Francke Statement

The following remarks were prepared by Terry Francke, general counsel for Californians Aware, to be presented at today's California Legislative hearing into the state stem cell agency.

“Thank you for sharing with me the March 1 letter from Bruce Alberts, president of the National Academy of Sciences (NAS) to Robert N. Klein II, Chairman of the Independent Citizens Oversight Committee (ICOC) of the California Institute for Regenerative Medicine (CIRM). “The letter explains the transparency rules governing NAS advisory committee meetings and records, and will, I gather, be presented as support for the ICOC’s apparent intention not to open to the public meetings of the Working Goups advising the ICOC. “There are several reasons why the NAS committee policies in this regard are not good models for those that should govern the Working Groups. “The NAS and the Federal Advisory Committee Act The NAS was incorporated by an act of Congress during the Civil War and charged, “whenever called upon by any department of the Government, (to) investigate, examine, experiment, and report upon any subject of science or art…” As noted on the NAS web site,
'Over the years, the National Academy of Sciences has broadened its services to the government. During World War I it became apparent that the limited membership -- then numbering only about 150 -- could not keep up with the volume of requests for advice regarding military preparedness. In 1916 the Academy established the National Research Council at the request of President Wilson to recruit specialists from the larger scientific and technological communities to participate in that work. 'Recognizing the value of scientific advice to the nation in times of peace as well as war, Wilson issued an executive order at the close of World War I asking the Academy of perpetuate the National Research Council. Subsequent executive orders, by President Eisenhower in 1956 and President Bush in 1993, have affirmed the importance of the National Research Council and further broadened its charter. 'Under the authority of its charter, the National Academy of Sciences established the National Academy of Engineering in 1964 and the Institute of Medicine in 1970. Much like the National Academy of Sciences, each of these organizations consists of members elected by peers in recognition of distinguished achievement in their respective fields. The National Academy of Sciences includes about 1,800 members, the National Academy of Engineering about 1,900, and the Institute of Medicine about 1,200. All three organizations also elect foreign associates.'
“The Federal Advisory Committee Act was passed in 1972 and for the next 25 years required that all meetings of a defined federal “advisory committee” be open to the public. The definition encompassed
'any committee, board, commission, council, conference, panel, task force, or other similar group, or any subcommittee or other subgroup thereof…which is – (A) established by statute or reorganization plan, or (B) established or utilized by the President, or (C) established or utilized by one or more agencies, in the interest of obtaining advice or recommendations for the President or one or more agencies or officers of the Federal Government except that such term excludes (i) the Advisory Commission on Intergovernmental Relations, (ii) the Commission on Government Procurement, and (iii) any committee which is composed wholly of full-time officers or employees of the Federal Government.'
'
“(5 U.S.C. App. §3) “In Animal Legal Defense Fund v. Shalala, 104 F.3d 424 (D.C. Cir.), cert. denied, 118 S. Ct. 367 (1997), the U.S. Court of Appeals for the District of Columbia Circuit held that under the “established or utilized by one or more agencies” criterion, an advisory committee of the NAS that developed standards for animal experimentation for various federal agencies was subject to the FACA open meeting requirement. Toward the end of that year, a bill was introduced in the House and, thanks to rule suspensions in that body and unanimous consent in the Senate, was on the President’s desk within 30 days, to be signed into law on December 17. “In other words, the exemption from the FACA’s open meeting requirements that NAS advisory committees were granted for their deliberative sessions was itself achieved without hearings or deliberation. Whatever merit such an exemption may have as a model for California is therefore still, needless to say, open to debate. The only clue I have been able to find to the justification that would have been openly offered to the Congress had there been hearings and debate is in the November 5 statement of G. Martin Wagner, Associate Administrator of the General Services Administration, to the Subcommittee on Government Management, Information and Technology of the House Committee on Government Reform and Oversight. His statement (full text at http://www.gsa.gov/Portal/gsa/ep/contentView.do?pageTypeId=8199&channelId=-13338&P=XAE&contentId=11771&contentType=GSA_BASIC) makes it apparent that the NAS quarrel with the Animal Legal Defense Fund holding was principally that it extended