CIRM Director Sheehy Decries Unfortunate Lack of Information

CIRM Director Jeff Sheehy, a patient advocate representative on the stem cell agency's board and a communications officer at UC San Francisco, sent along this note regarding our posting of the funding priorities presentation used at Thursday's board meeting.

"Thank you for posting this doc. I'm glad you have it up so the public can see it. I still don't have a copy, though I requested one at the meeting. And, I cannot understand why this doc was not provided to ICOC members and the public prior to the meeting since the Chair had a copy of the Power Point slides that he alone used to follow the presentation.

"In this troubling budget environment, it is extremely unfortunate that information is either withheld from the Board or provided in such a way that the Board is in a position of having to make decisions without all of the information or without adequate time to digest and consider the information presented."

Bad Link Advisory

We fixed a couple of bad links on the "CIRM PR" item and this "comment" notice. If you missed them the first time, you can find them now.

Torres-Roth Election Attracts Media Attention

The board of the California stem cell agency today received more than its usual amount of news coverage as the result of the election of Art Torres and Duane Roth as vice chairs of the board of directors.

The reason for the attention is Art Torres. He is well known to the news media because of his lifelong career in politics. If the vice chair race had involved Duane Roth and Marcy Feit(another CIRM director), the election of a vice chair would have been barely noticed.

Most of the stories focused almost entirely on Torres and Roth. A notable and important exception was the piece on one of the websites of the influential magazine Nature.

Erika Check Hayden reported on the election and much more from the meeting. Her story began:

"The California Institute for Regenerative Medicine has sharpened the agency’s focus on translating stem cell-based treatments into treatments, in the wake of President Barack Obama’s decision to loosen restrictions on federal funding for human embryonic stem cell research."

She touched on the funding crisis at the agency and its priorities, along with the struggle between basic science and translational research. She also had material from another CIRM meeting on March 11,

"'This push of getting out there to the clinic has some risks,' warned Arnold Kriegstein of the University of California San Francisco at the meeting. 'There’s a risk that little will be learned at great cost' if patients are harmed in poorly designed early clinical trials, Kriegstein said.

"And Warner Greene of UCSF’s Gladstone Institute of Virology and Immunology cautioned against 'turning over the reins' of basic science to the NIH: 'It’s foolish to expect now that the disease teams will succeed,' he said."

Terri Somers of the San Diego Union-Tribune wrote about the vice chair election. (Duane Roth is from the San Diego area.) Somers called the election "job sharing." She had this quote from CIRM director Francisco Prieto, a Sacramento physician, who spoke about compensation for the vice chairs,

"I believe that everyone should be compensated appropriately and fairly for the work they are going to do.In the context of the board and a state agency, to demand something like that excludes participation from anyone who isn't independently wealthy or cannot depend on outside income, which is a substantial portion of the population that needs to be represented here and everywhere else."

Torres was provided a $75,000 salary for halftime work. Roth has declined a salary.

The Los Angeles Times rarely covers the California stem cell agency, but again the draw was Torres in a story by Eric Bailey.

Other stories and writers included: Ron Leuty, San Francisco Business Times; Shane Goldmacher, Sacramento Bee's Capitol Alert; Juha-Pekka Tikka, Xconomy.com, and The Associated Press.

Fresh Comment

"Anonymous" has posted a comment on the "CIRM PR" item, saying that he or she has added this blog to their news reader after seeing our piece on FierceBiotech.

CIRM Funding Priorities Presentation

Here is the CIRM presentation today on the agency's funding priorities. The document was provided courtesy of CIRM and its communications chief, Don Gibbons. The document is available via Scribd.
Priorities(at Rev IV) 2009PC

Publish at Scribd or explore others: Presentations Academic Work

CIRM PR on Today's Meeting

Here is a link to the CIRM news release on today's board meeting. It includes a list of the institutions receiving the training grants with links to the reviews of their proposals.

CIRM Meeting Over, More News Coming

The board of directors of the California stem cell has adjourned its meeting. We will more news coming up shortly dealing with funding priorities.

Clinic vs. Basic Research: CIRM Funding Priorities

This item is part of the continuing coverage today of the board meeting of the California stem cell agency based on its audiocast.

The California stem cell agency today set a goal of raising roughly $240 million by privately selling state bonds over the next two years, preserving both its touted efforts to push development of therapies in the clinic and basic biological research.

CIRM Chairman Robert Klein told the board that one of those therapeutic efforts, a $210 million disease team program, is a critical piece in marketing the bonds and is unique to the agency. Without it, he said raising the funds not only will be more difficult but would turn the agency's back on its main mission.

Funding priorities came up today during the CIRM board meeting in Sacramento as a result of the financial plight of the agency, which will run out of cash next fall unless it sells bonds, virtually the only source of funding for the program.

Klein wrote the measure that created CIRM in such a fashion that it puts the agency outside the normal budget allocation processes involving the legislature and the governor.

Directors debated the virtues of funding grants for basic biology versus higher profile enterprises aimed at developing potential therapies at a more advanced stage of research.

Marie Csete(see photo), chief scientific officer for CIRM, told the board that scientists at recent hearings on CIRM's strategic plan were emphatic in stressing the importance of basic research, whose grant round sizes have already been cut.

Director Jeff Sheehy, a communications officer at UC San Francisco and a patient advocate representative, said the disease team project is already a year behind schedule. He said,

"We do not want to hamstring the disease team."

Requests for preliminary applications in that round have already gone out. It is scheduled to be awarded in September or October.

The goal set by the board of directors is just that. Klein will come back in late April with more information on his efforts to sell the bonds. The budget and funding priorities are expected to be reviewed again then.

CIRM Gives Go-Ahead on $17.5 Million Training Program, Funding Deferred on $41 Million Round

This item is part of the continuing coverage today of the board meeting of the California stem cell agency based on its audiocast.

Directors of the financially troubled California stem cell agency today approved funding for $17.5 million in training grants for the state's community and state colleges, but delayed funding for 12 months a more advanced, $41 million training effort.

The vote followed recommendations from CIRM staff that reflected the fact that the agency will run out of cash this fall unless it can privately market state bonds, which are virtually its only source of funding.

The two rounds of training grants were approved in January but the board deferred decisions on payment timing until it had a better grasp of the agency's financial situation. The board stipulated that recipients in the $41 million round could go ahead with their programs this year and could be reimbursed later.

The motion to fund the community/state college grants was approved 9-0 and the training grants received a 8-2 go-ahead. Twenty-nine persons sit on the CIRM board, but most of them could not vote on the grants because of conflicts of interest. The conflicts also barred them taking part in the discussion.

The staff recommendation for funding the $17.5 million program was justified because the schools do not have access to other funding. Timing is also critical since the programs need to be set up soon so they are ready for the next school year.

Rollins Richmond(see photo), president of Humboldt State University, told the board,

"To back away now would place CIRM and this whole program in question."

Board members expressed confusion during the discussion of the funding issues concerning what grantees were being told about the status of funding from CIRM. CIRM President Alan Trounson said that grantees are being informed that their cash is "subject to funds being available." CIRM Chairman Robert Klein summarized the agency's position by saying, "This is a contract. The question is timing."

Klein has repeatedly emphasized that the grants are legally enforceable contracts.

