Its directors are employed by institutions that have received nearly all the $1.1 billion in grants that the agency has handed out.

Here is a list of institutions that have or had seats on the board and their grant totals as of last week:  Stanford, $176 million; UCLA, $135 million; UCSF, $111 million; UCSD, $77 million; USC, $72 million; UC Irvine, $72 million; UC Davis, $61 million; City of Hope, $42 million; UC Berkeley, $37 million; Scripps, $37 million; Salk, $37 million; Sanford-Burnham, $31 million; UC Santa Cruz, $19 million; UC Santa Barbara, $13 million; UC Merced, $8 million; UC Riverside, $6 million, Cedars-Sinai, $9 million; Caltech, $2.3 million, and Childrens Hospital Research Institute, $55,000. One CIRM director, Sherry Lansing, a UC regent, accounts for many of the connections to the smaller UC campuses.

Last Thursday, directors awarded more cash to the following institutions with current or former CIRM directors: Stanford, $10.5 million; UC Berkely, $3 million; UCSD, $2.7 million; UCLA, $2.6 million; Salk, $2.3 million, Cedars-Sinai, $1.8 million, and UCSF, $1.8 million.

Directors with financial ties to applicants are barred from voting on their applications. Directors, however, approve concepts for grant programs and the rules for administering them. A former director tied to the Sanford-Burnham Institute and others ran afoul of conflict rules in 2007. The issue with Sanford-Burnham was disclosed by the California Stem Cell Report. The case resulted in a warning by the state Fair Political Practices Commission. The Sanford-Burnham official acted after he was advised to do so by CIRM Chairman Klein, an attorney who later said his advice was an "inadvertent error."

(Editor's note: An earlier version of this item incorrectly indicated that Salk was currently represented on the CIRM board. In fact, Salk last week lost its seat.)

CIRM Directors to Post Their Statements of Economic Interest Online

Directors of the California stem cell agency today decided to post their statements of economic interest on the CIRM web site along with those of the executives of the $3 billion enterprise. Also to be posted will be the expense claims filed by the same officials.

The action was approved on a unanimous voice vote. It came at the request of Citizens Financial Accountability Oversight Committee (CFAOC) one year ago when it urged more openness and transparency at the agency. The committee is chaired by the state's top fiscal officer, Controller John Chiang. It is a sister to CIRM, created also by Prop. 71 in 2004, and is the only state body specifically charged with overseeing CIRM's finances.

Chiang's office said the controller called the action "good news and a long-overdue step toward
transparency and accountability."
The postings will begin in April, the deadline for the 2010 statements of economic interest. Other state agencies, including the governor's and controller's office, already have been posting their own statements and expense claims. CIRM plans to confer with the CFAOC to be sure to comply properly with its request.

Director Sherry Lansing, chair of the Governance Subcommittee and a former Hollywood studio chief, said that CIRM  "has nothing to hide, and it (the information) is already out there."

CIRM Director David Serrano Sewell, a deputy city attorney in San Francisco, was delegated to work with staff and the CFAOC to implement the postings.

The California Stem Cell Report posted the statements for the directors and staff last August after CIRM balked at complying with the unanimous request from the CFAOC. The postings by the stem cell report were  noted more than once by directors today. Last month we began the process of gathering CIRM expense claims for posting but will suspend that effort.

Our take on today's board action? We applaud the CIRM directors. Today's vote represents a significant step forward in improving the agency's openness and transparency.

Details Finally Emerge on $200,000 Stem Cell Convention Subsidy Plan

The California stem cell agency last night belatedly gave the public its first glimpse at a $200,000 plan to subsidize attendance at an international stem cell conference in Toronto in June.

A one-sentence version of the proposal has been on the agenda of the directors of the California stem cell agenda for 10 days. However, the cost, number of persons involved and other details were not disclosed until only hours before the directors are scheduled to take it up this morning.

In a memo on the CIRM web site, Chairman Robert Klein estimated the cost at $2,000 per person for travel, hotel and registration expenses at the meeting of the International Society of Stem Cell Research, the world's largest such organization. He proposed sending "80 young California researchers who are actively involved in a CIRM-fund grant (including Bridges to Stem Cell Research, research training grants and other research award programs) and up to 40 California representatives of patient advocacy organizations."