FACA to NAS committee work operating under contract with federal agencies, even though NAS was only “quasi-public” and was “not subject to actual management and control by such agencies…” A proposed amendment turning on that distinction was abandoned in favor of the actual bill, introduced just two days later, which instead specifically gave NAS its express exemption. “The Deliberative Process Privilege “What rationale there is for the exemption is stated in Dr. Alberts’ letter: “Committee meetings that are not data-gathering committee meetings are not open to the public in order to protect the committee deliberative process.” In California law, the integrity of the deliberative process of the executive has been recognized by the California Supreme Court as one consideration to be weighed in the balance in determining whether records of the Governor’s office showing with whom the Governor met must be disclosed under the California Public Records Act. The high court resolved this question against disclosure in Times Mirror Co. v. Superior Court of Sacramento County, 53 Cal. 3d 1325 (1991), and since then two cases from the Court of Appeal have done likewise concerning records showing who has applied to be named by the Governor to fill vacancies on county boards of supervisors (Wilson v. Superior Court, 51 Cal.App.4th 1136(1996); California First Amendment Coalition v. Superior Court of Sacramento County, 67 Cal.App.4th 159(1998)). Only one case has applied what has come to be called the “deliberative process privilege” to a multi-member deliberative body, i.e. a city council, and in that case the issue was access to records of phone numbers called by council members over the period of a year (Rogers v. Superior Court of Los Angeles County, 19 Cal. App. 4th 469 (1993)). “Otherwise, California law on access to meetings of decision-making and advisory bodies in the legislative and executive branches of state and local government is uniformly contrary to the notion of a deliberative process privilege justifying exclusion of the public. The constitutional provisions requiring open meetings of the Legislature’s houses and committees acknowledge no such exemption from openness, nor do the Bagley-Keene Open Meetings Act governing state bodies generally, the provisions of that act applicable to the Board of Regents of the University of California, the Romero Act applicable to meetings of California State University student organizations, and the most thoroughly amended, litigated and interpreted statute of them all, the Ralph M. Brown Act, applicable to boards, councils, commissions and the advisory bodies thereto in local government. “This rejection of secrecy in the deliberative process has been resoundingly reinforced in the November 2 voter approval, by an 83.4 percent margin, of Proposition 59, amending the California Constitution to give citizens a fundamental right of access to “the meetings of public bodies.” The ballot argument for Prop 59 states, in part:
'What will Proposition 59 do? It will create a new civil right: a constitutional right to know what the government is doing, why it is doing it, and how. It will ensure that public agencies, officials, and courts broadly apply laws that promote public knowledge. It will compel them to narrowly apply laws that limit openness in government—including discretionary privileges and exemptions that are routinely invoked even when there is no need for secrecy. It will create a high hurdle for restrictions on your right to information, requiring a clear demonstration of the need for any new limitation. It will permit the courts to limit or eliminate laws that don't clear that hurdle. It will allow the public to see and understand the deliberative process through which decisions are made. It will put the burden on the government to show there is a real and legitimate need for secrecy before it denies you information. (Emphasis added)'
“In summary: “The exemption from the open meeting requirements of the Federal Advisory Committee Act granted by the Congress to the National Academy of Sciences in 1997 was achieved in extraordinary haste without public hearings or debate. There is no record of legislative intent or rationale. “The purpose of the exemption as articulated by NAS President Bruce Alberts —“ to protect the committee deliberative process”—is utterly alien to California law on meetings of official bodies. “California voters have overwhelmingly endorsed a constitutional principle to the contrary—underscoring their right “to see and understand the deliberative process through which decisions are made.” “Finally, if any argument were needed as to why the ICOC’s Working Groups are especially needful of public monitoring, it is the fact that the CIRM is otherwise so extraordinarily insulated from Legislative control and correction. The only oversight of the CIRM in its foundational years is provided by the ICOC. Since the task of the Working Groups is to present the ICOC with recommended standards and policies, and enforcement actions supporting them, the Working Groups should be as transparent as any committees of the Legislature.”

