Quartet of Researchers Snagged in Budgeting, Parliamentary Web at $3 Billion California Stem Cell Agency

Highlights
Fiscal discipline at CIRM
The 10 percent solution
A quorum shortage pops up

Four California scientists who are ready to kick off highly rated projects to treat everything from Alzheimer's to rotting jaw bones became tangled last week in a financial and procedural briar patch involving the directors of the $3 billion California stem cell agency.

The basic problem, however, was simple. Money.

The agency had budgeted only $15 million for this latest round of awards last Thursday. But the four applications -- already approved by the agency's reviewers -- totalled $16.6 million. Typically, the agency's full board rubber stamps in public the decisions of its reviewers, who act behind closed doors without disclosing their economic or professional interests. The board has reversed approvals by reviewers on only four occasions out of hundreds of awards over the past 12 years, according to the agency.

Last week, the chairman of the agency, Jonathan Thomas, began the public discussion by declaring that the board should go through the applications one by one and vote on them. When the money ran out, that would finish action on funding for November.

Fiscal discipline was cited as the main reason for such a course.

Steve Juelsgaard 

Wait a minute, said Steve Juelsgaard, a member of the board of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known. He asked for the amount of
funding already being provided for the afflictions targeted by the proposals. If research in a particular area was already heavily supported, perhaps approving another award in that area was not necessary, Juelsgaard reasoned. However, the agency staff could not provide those figures at the time of the meeting.

A lengthy discussion followed involving several scenarios. One would have cut each award by 10 percent but approve all four.  But that could mean that the proposals would be altered from the versions that were approved by the reviewers. (However, the board is not legally required to accept what the reviewers decide.  Under the terms of the ballot initiative that created the agency, the board has the final say, which is part of the justification for not publicly disclosing the economic interests of reviewers.)

Another proposal would have simply increased the funding for the round. That could not be acted on because it required 10 days advance public notice.

The board ultimately approved a Juelsgaard motion to slice roughly 10 percent from each award with the condition that applicants come up with matching funds to bring the total to the level approved by reviewers.

Yadong Huang, Gladstone photo

One applicant, Yadong Huang from the Gladstone Institutes, said, however, that non-profit research organizations were already hard-pressed and could not necessarily come up additional cash. His $5.9 million application (TRAN1-09394) was top-ranked by reviewers and targeted Alzheimer's.

Jill Helms, Linked In photo

Another applicant, Jill Helms, chief scientific officer of Ankasa Regenerative Therapeutics, Inc., of La Jolla, spoke on behalf of the company's application (TRAN1-09270) to target osteonecrosis, an affliction that "causes jaw bones to rot and thigh bones to snap." She urged the board to give priority to applications that already had co-funding. Her $3.7 million application contained a 20 percent co-funding component.

Helms, who is also a Stanford University medical school professor, unsuccessfully asked the CIRM board in 2015 to overturn a negative recommendation by reviewers.

During the two-hour telephonic meeting, the board did approve conditionally two awards under the matching-fund requirement. They were for the Alzheimers proposal and one dealing with sickle cell disease (TRAN1-09292).  The identity of the chief scientist on the sickle cell proposal was not disclosed by the agency under its longstanding policy and tradition within the research field.

Jeff Sheehy, Science photo

The board failed to complete action on the two others because it  lost the quorum that is required to do business legally. That came after a motion by board member Jeff Sheehy to reject one of the four applications failed on a 3-8 vote. Sheehy said another related proposal was already being funded by the agency and that the time to translate the research into a therapy  "would be enormous." The $2.5 million application  (TRAN1-09288) up for consideration last week involved cartilage repair.

Thursday's meeting was being conducted telephonically. After Sheehy lost his motion, he did not respond to telephonic queries from the board. The meeting was nearing its scheduled end at noon. Other board members also failed to respond, and the meeting was adjourned minutes later.

Juelsgaard and some other members said it was important for board members to stick around for the full meetings. Juelsgaard said,

"For gosh sakes, this is something that you signed up to do."

Termination of CIRM board business because of quorum problems regularly occurred some years ago. (See here, here and here.) But since Thomas has been chairman the issue has rarely popped up.

Thomas indicated the board would try to schedule a special telephonic meeting to deal with the four applications. It also has a face-to-face meeting scheduled for Dec. 13 in Oakland. Both meetings legally require 10 days advance notice.

