Race for the Chair: Political and Financial Pressure Help Thomas Win CIRM Chairmanship

SAN DIEGO, Ca. –- Directors of the $3 billion California stem cell agency late yesterday evening elected Los Angeles bond financier Jonathan Thomas as chairman of the unprecedented research enterprise as it strives to fulfill seven-year-old campaign promises to turn stem cells into cures.

The board voted 14-11 to choose Thomas over Frank Litvack, a cardiologist/businessman, also from Los Angeles. The vote came with no debate following a three-hour closed session. Each candidate appeared separately in private, followed by a discussion among board members, also in private. Only one member of the public spoke out on the election during the public portion of tonight's meeting, during which each candidate read a statement.

The California Stem Cell Report was told that Gov. Jerry Brown's office called six members of the CIRM board during the past two days and managed to switch some members from Litvack to Thomas. The governor's office did not respond to queries about the matter.

Outgoing Chairman Robert Klein said the key factor in the vote was the state's current financial crisis and its possible negative impact on CIRM, which depends solely on state bonds for cash. Earlier Thomas sounded an alarm about CIRM finances, telling directors it was necessary to move to assure financial stability. CIRM faces both short and long term financing problems. Thomas could be the last chairman of CIRM unless he and the board devise a way to finance it beyond 2018, roughly the date when the agency runs out of money.  (For more on Thomas' remarks, see here.)

Klein told the California Stem Cell Report that Thomas would be paid something in the range of $390,000 to $395,000 annually for 80 percent time on the job. (The agency later said the correct figure is $400,008.)

Thomas is chairman and co-founder of Saybrook Capital of Santa Monica, Ca. The firm specializes in distressed government bonds. The current state budget crisis in California has left the state with the worst bond rankings of any state in the nation. State Treasurer Bill Lockyer, who controls the sale of state bonds, and the governor and lieutenant governor all nominated Thomas.

On Monday Lockyer sent a strong letter to his five appointees to the CIRM board urging them to vote for Thomas. He said the bond financier was the only candidate with a "complete toolkit" for the job. Lockyer stressed Thomas' background in bond financing.

Unless CIRM receives funds from a fresh bond sale, it will run out of cash in the middle of next year. However, the state is limiting its bond sales because of its budget crisis. CIRM will face tough competition to have its bonds placed in the two sales rounds expected to come up in the next 12 months. .

Some observers interpreted Lockyer's letter as a veiled warning to the entire 29-member board to approve Thomas, with the letter implicitly raising the possibility that the agency could come up short in the next bond rounds.

Longer term, CIRM has only about $1.4 billion or so to hand out for grants or loans. Klein has touted a $3 billion to $5 billion bond measure that would be presented to voters sometime during the next few years. To win support of the proposal, the agency will need a record of substantial accomplishment that resonates with the public.

During Thomas' six-year term, the agency will also have increasing responsibilities for monitoring its massive and growing grant portfolio. The task will become more challenging with larger and more complex grants and loans that have achievement benchmarks that must be met. If not, CIRM is supposed to withdraw its cash. At the same time, the agency continues to wrestle with its computerized grant management system.

To accomplish its goals, CIRM is working ever more closely with the biotech industry. Some industry executives have been dismayed at the tiny fraction of funding that has gone to businesses. A blue-ribbon review panel last fall cited the need to bolster funding for industry. At the same time, the taxpayer-funded agency must assure that the state receives full value for its dollar.

Litvack also had a blue-ribbon business resume along with a record of scientific accomplishment. One description calls him a "serial entrepreneur." He was CEO of Conor MedSystems of Menlo Park, Ca., when it was sold a few years go to Johnson &  Johnson for $1.4 billion. More recently he has been involved with Pervasis Pharmaceuticals and Capricor, Inc.

Litvack touted his scientific and business experience in developing new products and running the FDA gauntlet. State Controller John Chiang, who recently gained national attention for cutting off the pay of California legislators because they failed to pass a balanced budget, nominated Litvack. Chiang said,

"Litvack knows from personal experience what it takes to develop new medical technologies and move them through the regulatory process to adoption in the market place."

Thomas Elected New Chairman of CIRM

Jon Thomas was elected chairman of CIRM on a 14-11 vote. More to come.

Board Resumes Public Session

The CIRM board just came back into public wsession after about three hours of meeting in private.

CIRM Directors Still Mulling Chair Selection Privately

The two candidates for the chairmanship of the California stem cell agency appeared separately and in private before the organization's directors tonight. Their appearances have concluded. Directors have now been huddled behind closed doors for about two hours. The staff and and the two candidates are all gathered in the public  meeting room, chatting in small groups..

CIRM Board Goes Behind Closed Doors

The CIRM  board has gone into executive session following presentations by the two candidates for chair. It is unclear when the public session will resume.

Thomas Stresses His Bond Expertise, Cites State's Dicey Financial Condition

Jonathan  Thomas, a candidate for chair of the $3 billion California stem cell agency, tonight hammered away at the value of his bond financing experience and what it could bring to the survival of the research enterprise. 

Speaking to the CIRM board, Thomas, a Los Angeles bond financier, hit on many of the themes sounded by state Treasurer Bill Lockyer in his letter on Monday. Lockyer nominated Thomas for the post. In his letter, he said Thomas was the only candidate who had a "complete toolkit" for the job. 

In his comments, Thomas repeatedly said he had "all" the qualifications for the job. Lockyer, in fact,  underlined all in his letter when he referred to Thomas' qualifications.. 

Thomas spoke candidly about CIRM's financial condition. He asked whether CIRM will have funds available after 2017, a reference to CIRM projections that its $3 billion will run out about then. Thomas said the state is in a "full out fiscal crisis." As a result, a "real possibility" exists that CIRM will not have "timely access to the funds it needs."  He said the the agency may have to look to other sources of funding.  

"Let's not kid ourselves. This problem could last for a long time," Thomas said. 

The board has not heard that sort of candid public comment about its finances recently, although the warning signs have been there for some time. 

Thomas also addressed the dual executive issue. He said the CIRM chairman and president should have complementary positions -- not overlapping. He said he spoke with CIRM President Alan Trounson on Sunday and would expect to have a complementary, highly collaborative arrangement with him. 

Thomas brought up the statement by Frank Litvack, the other candidate for chair, that he would serve in a parttime role. Thomas said the position demands more time than that offered by Litvack. 

We have asked Thomas for a copy of his remarks. He said his only copy was marked up and said he would provide one tomorrow. 

Text of Litvack's Statement to CIRM Board June 22, 2011

Here is the text of Frank Litvack's remarks this afternoon to the directors of the California stem cell agency. Litvack is a candidate for chair of the agency.
Litvack statement to CIRM board June 22, 2011

Race for the Chair: Litvack Discusses "Black Box" of Bond Financing

SAN DIEGO, Ca. – Los Angeles cardiologist and businessman Frank Litvack tonight made a final pitch to directors of the California stem cell agency to become the next chairman of the $3 billion research effort.

In remarks prepared for delivery, Litvack stressed his business experience during which he said he raised hundreds of millions of dollars. He noted that his enterprises were all high risk ventures and were not "back-stopped by the faith and credit of the state of California," a reference to the state bond funding behind CIRM.

He also reviewed his work in developing new products and his dealings with the federal agencies that regulate them.

Litvack reiterated much of what he has told the board previously, including his commitment to serve as more of an oversight chairman rather the engaging in day-to-day management. Prop. 71, which created the stem cell effort, set up a much-criticized dual executive arrangement with overlapping responsibilities for the chairman and president.