The $24 million Bridges program covers training largely at California state and community colleges.

The memo did not present a justification for the convention travel subsidy. Instead, it said that CIRM paid for the attendance of 98 persons in a similar program for the ISSCR convention last year in San Francisco. It said the program was a "success" but provided no basis for that assertion.

CIRM, through Klein's office, has been trying to improve relations with patient advocate organizations, which will be a key to winning support of a proposed, new $3 billion to $5 billion ballot measure for the stem cell agency.

The program would use part of the $3.5 million that has been donated to CIRM by private individuals and be operated under the auspices of the ISSCR. The organization would be given the $200,000 to set up a "scholarship" program. Klein would run the program through his office, he said, to avoid placing any additional burden on CIRM's scientific staff. It was not clear whether the ISSCR would require reimbursement for its administrative costs in connection with the program.

Late Info Posted for Stem Cell Agency Directors Meeting

The California stem cell agency today posted additional material for its directors meeting Thursday dealing with loan payback changes in its biotech loan program along with an update on its operational budget.

You can find a memo summarizing the loan changes here and the proposed regulations here. Obviously these come much too late – less than two days before the meeting – to expect thoughtful comment from most industry executives. The summary also did not provide an explanation of the reasons for the changes.

The budget figures can be found here.

CIRM Stingy with Info on Matters Before Directors This Week

With less than three business days left before Thursday's meeting of the directors of the $3 billion stem cell agency, CIRM has not yet produced details for the public on three significant matters that are to be considered.

The agency's failure to provide the information for the biotech industry, researchers, patient advocates, policy makers and the public via the directors' agenda is not a onetime event. It is part of a pattern -- a de facto policy -- that reflects poorly on CIRM. Withholding information about board matters effectively stifles participation by the public and discourages coverage by the media.  It also fails to meet the pledge of CIRM Chairman Robert Klein to adhere to the highest standards of openness and transparency.

However, more information on two items is now available. One involves a $6.6 million, visiting faculty program. Another deals with selection of grant reviewers, something of a sorepoint within the biotech industry.

The CIRM faculty plan states:

"The CIRM Visiting Faculty Award will operate through supplemental awards to existing CIRM-funded research grants, all of which have been peer reviewed and approved by the ICOC. The funds will enable a sabbatical researcher (Visiting Scientist) to work on an existing CIRM-funded research project for 6-12 months. The supplemental CIRM funds will cover up to 50% of the Visiting Scientist's salary and fringe benefits costs, with the remainder being paid by the Visiting Scientist’s home institution."

Applications would be submitted by the recipient of an existing research grant – who would be known as the "host scientist." The proposal envisions up to 30 awards with decisions on awards being made by CIRM staff.

Also before directors are eight proposed new alternate scientific members of the grants review group. None appear to have significant biotech industry experience. The agency has drawn fire from industry for its lack of grant reviewers who have a business background. CIRM's own external review panel said last fall,

"The majority of granting processes are designed on academic models. These processes do not necessarily fit the needs or timelines of industry and/or the realities of managing industry projects. Granting processes and funding criteria could be clarified and streamlined from an industry perspective and timelines for decision-making could be aligned with industry norms."

Regarding the review's sweeping recommendations themselves, CIRM President Alan Trounson said in early December that he would report on how they should be implemented. His report is not on the board's agenda for this month. The next CIRM board meeting is scheduled for March 9-10.

As for the previously mentioned three agenda items lacking information, one is a proposal to subsidize trips to Toronto in June for perhaps hundreds of persons to attend an international stem cell conference. The proposal contains no cost estimate nor does it indicate how many persons would be involved. We calculated a very rough estimate of $3,000 a person, depending on a number of variables. This may be worthwhile effort. We are inclined to think there is considerable value for scientists at such meetings. But so far CIRM has failed to do even a poor job of making the case for the subsidy program.

Another item needs much more explanation about why it is being considered this week. Only 22 words are devoted to it on the agenda although it is an unusual exception to the normal grant approval process. The item concerns an application for $4 million by Fred Gage of the Salk Institute in the early translational round. Decisions on that round were made last October by CIRM directors. Scientific reviewers did not approve the Gage application for funding, but it was set aside by the directors for additional consideration.