The review summaries on the applications are consolidated in this CIRM document along with their scores and more information.

Stem Cell Blowback from Proposition 71

Proposition 71 last week once again stood in the way of action by the $3 billion California stem cell agency.

This time it was a bit of minutia embedded in state law that prevented the agency's governing board from going forward. The result is that the board will have to hold another meeting in August to approve matters that need to be acted on in a timely fashion.

The minutia involves the supermajority quorum requirement for the board, the percentage of board members needed to conduct business legally. Proposition 71, the 10,000-word ballot initiative that created the agency in 2004, stipulates that 65 percent of the 29 members of the board be present for action.

Here is what happened: Late last Thursday afternoon, CIRM directors were moving fast after a long day of dealing with $151 million in research awards. But as they attempted to act on proposed changes in the agency's important intellectual property rules, one of the board members left the meeting, presumably to catch a flight. The result was that the meeting quickly ended after it was decided to deal with the IP proposal and another matter during a telephonic meeting this month.

The quorum problem has plagued the CIRM board since its inception, although the situation has eased since J.T. Thomas, a Los Angeles bond financier, was elected chairman in 2011. A few years back, the board also changed its rules to allow a limited number of board members to participate in meetings by telephone, reducing the pressure on board members to physically attend meetings.

The obvious solution would be to change the quorum to 50 percent, a reasonable standard. However, the board is legally barred from doing that. To make the change would require a super, supermajority vote, 70 percent of each house of the state legislature and the signature of the governor. That is another bit that is embedded in state law, courtesy of Proposition 71. To attempt to win a  70 percent legislative vote would involve a political process that could be contentious and also involve some horse-trading that the stem cell agency would not like to see.

Why does the 65-percent quorum requirement exist? Normally, one would think such internal matters are best left to the governing board itself. It is difficult to know why former CIRM Chairman Bob Klein and his associates wrote that requirement into law. But it does allow a minority to have effective veto power over many actions by the governing board.

Of course, there is another way to look at the problem: CIRM board members could change their flights and stick around until all the business is done. But that would ignore the reality that all of them are extremely busy people and have schedules that are more than full.

All of this goes to one of the major policy issues in California -- ballot box budgeting and the use of initiatives that are inflexible and all but impossible to change, even when the state is in the midst of a financial crisis in which the poor, the elderly and school children are the victims. One California economist has called the situation "our special hell."

For more on some of the other problems created by Proposition 71, see here(cap on size of staff, which took legislation to remove), here (board cannot nominate its ownchairman), here (dual executive arrangement).

California Stem Cell Agency Approves $68 Million in New Funding

In a matter of a few minutes this afternoon, directors of the California stem cell agency approved $68 million in new financing rounds, including a $30 million business-friendly effort to speed development of clinical therapies.

The proposals received almost no discussion as four board members scurried for flights or to return home. Their departure left the 29-member board without the 19-member quorum needed to act legally. The board was already short of a full contingent of members.

In addition to the business loan program, the board approved a $35 million basic biology round and a $3 million program to provide internships for high school students at research labs. The funding goes to the labs, which then pick the students.

Action on the items came swiftly after CIRM Chairman Jonathan Thomas told directors they had only 20 minutes to approve them before the quorum was lost.

Here is the CIRM press release on the plans.

CIRM Directors Adjourn

Directors of the California stem cell agency adjourned their meeting early this afternoon after hastily acting on a number of multimillion dollar items.

Four members of the board left to catch planes or return home, leaving the 29-member board without sufficient members to act legally. The board has a super-majority requirement written into state law, courtesy of Prop. 71, the measure that created CIRM. Loss of quorums has been a problem for CIRM since its inception.

The board had been scheduled to meet until 5 p.m. PDT today. The board adjourned at 2:39 p.m.

Board member Bert Lubin, president of Childrens Hospital of Oakland, told remaining board members that all board members should stay for the entire scheduled meeting. He suggested to CIRM Chairman Jonathan Thomas that he write a letter to the board to that effect.

The hasty departure of the board members followed a lengthy discussion earlier in the day about CIRM's shaky public image and ways to improve it.

Two minor items were put off until December. We will have more on board actions in the next couple of hours.

Stem Cell Board Racing Through Agenda

California stem cell agency directors are hurrying through their agenda in Irvine this afternoon as four directors will be leaving to catch planes.