Roth and Torres Chosen as Vice Chairs of CIRM

This item is part of the continuing coverage today of the board meeting of the California stem cell agency based on its audiocast.

The board of the California stem cell agency today unanimously elected two vice chairpersons – Art Torres, who is the head of the state Democratic Party, and Duane Roth, who has biomedical industry connections.

The board also voted to approve a $75,000, halftime salary for Torres(photo on left). Roth(on right) is a current member of the board of directors and is rejecting a salary. He receives $112 a day for CIRM meetings and $14 an hour for meeting preparation.

John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., suggested the salary should be $90,000 although he has been critical of much higher salaries at the agency. However, Bob Klein, chairman of the agency, indicated that the vice chair deal had already been worked out. The implication of Klein's remark was that changing the terms at this point could make things come unglued.

The vote came after several board members noted that the men bring different, high level skills that will enhance what CIRM is attempting to do.

Director Sherry Lansing, former head of a Hollywood film studio, said the agency had a "high class problem" when the two men were nominated. She electing both will total more than two – more like five.

Lansing is co-chair of the CIRM Governance Subcommittee. She and her co-chair, Claire Pomeroy, dean of the UC Davis School of Medicine, were the key players in putting together the dual vice chair plan.

CIRM Going With Taxable Bonds on its Private Sales Plan

This item is part of the continuing coverage today of the board meeting of the California stem cell agency based on its audiocast.

The California stem cell agency is planning to offer taxable state bonds, as opposed to tax exempt instruments, in its effort to shore up its critical financial situation and avoid running out of cash next fall.

Normally the state issues tax exempt general obligation bonds, which would carry lower interest rates than taxable bonds. The interest is a cost to the state.

However, CIRM Chairman Robert Klein said that he did not believe that the state would lose out financially because of the use of taxable bonds. He said CIRM will be dealing with individual purchasers as opposed to a broader market. He said the bonds will also meet program needs of potential purchasers such as charitable foundations.

In fact, Klein said, "We may well have less than a market rate interest."

He estimated that the bonds would have an interest rate of 5 to 5.5 percent, a figure that is attractive under current market conditions. He also said that the bonds could be repackaged in a few years, taking out the tax exempt projects and reissuing bonds for them separately.

Klein said that "going taxable saves us time" and avoids possible legal challenges, plus they can be sold to a larger range of customers.

Klein's statements on the use of taxable bonds came in response to a question from John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca.

Simpson also asked about the size of the legal fees involved in the sale of the bonds for CIRM. His question came after Klein said that CIRM's efforts have involved a goodly number of lawyers from other state agencies as well as CIRM and will continue to do so.

Klein said he plans to have a workup of costs associated with the private placement plan ready for the April meeting of the board. He said it is hard to estimate because the private placement plan is "unprecedented" in "our lifetimes."
Klein is a lawyer, but said he does not practice law and has no financial interest in any law firms.

In other matters, Klein acknowledged the presence of Art Torres at the Sacramento meeting. Torres is one of the candidates for the vice chair's job. Duane Roth, a current board member, is the other candidate.

The board is now in executive session.

Listening in on the CIRM Cash Woes, Vice Chair Election

Here is the latest information from the California stem cell agency on its audiocast Thursday of its board meeting during which its financial situation will be reviewed and vice chairs will be elected.

To hear the audiocast by telephone, dial (866) 254-5934 with an access code of 991416.

To hear it on the Internet, use this URL: http://65.197.1.15/att/confcast
Enter conference ID # 991416 then click go. No password is needed.

Do not use a period after the end of the URL

The meeting is scheduled to begin at 8:30 a.m. PDT but usually starts late, so you may not hear anything immediately unless ATT has made arrangements for some sort of recorded message.

The audiocast does not provide for public participation. But public participation is possible at remote teleconference locations at the City of Hope in Duarte, UCLA and the office of Jonathan Shestack in Los Angeles. Another location is at Toyon Farm in Napa, a horse training operation and vineyard owned by Camille and Ed Penhoet, who was the last vice chairman of CIRM and who remains on the board. Specific addresses are on the agenda.

Zach Hall on Monday Morning at the White House

Zach Hall, the first president of the California stem cell agency and now a director of the New York Stem Cell Foundation, attended the ceremonies at the White House on Monday. Here is his account of the event and some of its implications. Our thanks to Hall (pictured at left) for providing the article.

----

On a soft spring morning, a distinguished and festive group gathered at the East Entrance to the White House. It was a gathering of the tribe of embryonic stem cell research supporters – scientists, Washington officials, patients, and patient advocates, many of whom had been working for years for the day when the Presidential restrictions on stem cell research would be lifted. As we waited, we greeted colleagues, shared our excitement about the event, and began the first round of picture-taking. California was well-represented, with stem cell scientists Irv Weissman and Renee Reijo-Pera from Stanford; Bob Klein, Chairman of CIRM and author of Proposition 71; and CEO Tom Okarma from Geron. Leading stem cell scientists Jamie Thomson from Wisconsin, Shinya Yamanaka from the Gladstone Institute and Japan, John Gearhart from Pennsylvania and George Daley from Harvard were there, as were several Nobel Prize winners (Mike Bishop from UCSF, Steven Chu, the new Secretary of Energy, Robert Horvitz, Eric Kandel, Harold Varmus, Peter Agre) and other scientific notables (Bruce Alberts, Eric Lander, Francis Collins). Among the California patient advocates were long-time stem cell advocates, Roman Reed and his parents, Gloria and Don, and Katie Hood of the Michael J. Fox Foundation. A number of those present (Alta Charo, Clive Svenson, John Wagner, Janet Rowland) are well-known to CIRM as members of its Working Groups.

After passing through security, we entered the White House and, after a brief wait, streamed into the East Room where we were joined by a Congressional delegation including Speaker Nancy Pelosi, Senator Diane Feinstein and Representative Henry Waxman from California, Senators Tom Harkin and Orrin Hatch, and Representatives Mike Castle and Diana DeGette. One entire wall was packed with TV cameramen, journalists and photographers, whose presence was made evident throughout the event by the constant chorus of camera clicks.

The ceremony began with the entry of seven distinguished scientists, Nobelists and others, who would stand behind President Obama as he signed the Executive Order for embryonic stem cell research and the Memorandum on scientific integrity, their presence a clear signal of the importance of science to his administration.

The President entered, bounding onto the stage to a prolonged standing ovation. His first words were: “Well, I’m excited, too.” His speech was firm, clear and thoughtful, with the eloquence that we have come to expect from him. He was enthusiastic, but appropriately cautious about the promise of stem cell research, recognizing that “there is no finish line in the work of science.” He acknowledged and expressed respect for those who oppose the research, but cited the strong majority of Americans who believe the research should go forward. President Obama then adroitly tied the reversal of the presidential restrictions on human embryonic stem cell research to his effort to restore scientific integrity to government, to listen to scientists even when (“especially when,” as he added) it is inconvenient, and to “make scientific decisions based on facts, not ideology.” Needless to say, these words were warmly received by those present. The President ended with a tribute to Christopher and Dana Reeve and to the many people who have worked tirelessly on behalf of embryonic stem cell research.

The President then moved to the desk and signed the documents using multiple pens, as is the custom. “I’ve learned to extend my signature,” he said. After shaking the hands of those near the front (I was delighted to be one of them), the President left. Still excited and savoring the moment, the group lingered, reluctant to leave, until White House attendants pointed us to the door.