Litvack also addressed the "black box" issues raised by state Treasurer Bill Lockyer and others concerning the need for bond financing experience. (See here and here.)

Litvack said,

"In the spectrum of financial instruments, state bonds are not considered complicated. In fact, they are among the most simple."

He reviewed the current state financial situation and how state bonds work. Come next spring, Litvack said,

"Should the unthinkable happen, as it occasionally does, and there is no (state) budget by next year, then CIRM will need to assume the mentality of a start-up venture and get creative....One might consider a private placement (of bonds) if permitted. As with any form of financing, it is not the mechanics that is rate-limiting. Rather it is the ability to clearly articulate the vision to the prospective investors."

Other new proposals surfacing in Litvack's remarks included:

• CIRM-sponsored meetings between venture capitalists and promising stem cell companies to help generate much-needed funding for the businesses.
• Possibly selling industrial development bonds, which are aimed at building businesses in a particular region, to help finance clinical trials.

For more on Litvack's background and previous statements, see here and here and here.

CIRM Directors Approve $27 Million Training Effort at State and Community Colleges

Directors of the California stem cell agency this afternoon approved a $27 million extension of a training program at California state and community colleges. CIRM staff said the program supports 160 trainees a year at 16 institutions. The extension will cover a three year period. The vote was 7-0.. Nineteen of the 29 CIRM directors were not able to vote or participate in discussion of the proposal because of conflicts of interest.

$47 Million Training Extension Approved

On a 6-0 vote, directors of the California stem cell agency this afternoon approved a $47 million extension of a scientific training program at the state's universities and research institutions.  Only seven members present at the meeting were eligible to vote on the matter. The board has 29 members. The others were disqualified because of conflicts of interest.

An Example of Conflict of Interest Issues at CIRM

The $47 million training program extension now being debated by the directors of the California represents a good example of the conflicts built into the California stem cell agency.

The board has 29 members. Twenty are barred from participating in the debate or voting  because of conflicts of interest. Here is a list of the institutions that stand to receive funding under the extension.

CIRM Directors Start Chair Election Meeting

SAN DIEGO -- Directors of the California stem cell agency began their meeting this afternoon with a discussion of a $47 million extension of a training program. The meeting is well-attended by board members but probably has less than 10 members of the public in attendance. I chatted briefly with Jonathan Thomas, a candidate for the position of chair, briefly prior to the beginning of the meeting. He said the California Stem Cell Report has not reported his position accurately concerning the responsibilities of the chair and the president. We have described the structure as a dual executive with overlapping responsibilities for the chair and president and said that Thomas supports that sort of arrangement. We did not have time to cover the subject properly before the start of the meeting.  Thomas said he will address the structure in his presentation to the board later this afternoon or evening.

Live Coverage of CIRM Chair Election Tonight

The California Stem Cell Report will provide live coverage tonight from San Diego of the election of a new chairman for the $3 billion California stem cell agency. The two candidates are scheduled to make presentations about 5 p.m., but that could change.  The public can tune into the discussions via the Internet. Directions for the link can be found on the meeting agenda. Public teleconference locations can be found in Pleasanton and Los Angeles. Specific addresses are on the agenda. The teleconference locations can be used by the public to make comments to the board. The Internet audiocast is listen only.

Race for the Chair: Blowback, Politics and CIRM Financing

A strongly worded letter from California state treasurer Bill Lockyer concerning this week's election of a new chairman of the state's $3 billion stem cell agency could be triggering a bit of blowback for the candidate backed by Lockyer.

The letter advised all five of Lockyer's appointees that he is a vigorous supporter of Jonathan Thomas, a Los Angeles bond financier who was nominated for the chairmanship by Lockyer, the governor and lieutenant governor, all Democrats. The only other candidate is Frank Litvack, a Los Angeles cardiologist and businessman, who was nominated by the state controller, also a Democrat. The 29-member CIRM board meets late this afternoon in San Diego to choose between Litvack and Thomas.

Lockyer's preferences carry more than normal weight for the entire CIRM board because he is the gatekeeper on the sale of state bonds, the only real source of cash for CIRM. Lockyer becomes even more important since the agency will need a fresh dose of funding by next spring. The state plans to limit its bond sales during the next 12 months because of its ongoing financial crisis. CIRM is likely to face stiff competition for being placed in the bond rounds when they do occur.

Lockyer's letter disturbed or angered some CIRM board members, based on what the California Stem Cell Report has learned from a variety of sources. But none of the five Lockyer appointees responded to queries.

Political inteference – and nasty at that – was one reaction. Is Lockyer trying to tell the board that CIRM financing would be endangered if his candidate is not approved, wondered another board member.

One thought Klein engineered the letter. However, Klein and Lockyer are not on the best of terms, we understand. Another thought CIRM co-vice chair Art Torres, who is close to Lockyer, could have had a hand in it. Our own speculation is that Lockyer, like any successful politician, wants to see his candidate win and is willing to do what he thinks it takes to produce a victory. Other factors as well could have entered into it.

While the letter has triggered strong negative reaction, it is not clear whether it has changed the positions of fence-sitters. It could have a reverse effect for Lockyer, given the reaction of some board members in the past to other efforts at what they regard as outside intrusions into CIRM affairs.

Rumblings persist that CIRM Chairman Robert Klein, a real estate investment banker, continues to work on behalf of Thomas. However, CIRM's outside counsel, James Harrison, has strongly denied that on behalf of the outgoing chairman. Klein, however, is reportedly once again talking about the private placement of CIRM bonds and the need to have a chairman who could do that.

One board member reflected on Klein's unsuccessful attempt last fall to engineer the selection of his own successor. The pitch then was "science science science." The CIRM director said,

"Now it is bonds bonds bonds, legal legal legal. Full time is the only way possible and paid paid paid, and the only way CIRM can be governed is as it was written in the gospel of Prop. 71."

The reference to fulltime and paid is to Thomas' reported desire for a salary in the range of $400,000-plus, working at 80 percent or more time. Litvack says he would work parttime for a salary around $137,000. Another separation point on the men is Thomas' apparent support for continuing the much-criticized dual executive arrangement at CIRM while Litvack has indicated he sees the chairmanship as much more of an oversight function. Of the two, Litvack has a stronger scientific background while Thomas has more experience in bond financing.

One question arose about the public nature of Lockyer's letter with more than one board member saying the treasurer could have delivered the same message to his appointees privately with a phone call, letter or email. Copies of the letters were emailed Monday to the California Stem Cell Report by the treasurer's office. We have a standing request into the treasurer's office and others for any information regarding the chair election.

As for the politics in the matter, Thomas is reportedly being backed by by former California state Treasurer Kathleen Brown, who is now chair of investment banking for the Midwest for Goldman Sachs. She is also sister of California Gov. Jerry Brown and a personal friend of the candidate. The governor nominated Thomas for the post in a terse, 56-word letter. Thomas also reportedly has the support of Congressman Howard Berman, a longtime West Los Angeles Democratic politician.

Klein, who controls the CIRM board agenda, has allotted only 30 minutes for public presentations and public comments by the candidates beginning about 5 p.m. tomorrow. Then comes an executive session, allotted about 60 minutes, after which the formal public vote would be swiftly taken. The CIRM board agendas are always full, but the one for the meeting this week is especially jammed with major items. Several board members are not pleased with the tight schedule and wonder whether it is part of an effort by Klein to limit discussion and ensure favorable action on Thomas.