This week's agenda provides no hint concerning that background and no clue about why the application is still around. Its history can be unearthed from CIRM documents, although virtually all ordinary users of the CIRM web site would find the task daunting if not impossible. Here is a brief synopsis of the story:

At the Oct. 21, 2010, CIRM board meeting, CIRM Director Joan Samuelson, a patient advocate for Parkinson's and who also is living with the disease, moved to have directors override the negative decision by reviewers. During the discussion at the October meeting, CIRM Director Jeff Sheehy, also a patient advocate and member of the grants review committee, said in support,

"One of the key factors that was very motivating was the stature of the scientist and paucity of people working in Parkinson's in California. Eminent neurologists within the room said we campaigned (in 2004 for Prop. 71) -- we had Michael J. Fox on TV -- we talked about Parkinson's as a target. But one of the problems in our ability to fund this in California is that there's a lack of a sufficient number of outstanding Parkinson's (researchers) -- other diseases are more or better represented, at least this is what is stated, and the opportunity to get this particular eminent scientist into this arena was a value in and of itself."

The discussion at the October board meeting went beyond the specific grant and into procedures of the board and the grant review process, including discussion how of exceptions are made.

Ultimately the board asked CIRM President Trounson to look into the grant and report back on his views.

Researchers, patient advocates and others interested in CIRM funding would be well-advised to read the discussion, which covers about 17 pages of the transcript beginning on p. 144. Also of interest at the Thursday meeting concerning funding is an appeal by a Stanford researcher, Stefan Heller, in the tools and technology round that is before directors.

The third matter that is shy of information involves changes in the agency's biotech loan program and its payback provisions. We wrote earlier about what those might involve. Our take can be found here.

CIRM Directors to Consider Plan to Pay Some Board Members up to $15,000 Annually

The California stem cell agency has released more information on issues coming before its directors next week, including a plan to pay some of the patient advocate members on its board up to $15,000 a year for their work.

Ten patient advocate members sit on the 29-member CIRM board of directors. The proposal would apply to six, those who serve on the Grants Working Group and the vice chair and co-chair of the Facilities and Standards Working groups. Barred from the compensation plan would be the chairman and statutory vice chairman of the agency, Robert Klein and Art Torres respectively, who are also patient advocate members. They already are paid for their work.

The new pay plan -- to be considered next Thursday in Burlingame -- would establish a daily rate of $562.50 for patient advocates who sit on the groups as regular members. Patient advocates serving as vice chair or co-chair would be entitled  to that rate plus an additional, unspecified amount.  A cap of $15,000 would be placed on the pay.

The rate is 75 percent of what CIRM pays its outside scientific reviewers, whose expenses are also covered by CIRM. The patient advocate compensation would be in addition to their expenses as well.

The chairman of the CIRM board would determine the total compensation for each advocate based on the number of days required for "preparation and participation" in grant reviews as well as for meetings of the facilities and standards groups. (Our comment: The plan would give the chairman additional leverage on some board members. It may be more appropriate to require that the compensation decision be made by the chairman and the two vice chairmen of the board.)

Currently members of the board receive per diem of $114 per day and $14 an hour for attendance at meetings and preparation time, plus expenses.

The CIRM information about the plan did not contain an estimate on the total cost of the compensation. It also does not fully explain the justification for the pay. However, patient advocate members sometimes lose salary from their regular jobs when they take time off to participate in CIRM activities. Their attendance is also more critical because other board members often have legal conflicts of interest that prevent them voting on some matters. CIRM directors who are not patient advocates and who hold top executive positions may not lose salary, depending on the polices of their employers. Such members additionally can often use the staff of their institutions to perform work in connection with CIRM activities.

Some of the patient advocate members may decline the new compensation. Here is a list of those who would be affected, based on information posted on the CIRM web site but not on the agenda: Sherry Lansing, former Hollywood studio chief, co-chair of the standards group and member of the grants group; Jeff Sheehy, a communications manager at UC San Francisco, a member of the standards, facilities and grants groups; Jonathan Shestack, a Hollywood film producer, member of the standards group and grants group; Marcy Feit, CEO of ValleyCare Health System, member of the standards, grants and facilities group; Joan Samuelson, founder of the Parkinson's Action Network, vice chair of the grants group, member of the standards and facilities groups, and David Serrano Sewell, a San Francisco deputy city attorney, vice chair of the facilities group, member of grants group.

