CIRM, however, contends Klein did nothing wrong. One non-longtime CIRM observer called the violations "technical." And Klein's actions are not likely to have any significant impact on funding or result in sanctions on him personally.
According to the San Francisco Business Journal(see item below), Klein has been dickering with applicants in an effort to convince them to reduce the size of their grant requests by 10 percent if they receive the money sooner rather than later. CIRM's board of directors is scheduled to take up the grants in Los Angeles tomorrow.
Bylaws for CIRM's Facilities Working Group, of which Klein is a member, forbid him from contacting applicants. Article Seven, section four, states:
"Members of the Facilities Working Group shall not communicate with an applicant about an application to CIRM."In response to a query about Klein's actions, Don Gibbons, chief communications officer for CIRM, said,
"Chairman Klein was specifically authorized by the Facilities Working Group at its last public meeting to work with the institutions on this project in his capacity as board chair. This supersedes the language you cite."However, our review of the transcripts and a grant administration policy document from the April meeting showed no such authorization. A possibility exists that the authorization is somewhere in the 418 pages, and we asked Gibbons to provide a citation.
Gibbons said he was too busy with other matters today to provide a citation. He said,
"The Facilities Working Group approved the Facilities Grant Administration Policy with the understanding that Mr. Klein, in his role as chair, would carry out the negotiation."It is not clear what sanctions, if any, might apply if Klein is found to be in violation of the bylaws. As for the grants themselves, in our view, it is unlikely that any might be affected by Klein's contact with applicants.
We queried John M. Simpson, stem cell project director for Consumer Watchdog, on Klein's actions. Simpson, who was at the Facilities meetings on April 4 and 5, said,
"Given the working group's bylaws it would have been better if Bob Klein hadn't been the one to contact grant applicants about taking less CIRM money if the entire grant were paid up front. I think the idea is a good one and supported it enthusiastically at the working group meeting as a way to avoiding making more cuts. I still do.The no-contact clause in the bylaw has existed since 2006 and was drafted by James Harrison, outside counsel to CIRM. During the meeting when the language was adopted, Klein said,
"Based on the discussion at the meeting, I understood that Klein was one of those that would be contacting applicants. I thought that as long as all applicants were treated equally and offered the same discount in return for taking the money up front there was no problem.
"Re-reading the the working group's bylaws today, I reluctantly conclude that in his zeal to maximize the impact of CIRM's $262 million, Klein may have technically broken the rules."
"The purpose of having a committee here is that we are able to gather information generally; but once there's an application in, you can't discuss anything with them...there has to be a bright line created here."CIRM board member David Serrano Sewell also commented in 2006 on what he described as "ex parte discussions." He said,
"It sort of just goes without saying and common sense that an applicant doesn't have a one-on-one conversation about their particular application. Should that discussion happen, a, it's inappropriate, it's unethical, and, c, it's going to have to be disclosed on some level."However, the 2006 meeting, which we attended, was mainly considering the process prior to facilities group action. No one at that meeting discussed a situation where the chairman of the CIRM would negotiate some terms of a grant privately following the facilities group action, but before the grant came before the full CIRM board, which has final authority on funding.
At this year's April meeting of the facilities group, attorney Harrison presented language that would permit the reduction in the size of grants if applicants agreed to take the lesser amount up front. He did not mention the no-contact rule in the bylaws involving members of the facilities group. It appears, however, that no restriction exists on staff negotiating a hold-back on funding with grant applicants.
One final note on yesterday's item below, which was written before we turned up the no-contact rule. We raised a series of questions about whether Klein had contacted members of the CIRM board who had lab grant applications pending this week. We asked CIRM to respond to those questions. Here is Gibbons' response:
"The discount proposal was discussed at the April 5 public meeting of the Facilities Working Group, at which time Citizens Watchdog's John Simpson said it 'bordered on brilliant,' per the transcript on the CIRM web site.We have queried members of the CIRM Oversight Committee who have applications pending concerning contacts with Klein. We will report on their responses tomorrow, but so far it appears that none had contact.
"All discussions on the proposal subsequent to that time have been conducted in collaboration with CIRM legal counsel in full compliance with all regulations governing CIRM, so the chair did not negotiate with any board members."
(The actual discussion of the "hold-back" or "discount" plan begins on page 45 of the transcript of the April 5 meeting.)