The President’s remarks, as well as the stem cell document itself, contained several small surprises. The general expectation among the stem cell community was that the Executive Order would permit federal funding of research on stem cell lines as long as they were made from surplus IVF embryos using money from private or state sources. The Executive Order, however, makes no specific mention of what can and cannot be funded, but directs the NIH to provide guidance on that point within 120 days, in light of “widely recognized guidelines.” This leaves open the possibility that the NIH could fund research on embryonic stem cell lines made by other means, including somatic cell nuclear transfer, as long as federal money was not used to make the lines. The use of federal funds to actually make stem cell lines is, in any case, illegal under the Dickey-Wicker amendment which prohibits any research that results in harm or destruction of a human embryo.

The second issue concerns whether or not legislation is desirable. The White House had indicated previously that this was a matter for the Congress to decide, but in his speech he suggested that his former colleagues “still have plenty of work to do.” Presumably this is encouragement to pass a new version of the Castle-DeGette bill, which allows federal funding for new lines made from IVF embryos, but might be taken as a reference to the Dickey-Wicker amendment. A legislative battle over Dickey-Wicker would be much more difficult and more polarizing than a revised Castle-DeGette bill.

In the end, one can only admire the President’s eagerness to engage the scientific community in solving the many problems that the nation faces, the use of stem cells among them. To be there as a scientist, among so many distinguished colleagues and supporters of biomedical research, and to see the President demonstrate his commitment to our shared enterprise, both in word and deed, was truly inspiring. I felt privileged to be at the White House on this historic occasion.

Fresh Comment

“David” has posted a fresh comment on the “Dual Vice Chairs” item, pointing out that other state constitutional officers nominated Art Torres for vice chair of CIRM in addition to state Treasurer Bill Lockyer.

Audiocast Available for CIRM Board Session Thursday

Here is a reminder that Thursday's CIRM board meeting can be heard by dialing in 866-254-5934 or using this Internet address – http://65.197.1.15/att/confcast The access code is 991416. The audiocasts do not provide for participation, however.

The public can hear AND participate in the Sacramento meeting at teleconference locations in Southern California, including the City of Hope, the Salk Institute and two in Los Angeles, one at UCLA and one at the office of CIRM director Jonathan Shestack. Specific addresses can be found on the agenda.

Dual Vice Chairs Coming Up for CIRM -- One From the World of Politics, One From Business

With less than 24 hours remaining before Thursday's meeting of the CIRM board of directors, the agency has begun unveiling a plan aimed at keeping two big dogs of California politics quite happy.

The matter involves the election of a vice chairperson for the CIRM board as well as the wishes of Republican Gov. Arnold Schwarzenegger and Democratic State Treasurer Bill Lockyer. While the scheme may satisfy those two, it was called “ridiculous” by one longtime CIRM observer.

The governor has nominated Duane Roth, a current member of the CIRM board of directors and an executive with close ties to the biomedical industry, for the vice chair slot. Lockyer has nominated state Democratic Party Chairman Art Torres, a friend and former state legislator.

The governor has been a good ally for CIRM and loaned it $150 million in state funds a few years ago during the agency's first financial crunch. Lockyer controls the issuance of state bonds, which are the only significant source of funds for CIRM. He is a key player in the agency's current plans to market state bonds privately.

The CIRM board is set to elect both men to vice chair positions at its meeting Thursday in Sacramento. That became clear this morning when the agency posted proposed changes in bylaws that create a “statutory” vice chair and a “bylaws” vice chair.

It appears that Torres will be elected to the statutory slot because it carries a salary, which he said he needs. Roth has declined a salary.

The CIRM board is also scheduled to reduce the salary for the vice chair from its current range of $180,000 to $332,000 a year. The agency has not yet posted information on its plan, but we believe the new range to be roughly $75,000 to $90,000. CIRM Chairman Robert Klein is paid $150,000 for his halftime position. It is not clear at this point whether Torres will be designated halftime.

In response to a query, John M. Simpson, stem cell project director of Consumer Watchdog of Santa Monica, said,

“This is a ridiculous attempt to try and please both the governor and the treasurer. It’s also an insult to the candidates who were originally nominated and faced a real election when the (CIRM board) was first organized. Suppose next time there are four different candidates for chair. Do they create a 'statutory' chair and three bylaws co-chairs? I’ve got a modest proposal: Really please everyone and name 28 'bylaws' vice chairs.”

We are reserving comment on the deal at this point. But the bylaws changes were posted extremely late. They contain no explanation, context, justification or further details. The result is that the public and interested parties are effectively denied the right to comment intelligently or register their comments in the presence of the CIRM board of directors. Failure to provide details about the plan in a timely fashion is certainly a violation of the spirit of the California state Constitution, which guarantees a broadly construed right of access to information about issues before government agencies.

Fresh Comments

John M. Simpson of Consumer Watchdog has filed a comment on the “Shifting Sands” item. “Realtor in Toronto” has filed a comment on the “Obama Snippets” item.

The NY Times, CIRM and Shifting Sands

The financial woes at the California stem cell agency vaulted today onto the pages of the august New York Times. It was not a story that necessarily will find favor at CIRM.

Written by Andrew Pollack, the piece said that President Obama's actions “could cause state governments and philanthropists to pull back on billions of dollars they have pledged for such work.”

Pollack discussed the California research effort as a case study in how the shifting sands of science are moving in one major arena.

Pollack said Obama's action has removed the original reason for the creation of CIRM. He reported as well that hard economic times have hammered foundations and the wealthy donors, now not so wealthy.

Pollack covered familiar ground for this blog's readers on CIRM's financial plight as well as its plans to privately market $400 million in state bonds so that it does not run out of money late this year.

He noted that CIRM is turning towards the biotech industry, a move that came under fire last week at a hearing on the CIRM stategic plan at the City of Hope. Its CEO, Michael Friedman, sits on the CIRM board. Pollack quoted Linda Iverson, a neuroscientist at the City of Hope, as saying at the hearing.

“To use taxpayer money essentially as venture capital money is beyond the pale.”

Pollack continued,

“Alan Trounson, CIRM’s president, responded by saying Californians had approved the $3 billion effort to develop therapies, 'not just to get the work in scientific journals.'“

Pollack concluded,

“In the meantime, 'a lot of people are running on fumes in their labs,' said Jeanne F. Loring, director of the Center for Regenerative Medicine at the Scripps Research Institute in San Diego.

Even with the federal financing restrictions lifted, Dr. Loring said, “We need CIRM.”

Pollack's story was measured and fair, but by raising at a national level questions about CIRM, it adds to the burden that the agency faces while it tries to sell bonds.

With the exception of reports by Terri Somers at the San Diego Union-Tribune, no daily California newspaper has written in such detail about CIRM finances. It goes without saying that a total vacuum exists on television and radio.

The NY Times story may trigger some additional coverage. But given the gloomy state of the newspaper business, the tales of CIRM and its travails are likely to vanish once again into a media black hole in the near future.

Snippets from Obama Stem Cell Media Coverage

Here are some tidbits from the vast coverage of President Obama's stem cell ceremony on Monday.