That will leave the board shy of its super-majority quorum requirement. The 29-member board needs 19 members present to legally act. Maintaining a quorum has been a problem since day one of the organization. The quorum requirement was written into state law by Prop. 71.

Pay Proposal for Patient Advocates on CIRM Board

The California stem cell agency is proposing to pay the 10 patient advocate members on its 29-member board of directors up to $15,000 a year for work performed in connection with their responsibilities for CIRM.

The move would implement some provisions of legislation that also removes the 50 person cap on the size of the CIRM staff. That legislation (SB1064) seems likely to be enacted this year. It is up for consideration in Sacamento next Wednesday by the Assembly Appropriations Committee.

Both the cap and the problem being addressed by the patient advocate proposal stem from Prop. 71, the ballot initiative that created CIRM and also wrote variety of minutia into law. The proposition requires a super-majority (65 percent) for a CIRM governing board quorum, which is based on the number of board members eligible to vote. Since many of the board members have conflicts of interest that prevent them voting on matters before the board, the presence of patient advocates is necessary to take action – much more so than many other members of the board.

A memo by James Harrison, outside counsel to the CIRM board, said,

"As a result of the requirements in Proposition 71, the Patient Advocate members of CIRM’s Governing Board are required to devote a substantial amount of time to the review of applications for research and facilities funding and the development of the standards pursuant to which research must be conducted. The time devoted to service on the Working Groups is above and beyond the time devoted to Board, subcommittee and task force meetings. In the aggregate, this service can seriously affect members’ ability to serve while simultaneously carrying out their other responsibilities, including their current occupations.

“Under the proposed bylaw, the Board would have the authority to set a daily consulting rate to compensate Patient Advocate members of the Grants Working Group and the Vice Chairs of the Facilities and Standards Working Groups for their service on the Working Groups. The Patient Advocates would continue to be limited to a per diem of approximately $116 per day for their service on the Board, Board subcommittees, and task forces. The proposed bylaw also addresses concerns that SB 1064 imposes no cap on the daily consulting rate the Board could set for Patient Advocate members of the Working Groups. Thus, it would impose a $15,000 annual cap and it would limit the daily rate to no more than 75% of the rate paid to scientific members of the Grants Working Group. In addition, the bylaw would require the Board to find that service on the Working Groups requires an extraordinary commitment of time.”

The CIRM directors' Governance Subcommittee will take up the pay plan at its meeting next Tuesday. Also on tap for the session are changes in outside contracting procedures. The agency is heavily reliant on contractors because of the 50 person staff limit.

The panel is additionally slated to discuss CIRM's grants management system, which has been a critical issue for the agency since 2007. A number of directors expressed concern at their June meeting about the staff decision to build a custom system, declaring that such efforts often have unfortunate outcomes. The staff report on the matter is not yet available to the public.

The public can take part in the subcommittee meeting at a number of teleconference locations throughout the state. The specific addresses can be found on the agenda.

California Chief Justice Rips State's Initiative Process

First it was Bill Gross, and then came Ronald George.

Neither name is a household word, but they do have a cachet in certain circles.

Gross is head of a $178 billion bond fund (Pimco Total Return) based in Southern California. George(see photo) is chief justice of the California State Supreme Court.

What they have in common this month is their public scorn for the state's ballot initiative process, the method used to create CIRM and which lies at the root of the some of the problems that regularly trouble the California stem cell research agency.

George's remarks surfaced during the weekend in both the New York Times, Los Angeles Times and The Sacramento Bee, among other news outlets. His comments followed an earlier blast by Gross that the government of the Golden State has been “perverted” with many of its financial difficulties stemming from ballot initiatives.

In the case of Ronald George, Jennifer Steinhauer of the New York Times described his comments as a “rare public rebuke of state government and policies delivered by a sitting judge.” She said George “scathingly criticized” the initiative process, declaring that it has “rendered our state government dysfunctional.”

George noted that ballot initiatives not only foul up California's budget but tinker with how barnyard creatures are managed. Steinhauer wrote:

“The state is unusual, he said, because it prohibits its Legislature from amending or repealing many types of laws without voter approval, essentially hamstringing that body — and the executive branch.”

The chief justice could have added that CIRM has fallen prey to the same problem. Prop. 71, the ballot initiative that created the agency in 2004, has handcuffed the $3 billion California stem cell agency in dealing with the problems created by its ill-conceived, super-majority quorum requirements as well a redundant limitation on the size of CIRM staff.