Ortiz Media Advisory

Here is the media advisory from Sen. Ortiz.

SENATOR ORTIZ HOLDS FIRST LEGISLATIVE OVERSIGHT HEARING ON THE IMPLEMENTATION OF STEM CELL RESEARCH

SACRAMENTO – Senator Deborah Ortiz (D-Sacramento) on Wednesday will hold the first legislative oversight hearing on the implementation of Proposition 71, the Stem Cell Research and Cures Act. The joint hearing will be conducted by the Senate Health Committee and the Senate Subcommittee on Stem Cell Research Oversight, both chaired by Ortiz; and the Assembly Health Committee, chaired by Assemblywoman Wilma Chan (D-Oakland).
Legislators will be provided their first opportunity to hear first-hand how the California Institute for Regenerative Medicine and the Independent Citizens Oversight Committee, the 29-member panel charged with overseeing implementation of Proposition 71, are designing the nation’s premier stem-cell research program. They also will hear about steps planned to ensure patient protection and public accountability.
“Voters overwhelmingly approved Proposition 71 because of the promise it holds for finding new medical breakthroughs for debilitating and life-threatening diseases that affect millions of Americans,” Ortiz said. “In approving this important research, voters also ponied up $3 billion to $6 billion of their hard-earned tax dollars. It is critical that Californians remain confident that their public dollars are well spent and the state receives a fair financial return on its generous investment – both in royalties and affordable access to therapies that are developed.”
Most of the hearing will be devoted to testimony from experts regarding several critical issues that were not addressed in the initiative, including: adopting conflict-of-interest and economic disclosure requirements to ensure members of the governing committee and working groups that award research grants are not tainted by financial holdings or affiliations with any university or disease advocacy group; determining how much of the work by the governing and working groups should be conducted in a public forum; ensuring the state receives a fair financial return on its investment through royalties and/or access to medical remedies and products developed; and adopting strict patient protection regulations and bans on financial gain for donating eggs.
Senator Ortiz is the author of SB 18, which addresses each of those areas. The bill is scheduled to be heard in the Senate Health Committee in April.

Greenlining Statement

The following letter dealing with supplier diversity was submitted by Jorge Corralejo to Sen. Ortiz as part of the Greenlining Institute's presentation for the committee hearing on the stem cell agency.

“As a board member of the Latin Business Association and of the Greenlining Institute, I wish to express my concerns regarding the $3 billion in contracts that the Stem Cell Research Institute is likely to grant to white institutions. I have personally been involved in negotiations with a wide range of regulatory bodies and private institutions, including all of the major banks, on supplier diversity issues and have advised the Insurance Commissioner on this matter as part of my duties on the Insurance Department COIN Board.
“Our organization has been active before the California Public Utilities Commission (CPUC). As a result of actions by various minority organizations, AT&T awarded 17% of its contracts to minorities, SBC awarded 23% of its contracts to minorities, Edison awarded 16% and Verizon awarded 15%. In large measure, this is due to the CPUC having set 15% minority contract goals at our request.
“We are concerned that no such goals exist for stem cell research. We are also well aware of the University of California’s embarrassing record of failing to enroll, hire or do business with minority communities. Unfortunately, UC does not, as a deliberate policy in order to prevent criticism of its white-only policies, gather records generally relating to race and ethnicity of its almost $5 billion a year in contracts. However, according to recent data provided to the Greenlining Institute from the office of the General Counsel for the Regents of the U.C., data is available for U.C. Davis. It shows that just 5% of contracts were awarded to minority-owned businesses for the last year reported 2003.
“We urge you to take the following action:
“Request that the Oversight Committee set goals of fifteen to twenty-five percent of contracts for small, minority-owned businesses, including professional services, and that the Committee provide an annual report broken down by race and ethnicity on achievements.
“No contracts of $1 million or more be awarded unless the business or institution, including universities, has a supplier diversity program and discloses its results by race and ethnicity.
“Require the University of California, prior to its submitting any bids for any contracts or services, to submit detailed information by race and ethnicity of all of its contracts, much as the CPUC requires of the utilities.
“Californians, including an overwhelming number of Latinos and other minorities, voted in favor of Prop 71. We also deserve a fair share of all contracts.
“Please be assured that if you have other hearings on this matter, I will be pleased to attend and would be pleased to work with the stem cell research Oversight Committee in achieving equal opportunity for all businesses.”