Nicholas Wade of the New York Times wrote:

“Members of Congress and advocates for fighting diseases have long spoken of human embryonic stem cell research as if it were a sure avenue to quick cures for intractable afflictions. Scientists have not publicly objected to such high-flown hopes, which have helped fuel new sources of grant money like the $3 billion initiative in California for stem cell research.

“In private, however, many researchers have projected much more modest goals for embryonic stem cells. Their chief interest is to derive embryonic stem cell lines from patients with specific diseases, and by tracking the cells in the test tube to develop basic knowledge about how the disease develops.

“...(M)any scientists believe that putting stem-cell-derived tissues into patients lies a long way off. Embryonic stem cells have their drawbacks. They cause tumors, and the adult cells derived from them may be rejected by the patient’s immune system. Furthermore, whatever disease process caused the patients’ tissue cells to die is likely to kill introduced cells as well. All these problems may be solvable, but so far none have been solved.”

Rob Stein of the Washington Post wrote about the job facing the NIH.

“The task of deciding what kinds of studies will be supported now falls to the National Institutes of Health, which finds itself confronting far more extensive questions than its officials were contemplating. It has 120 days to do the job.

“Among other things, officials will have to decide whether to endorse studies on cells obtained from much more contentious sources, such as embryos created specifically for research or by means of cloning techniques. “

Lynn Sweet of the Chicago Sun-Times carried, on her blog, a list of guests at the Obama ceremony. They included Zach Hall, first president of CIRM, and other Californians tied to the state's stem cell agency. The list did not include CIRM Chairman Robert Klein, but other stories indicated that he attended. The current CIRM president, Alan Trounson, was invited but did not attend.

Reporter Terri Somers of the San Diego Union-Tribune reported that Klein was at the ceremony and reported that he said the door is now open for more collaboration between California scientists and those in other states.

Somers also wrote:

“At a 'Free the Stem Cells' breakfast at the home of researcher Jeanne Loring of The Scripps Research Institute, scientists gathered to watch the event and toast Obama. Some were moved to tears, Loring said, because the president's actions validated research to which they have dedicated their careers.”

Fresh Comment

“Anonymous” has filed another comment on the “CIRM calendar” item.

The remarks include the following, which is hard to disagree with:

“This calendar project may be an example of exactly the types of expenditures (multiplied over and over) which create the state's budget shortfall in the first place. State agencies should not spend money just because they can; government at CIRM, and at all other levels, have a responsibility to look at each expenditure with a critical eye toward whether the expense is fundamentally necessary and if so, insure the State's statutes governing the acquisition of goods and services are being complied with. CIRM is not a private enterprise, instead it should always be mindful that it is funded with real taxpayer dollars.”

Fresh Comment

“Anonymous” has filed comment on the “CIRM calendar” item asking about state bidding procedures and public records. We have filed a response.

Fresh Comment

“VoicedUp” has left a comment on the “Obama Chapter 5” item.

Waiting for Obama, Chapter 5 -- Be Careful What You Wish For

Some of the California reaction today to President Obama's action on stem cell research indirectly highlighted potential side effects that might make the state's stem cell agency uneasy – not to mention the biotech industry.

With the feds back in the game, they may not look kindly on wildcat activities out in fringy California and elsewhere. Turf does, in fact, matter. Moreover, with Congress now back in the stem cell legislation business, to borrow from one oldtime political commentator, no one is safe.

Consider the comment from John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca. He issued a call for the feds to act to ensure that taxpayers share in any profit generated by stem cell therapies developed with government funds.

In a letter to President Obama, Consumer Watchdog cited the profit-sharing model at CIRM and said,

“Celebrating the change in policy is not enough, however. It is now necessary, more than ever, to examine the regulations governing the way federal funds are distributed to researchers. A change in those rules is needed and we call on you to work with Congress to implement reform of the Bayh-Dole Act.”

Businesses in California have taken issue with CIRM's profit-sharing rules, but the state agency has now broken the Bayh-Dole ice. The precedent in California will help fuel efforts to make changes in the federal law.

From Oakland, Ca., came another call for federal action that could have an impact on CIRM. Marcy Darnovsky, associate executive director of the Center for Genetics and Society, said the national government should enact enforceable rules for all stem cell research, public and private. Such rules would supersede those in California.

Jesse Reynolds, policy director of the center, said,

"We've seen what happens with inadequate regulation and oversight in the financial sector. The human biotechnology sector also needs effective public policy."

The Dickey-Wicker amendment is already on the table in Congress. It could become the vehicle for a host of challenges to the established order in the biotech business.

More Than You Want to Know about CIRM's Cash Crisis

An overview by yours truly of the financial situation at the California stem cell agency was published today by the FierceBioResearcher newsletter. You can find the piece here.

FierceBioResearcher reports that it has more than 65,000 industry email subscribers and 410,000 monthly page views.

Here are additional links on the subject of CIRM finances, which will come up at Thursday's meeting of the CIRM board.

An overview on the California Stem Cell Report of the situation including Power Point presentations by a top CIRM official.

CIRM´s only statement on its web site concerning its financial status.

An assessment of the January briefing by John M. Simpson, stem cell project director of Consumer Watchdog, a Santa Monica, Ca., nonprofit, and a longtime CIRM observer.

The CIRM transcript from the briefing.

Waiting for Obama Chapter 4 -- Political Thorns and hESC

The No. 2 story this evening on the web site of the New York Times is not one that will necessarily please the most avid advocates of human embryonic stem cell research.

Written by Sheryl Gay Stolberg, the article said,

“President Obama intends to avoid the thorniest question in the debate: whether taxpayer dollars should be used to experiment on embryos themselves, two senior administration officials said Sunday.”

Stolberg wrote about a legal prohibition that is generally subsumed in mainstream media reports on hESC research. She said,

“The ban, known as the Dickey-Wicker amendment, first became law in 1996, and has been renewed by Congress every year since. It specifically bans the use of tax dollars to create human embryos — a practice that is routine in private fertility clinics — or for research in which embryos are destroyed, discarded or knowingly subjected to risk of injury."

Stolberg continued,

“Mr. Obama has not taken a position on the ban and does not intend to, Melody C. Barnes, his chief domestic policy adviser, said Sunday. The president believes stem cell research 'should be done in compliance with federal law,' she said, adding that Mr. Obama recognizes the divisiveness of the issue.

“'We are committed to pursuing stem cell research quite responsibly but we recognize there are a range of beliefs on this,' Ms. Barnes said.”

Stolberg wrote,

“A senior House Democratic leadership aide, who was not authorized to speak publicly about the issue, said overturning the ban 'would be difficult, but not impossible,' adding, 'It’s not something that we would do right away, but it’s something that we would look at.”

Hear CIRM Board Live on its Financial Woes and Politically Charged Election of Vice Chair

This week's meeting of the board of directors of the $3 billion California stem cell agency, which will include an update on its financial woes, will be available live via telephone and the Internet.

The audiocast is the second for the CIRM board and provides a valuable opportunity for public and those affected by the agency's actions to hear first hand its deliberations and actions.

In addition to a briefing by CIRM Chairman Robert Klein on his efforts to peddle state bonds privately, the board is expected to choose a new vice chairman, probably two, in fact. You can find the politically charged details here involving Republican Gov. Arnold Schwarzenegger and Democratic State Treasurer Bill Lockyer.