Other information posted by CIRM on its web site for the directors meeting includes the grant reviewers' summaries of the 56 applications submitted for the $40 million tools and technology round. In response to a question, Gibbons said seven businesses applied for grants. However, CIRM refused to provide a breakdown between non-profit research institutions and academic applicants because, Gibbons said, the non-profits "have always had an academic component." Five of the 56 applicants have German collaborators, who will receive their funding from non-CIRM sources.

The top ranked grant was given a scientific score of 90. The lowest ranked grant approved by reviewers was scored at 62. Fourteen grants that appear to be ranked above 62 were rejected by reviewers. The summary of the reviewer comments indicated that a portion of the grant was recommended for funding because of "programmatic" reasons. That portion of the review said,

"The proposed materials may offer some advantages over competing materials in the current marketplace for soft tissue reconstruction. Reviewers discussed the emergence of clinical data for utility of hASC and agreed that there might be potential for nearer term translation of formulations as proposed in Aim 1."

So far we have not seen any appeals from researchers whose grants were rejected by CIRM reviewers.

The directors agenda also now has links to information concerning the determination of the criteria for the person who is elected in June to succeed CIRM Chairman Klein, who has said he will step down then.

(Editor's note: An earlier version of this item incorrectly characterized the amount of compensation for the co-chairs and vice chairs, based on inaccurate information provided by CIRM. For more details on the error, see this item.)

CIRM Directors to Hand Out $40 Million Next Week; Meeting Details Not Available to Public

Directors of the California stem cell agency meet one week from tomorrow to give away $40 million and move forward on electing a new chairman of the $3 billion enterprise come next June.

With six business days left before the meeting, however, few details of what is to be considered are available to the public via the directors' agenda on the CIRM web site. That is in keeping with the agency's practice of not making such material accessible until very shortly before its board meetings. The de facto policy effectively suppresses public involvement in CIRM affairs.

Some information on the matters before directors on Jan. 27 is available elsewhere on the agency's web site, although it may have changed and be out-of-date. Less than avid users of the web site would have considerable difficulty in locating the information on their own. Nonetheless, the California Stem Cell Report has ferreted out some background on what is likely to be discussed next week by CIRM directors.

Item 8 before directors is only described as "consideration of recommendations from Grants Working Group regarding applications submitted in response to RFA 10-02: CIRM Tools and Technology Awards II." What that means is that directors are virtually certain to give away $40 million to 20 lucky scientists. The board almost always ratifies all the recommendations of its grant reviewers when the reviewers approve funding for applications. Summaries of the reviewers' recommendations were not available at the time of this writing.

Scientists from Germany are collaborating on some of the applications, but their funding will not come from CIRM. The purpose of the grant round is to "develop such tools and techniques that address technical bottlenecks and enable novel translational approaches." Some information on the program can be found here.

CIRM directors are also scheduled to deal with the criteria for a new chair to replace Robert Klein, whose latest retirement date comes in June. The evening before the directors meet, their Governance Subcommittee will discuss the matter and make recommendations to the full board. In contrast to the meeting of the full board, the committee posted all the relevant material well in advance of its meeting. However, that information cannot be found via the agenda for the directors' meeting. But you can find it here and via an item on the California Stem Cell Report.

The CIRM board will also be asked to subsidize trips in June to Toronto for perhaps hundreds of persons for the annual convention of the International Society for Stem Cell Research, the largest such organization in the world. The agenda says subsidies would go to "patient advocates, CIRM Bridges Scholars and other CIRM funded early career scientists." No information was provided via the agenda on the number of persons involved or the total cost of the effort. We could not find such details elsewhere on the CIRM web site.