Semi-Complete Coverage Coming Up on Ortiz Hearing

Later today, we will have semi-complete coverage of the California Legislative hearing into the new state stem cell agency. Look for information from State Sen. Deborah Ortiz, who is chairing the hearing, and Californians Aware, the Center for Genetics and Society, the Greenlining Institute and perhaps more. We expect to post about 3:30 p.m. PST

More Egg Regulation Sought

The Center for Genetics and Society has joined with the Pro-Choice Alliance for Responsible Research to call for increased regulation of the California stem cell agency in connection with the use of women's eggs for research.

The groups plan to testify at Wednesday's California State Senate hearing into the new agency.

One of their recommendations: “Before undertaking multiple egg extraction from healthy women, all data on drugs used in such procedures should be reviewed by a neutral, knowledgeable, and independent oversight body whose sole purpose is to protect the safety and rights of women wishing to provide eggs.”

“If researchers begin experimenting...on a large scale, they will need eggs from many thousands of women. Payment to these women for their eggs, even if it is considered reimbursement, would create an economic inducement for women to put themselves at risk. This would be especially true for poor and young women,” said Marcy Darnovsky , associate director of the Center for Genetics and Society .

You can see the press release here and the full text of a letter from Suzanne Parisian, M.D., a former chief medical officer for the FDA.

Not Everyone Buying...

An insight into the dynamics of the new California stem cell agency was presented on Sunday in an editorial in The Sacramento Bee. The headline on the piece was "Cell Break." Here is an excerpt:

"During Tuesday's meeting at Stanford University, Klein asked the committee for sole authority to respond to the (Lee-Halpern) petition, with no discussion of its merits. It was a remarkable power grab, but not everyone was buying.

"The first dissenter was Dr. Francisco Prieto, a Sacramento physician appointed to the committee by state Treasurer Phil Angelides. Prieto said the petition had "substantive points" for discussion. He was joined by Dr. Michael Friedman, another Angelides appointee who heads City of Hope, a Southern California cancer research and treatment center.

"From that point on, Klein lost control of the proceedings. The committee wasted 30 minutes debating whether to write a perfunctory response to Halpern and Lee or - horrors! - actually meet with them. The most shameful performance was by David Serrano Sewell, who suggested the petitioners were plotting a "judicial intervention." (Note to Sewell: Lee is a distinguished health official who supports stem cell research. He deserves more respect than you granted him.)

"Later, Klein tried to vest authority in a subcommittee to devise $15 million to $25 million in grants to train scientists and create "centers of excellence" for stem cell research. Dr. Claire Pomeroy of UC Davis rightly questioned this delegation of authority, and the matter was put off to the next meeting.

"What we are witnessing is the natural tension between doing things fast, and doing things right. As we have stated earlier, California's landmark stem cell research program holds enormous promise for treating diseases. But by trying to strong-arm every decision, Klein may actually be slowing down the process - by infuriating colleagues and emboldening opponents."