According to the agenda, part of the vice chairman deal now involves an unspecified reduction in the salary range for the position, which currently is $180,000 to $332,000 annually.

Klein, a millionaire real estate investment banker, receives $150,000 for what the board has defined as a half-time job.

The board will also consider unspecified changes at the top of the CIRM organizational chart in connection with the new vice chairmen or whatever the designation for the posts will be.

None of the details are available on the agenda although the meeting is only three days away. Based on past performance, a strong likelihood exists that the public will be denied access to the proposals in advance of the meeting.

Also scheduled for board action are staff recommendations on research funding priorities that reflect that CIRM will run out of cash by next fall unless bonds are sold. The agency has not released anything beyond a cryptic agenda item on that matter.

Another topic before the board is the actual funding of $58 million in training grants approved in January. The board delayed delivery of the cash in light of CIRM's bleak financial situation.

Expected to be approved are additions to CIRM'S outside legal contracts that will push the total to more than $1 million for this fiscal year. The figure does not include the salaries and benefits of attorneys on staff.

John M. Simpson of Consumer Watchdog attended the directors' Governance Subcommittee meeting last week and reported that it approved a $180,000 hike (40 per cent) in the $450,000 contract with the law firm of Remcho, Johansen & Purcell of San Leandro, Ca.

It also approved a $180,000, 6-month extension on a contract with attorney Nancy Koch, Simpson said. Koch started with a $150,000 contract last April. It jumped to $245,000 sometime after Nov. 30 and now will total $425,000 by the end of September if it is not extended further, based on the Dec. 22 and March 5 outside contract reports.

No written justification for the increases was provided last week, although Simpson reported that Klein said the money was needed for legal work connected with CIRM's financial troubles and the inquiry by state's Little Hoover Commission. Koch is also supposed to help fill the gap until the new counsel to the president comes on board in July, although CIRM also has a $140,431 arrangement with the state Department of Justice.

In an email, Simpson said the additional funds were approved only after CIRM director Claire Pomeroy, dean of UC Davis School of Medicine, insisted on a written justification prior to final board action on Thursday. Klein said the justification would be forthcoming. Last year, Klein pushed through a 66 per cent hike in Remcho fees with no public, written justification.

Thursday's board meeting can be heard by dialing in 866-254-5934 or using this Internet address – http://65.197.1.15/att/confcast. The access code is 991416. The audiocasts do not provide for participation, however.

The public can hear AND participate in the Sacramento meeting at teleconference locations in Southern California, including the City of Hope, the Salk Institute and two in Los Angeles, one at UCLA and one at the office of CIRM director Jonathan Shestack. Specific addresses can be found on the agenda.

New Counsel to President Hired at CIRM

After an eight-month search, the California stem cell agency has hired an attorney from Genentech to become counsel to its president.

The name of the lawyer was not disclosed but she is scheduled to start at the beginning of July.

The job has been vacant since Tamar Pachter resigned in August and returned to the California State Department of Justice. Pachter was with CIRM only 16 months and had a salary of $225,000 with the title of CIRM general counsel.

If we were to hazard a guess, the new hire will not be earning that much. She will hold the title of counsel to the president. It appears that the general counsel position has been effectively eliminated.

CIRM is rich in legal talent and spending nearly $1.2 million this year for outside legal help.

CIRM President Alan Trounson disclosed that the new hire had been made at a meeting last week of the CIRM Governance Subcommittee, according to John M. Simpson of Consumer Watchdog, who attended the session.

Consumer Watchdog on Obama and CIRM

Consumer Watchdog of Santa Monica, Ca., today released the following statement concerning the California state stem cell agency and the lifting of federal restrictions on funding for stem cell research.

John M. Simpson, stem cell project director for the group, said,

"With word that President Obama intends to lift Bush era restrictions on federal funding of embryonic stem cell research, California's stem agency needs to think carefully about where to focus California taxpayers' money.
>>
"Fortunately the agency is in the process of reviewing its strategic plan. Clearly the California Institute for Regenerative Medicine should try to avoid duplicating funding efforts by the National Institutes of Health. CIRM's programs should augment those of the NIH."

Fresh Comment

John M. Simpson of Consumer Watchdog has posted a comment on the "Obama cash source" item, pointing out that the new Podesta lobbying contract slips neatly below the cutoff line for approval by a committee of CIRM directors.

CIRM Calendar Hooha Raises Transparency Issues; Agency Says Calendars Cost $23 Each

The California stem cell agency said today that its 2009 calendar cost $23 apiece and provided figures that indicated the total expense for the calendars was about $35,310.

Based on the numbers provided by CIRM, that seems to mean that 1,535 calendars were printed. Earlier, CIRM said the calendars were sent free to its grant recipients and trainees to remind them "365 days a year where their funding comes from." The agency has 448 recipients and trainees, according to figures on its web site. Calendars were also sent to an unspecified number of "constituents."

In comments on our earlier item on CIRM's 2009 calendar, some readers of this blog said production of expensive, free calendars is a waste of taxpayer money.

Here is the current breakdown on the calendar cost, based on a CIRM report and information supplied by Don Gibbons, chief communications officer for the agency: Printing, $14,000; design, $10,200, and $11,110, which was part of a larger contract.

The $11,110 is a new figure and came today from Gibbons. He said it was part of a $45,000 expenditure with Abbott and Company that CIRM now says was for "image development, office art design and framing." The Abbott contract was initially identified as involving the calendar. After the California Stem Cell Report inquired about the calendar project, the description of Abbott contract was altered on the CIRM web site to remove any mention of a calendar. No footnote was provided on the PDF document to notify the public or directors that a change had been made from an earlier version.

Here is the text of what Gibbons sent earlier today concerning our original item on this subject.

"For the record, you never asked me for the cost per calendar. Instead you chose to make one of your usual worst-case projections. The portion of the Abbott contract that covered the calendar was $11,110, which made the cost per calendar $23. Also, this project began in July, long before the complete budget meltdown."

More than a week ago, we asked Gibbons for the total number printed. He has not provided that number. Following his latest email today, we asked again for that information as well as the number distributed and the cost of postage.

As for our "projections," you can read them here along with our assumptions. They were based on information from CIRM, which was incomplete then and remains incomplete today.

The CIRM calendar is a minor expense in the agency's $13 million operational budget. But outside contracts are not. They now total more than $3 million, up from $2.7 million, as the result of action earlier this week. The outsourcing, which often poses major oversight issues for government agencies, is the second largest category in the budget.

How the agency describes the contracts and other budget items and responds to questions about them is basic to the agency's transparency and openness. The calendar issue is not the only one. A lobbying contract with the Nielsen, Merksamer firm in Sacramento continues to be described as "public education." There may be other fanciful descriptions, but without an examination of contracts and other documents, it is impossible to tell.

Several years ago, CIRM directors initiated the requirement for regular reports on outside contracting because they felt they were not fully informed. While creative budgeting occurs in every organization, without good information it is impossible to make good decisions.

Obviously it is nice to offer gestures of good will to "constituents" and others associated with any enterprise, but CIRM's calendar project came at an impropitious time. The project began shortly after a salary freeze at the CIRM that ran through December. As we remarked then, such freezes affect those on the lower end of the pay scale much more harshly than at the top levels. Perhaps during the holidays, CIRM management could have spread that $35,310 among employees making less than $70,000 a year. That would have been a nice gesture as well.