Legally, the number of CIRM employees cannot exceed 50, probably about the number of persons needed to run a 24-7 Burger King. That amounts to one CIRM employee to deal with every $20 million in grants expected to be approved by the end of this year. That doesn't count another $2 billion to be awarded in the next five to 10 years.

George noted that ballot measures – originally intended to empower the people – have become tools of special interests. Last year, the Center for Governmental Studies in Los Angeles, documented the range of problems in a 402-page study calling for changes in ballot initiatives. It said that Prop. 71, which established CIRM, is an example of an initiative sponsored by “wealthy elites.”

The timing of George's speech and its handling by his representatives seems interesting as well. The speech was delivered Saturday in Cambridge, Mass., to the American Academy of Arts and Sciences. But advance copies were placed in the hands of reporters at the Los Angeles and New York Times and The Bee in sufficient time for stories to be written and published before it was actually delivered.

It is undoubtedly no coincidence that the placement occurred just before hundreds of persons convene this week in Sacramento for a conference on state constitutional reform, which is what it will take to correct the abuses in the ballot initiative process.

Correction

The “Prop. 71 Minutia” item on Sept. 16 contained a quote that referred to “advice” from the Little Hoover Commission that CIRM should lower its quorum requirements. A draft of the Hoover report contained that recommendation, but it was omitted in the final version. The final report said the super-quorum requirement was “restrictive” and “problematic” but said the problem would be eased by reducing the size of the board from 29 to 15.

Prop. 71 Minutia Stalls CIRM Again

SAN FRANCISCO – The board of directors of the California stem cell agency Tuesday failed to achieve a quorum and was forced to put off action on regulations tied to its ambitious, $210 million disease team grant round, the largest ever in CIRM history.

That means it will be at least another two weeks or more before the board can act on the IP rules that it needs for disease team project. The grants are scheduled to be awarded later this year.

The board has been handicapped for years by its super-quorum requirement, 65 percent of its 29 members. Tuesday, the quorum was 19 but only 18 answered the roll call during the special, teleconference meeting based here. Twenty-one had been expected. Without a quorum, the board cannot take legal action.

John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., said today that problems with quorums are a persistent and important issue at CIRM. Simpson has followed the matter for several years. In one case in 2008, he wrote about how the board “essentially” drafted a member of the audience to raise a quorum.

Commenting today, he said,

“This clearly shows that (the board) has not resolved its nagging problem with mustering a quorum. They should have taken the Little Hoover Commission's (initial) advice and moved to make a simple majority all that is necessary to conduct business. Instead, they insist on a meaningless charade that wasted the time of 18 very busy people.”

The quorum mandate is written into state law by Prop. 71, which created the stem cell agency in 2004. It cannot be changed without a vote of the people or by the legislature. But the latter involves another super-majority requirement, 70 percent of both houses of the legislature and the signature of the governor.

The Little Hoover Commission, the state's government good government panel, earlier this year cited CIRM's problems with achieving quorums. But the CIRM board last month rejected suggestions that the quorum be reduced to 50 percent. It relied on its attorney's opinion that to do so would “undermine” the intent of the voters and would leave the board open to being captured by a minority.

However, super-majority requirements actually facilitate minority dominance of bodies such as the CIRM board. On Tuesday, the absence of one member paralyzed the board. In other cases, a few members have left CIRM board meetings and thus prevented it from taking action. Conceivably, 11 members of the board could control it by simply refusing to attend unless their wishes prevailed.

The regulations under consideration Tuesday dealt with intellectual property requirements. Initially, they appeared to be relatively non-controversial, although CIRM director Susan Bryant, vice chancellor for research, University of California, Irvine, raised anew concerns expressed last July by the University of California (statewide).

Director William R. Brody, president of the Salk Institute, also criticized some of the proposed regulations as “absurd” and suggested that language from federal IP law be adopted. However, others noted that CIRM deliberately moved away from federal law in its development of the regulations over several years.

In the absence of a quorum, CIRM Chairman Robert Klein said the proposed regulations will be taken up later after CIRM director Ed Penhoet, head of the IP Task Force and a co-founder of Chiron, has a chance to discuss them with Brody and Bryant.