CIRM's Trounson Has Month-Long Gig in Australia in July 2012

The Australian Centre for NanoMedicine has announced that the president of the $3 billion California stem cell agency, Alan Trounson, will be spending July 2012 as its "visiting professor."

The announcement apparently came as a surprise to some directors of the state's research program, which paid Trounson $490,118 in 2010. There was no date on the announcement but it appears to have been placed on the Internet sometime this spring.

The center is part of the University of New South Wales and was formed in April 2010. Trounson, who emigrated from Australia to take the CIRM post, is the second visiting professor in the program.

The center's announcement did not specify whether Trounson would be paid for his stint in Australia next year. Nor did it explain his exact duties. The center has at least one very slight connection to CIRM. Geoff Symonds, a longtime Australian researcher and chief scientific officer of Calimmune of Tucson, Az., made a presentation at the center's international conference last June 30-July 2. Calimmune, whose founders include former CIRM director, Nobel Laureate David Baltimore, shares in a $20 million grant with Irvin Chen of UCLA.

For more on Calimmune, see here and here.

We are querying CIRM for more information on Trounson's commitments in July 2012.

Election Night Coverage Planned for CIRM Chair Balloting

The California Stem Cell Report will provide live coverage tomorrow and Thursday of the election of a new chairman for the $3 billion California stem cell agency. The election is scheduled for Wednesday evening with the two candidates to make presentations about 5 p.m., but that could change.  The public can tune into the discussions via the Internet. Directions for the link can be found on the meeting agenda. Public teleconference locations can be found in Pleasanton and Los Angeles. Specific addresses are on the agenda. The teleconference locations can be used by the public to make comments to the board. The Internet audiocast is listen only.

State Treasurer Boosts CIRM Chair Candidate with Strong Letter of Support

California State Treasurer Bill Lockyer today urged his five appointees to the board of the $3 billion state stem cell agency to vote this week for a Los Angeles bond investor as the new chairman of the research enterprise.

In a robustly worded letter, Lockyer said Jonathan Thomas, chairman of Saybrook Capital of Santa Monica, Ca., is the only candidate to have the "complete 'toolkit'" to meet the legal and other criteria for the job.

Lockyer, who holds the key to CIRM's financing, and two other state officials nominated Thomas in May. In his letter, Lockyer particularly stressed Thomas' background in state bond financing. California state bonds are the only real source of cash for the agency. Thomas' firm specializes in distressed government bonds. California's bond rating is the worst of any state in the nation.

The other candidate to replace outgoing Chairman Robert Klein is Frank Litvack, a Los Angeles cardiologist and businessman. Litvack was CEO of Conor MedSystems of Menlo Park, Ca., when it was sold in 2006 for $1.4 billion. Litvack, who has been described as a serial entrepreneuer, says he has raised tens of millions of dollars for various companies.

The election for the new chair is scheduled to be held Wednesday evening at the meeting of the 29-member CIRM board in San Diego.

If this were a normal political situation, Lockyer's letter would be considered a direct order to his appointees. Failure to comply could mean a request that the appointee resign. However, this is only the second election for CIRM chair. And the research enterprise is quite removed from the normal political environment.

Lockyer, however, runs the sale of state bonds, which are CIRM's life blood. The stem cell agency will need a fresh fund transfusion no later than next spring.

Lockyer said in his letter (see the full text below) that all – and he underlined all – the legal criteria should be given full consideration. Lockyer specifically mentioned "direct knowledge and experience in bond financing," which he also underlined and parenthetically noted "emphasis mine."

Lockyer said that the legal requirements "must govern" the selection of the chair. If the criteria are missing, Lockyer said that the chairman "simply cannot independently fulfill the oversight responsibilities of the position, much less the very significant responsibilities" of dealing with bond financing and government relations.

The state treasurer told his appointees that his letter was the first time he had contacted his appointees to board. He said he did so today only because he felt so strongly about Thomas.

Here is the text of the letters to all five CIRM board members appointed by Lockyer: Michael Goldberg, Michael Friedman, Francisco Prieto , Floyd Bloom and Robert Quint.
Lockyer Letter to ICOC Appointees Supporting Thomas 06-20-11

Coming Up This Week

The California Stem Cell Report will be providing live coverage Wednesday and Thursday of the election of a new chairman for the $3 billion California stem cell agency. We will also have comprehensive coverage of additional issues from the meeting site in San Diego. The public can tune into the discussions via the Internet. Directions for the link can be found on the meeting agenda. Public teleconference locations can be found in Pleasanton and Los Angeles. Specific addresses are on the agenda. The teleconference locations can be used by the public to make comments to the board. The Internet audiocast is listen only.

Right Medicine for CIRM: Front Page Paean to Stem Cell Research

The California stem cell agency scored another PR plus a couple of days ago with a glowing, front page story in the San Francisco Chronicle that basically left readers thinking stem cells are the fountain of youth.

It is the type of coverage that the agency needs to persuade California voters to borrow another $3 billion to $5 billion and place it the hands of the small band at CIRM HQ on King Street in San Francisco to give to researchers.

The story had all the earmarks of being generated by CIRM. If it wasn't, it should have been. It was a nifty paean to the virtues of all manner of stem cell research. It included a solid quote from CIRM President Alan Trounson. And all four of the researchers named in the article are recipients of CIRM grants.

Written by Chronicle reporter Erin Allday, the article's first paragraph said,

 "It may not be as sexy as curing cancer or repairing devastating spinal cord injuries, but the science of aging — and what researchers might be able to do to slow down or even reverse some of the worst effects of getting older — is taking off in the stem cell industry."

The piece cited research by Thomas Rando of Stanford and said,

Stanford's Thomas Rando -- stitching old and young together

"Even if stem cells don’t add decades to human life, they might give people many more productive years in their 70s, 80s and beyond, Rando and other scientists say. 'With aging, there are a lot of systems that start to become less efficient or break down or be more inclined to diseases. We may work out ways to provide stem cells that would enable people to remain vigorous,' said Alan Trounson, president of the California Institute for Regenerative Medicine. "

The story continued,

"'The idea has always been there, the fountain of youth you could get at if you were constantly replacing old cells with new cells,' said Dr. Deepak Srivastava, head of cardiovascular and stem cell research at the Gladstone Institutes in San Francisco."

This paragraph caught our eye and conjured up an amazing image when we thought about its direct application to humans.

"In 2005, (Rando) stitched together two mice — one young, one old — to join their circulatory systems. After awhile, the stem cells in the old mouse were healthier and more active, leading scientists to believe that the younger blood and tissue from the young mouse were invigorating the stem cells in the old one."

In 2008, Amy Adams, then of the Stanford PR staff but now with CIRM, also wrote about the implications of Rando's research in a piece in Stanford Medicine magazine. She explored more of the scientific implications and limitations about sharing blood via stitching or otherwise. A sidebar to her main piece said,

"A lack of scientific grounding won't thwart anti-aging hucksters, says David Magnus, director of the Stanford Center for Biomedical Ethics. 'I can easily imagine a company starting up in another country based on Rando's findings,' Magnus says."

In fact, dubious stem cell marketing pitches are already well underway. We encountered one advertising on Google while doing research for this story. It was from a company in the Phillipines that offers treatments for breast augmentation and erectile dysfunction.  Our readers may even find ads like that on this blog, placed there by Google's automated system.