CIRM Identifies Obama as Cash Source for Its Troubled Lab Projects

California stem cell Chairman Robert Klein says that strapped recipients of CIRM lab construction grants should attempt to tap the nearly $1 trillion Obama stimulus package.

His remarks were contained today in a piece by Ron Leuty of the San Francisco Business Times. Leuty quoted Klein as saying,

"Our grantees are perfectly situated — they’re in construction or about to go. They can clearly demonstrate that they’re going to create jobs."

Leuty wrote that CIRM intends to use its new, $240,000 Washington lobbyist, the Podesta Group, to help snag the cash. Leuty reported,

"The California Institute for Regenerative Medicine — with the help of a well-heeled Washington, D.C., lobbying firm — wants organizations like Novato’s Buck Institute for Age Research to seek some of the $1.5 billion that is earmarked in the $787 billion stimulus package for biomedical research facilities and construction."

Other institutions previously identified as needing to raise more matching funds include the Sanford Stem Cell Consortium (UC San Diego, Scripps, Burnham and Salk) and UC Santa Barbara.

The $240,000 figure is new and comes from a copy of the contract requested from CIRM by the California Stem Cell Report. The total includes expenses plus $20,000 a month from Feb. 11 through Dec. 11, 2009. The contract, which does not need CIRM board approval, can be extended indefinitely by mutual agreement.

If you are interested in a copy of the contract, please send an email to djensen@californiastemcellreport.com.

Obama Watch Chapter 3: Funding Ban to be Lifted on Monday

The Washington Post reported this afternoon that President Obama on Monday will lift the restrictions on federal funding of human embryonic stem cell research.

According to reporter Rob Stein's story, the move will be announced at an event at 8 a.m. PDT. He cited an email sent out on Thursday from the White House concerning a ceremony at that time "on stem cells and restoring scientific integrity to the government process. At the event the president will sign an executive order related to stem cells."

No other significant details were disclosed.

Fresh Comment

"Anonymous" has filed a comment on the "CIRM Calendar" item. Among other things, the comment says the agency "appears uninterested in answering legitimate questions regarding the use of public funds."

Fresh Comment

John M. Simpson, stem cell cell project director of Consumer Watchdog of Santa Monica, Ca., has posted a fresh comment on the "CIRM Calendar" item. Among other things, he notes the size of the CIRM public relations operation and the scanty mainstream media coverage of the agency.

Fresh Comment

John M. Simpson of Consumer Watchdog has posted a comment on the "vice chairmanship" item in which he suggests that it might be a good idea to designate all the board members as vice chairs.

Fresh Comment

"Anonymous" has posted an indignant comment on the "CIRM calendar" item. The remarks say, in part, that the calendar is "a blatant waste of taxpayer money. Just because CIRM defends it, and characterizes this site's inquiry about it as petty, doesn't mean it's so. CIRM's mission is to aid industry in emerging science, not publish high quality photos and calendars. Calendars won't cure any diseases, period."

The Tale of CIRM´s 2009 Calendar

Asking questions of government officials can sometimes generate interesting responses, and the California stem cell agency is no exception.

Last week, as part of the agenda for the meeting Thursday of the directors Governance Subcommittee, the agency posted one of its regular reports on outside contracting. The category is the No. 2 operational expense for the agency at $2.7 million for the 2008-09 fiscal year.

CIRM Chairman Robert Klein and President Alan Trounson take justifiable pride in keeping expenses low -- well under the cap in Proposition 71.

That was one reason I asked questions about what appeared to be $69,200 for a 2009 calendar. How many were printed, why and so forth. But by the time, we were through, it seemed that the cost for each calendar could range from anywhere well under $50 to perhaps $100 or so. And the report on the outside contracts had been altered to remove any mention of the calendar as part of a $45,000 expense, which is now described only as image development, office art design and framing

We will probably never know what the correct cost of the calendar is. Don Gibbons, CIRM´s chief communications officer, has not even responded to my 5-day-old question about how many were printed. However, he did say that they went mainly to CIRM grantees and trainees, which number 448. An unspecified amount went to “constituents.”

Here are the calendar figures that triggered the original inquiry: $14,000 calendar printing to Fong and Fong, $10,200 calendar production to Reineck and Reineck, and then the $45,000 for “calendar” work by Abbott and Company.

On Feb. 25, I asked Gibbons about what was entailed in those contracts as part of other questions dealing with the outsourcing report.

His response:

“Calendar was short hand used by the contract office for a complex series of projects that resulted in high resolution stem cell images fit for printing (quite difficult) that were re-used for several projects, including the FLICKR site, backdrops for media interviews, an exposition banner, to provide to the media, and for framing to dress up the bare walls of our office (framing included in the budget), and yes, the calendar.”

On Feb. 27, I asked him:

“Re the calendars, for what year were they printed? How many were printed? Were they given away or sold? To whom? How many does CIRM still have on hand?”

Gibbons replied on Friday:

“I don’t work for the CSCR (this web site). All of your diving into minutia is a huge waste of tax payer resources. They are paying me to execute much more important and informative projects. The calendars were printed in December for the 2009 calendar year. Almost all were given away already (if you think I am going to the store room to count the actual number left over your are crazy). None were sold. Primary audience was the grantees and trainees to remind them 365 days a year where their funding comes from. All the various constituents who give use their time on working groups etc. received multiple copies. Each image is accompanied by a story about the science it represents. Short versions of those stories are the captions on the Flickr site.”

An earlier version of this item incorrectly gave the total as $65,200 instead of $69,200. The difference was in the Fong printing contract, which is for $14,000 instead of $10,000.

Stem Cell Bifurcation at the Vice Chairmanship Level

Come Friday the 13^th of this month, it is a good bet that the $3 billion California stem cell agency will have two vice chairmen or something akin to that.

No matter that the legal charter for the agency calls for only one, the board of directors is likely to find a way. They have a $1 million crew of artful legal beagles to help them sniff out an appropriate direction for almost any course.

CIRM Chairman Bob Klein signaled the dual vice chairmanship likelihood in his agenda for the March 12 meeting of the agency's board of directors. It was a simple but ambiguous matter of saying something in the plural and not the singular – chair(s) versus chair. The agenda item only says:

“Consideration of election of Vice-Chair(s)”

It was a move that the 17^th century Jesuit Baltasar Gracian (see drawing), a student of the exercise of power and control, would have admired and whose works we became acquainted with as a student 47 years ago.

“Maintain an air of uncertainty,” Gracian said in 1653. “Know the meaning of evasion.”

But in 2009 we need to know more. So here it is: The board has a choice between two men: Art Torres, chairman of the state Democratic Party, and Duane Roth, a current member of the CIRM board of directors and an executive with biomedical industry ties and head of Connect business development organization in La Jolla, Ca.

Torres is a former state legislator and was nominated by Democratic state Treasurer Bill Lockyer, who is the final arbiter on the state bonds that finance CIRM's grants and operations. Lockyer is also a former state lawmaker and friend of Torres, who needs a paying job since he is stepping down as head of the state Democratic party. Roth was nominated by Republican Gov. Arnold Schwarzenegger, who okayed a $150 million state loan to CIRM when it was on the financial ropes a few years ago. The governor has expressed concern about the high salaries at CIRM, and Roth has said he will not need a salary.