The CIRM board also did not act on hiring underwriters (more than one is needed because of potential conflicts of interest) to run its $500 million biotech loan program. The effort is scheduled to begin with the disease team grant round. But the board was told that a very small number of potential borrowers are involved in that round.

Instead of hiring two or more underwriters, John Robson, CIRM vice president for operations, said the lending effort can begin with a pilot project involving one underwriter. He said that it will help the agency develop a better underwriting effort for the directors to approve next year. Following the meeting, Robson said he hopes to conclude a pilot agreement within days.

You can read more on quorum problems, as discussed by Simpson, here, here, here, here and here.

(Editor's note: In an earlier version of this item, the quotation from John M. Simpson did not contain the word "initial" in parentheses.)

Stem Cell Directors Ruffled by Voting Changes

The California Legislature has long had a practice of voting that has kept the wheels of government churning and enhanced the power of already important committee chairman. It is known as “holding the roll open.”

The practice made a controversial debut in May at the California stem cell agency, triggering a sharp exchange between Chairman Robert Klein and some directors.

As a result, the procedure and possible guidelines for its use are now on the agenda next week of the board of directors of the California stem cell agency.

Here is how it works in legislative committees, which are always plagued with absenteeism. A bill is presented to the panel and discussed. A vote is taken. If insufficient votes exist to pass, the chairman of the committee can hold the roll call vote open until the committee adjourns, often hours later. That allows absent lawmakers to pop in and vote without having heard any of the discussion. Lawmakers presenting legislation may also ask to hold the roll open until they can drag in their supporters. Of course, the chairman can close the roll and thus kill a bill.

Because of absenteeism, CIRM has been plagued with an inability to reach the super-majority quorum requirements mandated by Prop. 71. Some of the pressures have eased since limited teleconference participation has been permitted for some members for CIRM board meetings.

Holding roll call votes open would help grease CIRM's wheels, but some directors were not happy with the introduction of the procedure at the May 12 teleconference board meeting. The session involved support of industry-backed federal legislation having to do with patent protection of biotech therapies.

At one point, Director Oswald Steward, chair and director of the Reeve, Irvine Research Center, University of California, Irvine, raised questions about the voting procedure. According to the transcript, Steward said,

“I just don't understand why this process has been invoked now today, and I have to say in a very strange way.”

Other directors joined in with their reservations. Steward then said he was "a little offended" by the voting practice.

At that point, an obviously irritated Klein (based on the audiocast of the meeting), snapped,

"Hold on. Excuse me. Point of order here."

Directors raising issues about the voting procedure included Philip Pizzo, dean of the Stanford School of Medicine; Gerald Levey, dean of the UCLA School of Medicine, and Jeff Sheehy, director for communications, UCSF AIDS Research Institute.

Pizzo caught the flavor of most of the concerns. He said that permitting roll call votes to be held open would affect the “quality of our discussions.”

Pizzo said,

"Whereas, I like the idea of facilitating the process, I think at a subsequent (board) meeting we should discuss it because it does impact on our culture and how we do things."

He continued,

"I think we've been enriched over the years by hearing each other's point of view. I worry that we're going to wind up coming in with prefixed ideas that don't necessarily allow themselves to be attentive to new insights."

Klein did not directly address those concerns in May but said he would put the voting procedure before the entire board next week in San Diego.

While the practice offers some efficiency, differences exist between legislative committees and the CIRM board. Lawmakers could be reasonably well-informed on a measure without hearing the debate. They have in their hands well prior to the committee meetings a thorough-going analysis of bills before the committee, their pros and cons and a list of opponents and supporters. That never happens at CIRM.

Rare Teleconference Session of CIRM Directors on Monday

Californians will have an unusual opportunity next Monday to tell the directors of the $3 billion California stem cell agency what they think and listen to them attempt to solve a problem that has nagged them since 2005.

The occasion is a meeting of the directors, who are officially known as the Independent Citizens Oversight Committee. Virtually all of their meetings have been held under circumstances that require the physical presence of interested parties who might want to observe or comment.

However, on Monday, the meeting will be conducted via teleconference arrangements from locations throughout the state, from Healdsburg to La Jolla. One site in San Antonio, Tx, is included. Apparently one director will be staying at the Grand Hyatt there.

All the locations are public for the purposes of this meeting. The agenda includes only one item – a plan to solve the problem of meeting the board's super-quorum requirement of 65 percent at meetings of the 29-member group. The requirement is enshrined in state law courtesy of Prop. 71 and is politically nearly impossible to alter. Instead, the plan to help provide better director attendance provides for the telephonic participation of a limited number of directors on a limited basis for regular meetings.