Information on the ISSCR web site, however, shows that non-member registration for the convention can run as high as $1095 for the four-day session. Then there are hotel, eating and travel expenses. Discounted rooms for single and double occupancy are going for $227 US at the convention hotel, the Fairmount Royal York, which, at 28 stories, once was the tallest building in the British Commonwealth and featured a 50-ton pipe organ. Round trip air fares for June from San Francisco to Toronto were running about $500 to $700 if booked today. No one from CIRM is on the program when we checked. Our ballpark calculations show a very rough cost of $3,000 per person, depending on such variables as the actual cost of registration and flight reservations.

Biotech firms should have considerable interest in a proposal involving the CIRM loan program and "proposed regulatory language/process for multiple payback alternative to warrant coverage for loans." The agency provided no further clue to the specifics although the item probably refers to this Nov. 29 proposal, which could be out-of-date.

In all, CIRM directors have nine matters of considerable importance before them next week. But the public, scientists, the biotech industry, policy makers and others are left in the dark by CIRM if they depend on the agenda that the agency posts.

The directors meetings are the most important public events involving the agency, which is consuming $6 billion(including interest) in taxpayer funds. Giving stakeholders and the public easy access to matters before the  board is a simple and straight-forward task. It would seem to be very much in CIRM's best interests to keep all the interested parties well-informed about its activities.

Oversight Panel to Review CIRM Finances Later This Month

The only state panel specifically charged with financial oversight of California $3 billion stem cell research effort meets later this month to examine its budget and review last fall's external review of CIRM's operations.

The Citizens Financial Accountability Oversight Committee is scheduled to convene in Los Angeles on Jan. 28, two days after a key panel of CIRM directors is expected to take up part of the committee's 12-month-old request to improve openness and transparency at CIRM.

The financial committee was created as part of Prop. 71, the ballot initiative that also created the stem cell research program. It is chaired by the state's top fiscal office, Controller John Chiang. CIRM is exempt by provisions of Prop. 71 from the normal oversight of the governor and the legislature.

While the committee is a sister to CIRM, the agency has distanced itself from the panel. CIRM successfully lobbied last year to remove from legislation a Chiang-supported provision that would have required the panel to commission a performance audit of the agency. Last February, shortly after the committee unanimously recommended more openness, CIRM President Alan Trounson described the committee's discussion of CIRM as a “strange critique” and “irrational attack.”  (See page 132 of the transcript of the board of directors meeting.)

Among the financial committee's recommendations was a proposal that CIRM post on its web site the statements of economic interests of its directors along with expense claims from directors and top staff. The proposal is to be taken up by the CIRM directors' Governance Subcommittee on Jan. 26 in Burlingame.

Also tap for the Jan. 28 financial committee meeting is discussion of a new law that removed the 50-person cap on CIRM staff. The change was made after Trounson said the quality of its work will suffer without more help. Currently CIRM has more than $1 billion committed to nearly 400 recipients. It has nearly another $2 billion go hand out.

Fresh Approach Urged on CIRM Chair Selection, Self-evaluation of CIRM Board Included

Directors of the California stem cell agency are being asked to make a "clean start" in their effort to elect a new chair of the $3 billion enterprise – an effort that would also include a self-assessment of the board itself.

The appeal is being made by Claire Pomeroy, a CIRM director and dean of the UC Davis School of Medicine and is scheduled to be considered at a Jan. 26 meeting of the CIRM directors' Governance Subcommittee. The full board will take up the panel's recommendations the next day.

In an email to Sherry Lansing, chair of the Governance panel, Pomeroy said,

"In the spirit of a clean start and an open process, I would suggest that the Governance Committee consider proactively attaining input from all the board members in two areas:
"1. Self-assessment of board performance/function to date
"2. Desired attributes of board chair"

In her email, Pomeroy noted an article last month in Science magazine, headlined "CIRM: The Good, the Bad And the Ugly." Pomeroy said her recommendations would help to "to ensure an open process free of conflict of interest and personal agendas." She said,

"This is our chance to emphasize the mission over in-fighting and can define what kind of organization CIRM and the board will be."

Asked for a comment., John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., said that Pomeroy's suggestions sound "like exactly the right approach."

Pomeroy's proposal and other important background material were posted on the CIRM web site on Saturday, 11 days in advance of the meeting. CIRM has had considerable difficulty in posting such material in a timely fashion. But the postings for the Jan. 26 session represent a substantial improvement and offer the public and interested parties an opportunity to make thoughtful comments in time for the meeting or to make plans to attend.