Both men bring different skills to the job. Torres is well connected in California politics and Washington. He is endorsed by Sen. Ted Kennedy and House Speaker Nancy Pelosi. Torres would contribute mightily to Klein's lobbying effort for a $10 billion aid package for the California biomedical industry. Roth is connected directly to the industry itself, chairing a CIRM committee that pulled together CIRM's $500 million lending program.

No one at CIRM wants to offend either Lockyer or Schwarzenegger.

While our good Jesuit Gracian would likely have admired Klein's agenda item on the Torres-Roth election, another more contemporary observer and participant in California stem cell issues does not.

In response to a query, John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca. and a man who is reasonably adroit in his own political maneuverings, said,

"Once again Chairman Bob Klein is posting an ICOC (board of directors) agenda that raises more questions than it answers. This serves neither the public nor CIRM. If they are thinking about having more than one vice chair, why not say so?"

One CIRM director, David Serrano Sewell, in response to a query about the result next week, said,

"We'll see what happens at the meeting."

As for CIRM's official views on this, earlier today we told the agency via email that we intended to write that the board is considering electing two vice chairmen. We asked whether CIRM considered that accurate.

CIRM Communications Chief Don Gibbons responded,

"No decisions have been made. The board will decide what motions to consider."

Applying flackery's Rosetta Stone to that comment, it means,

"I am not denying the accuracy of what you are writing. I can't say anything else. This is a delicate issue involving my bosses and issues at a much higher level that they do not want to air in public."

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(Editor's note: I have a copy of Gracian's 1653 work -- “A Truthtelling Manual and the Art of Worldly Wisdom” -- in a net bag next to my bunk on our sailboat here on the west coast of Mexico. The version I have was copyrighted in 1945. More recent versions exist, but they are not as powerful as the 1945 version. And by the way, I am fond of legal beagles that can find ways to make things happen.)

The 'Free Rides' Story: Petty Cash but Major Fallout

One of the most widely read stories on the Los Angeles Times web site during the past few days involves a California state government matter of picayune financial proportions. But it scored extraordinarily high on the public outrage scale.

It is a story that confirmed all the worst suspicions of a cynical public. And it has a lesson in it for state officials, elected and otherwise, including those at the $3 billion state stem cell agency.

The key actors in the Times “free rides” story are top officials on Gov. Arnold Schwarzenegger's staff. Here is the what reporter Michael Rothfeld wrote,

“Over the last two years, as California has slashed services and scrambled to pay bills, top administration officials have made free use of government expense accounts with little oversight and, in some cases, no documentation, The Times has found.

“Together, they have spent tens of thousands of dollars on state-funded trips between Sacramento and the areas where they live, justifying the travel as necessary for state business. Some built weekend trips around one short meeting, and some charged the state to attend events with no apparent connection to their jobs. Often their expense reports were approved by subordinates.

“Many of the costs were incurred after the governor issued an executive order a year ago that state agencies avoid all nonessential travel due to California's fiscal emergency. State law allows employees to charge taxpayers only for activities on behalf of the public, which do not include commuting or events related to their personal lives."

These types of stories are regulars on government beats. But the dollars involved are relatively trivial when compared to such things as the state's $42 billion budget crisis.

I have written my share of them over the years and edited them as well. While reporting for United Press International in Sacramento, I wrote one such story that infuriated then Assemblyman John Burton of San Francisco, chairman of the Legislature's Joint Rules Committee . He wrote a letter, with tongue barely in cheek, ousting the UPI bureau from the Capitol.

I have shied away from such stories on this web site because I am now free of the journalistic demand for them. They have high outrage potential and high readership, but limited impact on what is important in terms of dollars and cents and public policy issues. They do, however, demonstrate an egregious sense of public-be-damned entitlement on the part of the officials. And they do provide fodder for their foes and the enemies of the enterprises involved.

Only a handful of these stories have appeared in the mainstream media involving CIRM. They chronicled the use of limos, expensive meals and so forth. It would be easy to gin up more by examining expense reports at the agency, such as those involving the trip by CIRM Chairman Robert Klein to Australia in 2007. He combined his honeymoon with an appearance at an international stem cell convention. We chose not to write about that at the time because of the relatively minor sums involved.

However, it is easy for an agency isolated in a tiny corner of government, unfettered by the usual oversight by the governor and legislature, to slip into bad habits. Some would argue that CIRM management salary scales, which top out at $508,750 annually, are part of those bad habits.

The salaries do not bother me as much as some. What is worrisome is a sense from the agency that the some of the folks there do not grasp how easy it is for an apparently trivial matter to trigger blowback that could seriously damage not only CIRM, but the entire human embryonic stem cell effort.

The Los Angeles Times story is just one example of how a small issue can trigger public outrage. And the result for the governor's aides is that the report of the petty chiseling not only outweighs, but it overwhelms the good work that those public servants perform.

Fresh Comment

John M. Simpson of Consumer Watchdog and longtime observer of the California stem cell agency has posted a comment on the “Tea Leaves” item. Among other things, he says that he understands that the terms “of the vice chair's employment -- salary and whether it's a full-time job -- will be discussed in closed executive session” on Thursday. Our comment: That's an interesting way to fill a position that is supposed to be publicly elected. But it will certainly permit candor and may provide a challenge to lawyers seeking to keep the subcommittee from violating the state's open meeting laws.

Executive Evaluation Procedures Posted for CIRM

Proposed procedures for evaluation of the chairman, vice chairman and president of the $3 billion California stem cell agency are now available to the public in advance of Thursday's meeting of its directors' Governance Subcommittee.

The three paragraphs are straight forward and aimed at generating what it calls “deliverables,” The procedures also seem to be non-controversial. No definition of what the board expects from the yet-to-be-elected vice chairman is contained in the document.

Whether the evaluation procedure leads to a broader discussion of the direction of CIRM remains to be seen. But it is interesting that this document is being produced four years after creation of the stem cell agency. It is also coming three months after a salary was paid for the first time to the chairman. A salary may also be paid for the first time this year to the vice chairman, depending on whom the board chooses. The president has always received a salary but Chairman Bob Klein and former Vice Chairman Ed Penhoet were independently wealthy and declined salaries. Klein, however, asked for a salary last year. In December, the board defined his position as half-time and approved $150,000.

One could speculate that the board is telegraphing a preference on the vice chairmanship if it approves formal evaluation procedures for the job that are the same as for the two other salaried positions. However, that may not be the case. You can read more about our speculation about Thursday's meeting here.

$1 Billion for Stem Cell Labs: Troubles and Status

California's $1 billion stem cell lab construction program will be under scrutiny on March 9 as the state's stem cell agency weighs a request for changes in one approved grant while other recipients report difficulty in raising the required matching money to build their labs.

It all comes as CIRM itself faces a looming cash shortage. It will run out of money next fall unless it is successful in privately marketing state bonds – its only significant source of funding – as opposed to their general market sale by the state.

The Buck Institute of Novato, Ca., the Sanford Stem Cell Consortium in San Diego (UC San Diego, Scripps, Burnham and Salk) and UC Santa Barbara have already reported difficulties in completing financing arrangements.