One downside to the impact of Chronicle story: It is behind a paywall and hasn't shown up in ordinary Google searches or alerts. We are in debt to Wesley J. Smith, whose blog post on the Chronicle story called it to our attention.

Smith, an attorney and author, is no friend of CIRM. His item yesterday described the $3 billion agency as "arrogantly managed and wildly expensive." Smith wrote,

"I suspect that the CIRM and its supporters are gearing up for a very expensive–pull out all the stops–PR drive to resell stem cells as the  cure all, as the once Golden State turns to pyrite.  Since they don’t have any real cures to point to, they plan to seduce with vaguely timed promises that stem cells will allow us to run marathons when we are eighty and make love at 90 like we were 25 and hormonal–the old quest for a fountain of youth updated for the scientific age."

Nonetheless, stories like one in the Chronicle are the right medicine for CIRM if it wants to live to a ripe old age.

CIRM Director Samuelson on Laggard Information: 'It's crazy. It isn't professional. It bugs me.'

Failure of the $3 billion California stem cell agency to make information available this month in a timely fashion led one of its directors to vote against major changes in its grant review procedures and abstain on another $30 million grant proposal.

Joan Samuelson

The director involved is Joan Samuelson of Healdsburg, Ca., an attorney and patient advocate member of the 29-member board. The occasion was the June 6 meeting of the directors' Science Subcommittee. Ironically,  one of the proposals involved would mandate greater advance notice to some grant applicants about issues on their applications than the advance notice that the CIRM board itself receives on matters it is considering. The other item  would create a new, $30 million "opportunity fund."

Both proposals were not made available to the public until Saturday June 4 for a meeting Monday June 6. Members of the Science Subcommittee apparently did not receive information about the matters any sooner than the public. Samuelson's reaction to the laggard performance was stronger, but not isolated from complaints heard in the past from some directors about late information. (See here for a discussion of problems with CIRM openness.)

Here are excerpts of what Samuelson, other directors and CIRM staff had to say June 6, according to the transcript, which was posted two days ago with little notice -- standard policy for CIRM.

Samuelson: "This is going to feel like the bad kid at the birthday party. I think we have to go back to the beginning and just acknowledge that we didn't have time to reflect on this stuff. The beginnings of the agenda came on Friday, and there wasn't -- at the end of the day and then we were getting stuff just a few hours ago.

"So I'm hoping we're not going to make any permanent decisions or recommendations to the (governing board) until we've had some time to reflect on it. And in part that's because it seems to me there's some questions about whether this changes programmatic review, whether it changes the nature of the (grant review group), and the way that the patient advocates are involved in it. It excludes them from participation in at least one place."

Outgoing CIRM Chairman Robert Klein pressed for action on the matter. He said a "number of board members" asked that it come to the full board in June.

Ellen Feigal, CIRM vice president for research and development, responded, generating the following exchange:

Feigal: "Frankly, we're not going to be able to try this out until next year."

Samuelson: "Then, for goodness sakes, let's wait till the next board meeting."

Feigal: "Well, we don't need to wait. I think --"

Samuelson: "If it was in such a rush, why didn't we get the material earlier? We should have some kind of timetable."

Feigal: "I think what we're trying to do is be responsive to the board and to -- at our last review group meeting, we had told people that we were going to do this in due diligence, and we tried to pass this forward. So just let us know how --"

Samuelson: "I'd like two weeks notice for any changes in the process."

Jeff Sheehy(chair of the committee): "I have a motion on the floor, and I'd like to get a second, and then I'm going to take public comment."

The discussion continued with more comment about how some board members wanted to consider the proposal while the problems with the clinical trial round were fresh in their minds.

Feigal then said that the proposal would have to go out to affected parties before this fall.

Feigal: "If we don't present it (to the board)in June, we don't have much time.

Samuelson: "I'm going to have to vote against it, and I don't want to do that. I just feel like in good conscience, I need to feel like the process was deliberative enough, and I just don't feel that way."

CIRM President Alan Trounson said he had brought the matter up a year ago and has been talking about it to board members for a "long time."

Samuelson said: "Jeff, could you add to the agenda a discussion of the timetable for bringing materials to the subcommittee?"

Sheehy: "I take responsibility for the delay in getting materials for it, Joan."

Samuelson: "We're going to in a minute be voting on something that I didn't have any time to look at at all because it arrived about an hour ago."

Sheehy: "I understand. I understand. we're trying. all of us –"

Samuelson: "I'm not complaining as long as I'm not obligated to make decisions on it in real time. It's crazy. It isn't professional. It bugs me. so I think -- if we can't be sure that staff will get it to us, then we've got to set a time frame."

Sheehy: "I think it's something we can discuss at the next subcommittee meeting."

Pat Olson, executive director of scientific activities, subsequently addressed the matter, declaring:

"Joan, I do apologize for the delay in getting the materials out. That was actually my fault. I'm not going to let Jeff take the blame for that. And I apologize because I've been working on getting an RFA out. So there is a lot of things going on right now. So that's wholly my problem, and I take full responsibility for it. Nonetheless, I think that the dialogue here should be helpful in essentially clarifying things."

CIRM Posts Details of Change in Big Ticket Grant Reviews

The California stem cell agency has added substantial amounts of additional information to its agenda for its board meeting next week, including a proposal that will make significant changes in the reviews for its important clinical trials and disease team rounds.

The additional material was posted late yesterday, only two business days before the meeting that begins next week in San Diego. As we noted yesterday, the dilatory postings do not serve the public, the California stem cell community, the agency or its directors well. One CIRM director, Joan Samuelson,  says laggard postings at CIRM are "crazy" and unprofessional.

"It bugs me," she told other directors earlier this month.

The new review procedures would involve grants or loans in the roughly $20 million and up range. They would provide an opportunity for applicants to comment on reviewer questions in advance of the formal peer review meeting. They would also allow reviewers to question applicants by telephone on the day of the review. The procedures grew out dissatisfaction by some board members with the process in which Geron was loaned $25 million in May.

The Geron funding represents CIRM's first entry into clinical trials. The agency is expected to be involved in more clinical trials as it tries to push stem cell therapies into the marketplace. The agency is seeking to produce results that would persuade voters to approve another bond measure – perhaps as large as $5 billion – to continue CIRM's efforts.

Ellen Feigal, CIRM's new vice president for research and development, told a panel of CIRM directors earlier this month that the new procedure is aimed at "making sure we have complete information in real time about the research grant." She said the changes are designed "to make sure that the investigators, the applicant, actually feel that they have an opportunity to address some of the difficult questions that could arise during the review process."

Her comments were made at the directors' Science Subcommittee meeting June 6. The transcript of the session, which is worthy of review by all potential CIRM applicants, was released two days ago with little notice, which is standard procedure for CIRM.

The review changes call for scientific reviewers to complete their initial review of applications 14 days in advance of a review meeting along with a list of key questions. The questions, plus any additional issues that CIRM staff has, would be go to applicants 10 days ahead of the review to give them time to respond. Applicants would be asked to be available by phone on the day of the review for any additional questions.

The discussion at the committee meeting largely involved details in execution of the plan and whether reviewers would pose questions directly to applicants. The answer was no, that some other person would pose the questions to avoid possible identification of scientific reviewers, whose identities are kept secret by CIRM.