Monday's meeting also provides an opportunity for the public to comment on any issue, although the board is legally restricted to action only on agenda items.

Here is the current list of teleconference locations in California other than Healdsburg and La Jolla(two sites): San Francisco(two sites), Sacramento, Los Angeles(five sites), Duarte, Menlo Park, Elk Grove, Irvine, Pleasanton and San Carlos. The locations could change, so keep an eye on the agenda, which also includes the specific addresses.

Finessing the CIRM Directors' Attendance Issue

Next Monday, directors of the California stem cell agency will try once again to figure out how to work around their perennial problem of having enough directors on hand to conduct their business.

The 29-member board has regular difficulty meeting its 65-per cent quorum requirement. Chairman Robert Klein is reportedly worried that not enough members will be on hand in December to hand out many millions in additional grants.

Sherry Lansing, a CIRM director and former Hollywood film studio executive, has taken on the task of finding a work-around in her capacity as chairperson of the CIRM Governance Subcommittee.

The group initiated its effort last month. Several suggestions were made for changes in the proposed policy. However, the latest version is not yet available on the CIRM website.

The quorum issue is one created by Prop. 71, which locked into state law procedural issues that are better left to regulation, which is easier to change. Ironically, directors recently successfully opposed legislation to ensure affordable access to CIRM-financed therapies on the grounds that the bill would codify in state law matters better left to regulation by CIRM directors.

CIRM could ask lawmakers to change the super-quorum requirement but that would open up discussions for other possible changes.

The public can listen in or make comments at teleconference locations in La Jolla, San Francisco, Los Angeles and Irvine. Othere locations may be added later. You can find them on the agenda.

Ballot Blowback: The Klein Quorum Petard

Prop. 71 created the California stem cell agency nearly four years ago, but the ballot measure also plays hob with CIRM from time to time.

One of those occasions came last week at its directors meeting in San Diego, which barely mustered the 65 percent quorum necessary to conduct its business legally. It was not the first time. Maintaining a quorum is a regular problem at meetings of directors and their subcommittees. Thursday's meeting also set a record for the largest percentage of alternates filling in for directors. Five alternates were there, 28 percent of the 18 directors in attendance.

John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., was there and wrote about the events on his organization's blog.

"Chairman Bob Klein is so worried about the possibility of no quorum at the December meeting when the board is slated to award a substantial number of grants, that he announced he will schedule a special ICOC(directors) meeting in about 30 days to adopt the procedures to allow telephone participation in December.

"All of this trouble comes from what I believe is a paranoid fear that stem cell research opponents could somehow gain control of the board and wreak havoc with a mere simple majority quorum requirement.

"And so Proposition 71 passed with a super-majority rule that Bob Klein wrote into it. And now he is often hoisted by his own petard."

The super-majority quorum also does something else. It gives a minority on the board tremendous power. All a handful of persons – maybe even one -- have to do is walk out of the room, and CIRM directors are legally paralyzed.

There is definitely an attendance problem at CIRM meetings, which stems in part from the membership of the board of directors. Prop. 71 stipulates that 29 persons serve on the board, which makes it difficult to schedule meetings at mutually convenient times. It also stipulates that the most of the directors come from top executive positions at other enterprises. These are folks who are more than busy. They already have important responsibilities at their own organizations, and naturally those come first.

The use of alternates to fill in for the directors additionally nullifies some of the justification for the selection of the directors. That argument contends that deans of medical schools and the chancellor of UC Berkeley, among others, should serve on the board because they bring skills and knowledge from their own positions to make good decisions on stem cell matters. So the fact that their organizations also stand to benefit to tune of hundreds of millions of dollars should be put aside. But if they are sending alternates, the state does not receive the benefit of their expertise. That said, at least some of the alternates more than hold their own and make significant contributions at the meetings.

So why not just change the law to reduce the quorum? Easier said than done. Under Prop. 71, that requires another super-majority vote – in this case, a 70 percent vote of both houses of the legislature and the signature of the governor. That is an exceedingly difficult task. Nonetheless some legislator might be willing to carry the bill. But to win approval, Klein might have to do some horse-trading that would affect other aspects of CIRM in ways that do not find his favor. In other words, it is a legislative can of worms that Klein probably does not want to open.