Pomeroy said she borrowed the self-assessment plan from another organization on whose board she serves. The plan would involve a series of questions for all 29 board members with "Yes/Sometimes/No answers" and a section for free-form comments.

Some of the questions proposed by Pomeroy:

• "Board focuses on the appropriate strategic, fiduciary, and generative issues that guide the work of the organization
• "Board attends to policy related activities that guide the work of management staff
• "Board is composed of a diverse group of individuals with a variety of skills to consider the interests of the organization's broad constituencies
• "Board avoids getting into administrative/management details
• "Board members offer a diversity of opinions and addresses issues in a respectful manner
• "Board is too influenced by the views of the president and/or other management staff

Another section would deal with individual board members. Some proposed questions:

• "I understand my responsibilities as a board member
• "I come to the board meetings fully prepared to participate
• "I receive adequate information, presented in a concise and focused manner, on matters that come to the board in a timely manner
• "At board meetings, I feel comfortable raising and discussing dissenting or contrary opinions
• "I think about the work of the organization (CIRM) between board calls and meetings
• "I understand the issue of conflict of interest and have no conflicts other than those disclosed in writing
• "I receive personal satisfaction from my role as board member."/li>
  

On the subject of desired attributes of a new chair, Pomeroy said,

"It seems to me that we don't always hear from all the board members about their thoughts on this issue and as a committee we should know the ideas of all the (board) members."

She proposed a survey of all board members asking such things as:

• "Desired attributes of a chair (e.g. collaborative, etc)- list top 3
• "Desired skill sets of a chair (e.g. advocacy, financial, etc)- list top 3
• "Desired background/experience of a chair (e.g. academics, patient advocate, industry experience, etc)- list top 3
• "Recommended time commitment of chair (e.g. full time, 1 day a week, attendance at meetings and availability by phone in between, etc)
• "Recommended financial compensation for chair (e.g. salary range)"

Included on the agenda for the Governance meeting in Burlingame is a memo on the legal criteria for the CIRM chair.

 Another issue dealing with openness and transparency is also on the committee's agenda. It consists of a request from the Citizens Financial Accountability Oversight Committee that CIRM post on its web site the statements of economic interests and travel expense claims by the CIRM board and executive staff. The committee, which reviews the financial operations of CIRM, made the request nearly a year ago.

The panel is chaired by the state's top fiscal officer, Controller John Chiang, one of four state officials who makes nominations for the CIRM chair. Chiang's office posts the economic interest statements and expense claims of its top staff on its web site, as did former Gov. Arnold Schwarznegger. It is unclear whether Gov. Jerry Brown will follow the practice.

(Editor's note: An earlier version of this story did not mention that the Governance Subcommittee's recommendations will be taken up by the full board of directors on Jan. 27.)

CIRM Directors Move Towards Wider Public Access in Chair Selection

Directors of the California stem cell agency this week opened the door to a broader and more open way of determining who should lead the $3 billion enterprise for the next six years.

They set in motion a process in which the directors will publicly establish criteria that they would like to see in a person who would succeed Robert Klein as chairman come next June. No details were forthcoming and undoubtedly not yet developed, but the process is scheduled to be completed by about Feb. 15.

The timeline may be unrealistic given that the board has only one scheduled meeting between now and then. Nonetheless the new effort will provide the public with a chance to offer suggestions and comments. The vehicle for determining criteria for the new chairman is the CIRM directors' Governance Subcommittee, chaired by Sherry Lansing, a highly regarded former Hollywood studio chief. The subcommittee is supposed to complete its work within 60 days and develop criteria that will go beyond the legal qualifications for the chair.

CIRM directors now have an excellent opportunity to reach out and engage both the public at large and CIRM's special constituencies. Reach out is the operative phrase. Passive posting of information a day or two ahead of a meeting someplace on the CIRM Web site will not draw in comments. An email and phone effort, with follow-up, would be far more successful in generating thoughtful suggestions from both the public and specific, important stakeholder groups. To be useful, background material should be available prominently on the CIRM Web site at least two weeks ahead of the first subcommittee meeting. Indeed, it is not too early for the public to file suggestions and thoughts with the agency this week and next.