Also discussed was the nature of the questions – whether they would involve nuanced matters or matters that could be addressed with a yes or no. From the committee's discussion, it was clear that this initial effort will be a testing ground to work out exactly how the new procedure will be implemented.

Other information freshly available on the agenda for next week's meeting involves:

• An $80 million grant program, beginning next year, for physician scientists to conduct research that will translate into possible applications.
• A $30 million "opportunity fund," controlled initially by the CIRM president, to accelerate development of therapies and implement a recommendation of last fall's blue-ribbon external review panel and assist industry.
• A $27 million, three-year extension of a training program involving California state colleges(but not the University of California) and community colleges.
• A job description for CIRM's new director of public communications, who apparently would run the agency's PR efforts from the chair's office as opposed to the president's. The post is part of a reorganization of CIRM management.

(Editor's note: An earlier version of this item did not contain the comments from Joan Samuelson.)

Openness Failure – Public Stiffed on Major California Stem Cell Matters

With only two business days remaining before a critical directors' meeting of the $3 billion California stem cell agency, the research institute has failed to provide basic background information to the public and the California stem cell community on many of the issues to be decided.

The CIRM openness failure makes it nearly impossible for researchers and biotech business executives and the public to make thoughtful suggestions or raise questions before the matters will be approved at the meeting next Wednesday in San Diego. The failure is not a onetime breakdown. It is the latest in a years-long demonstration of mismanagement of what should be a routine task. The dearth of information additionally damages CIRM's ability to generate the kind of positive news stories about its efforts that directors increasingly desire. 

The matters involved next week are not picayune. One involves major changes in the peer review process on applications for big-ticket, high profile grants ($20 million or so) on which CIRM is staking its future as well as the actual clinical development of stem cell therapies. The proposal will immerse CIRM ever more deeply in the earliest stages of grant applications. Some candidates will benefit. Others will lose out. But no details are available via the board meeting agenda about what exactly is under consideration.

Another matter with missing information involves creation of a $25 million "opportunity fund" that would be controlled by CIRM President Alan Trounson – not the CIRM board. Another involves extension of a $90 million training program. Still another involves a new, $180,000 federal lobbying campaign – a subject that generated some controversy two years ago.

Persons who understand the murky navigational nuances of the CIRM web site might be able to ferret out some outdated information dealing with the issues. But one cannot assume that two- and three-week-old memos, some of which are quite scanty, represent exactly what will be presented to CIRM directors next week.

This is not a problem for the public alone. Some CIRM directors have complained that they have received documents too late to examine them carefully. It is clearly unreasonable to expect the 29 persons (business executives, medical school deans, physicians and so forth) who serve on the board to push aside all their other concerns to perform a last minute study of material that should have been provided days earlier.

The responsibility for this sad state of affairs rests clearly with CIRM Chairman Robert Klein and CIRM President Alan Trounson. Klein controls the board agenda. Trounson is responsible for the staff work necessary to generate most of information. Klein's staff generates the rest.

One can only hope that the election of a new chair next week and revision of the CIRM management structure will also mean a major improvement in a critical interface between a $3 billion enterprise and the people who are paying for it – not to mention Californa's entire stem cell research community.  

Race for the Chair: A Reading List on Selection of a New Chairman of the $3 Billion California Stem Cell Agency

Jonathan Thomas (left) and Frank Litvack

Here are links to information concerning the selection of a new chairman of the $3 billion California stem cell agency, including items on the California Stem Cell Report and documents posted by the state's stem cell agency. It is not a complete compendium, however, of all news coverage or CIRM documents. Links within the articles will take you to additional information, including primary source material. The links to items on the California Stem Cell Report are excerpts and headlines from the actual item. (This list was updated June 22.)

Criteria for the chairmanship

March 22, 2010
Trounson's Criteria for New CIRM Chairman
CIRM President Alan Trounson has offered in writing his thoughts on the qualities that should be reflected in a person who may succeed Robert Klein as chairman of the $3 billion stem cell research effort next December.

March 4, 2011 -- Outgoing Chair Robert Klein's lengthy memo on the role of the chair.

March 10, 2011
CIRM Directors Move to Alter Role of Chair of $3 Billion Stem Cell Program
Directors of the California stem cell agency, in sharply divided moves, today said that its next chairman should serve in a part-time capacity in largely an oversight role.

Candidate Statements

The June 5 and June 6 items below carry verbatim statements from the two candidates that can only be found on the California Stem Cell Report.

June 5, 2011
Litvack Envisions Oversight Role for CIRM Chair, Shoring Up 'Messaging' and Industry Ties
Los Angeles cardiologist/businessman Frank Litvack, a candidate for chair of the $3 billion California stem cell agency, says he regards the job as part-time and says that the chair should not be involved in day-to-day management.

June 6, 2011
The CIRM Chair Race: Candidate Thomas Touts His Public Finance Experience
In his first appearance before directors of the $3 billion California stem cell agency, bond financier Jonathan Thomas, a candidate for the chairmanship of the agency, stressed his professional background as an investment banker and attorney and his service on government boards.

June 2, 2011
The Candidate's Letters: What Thomas and Litvack Have to Say
Here is a brief look at the letters of interest submitted to the board of the $3 billion California stem cell agency by two men in pursuit of a six-year appointment as its new chairman. First the item on Jonathan Thomas, then Frank Litvack. CIRM directors begin evaluating the men on Monday.

News Coverage of the Nomination Process

May 24, 2011
Nature Says CIRM Faces 'Stark Choice" in New Chairman
Nature magazine today weighed in with its story on the nominations for the new chairman of the $3 billion California stem cell agency.

Minimal News Coverage on CIRM Chair Nominees
The latest news coverage of selection of a new leader for California's $3 billion stem cell agency is meager, to say the least.

May 23, 2011
Litvack vs. Thomas for Chair of the $3 Billion Stem Cell Agency
California State Controller John Chiang today nominated Frank Litvack, a "serial entrepreneur" and cardiologist, to become the new chairman of the $3 billion California stem cell agency.

Southern California Investor Nominated for Chair of the State's Stem Cell Agency
California Gov. Jerry Brown and the state's treasurer, Bill Lockyer, today nominated the head of a Southern California bond investment firm, Jonathan Thomas, as a candidate to become the new chairman of the $3 billion California stem cell agency.

May 18, 2011
Southern California Investor Identified as Possible Candidate for CIRM Chair
Robert Klein, chairman of the $3 billion California Institute for Regenerative Medicine, is backing the head of a Southern California investment firm to succeed him at the helm of CIRM as it pushes aggressively to bring stem cell therapies into the marketplace, according to a reliable source. However, James Harrison, outside counsel to the CIRM board, flatly denied that Klein has endorsed any candidate.

May 19, 2011
Cardiologist/Entrepreneur Eyed for Stem Cell Agency Chair
A Los Angeles cardiologist who is also described as a "serial entrepreneuer" is under consideration as a possible candidate for chairman of the $3 billion California stem cell agency.

June 20, 2011
State Treasurer Boosts Chair Candidate with Strong Letter of Support

California State Treasurer Bill Lockyer today urged his five appointees to the board of the $3 billion state stem cell agency to vote this week for a Los Angeles bond investor as the new chairman of the research enterprise.

June 22, 2011
Race for the Chair: Blowback, Politics and CIRM Financing
A strongly worded letter from California state treasurer Bill Lockyer concerning this week's election of a new chairman of the state's $3 billion stem cell agency could be triggering a bit of blowback for the candidate backed by Lockyer.