New Frontiers: Stem Cells and the Web

Only about one out of every five million Californians was able to make it to this month's meeting of their state's new stem cell agency.

Yet, nearly half of all the families in California could potentially benefit from programs that the multibillion dollar agency is just starting.

It may be that the old saw about the making of sausages and laws also applies to the making of a new bureaucracy. It is an untidy business, perhaps best left unobserved by the overly fastidious.

The new institute, however, is also making history with forays into the frontier of medical science. Cures or vastly improved treatment for such ailments as diabetes, cancer, Parkinsons, Alzheimers, ALS, multiple sclerosis, spinal injuries and heart disease are all part of its goals.

Its leaders have promised the highest and best standards for its science. That promise should apply as well to the openness and accessibility on the Web of the California Institute for Regenerative Medicine.

It certainly would benefit the many Californians living with the diseases targeted by CIRM. Many are not able to travel to CIRM meetings but might find them of interest if the sessions were broadcast on Web. Webcasting would be of enormous utility to thousands in the scientific community, academic world, biotech businesses as well as legislative and governmental officials.

But Webcasting should only be a start. When the Web became a reality for most state agencies, they were living in a world that had only recently abandoned typewriters. Bringing information and public records online was an expensive and time-consuming process – not to mention a frightening one for the officials who preferred life in semi-obscurity.

Today's technology allows – virtually insists – that all of CIRM's public records be available online and easily searchable. The agency has moved in that direction already with its first efforts on the Web. Much more can be done.

CIRM can readily establish new performance levels for Internet access to government agencies, since it is not hobbled with the baggage of the past. Doing so would advance the institute far along the path of fulfilling its promise of maximum openness. As CIRM Chairman Robert Klein has said, what this agency ultimately generates must be shared with the world.

The value of open Web access involving grants and research (with the obvious usual limitations) would seem immeasurable. Web access would achieve other goals as well, such as reducing staff time involved in routine phone calls and conventional mail. Given the picayune size (50 persons) of the agency's staff, that would seem something worth doing.

We must admit the possibility of the opposite result. Years ago, the advent of computers was predicted to eliminate paper in offices. In fact, paper multiplied geometrically. It could be that unprecedented openness could lead to a wave of totally unexpectedly public interest in CIRM. Not that that would be so bad.

It is not often that government agencies can make fresh starts or have new beginnings. CIRM stands in an historic position. It may be the first time that government has embarked on such a massive effort on the frontiers of biology and theology, life and death, and, yes, even sex.

Opening a frontier in cyberspace may not double attendance at CIRM meetings to as high as, let's say, two out of every five million Californians. But it would be a shame to pass up an extraordinary opportunity to set a global benchmark for openness and public access.

Readers Write

Pete Shanks writes:

"I just re-checked the Cal. Sec of State campaign database and found new data on the 71 campaign.

"As of 03/04/05, these are the numbers: Support 71 -- raised $25.1 million -- spent $34.8 million

"Oppose 71 -- raised $635 thousand -- spent $625 thousand i.e. Yes on 71 is still almost $10 million in debt and the ratio of expenditure is, gulp, 55 -- almost 56 -- to one.

"The URL is http://dbsearch.ss.ca.gov/BallotSearch.aspx (and then navigate via drop-down menus).

"It certainly seems as though the Yes on 71 people overspent badly, since they got 59% of the vote and yet ended up so hugely in debt.

"I do not doubt the sincerity of the supporters, especially the patient advocates, but I do question their judgment. (There is an element of self-interest among some of the entrepreneurs but I suspect that even they think they will be "doing well by doing good.")

"My take is that there was a frenzied feeling that this HAD to be passed at virtually ANY cost, and I wonder if there will be a backlash when cures do not appear RIGHT NOW. In a sense, the leadership -- most visibly Klein but it's broader than just him -- put themselves into a bind with the language of the Proposition, dug themselves a deeper hole with their no-quarter approach to campaigning, and fumbled an opportunity to mollify their critics after the election.