But UC Merced had a bit of good financial news in its bid to change its grant. The proposed changes, which will be presented at the CIRM facilities group March 9 meeting, would reduce the cost from $7.5 million to $6.1 million, $3.8 million of which comes from CIRM. However, the space is about 20 percent smaller.

Merced is requesting that it be allowed to build its stem cell instrumentation foundry on its campus instead of on the former Castle Air Force Base. In a Feb. 9 letter to CIRM, the campus said the old military base has problems with utility service and backup capabilities. UC Merced also cited unspecified issues with the county, which leases the space to UCM.

John Robson, CIRM vice president; Marie Csete, CIRM chief scientific officer, and Ray Groom, a facilities consultant hired by CIRM at a cost of $15,000, are scheduled to visit the campus on Friday to be briefed on the new plans and view the site.

Another item on the March 9 agenda is a status report on all the lab construction projects around the state. No background material on that subject has yet been posted by CIRM on its website.

An additional topic is funding for GMP facilities. Csete has prepared a report on the matter, and her conclusion is that CIRM does not need to fund such facilities at this point. In her Feb. 23 memo, she said that “CIRM grantees have adequate options and access for GMP cell manufacturing.”

But she also said that a “critical lack of workers” exists and that CIRM should provide for training in another round of grants. CIRM hired Biologics Consulting Group of Alexandria, Va.,for $15,000 to assist in the GMP survey.

The facilities group meeting will be in San Francisco. Currently the agency has not posted any plans for teleconferencing access to the meeting. Even if it does, our recommendation is that institutions with something at stake should be at the session in San Francisco and be prepared to comment authoritatively.

Here is a link to Ron Leuty's piece in the San Francisco Business Times on problems at Buck and our item on Terri Somers' article in the San Diego Union-Tribune about the consortium, Buck and UC Santa Barbara. Here is a link to what consortium told us more recently.

Overseeing Top CIRM Execs: A Reading of the Tea Leaves

Next Thursday, a key panel of the directors of the world's largest source of funding for human embryonic stem cell research will consider a matter that could give some indication of its future direction,

Nominally, the issue seems less than controversial. The agenda says it involves “consideration of policy/procedure for performance evaluation” of the chairman, vice chairman and president of the $3 billion stem cell agency.

But lying behind that bland language are such matters as the political and lobbying efforts of CIRM, its connections to industry and the election of a vice chairman to assist in those endeavors. Will the agency continue pushing hard to become a global powerhouse for stem cell research, pleading for billions from Congress for industry? Will it embrace the biomedical industry ever more closely, funding its efforts to bring products to markets? Or both, for that matter?

The agency could get to those issues through more closely defining the position of the vice chairman, which is now vacant, and discussion of related matters. The two contenders for the post come from radically different backgrounds. One is Art Torres, now the head of the California State Democratic Party and a former state lawmaker with good connections in the nation's capital. The other is Duane Roth, an executive with biomedical industry ties and head of Connect business development organization in La Jolla, Ca.

Roth was nominated by Gov. Arnold Schwarzenegger, a Republican. Torres was nominated by Democratic state Treasurer Bill Lockyer, whose good offices are especially important to CIRM as it attempts to market state bonds privately. The treasurer is the ultimate arbiter on state bond deals. On the other hand, the governor loaned CIRM $150 million in state funds a couple of years ago when it had another period of financial difficulty. The loan has been paid back, but CIRM has had to seek his support on other matters, such as his veto of legislation that the agency opposed,

Also entering into the mix is the salary for the vice chairman. The job carries pay that could run as much as $332,000. Torres says he needs a salary, but has not indicated a figure. Roth says he will not accept a salary. In December, CIRM directors awarded CIRM Chairman Robert Klein a $150,000 salary and defined his job as halftime. Klein, a millionaire real estate investment banker, previously declined a salary.

Sadly, the public is pretty much out of the loop in advance of the meeting on the policy/evaluation agenda item, which first came up Dec. 22 last year. The proposal discussed at that meeting was only described orally and never publicly disclosed in written form in its entirety. The only access to what it contains is the transcript of the meeting. Given CIRM's past performance, do not expect to see any written material ahead of the upcoming meeting.

Also missing from next week's meeting are proposed changes in CIRM's internal governance policies, which are closely tied to the responsibilities of the chairman, vice chairman and president. The proposal came up at the Dec. 22 meeting, and directors said it would come up again at the next governance meeting (the one that is next week). However, it is not on the agenda, although it could be discussed.

Next week's meeting will be available to the public to hear and participate in via teleconference locations in La Jolla (Roth's office), Duarte, Sacramento, Irvine and San Francisco. But don't expect a “full and frank” discussion, The board generally deals obliquely with these sorts of issues, It could also sidestep them entirely.

The specific location for the teleconference sessions can be found on the agenda.

Fresh Comment

We have filed a response to John M. Simpson's comment on the “Honesty, Science and Politics” item. Among other things, our response says the No. 1 objective of CIRM right now should be to make sure it has cash next fall to pay its grantees.

Fresh Comment

John M. Simpson of Consumer Watchdog has posted a comment on the “Honesty, Science and Politics” item. Among other things, he says that when California voters approved Prop. 71, they did not expect to see an agency that would become “a platform for worldwide stem cell advocacy by Chairman Bob Klein.”

CIRM Legal Costs Climb Towards $1 Million

Legal costs at the California stem cell agency are heading towards the $1 million mark this year and could well go higher as it embarks on an ambitious and unusual plan to market state bonds to dig itself out of a financial hole.

Next Thursday, the Governance Subcommittee of the CIRM board of directors is expected to increase payments for its main outside counsel, Remcho, Johansen & Purcell, of San Leandro, Ca., and also for Nancy Koch, who deals with intellectual property issues.

According to the most recent document from CIRM, as of Nov. 30, 2008, Remcho had already been paid $237,545 out of its $450,000 contract for the 2008-09 fiscal year. Also as of Nov. 30, Koch had been paid $82,306 out of a $150,000 contract for this fiscal year.

Their contracts and possibly other legal assistance agreements are up for "amendment" at next Thursday's meeting. The use of that word generally means that CIRM needs authorization for more cash to pay the lawyers.

According to CIRM's Dec. 22, 2008, report on outside services, total contracted legal services for the fiscal year amount to $812,930, including $140,431 for the California State Department of Justice. Not all of the total has been spent, but the budget did not anticipate the need for CIRM to engage in attempting to place state bonds with private investors.

CIRM's annual operational budget, which does not include grant payments, totaled about $13 million when approved last July. The currently contracted legal expenses amount to roughly 6.2 percent of the budget. The agency has also not filled the position of general counsel, which became vacant Aug. 15. It is still looking for a person to fill that position, which is now described as general counsel to the president.

CIRM will run out of money in about seven months unless it generates additional cash. That's because the financially troubled state of California has stopped selling the bonds that CIRM relies on to finance its operations and pay for research.

What Bob Klein and CIRM Owe George Bush

Here is what Hank Campbell, the major domo of scientificblogging.com, says,

 "Whether you agreed with Bush or not, his restrictions on stem cell research were good for science - California alone threw $3 billion at human embryonic stem cell (hESC) research for no other reason than that Bush was against it, something that could never have occurred through the NIH, and scientists also found creative alternatives, also something that would probably not have happened."