Endorsements

May 31, 2011
Litvack Picks Up Public Support for Bid to Become Chair of Stem Cell Agency
The Consumer Watchdog organization today endorsed a Los Angeles cardiologist as the new chairman of the $3 billion California stem cell agency, declaring that it is time to "correct the agency's dysfunctional management structure."

Endorsement letter from the president of the Genetics Policy Institute supporting Litvack

CIRM executive structure

June 12, 2011
CIRM Directors Tackle Touchy Management Issues
Key leaders of the California stem cell agency have scheduled a 60-minute meeting tomorrow to decide long-standing, thorny matters at the $3 billion enterprise, ranging from the province of the new chairman and the current president to just exactly who is a senior officer of CIRM.

June 14, 2011, CIRM memo summarizing changes in management structure

June 14, 2011, text of new management structure/internal governance policy

Chair Salary

April 2, 2011
Sacramento Bee Whacks Pay Plan for New CIRM Chair
In case you missed it, The Sacramento Bee editorialized last week about the $3 billion California stem cell agency, deploring its much-criticized, dual-CEO structure and the possibility of a $400,000 salary for a new, part-time chairman.

March 24, 2011
Papering over the Pay Problem at CIRM: When is a $400,000 Salary Not $400,000?
Three top leaders of the California stem cell agency have come up with a plan that they hope will allow CIRM to avoid the wrath of the public when its new chairman is paid a salary that could be seven times the income of an entire, typical California household.

2010 attempt to find a new chair

Dec. 13, 2010, letter from state Controller John Chiang, who said the process was "fundamentally flawed."

Dec. 15, 2010
Klein Given New, Six-Month Term as Chairman; Board to Examine Criteria for Replacement
Directors of the California stem cell agency today re-elected Robert Klein as chairman of the $3 billion enterprise, culminating a weeks-long flap that included closed-door dealings, allegations of “sleazy” conduct and dubious, last minute financial warnings about CIRM's financial condition.

Dec. 16, 2010
Nature Magazine Says Bernstein Is Still A Possibility for CIRM Chair
Canadian scientist Alan Bernstein is not necessarily off the table as a candidate to become the next chairman of the $3 billion California stem cell agency, Nature magazine's Web site is reporting today.

Dec. 5, 2010
The Biopolitical Times Recounts the "Sordid" Saga at CIRM
The Center for Genetics and Society, which has not written much recently about the California stem cell agency, has posted its perspective on the latest events involving the election of a new chair at the $3 billion enterprise.

Dec. 6, 2010
Read This Item to See What CIRM Has Expunged From Its Web Site
With one day left before Wednesday's meeting of the directors of the California stem cell agency, the public can find much to mull over by reviewing the agenda for the session. But no one will find anything on three matters that have been expunged from CIRM's Web site. They deal with the less than artful attempt by CIRM Chairman Robert Klein to engineer the selection of his successor.

Dec. 5, 2010
Klein's Maneuvers, CIRM's Reputation and Bernstein's
A Canadian scientist yesterday pretty much identified a bottom line on the attempt by CIRM Chairman Robert Klein to hand pick his successor at the $3 billion public research agency. In an interview with the Toronto Globe and Mail, Alan Bernstein said the publicity about the machinations “compromises his international reputation and the reputation of the [California] agency.”

Stem Cell Blogging from Toronto

For a close-up, on-the-scene look at the biggest stem cell conference in the world, check out the blog on the web site of the California stem cell agency.

Don Gibbons, CIRM's chief communications officer, has filed one blog item already about and is Tweeting a couple of times a day. He wrote,

"What a rapt full house of attendees heard was an impassioned evening of hope and excitement balanced nicely with restraint and patient persistence."

Gibbons said in an email this morning,

"I am on the ISSCR education committee that plans the opening public session that I wrote about in the blog and made an oral presentation the following day on public education and (the CIRM) high school curriculum project."

CIRM has also sent 20 patient advocates to the meeting in Toronto of the International Society for Stem Cell Research as part of a $200,000 program. Don Reed of Fremont, Ca., is one of them. He is also filing reports on his blog.

CIRM Provides Public With More Info on Next Week's Important Directors' Meeting

To its credit, the $3 billion California stem cell agency today pumped a goodly dollop of information onto its web site dealing with the complex and costly matters that its 29 directors will vote on next week.

Before today's workday began and with only five business days remaining before its board meeting, the agency had provided little information via the meeting agenda for next Wednesday and Thursday in San Diego.

But by 5 p.m. today, CIRM offered to the California public and the stem cell research community links to information on five out of 24 items, including the selection of the new chair and the latest version of its reorganization plan.

Other background material now available includes:

• A $47 million extension of training grants to possibly as many as 17 institutions, all of which currently have grants. Most of the recipients have representatives on the board although they are barred from voting on grants to their institutions.
• An $882,974 increase in a grant to Henry Klassen of UC Irvine because of a "clerical error."
• Reappointment of a number of scientists to the grant review panel.

Still missing is information on the important, new grant review procedures for the big-ticket clinical trials and disease team rounds.

At this point, the information dealing with selection of the new chair appears to be unchanged from that which could be found earlier elsewhere on the CIRM website. It also appears that no changes were made earlier this week by the directors' Governance Subcommittee in the reorganization plan.

The agenda says that teleconference locations are available to the public in Pleasanton and at UCLA. Persons wanting to utilize the location at UCLA will need to call CIRM for more details because the agenda information is not specific.

The agenda also has instructions for listening to the meetings via the Internet.

CIRM Deficient Again on Informing the Public and Stem Cell Community

Directors of the $3 billion California stem cell agency have scheduled a two-day meeting in San Diego next week that is chock-a-block full with complex and enormously expensive business ranging from generous grant programs to revamping reviews on its highest profile financing rounds.

That is not to mention the matter of electing a new chairman for what may well be the final years of the research enterprise.

Outgoing Chairman Robert Klein has stuffed 24 items into the agenda. Some are routine but others are controversial, such as the management restructuring plan. Another far-reaching proposal involves significant changes in how the agency reviews applications in its clinical trials and disease team rounds, which can award $20 million or more on an individual application.

Meanwhile, the public and the California stem cell research community is coming up short. With only five business days left before the meeting begins next Wednesday, CIRM has failed to post on the board agenda any significant background information on the matters that its 29 directors are set to consider.

CIRM leadership fusses and fumes from time to time about the lack of media coverage, particularly "good" media coverage of the agency. One of the basics in helping to drive media attention is to make information about an enterprise accessible and transparent. CIRM is famously deficient in that area when it comes to its most important activity – meetings of its board of directors. (See here, here, here, here, here and here for a few examples.)

Beyond that, as a taxpayer-funded endeavor, CIRM has an obligation to openness and transparency under California law.

The agency will run out of cash in a few years and is talking up a fresh pitch to California voters for as much as $5 billion – money that the state has to borrow. Given the financial crisis in California state government – which is not going away in one or two years – CIRM will need tangible research results that the public will find persuasive. But another critical measure is the agency's record of openness and transparency. A pattern of withholding information leads even supporters to suspect the worst.

As state Controller John Chiang, the state's top fiscal officer, said more than a year ago,

“To ensure that taxpayer dollars are spent lawfully, wisely and successfully, the stem cell program must pursue the highest standards of transparency to be fully accountable to the public.”