"I suspect that the money overspent -- indeed, just the money raised -- is symptomatic of a "true believer" syndrome that certainly makes for bad governance and quite possibly bad science, too."

Pete Shanks is the author of Human Genetic Engineering: A Guide for Activists, Skeptics and the Very Perplexed, to be published by Nation Books in June.
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We welcome comments on CIRM or the failings of this blog. They will be published. Please send them to djensen@californiastemcellreport.blogspot.com.

Need Work?

Hiring is on the rise on the stem cell front.

Now that California's new stem cell agency has an interim president, he is expected to begin quickly filling a variety of positions. Not that there are a lot of jobs open, something in the neighborhood of 40. They range from general counsel to director of governmental relations.

CIRM has not yet posted the openings on the Web but one would expect to see the listings in the not-too-distant future. Job application forms are available here.

The Center for Genetics and Society, which is monitoring CIRM, is also looking for new people, including a director of communications, somebody with considerable experience and a track record. The nonprofit is also looking for a director of administration.

Fiber Optics and 300 Square Foot Offices

Imagine California's stem cell agency a year from now. What is its staff going to look like, its management? What sort of offices might they be working in?

Some indication can be had from documents linked to the RFP for the permanent headquarters. They show that CIRM plans to have 10 top executives with the chairman and president occupying 300 square foot offices.

The agency also wants its new permanent headquarters to contain two conference rooms (750 square feet each) that could accommodate up to 50 persons and four "quiet" rooms for small meetings (two at 150 square feet and two at 250 square feet). Plans call for an employee lunch room (250 square feet) with a dishwasher, full size refrigerator, stove, dishwasher and microwave oven.

The following executives of the agency are listed: chairman, president, vice chairman, deputy chairman, chief legal officer, chief administrative officer, chief scientific officer, chief communications officer, director of government relations and program director. The president and chairman are slated to work in 300 square foot offices. All the rest have 200 square foot rooms.

The plan calls for 37 scientific, medical, technical and administrative staff with 150 square foot offices. Administrative assistants are provided specifically for the president and chairman and one other AA is allocated generally. They are scheduled for 100 square foot open work areas. Out of the 37 staff, presumably at least eight or more would serve as secretaries or assistants to the top executives.

The offices will be well wired with fiber optic cable and a minimum of two voice and two data outlets (more in top executive offices) and cable TV outlets throughout.

The information is contained in documents here and here posted on the Web site of the state Department of General Services.

Readers Write

The following is from Terry Feuerborn in California:

"I was very pleased this morning to read that Zach Hall has been appointed head of the new stem cell agency. Prior to his appointment at USC, Zach was Vice Chancellor for Research at UCSF. At that time, I was head of the UC patenting and licensing office. Since patent issues bedevil the research program, I had a lot of interactions with Zach. He was also the campus representative to the system-wide Technology Transfer Advisory Committee, which was set up to monitor the work of my office--among other things.

"Without reservation, I can tell you that Zach's appointment is a very positive development for the stem cell program. Zach is personable, extremely competent, and absolutely straight arrow. I can remember dealing with him on some particularly difficult issues involving the desire of a well-known company to establish a research institute at UCSF. There were many millions of dollars on the table, but the company wanted intellectual property terms that were not acceptable to UC for a variety of reasons. Under very difficult circumstances, Zach supported the principles involved. When a lot of money is being dangled in front of a university, that is a very hard thing to do. I gave him a lot of credit for that.

"Zach should do very well as head of the new agency. I wish him the best."

We welcome comments on CIRM or the failings of this blog. They will be published. Please send them to djensen@californiastemcellreport.com.

Is $389,000 Too Much for "John the Baptist?"

Zach Hall demonstrated a felicitous quality this week after he was named interim head of the California stem cell agency: The ability to turn a phrase.

"I'm John the Baptist here to prepare the way, get things started," Hall was quoted as saying in newspapers in California.

