Trivializing Conflicts of Interest at a $3 Billion California State Agency

The California stem cell agency is planning minor changes in its conflict-of-interest rules that narrowly target a violation that arose last spring involving two internationally known scientists.

The proposal was triggered by a situation in which Lee Hood of Seattle, Wash., was recruited to serve as a scientist-member of the group that was reviewing applications in a $40 million grant round last spring. One of the applications involved stem cell scientist Irv Weissman of Stanford University, a close friend of Hood. The men also own a ranch in Montana together and have scientific and professional links. Alan Trounson, the stem cell agency's president, has been a guest of Weissman's at the ranch and recruited Hood, an expert in genomics, as a grant reviewer.

CIRM, as the $3 billion stem cell agency is known, said it did not detect the relationship between Hood and Weissman until it was called to their attention by another reviewer who was also participating in the closed-door review of applications.

A staff memo prepared for next week's meeting  of the agency governing board described the violation as “inadvertent and highly technical.”

On Monday, the California Stem Cell Report reported that unspecified changes were being considered in the conflict rules. Following publication of the item, more information on the proposal was posted on the agency's Web site in preparation for next Wednesday's meeting of the agency's governing board in Burlingame, Ca.

The memo, prepared by the agency's attorneys, said, 

“In order to prevent both the reality and appearance of a conflict, while preserving CIRM's ability to attract the best reviewers available, the rules should flag only those interests that could genuinely be deemed material.”

The changes would create a threshold of $5,000 a year for conflicts involving salary or consulting fees. Less than that would not trigger a conflict situation. Other proposed changes to be taken up by the agency board involve personal and professional conflicts along with the nature of the economic disclosures that reviewers, all of whom are from out-of-state, must disclose privately to a handful of agency officials.

The agency's scientific reviewers do not have to disclose publicly their financial and professional interests despite the fact that they have made all of the decisions on 98 percent of the applications for the $1.8 billion the agency has handed out. The interests of the reviewers are also withheld from applicants, many of whom may have competing or professional interests. The agency requires that reviewers who have conflicts must be removed from consideration of applications where conflicts exist. However, there is no way to determine whether that is actually done because the applications are reviewed behind closed doors and the economic and professional disclosures are withheld from the public.

Our take:
The agency's position on the conflict involving Weissman and Hood is disingenuous. To say that it is “highly technical” trivializes the entire matter. The conflict problem does not necessarily arise because Hood's friend (Weissman) could have received a few thousand dollars through approval of a grant. It involves much, much more. The application was for $24 million to create the first-ever stem cell genomics center in California. Should Weissman's employer, Stanford University, have been selected for the facility, it would have accrued to the great benefit of that institution, both monetarily and otherwise. Indirectly, it would have also enhanced Weissman's already substantial reputation and prestige as a person whose name can sway actions by California's state research effort. In the world of science, reputation and prestige often count for more than money.
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Conflict-of-Interest Changes Coming at California Stem Cell Agency

Directors of the $3 billion California stem cell agency meet next week to consider changes in conflict of interest rules for the persons who make virtually all the decisions on the hundreds of applications  for the cash that it hands out for research.

Details of the changes and their justification are not yet publicly available for the meeting in Burlingame, Ca., on Oct. 9. The only information that was posted on the CIRM Web site as of this morning was this brief note from the meeting agenda:

“Request for consent to initiate rule-making to amend conflict of interest regulations for non-ICOC members of the Grants Working Group.”

ICOC is the abbreviation for the stem cell governing board, whose members are required to publicly disclose many of their financial interests.

The changes would affect the out-of-state scientists who score grant applications during closed-door deliberations. The agency's governing board, which has the ultimate legal authority for application approval, has ratified 98 percent of the decisions by the grant working group, according to the agency's own calculations.

The agency does not require the scientists to disclose publicly either their economic or professional interests and has resisted proposals for more transparency for years. The interests of reviewers instead are disclosed privately to a limited number of persons within the agency There does not appear to be a significant effort to audit the disclosures for accuracy.

Questions about the legal necessity for public disclosure of grant reviewers' interests have arisen as far back as 2007, including a recommendation by the state auditor that the agency seek an opinion from the state attorney general on the matter. The auditor said,

 “The FPPC (the state's government ethics agency) believes that members of working groups, who perform duties such as advising the committee on standards and policy or evaluating grant applications and making award recommendations to the committee, may need to be included in the conflict-of-interest code. Specifically, the FPPC believes that, under state regulations, working group members may act as decision makers if they make substantive recommendations that are, over an extended period, regularly approved without significant amendment or modification by the committee. Thus, as decision makers, working group members would need to be subject to the conflict-of-interest code.”

However, the agency said, also  in 2007,

  “The recommendations of the CIRM working groups have never been routinely and/or regularly adopted by the ICOC. Until the time that such a pattern is detected, the question you suggest we raise with the attorney general is entirely hypothetical, and is therefore not appropriate for submission. We will, however, continue to monitor approvals for such a pattern and will reconsider our decision if one emerges."

Because of the closed door nature of the grant application review process, conflict questions rarely surface publicly. Last spring, however, the California Stem Cell Report reported conflict violations involving an internationally reknown scientist-reviewer in a $40 million grant round. The scientist, Lee Hood of Seattle, Wash., is a close friend of one of the applicants, Irv Weissman of Stanford. They also own property together in Montana.

As we reported at the time,

“The conflict was not discovered by the agency during the review. It was raised by another reviewer at the end of the review, which, for the first time in CIRM history, failed to conclude with a decision supporting any of the proposals. Reviewers' comments have been sent back to applicants with another review scheduled for November. The agency said Hood will not take part in that session.”

Hood was recruited as a reviewer by CIRM President Alan Trounson, who has been a guest of Weissman at the Hood-Weissman ranch.