California Stem Cell Agency Beefing Up PR, Financial Expertise

The Governance Subcommittee of the California stem cell agency yesterday approved a major reorganization of the way it does business, including the hiring of its first-ever chief financial officer and a new, executive-level public relations person to add to its $1 million PR efforts.

The CFO will report to both the chairman and the president. The new PR person reports only to the chair. It is unclear what his or her relationship will be to the existing CIRM communications chief, who reports to the president. The creation of the posts appears to add a new layer to the much-criticized dual executive arrangement at CIRM.

The Governance panel, composed of 10 CIRM directors, unanimously approved the new management plan on Monday, according to Don Gibbons, the agency's communications chief. The proposal now goes to the full 29-member CIRM board next week for final adoption. The positions are among the 56 employees (including two members of the board) approved in the CIRM budget for the coming year.

CIRM directors have described the proposal as a "starting point" for its new chairman, who is expected to be elected, also next week, at the two-day San Diego meeting. Directors have indicated that no hiring is to take place until the new chairman has begun work. Additionally, a job description has not yet been written for the new PR position. That comes up on June 20. Some CIRM directors have raised questions about the urgency of adopting the plan on the eve of the election of a new chair.

CIRM President Alan Trounson and the No. 2 executive at CIRM, Ellen Feigal, also raised questions about some of the aspects of the new structure in a memo posted on the CIRM web site. Art Torres, co-vice chair of the board, rebutted the questions in another posted memo.

In other matters, the Governance committee approved a new $325,000 contract for legal work from attorney Nancy Koch for the coming fiscal year and a $450,000 contract for the coming year with the Mitchell Group, a Long Beach, Ca., firm that recruits information technology professionals. The arrangements are among the $3.3 million in spending for outside contracts that is the second largest item in CIRM's $18.5 million operational budget, trailing only the $10.3 million compensation for its staff.

Action on a proposed code of conduct for CIRM directors was put off for unspecified revisions.

Defining a PR Post: CIRM Directors Take a Crack

A dozen directors of the California stem cell agency are scheduled to spend about 30 minutes next Monday crafting a job description for a new, top level public relations person at the $3 billion enterprise.

Ordinarily, such an activity would not come to the attention of directors, much less warrant the attention of even this blog. However, the position is caught up in the touchy management reorganization that grew out of the directors' performance evaluation last year of CIRM President Alan Trounson. The new post seems to have evolved from dissatisfaction with how CIRM and its efforts have been portrayed in the mainstream media coupled with the likelihood that the agency may seek $5 billion in additional bond funding from California voters in a few years.

CIRM already spends about $1 million(including internal compensation and outside contracts) on communications and PR efforts, directed by Don Gibbons, the agency's chief communications officer. Gibbons works under the direction of the CIRM president. The new position would report to the chairman of the agency.

No salary has yet been specified for the new post, but it is likely to match or exceed Gibbons' $196,409 annual salary in 2010.

Creation of the job seems to be following the model of the much-criticized dual executive situation at CIRM involving the chairman and the president. The new position would report independently to the chairman. It is not clear what his or her relationship would be to Gibbons.

Outgoing CIRM Chairman Robert Klein said at the May 4 directors' meeting that although the "public communications officer" would report to the chair

"...(I)t's going to be important to have a collegial relationship and a coordinated relationship with the president so we have a coordinated voice in this organization."

So far, the CIRM budget contains no support budget for the new PR person although clearly he or she is going to need one.

Our comment: Based on 30 years experience in the news business in Los Angeles and Sacramento and two years as a flack (PR person) for the governor of California, it is clear that this dual PR arrangement will be a mess. It is essential that the agency's PR effort operate under the direction of one person. Otherwise, it will fumble and stumble, lack clarity, react slowly and constantly be searching for direction. Putting two persons in charge of an enterprise means that no one is in charge.

CIRM President Alan Trounson is already balking at designating the new position as a senior officer of CIRM. However, without that designation and access, CIRM should not bother with hiring another person. To be effective, the senior PR person must be part of the top executive team and be prepared to give advice at the earliest stages of proposals and at the highest level. Otherwise, dubious initiatives may be launched with no real understanding of how they will play out in the media or affect the public -- much less how they can be sold.

Finally, top executives at CIRM should not confuse their own excellent expertise on matters of science, law and financing with expertise in communications and media campaigns. These matters require specialized knowledge, skills and years of experience and contacts that the top executives at CIRM do not have. That is not to diminish their capabilities, which are considerable, but it simply reflects the fact that they followed a different professional path.

The directors' Communications Subcommittee will take up the job description in a teleconference meeting that has public locations in both Northern and Southern California, including San Francisco, Duarte, La Jolla, South San Francisco, Irvine with more likely to be added. Specific locations can be found on the meeting agenda.

Reading About Stem Cells in Farsi: An Outreach Effort

California stem cell researcher Paul Knoepfler has begun an effort to spread the word globally about stem cell research in languages ranging from Polish to Farsi.

Writing last week on his blog at UC Davis, Knoepfler said,

"I think stem cell technology will transform medicine across the globe, but it will take a concerted effort to make certain that stem cell-based therapies do not become a type of medicine only available to the relatively wealthy or predominantly available only to English speakers in the U.S. and around the world.

"Access is a key issue."

Knoepfler has kicked off his campaign with something he calls the Stem Cell Outreach Program for Education or SCOPE. The first entry is a short summary of key facts about stem cells and why people around the world should care about them.

The document is available in Chinese, Spanish, Portuguese, Farsi, Romanian, Polish and English. More languages are expected in coming weeks.

Knoepfler is also looking for web sites that can provide links to the material in order to make it available to the widest possible audience.


\

High Speed Rail and California Stem Cell Agency on Same Lobbying Track

The California stem cell agency has a number of things in common with the California High Speed Rail Authority. Both generate a certain amount of controversy. Both use billions in money borrowed by the state. And both are among the rare state agencies with a federal lobbying effort.

The rail authority was created by California voters in 2008 when voters approved $8 billion in bond funding. It already has snagged $3.5 billion from the feds, but needs many billions more.

The stem cell agency is all but ready to spend about $180,000 on outside lobbying help in Washington during the next 12 months. The rail authority has already spent $40,000 on lobbying in the first three months of this year, according to a story in The Sacramento Bee on June 12.

Where they diverge – so far – is the news coverage about their lobbying efforts. The Bee's story said that state Sen. Doug LaMalfa, R-Richvale, has begun an investigation into whether lobbying restrictions have been violated by the rail authority. LaMalfa said the publicly funded lobbying is "outrageous" and "inappropriate, at the very least."

No similar sentiments have been heard from state legislators about CIRM's federal lobbying foray. But one reader left this anonymous comment on The Bee's rail story.

"It should be illegal for any government enity to lobby with our tax money.... They take our tax money and spend it to ask for more of our tax money...... Is it any reason our government is a mess and corrupt?"

One difference currently exists between the rail and the stem cell lobbying. CIRM is not proposing at this point to ask for federal assistance, although outgoing CIRM Chairman Robert Klein talked up a massive, $10 billion package in 2009 that would help CIRM and the biotech industry.

CIRM Directors Tackle Touchy Management Issues

Key leaders of the California stem cell agency have scheduled a 60-minute meeting tomorrow to decide long-standing, thorny matters at the $3 billion enterprise, ranging from the province of the new chairman and the current president to just exactly who is a senior officer of CIRM.

The matters, which come under the rubric of "internal governance policy," have been around for some time – in some cases for years, particularly the much-criticized dual executive arrangement involving the chair and the president. In this latest episode, only bits and piece of that management issue have surfaced. (Here are links to an introductory memo and the text of the proposal.)