Some questions for the public to consider: Does the chair need to be a nationally known scientist? Does the post require experience in the biotech industry? Must the person have extensive experience in hands-on administration? Should the person be skilled in conciliation and negotiation?

One starting point for those interested in the election is the official rundown on how the nominations and election are supposed to work.

The information was offered up yesterday on the agency's Web site for the CIRM board of directors meeting.

Written by CIRM's outside counsel, James Harrison of Remcho, Johansen and Purcell of San Leandro, Ca., the memo, however, is a bit outdated. It was prepared last August but not widely publicized by CIRM. It is also not clear that the process, even with a change of dates, will be followed exactly for the election of new chair by next June, Klein's retirement date.

The earliest meeting date for the Governance Subcommittee is likely to be sometime in January, given the upcoming holiday season. The CIRM board is scheduled to meet Jan. 26-27 in San Francisco. The subcommittee may want to tackle the issue before that meeting in order to present a tentative proposal to the full board for suggestions and possible revisions for final adoption in March 9-10 in Sacramento.

The board has a relatively light schedule during the first half of the year, only four meetings between now and August. Presumably the election for the chair would occur June 22-23 at the board meeting scheduled for San Diego. The only other meeting scheduled in the first half of the year is May 3-4 in Los Angeles.

Klein Given New, Six-Month Term as Chairman; Board to Examine Criteria for Replacement

Directors of the California stem cell agency today re-elected Robert Klein as chairman of the $3 billion enterprise, culminating a weeks-long flap that included closed-door dealings, allegations of “sleazy” conduct and dubious, last minute financial warnings about CIRM's financial condition.

Klein said he would serve for no more than six months and would prefer a shorter term. He is expected to serve without a salary. The directors also instructed its Governance Subcommittee to examine the criteria for a replacement and report back to the full board in 60 days.

The vote on Klein was not entirely audible on the Internet audiocast but it appeared nearly unanimous with the exception of Jeff Sheehy, who abstained.

Sherry Lansing, chair of the Governance Subcommittee and a former Hollywood studio chief, supported Klein's re-election and defended the election process. She said,

"Nothing was done that was not correct."

She said all actions taken were in the best interests of CIRM's mission.

Klein had been publicly telling the board and others for months that he would not seek re-election to a six-year term. Behind the scenes, he began to attempt to engineer the selection of his successor, a Canadian scientist, Alan Bernstein, who chaired the recent “external review” of CIRM's programs.

Klein's effort began to fall apart after Bernstein's name surfaced publicly in an item Nov. 29 on the California Stem Cell Report.

A spate of articles dealing with the issue appeared in a number of publications, including the Los Angeles Times, the San Francisco Business Times, Nature magazine's Web site, the Biopolitical Times, the Toronto Globe and Mail and The Sacramento Bee as well as here. The various articles detailed the reports of backroom dealings and issues with Klein's conduct.

On Monday, the state's top fiscal officer, John Chiang, who has a special role in connection with the agency, urged cancellation of this week's election, declaring that the process was fundamentally flawed. Sheehy read Chiang's letter to the board and said he agreed with it.  No other CIRM directors publicly raised questions about the election flap.

Klein has been chairman of the California Institute for Regenerative Medicine, as the agency is formally known, since voters approved its creation in 2004 through Prop. 71. Klein and a handful of associates wrote the measure, which included a detailed legal list of qualifications that fit only one person in the state – Klein. The move so angered one early major backer of Prop. 71 that he now refuses to speak to Klein, according to Nature magazine.

Klein has been the dominate force at the stem cell agency since he was elected by the 29-member board to his first six-year term. He also has angered at least some members of the CIRM board and clashed with its first president, Zach Hall. Prop. 71 gave overlapping executive responsibilities to the chairman and president of the agency.

As of this week, CIRM has approved $1.1 billion in grants, 90 percent of which has gone to institutions that have representation on the CIRM board of directors. The board is making larger awards currently, and Klein is looking for more cash. His plans include another bond measure, perhaps as high as $5 billion, before voters possibly in 2012 or 2014.