"I will raid every place I can get to get the best possible people," Hall said.

When a public figure can crystallize issues, it goes a long way to ensure that his point of view is mentioned often and prominently in news stories. Good quotes are nuggets that reporters use to fashion stories. Skillful expression is also an important element of strong leadership and management, which is the task before Hall.

Little doubt exists that the stem cell agency has been hard pressed since its first meeting. Hall should boost the agency along, providing more guidance and hiring much needed staffers.

Hall's appointment dominated the news coverage of the agency's meeting on Tuesday. However, Carl Hall (no relation to Zach)of the San Francisco Chronicle focused his story on what appears to be the board's apparent failure to make research grants by May, its own self-imposed deadline.

Coverage of the Halpern-Lee petition, with its concerns about conflict of interest, openness and salaries, shared attention with the presidential appointment. That was to be expected, given the way news coverage works. Hall's salary, $389,000, provided a fresh peg on which to hang some discussion of the petition's concerns about salaries, which it contends are too high. Significantly reporter Paul Elias of The Associated Press, whose story was distributed on Web sites around the world, focused on that in his article.

The board did delegate the petition to Robert Klein, CIRM chairman, who should hand it off immediately to the new interim president. Based on the news accounts, Klein seemed to promise public hearings on the general subjects of the petition, but petition supporters said that was not good enough.

Here are the beginnings of the various news stories that appeared this morning with links:

Associated Press (reporter Elias):
"Even before neuroscientist Zach Hall was formally given the job Tuesday to run California's $3 billion stem-cell research institute, his salary had come under fire. Charles Halpern, a Berkeley writer who filed a legal petition with the California Institute for Regenerative Medicine protesting some of its activities, complained that Hall's $389,004 annual paycheck to serve as interim president was too lucrative."


Contra Costa Times (reporter Sandy Kleffman): "The group overseeing California's $3 billion stem cell research program should adopt tougher conflict-of-interest laws and open up more of its meetings to public scrutiny, critics said Tuesday. Critics pushed for the changes as the fledgling stem cell group held its third meeting and named Zach Hall, 67, as acting president of the California Institute for Regenerative Medicine."

Los Angeles Times (reporter Megan Garvey): "Zach W. Hall, a University of Southern California neuroscientist and former head of one of the National Institutes of Health, was named Tuesday as interim president of the state's new $3-billion stem cell agency. The 29-member board charged with creating the agency voted unanimously to hire Hall, 67. The board has met three times and still has substantial ground to cover before the new California Institute for Regenerative Medicine awards the first grants for stem cell research, something Chairman Bob Klein has said he would like to do by May."

Sacramento Bee (reporter Laura Mecoy): "The stem cell oversight committee hired an interim president Tuesday at a salary critics said was too high, and it sidestepped a petition seeking salary caps and more open meetings. The panel voted unanimously Tuesday to hire neuroscientist Zach Hall as an interim president of the state's new stem cell agency, the Institute for Regenerative Medicine. It set his salary at $389,004 a year."

San Diego Union-Tribune (reporter Teri Somers):
"Despite years of experience and a reputation as a hard-core scientist, Zach W. Hall stepped into controversy yesterday when he was hired as the interim president of California's fledgling stem cell institute. Several watchdog groups questioned the $389,004 salary Hall will receive for the one-year job, which deal has him taking a demotion to senior scientific adviser once a permanent president is found."


San Francisco Chronicle (reporter Hall): "California's $3 billion stem cell program appears all but guaranteed to miss its own informal deadline of issuing its first research grants by May -- a goal that many had doubted could be met. Robert N. Klein, chairman of the California Institute for Regenerative Medicine, said after a daylong meeting of institute policy-makers Tuesday that he still hopes to get some money out the institute's door before July -- but it won't be in the form of research grants."

The San Jose Mercury News used the AP story.