Klein and Sheehy Tangle Over Lucrative CIRM Contract with Former CIRM Director

Should a former director of the California stem cell agency be paid hundreds of thousands of dollars by the agency after he leaves the board?

That was the essential question at a meeting last week of the CIRM Governance Subcommittee, which is a subset of the 29-member board of directors.

John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., wrote about the session on his organization's blog in an item headlined, "Tempers flare at stem cell subcommittee meeting."

Simpson alluded to the "old boys network" at CIRM and wrote,

"Stem Cell Board Chairman Bob Klein and member Jeff Sheehy clashed heatedly over a former board member's highly paid consultancy to the state agency at a recent  meeting of the Governance Subcommittee.

"I lit the spark on Friday when I asked what Dr. Richard Murphy was doing under the description of "Strategic Consulting" for a fee $155,000 from April 15 through Dec. 31.  Was he revising the California Institute for Regenerative Medicine (CIRM) strategic plan?  That was a large part of it, President Alan Trounson said."

Simpson also wrote:

"'You don't like Dr. Murphy,' Klein told Sheehy. 'Let's stick to the mission.'

Sheehy said that 'he deeply resented' the suggestion his concern stemmed from 'personal animus.'  

"'We need a more open process,' he said."

Murphy served as interim president of CIRM last year and part of this year under a $300,000, six-month contract. The consulting contract followed.

In another item, Simpson also discussed the proposal by the Governance Subcommittee to deal with CIRM's longstanding difficulties in securing quorums necessary to do business legally. Ironically, the subcommittee meeting itself did not have a quorum.

Wright's Departure From CIRM Illustrates Agency's Voting Practices

The 29-member board of directors for the California stem cell agency has a new vacancy, caused by the impending impending departure of Janet Wright, a Chico cardiologist, for a new job in Washington, D.C.

Ordinarily, the loss of one of 29 members would be insignificant. But Wright's departure affects actions involving CIRM's mammoth $758 million stem cell lab construction program.

It also illustrates what some may consider the board's bizarre voting structure and its built-in conflicts of interest.

The impact of Wright's departure could be felt as early as next week's meeting of the board, which is known as the Oversight Committee or ICOC. One of the matters on the agenda involves the lab grant program. Only board members whose institutions are not affected can vote on the matter. Those affected cannot even take part in the discussion.

Earlier this year we wrote about what amounts to a floating ICOC quorum with a "quartet majority," and how it can reduce many of the board members to silent sphinxes on some issues. To recap how it works, Prop. 71 uses the number of ICOC members eligible to vote as the basis for a quorum, rather than the total number of persons on the ICOC. Prop. 71 also states that a quorum is 65 percent of those eligible to vote. Action can be taken by a majority of a quorum. So when 10 persons are eligible to vote, the quorum is seven . A majority would be only four.

In January, only 10 members of the board, including Wright, were allowed legally to participate in the discussion of lab grant matters. She filled a patient advocate position on the board and rarely, if ever, was disqualified from participating or voting. Six of the 10 persons in the lab grant case are patient advocates. The others mostly represent industry, which sometimes has strong backing from patient advocates who want to see cures on the market quickly.

In theory, with absences, a quorum on lab grant issues could be as low as three, or so it appears. That would mean only two persons are needed to take action on some far-reaching and important issues. However, the possibility of that actually happening seems remote.

As for Wright's replacement, that is up to state Treasurer Bill Lockyer. According to state law, he must pick a patient advocate to fill the position. Lockyer's spokesman, Tom Dresslar, told the California Stem Cell Report,

"It's our intent to move with due diligence and as expeditiously as possible. Treasurer Lockyer's objective is to find a qualified person with impeccable credentials who demonstrates a strong commitment to helping ensure CIRM provides Californians what they voted for when they passed Prop. 71."

If you are interesting in serving on the board or want to recommend someone, you can write the treasurer at this Internet location.

Wright's new job was first reported in the Chico Enterprise-Record Feb. 26, which said she has become vice president for science and quality with the American College of Cardiology. She had worked in Chico for 23 years.

(An earlier version of this item incorrectly stated that the Wright had left for her new job last month. That information, reported by the Chico Enterprise-Record, was incorrect. As of March 17, CIRM could not say when she would no longer be on the board. Wright did not respond to email queries.)