The proposed changes in the structure of CIRM involve both major and minor matters, including the agency's bond financing and budgeting and adding staff in the chair's office, boosting it from eight to nine persons. Currently CIRM has about 50 employees. The board has 29 members.

The governance proposals were originally prepared by CIRM President Alan Trounson and grew out of the evaluation last year of his performance by the CIRM governing board. The plan has triggered an unusual exchange of memos on the agency's web site that illustrates the contentiousness of some of the issues. First is a "Memo from two staff members to Governance Subcommittee of Board." Then comes a "Memo from Vice-Chair Senator Art Torres in response to memo from two staff members."

The nomenclature describing the memos has significance. The description is controlled by the office of the chair, which posts material to meeting agendas -- in this case the directors' Governance Subcommittee, which is the group that meets tomorrow. The memo from "two staff members" did not originate with ordinary CIRM employees but Trounson and Ellen Feigal, who is the recently hired No. 2 executive at CIRM with the title of vice president for research and development.

The "two staff members" memo takes issue with a number of provisions in the proposed internal governance policy. The memo also appears to seek a 30-day delay in considering the plan. At that time, Trounson and Feigal propose consideration of a presidential reoganization plan as well as another from the new chair, who is to be chosen June 22-23 at a meeting in San Diego.

Among other things, the Trounson-Feigal memo says the new chair may not be qualified to supervise public meeting and conflict of interest issues as well as the legal and financial accountability of the CIRM board. Thus, they suggest a provision to that effect in the new policy should be deleted. Trounson and Feigal said the executive director of the CIRM board and the new public media director should not – and they underlined not – be considered senior officers of CIRM. They also said the new position of chief financial officer, who will direct budget and bond financing matters, should reside in the office of the president for the purposes of budgeting. Presumably that would give the president a bigger handle on the compensation for the CFO, who is supposed to report to both the chair and the president.

In his response, CIRM co-vice chairman Torres took issue with nearly everything in the Trounson memo.

All this involves devilish details that can add up to much more than their surface appearance. During debate last month on the plan at both the Governance Subcommittee and the full board meetings, the discussion became so touchy (see debate excerpt below) that the committee and the board felt compelled to go into executive session. During the board meeting, Trounson exited the room before the topic came up. Feigal and Elona Baum, CIRM general counsel, were left to represent his position and ran into some resistance from board members.

Given that a new chairman is yet to be elected, two board members, co-vice Chairman Duane Roth, a San Diego businessman, and Claire Pomeroy, dean of the UC Davis Medical School, have objected to action on the plan, even though it is couched as a "starting point." The response has been that the plan has been in the works since Trounson's evaluation last year and needs to be moved forward.

It would be easy to dismiss the flap over internal governance as inside bureaucratic baseball. But the proposal and discussion about it highlight issues at the heart of how CIRM does its business for the people of California. Without effective management, it is not at all certain that taxpayers will get a meaningful return on their $6 billion investment (including interest). The issues also speak to the limitations and handicaps that Prop. 71, drafted by outgoing Chairman Robert Klein, places on the research effort. The 10,000-word proposal wrote into state law management minutia, which is now nearly impossible to change, also because of Prop. 71. Beyond that, CIRM and its conduct are  providing a civics lesson in whether the ballot initiative process can or should be used in connection with complex California issues. Finally, how CIRM conducts its affairs will have major impact on the hESC research worldwide and help determine whether the public supports stem cell research or regards it as something less than worthy.

Also on Monday's agenda is the first-ever code of conduct for the CIRM board. (See here and here.)

If you are interested in taking part or listening in on Monday's meeting, teleconference locations are available throughout California, including San Francisco, Los Angeles, South San Francisco, La Jolla, Irvine, Stanford and Palo Alto. Specific addresses can be found on the meeting agenda.

Here is an exchange from the May 4 CIRM board meeting debate on the internal governance policy.
CIRM Management -- Excerpt from debate at the directors meeting May 4, 2011

CIRM Headed for Another Federal Lobbying Effort

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

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

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

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

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

The CIRM memo said the bill and other federal proposals

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

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

The memo continued,

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

From Conflicts of Interest to Unfilled Promises: LA Times Columnist Lambastes CIRM

California's largest circulation newspaper, the Los Angeles Times, was the stage this week for a broadside concerning the failings of the $3 billion California stem cell agency.

Among other things, the June 7 column by Pulitzer Prize-winner Michael Hiltzik, said CIRM

• "...(H)as always displayed a curious lack of vision about its own responsibilities,"
• Has not "resolved the persistent questions about whether its grant-making process is subject to adequate public oversight or free of conflicts of interest, "
• Has failed to deal with "chronic management difficulties,"
• Has not found the therapies promised in the 2004 ballot campaign that created the agency and has failed to temper the "inflated optimism" created by electioneering rhetoric.

"Indeed," Hiltzik wrote, "given the current research and budgetary environment, the institute probably shouldn't exist."

All this coming from a writer who also said, " There's no question that stem cell research is important and potentially groundbreaking."

Hiltzik has been critical of CIRM since the 2004 election for a host of reasons. (See here,here, here and here.) Some may disagree with his opinions, but his columns appear in the nation's fourth largest circulation newspaper, currently with 605,243 average daily copies for the most recent six month period. Its influence, however, is much larger. It boasts a cumulative readership over a seven-day period of 4.4 million, exceeding even the best-performing TV stations in the area. The Times defines what is news in the Los Angeles basin, if not all of Southern California. It is the starting point for TV and radio news coverage in the area every day of the week. And when journalists elsewhere in the country look for solid coverage of California affairs, the Los Angeles Times is one of the first places they go.

All something for CIRM to consider as its governing board weighs the choice of a new chairman and forges ahead with aggressive forays into big-ticket financing rounds aimed at pushing stem cells into the clinic. The stem cell agency is also gearing up for another pitch to California voters for billions more in state bonds, perhaps as much as $5 billion, on top of the $3 billion it already has. (Double those amounts for the true cost when you add in the interest on the borrowed money.) But unless something changes in a major way in the California economy or in CIRM's slim list of accomplishments, that bond proposal is likely to be defeated and CIRM will run out of government funds in about five years, maybe less depending on its burn rate.

One way to look at the Hiltzik column in the Times, as well as other stories of that ilk, is that they are only a PR problem. Improve CIRM messaging, hire another $200,000-year spokesman and send out more Tweets on Twitter. That takes care of it. Another view would hold that genuine improvements need to be made, procedures altered and meaningful results – that is, meaningful to the untutored public – generated and cemented in the public mind. It is not as if Hiltzik is a lone voice.  Even CIRM's own blue-ribbon external review panel last fall stressed the need for significant changes, although not necessarily all those mentioned by the Times writer.

Hiltzik quoted state Controller John Chiang, who is the state's top fiscal officer and who chairs the only state entity with specific oversight of CIRM, as saying,

"We're at a critical crossroads. The voters invested a significant amount of money for what they thought was going to be life-changing improvement….[CIRM] hasn't produced a game-changer in the public mind-set."

Coming up in the next year or so are two expensive assessments of CIRM – total cost around $1 million. CIRM directors are talking about making changes based on those recommendations. However, it is not to early to act on some issues that already are troubling CIRM and hampering its abilities to fulfill the seven-year-old election promises to millions of California voters.