More Openness Effort

Supporters of efforts to create more accountability and openness on the part of the California stem cell agency are marshalling their efforts at today's Oversight Committee meeting.

The coalition now consists of the California Nurses Association, CalPIRG, Redefining Progress, Californians Aware, Center for Genetics and Society, the Pro-Choice Alliance for Responsible Research and the Greenlining Institute. The group notified the media that spokespersons will be available both during and after the CIRM meeting.

One measure of the success of the coalition efforts today will be coverage in the media. We will examine that tomorrow.

See the latest press release from the group here.

High Risk or Low Risk

Robert Klein can make a serious mistake today.

Right now, the chairman of the California stem cell agency seems bent on a course that not only will damage his own credibility but that of the agency that is so important to the people of California and the world. He seems to want to handle privately a legal petition for more accountability and openness.

He can continue on that course or he can support public hearings into the issues that have been raised by legitimate groups and individuals, including the former chancellor of UC San Francisco.

It is a low risk, high reward proposition to hold hearings. They certainly will not impede the progress of the agency, which is exercising some deliberation in the matters at issue. Hearing the voices of all concerned brings everybody into the tent. It ameloriates criticism that concerns have not been heard. It will also provide valuable information that can help draw realistic standards for openness and accountability.

On the other hand, it is a high risk, low reward proposition to take the matters behind closed doors. Such an effort will not stop the critics. Indeed, it gives them more ammunition. Already their assaults are resonating around the world, given our Internet age.

Klein is a well-to-do man with active and substantial business interests aside from his work on Prop. 71 and the agency it created. He deserves great credit for his public service, which has undoubtedly drawn him away from his own enterprises. He was not compelled to serve on the CIRM oversight committee, a task he may come to regret assuming. Many other persons in his position have shied away from public service for a host of reasons.

Klein must be rankled, at least from time to time, by the allegations of conflicts-of-interest and impropriety. Any of us would be in his position. He is also legitimately suspicious that some of the critics simply want to strangle CIRM.

But if they do, the best strategy is to let them display their most heartfelt desires in public in a venue where strong, contrary voices will also be heard.

On today's agenda at the meeting of the Oversight Committee, which he chairs, Klein has placed a resolution to allow him to handle personally the petition for hearings into Halpern-Lee petition, which is seeking adoption of certain standards on conflict of interest, open meetings, hiring and compensation.

It is not entirely clear what Klein would do with that delegation of authority. But it is clear that he wants to sidestep the full board.

Klein repeatedly has voiced his support for the highest and best standards for CIRM on accountability, openness and conflicts of interest. Talk is one thing. Action is another. Alta Charo, the noted bio-ethicist and lawyer, is addressing today's CIRM meeting on matters not related to the Halpern-Lee petition. But she is fond of quoting Jane Addams (1860 - 1935), the founder of the social work movement: "Action indeed is the sole medium of expression for ethics."

Questions for the Landlord

The RFP for the permanent headquarters of the California stem cell agency admirably attempts to avoid any conflicts of interest with future landlords, but at the same time leaves a substantial ambiguity gap.

According to a CIRM press release, one of the requirements of a lease is a "letter signed certifying that the owner does not have and will not have in the future any ownership interest in any firms or agencies competing for grants to be awarded by the Institute."

The question is: What is ownership? Some folks say owning stock in a company is ownership. However, if the amount is only worth, let's say $10,000, is that ownership? What if it is $1 million? That may be only a fraction of one percent of the value of a company. But it could promise substantial gains if the stock rises.

What about ownership by spouses or minor children? What if the property is owned by a partnership, say 10 persons? Are all 10 required to meet the no-ownership ban?

It is impossible to write rules that cover every possibility, but this one needs a little clarification.

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We welcome comments on CIRM or the failings of this blog. They will be published. Please send them to djensen@californiastemcellreport.com.

What is an Audit?

State Controller Steve Westly is recommending that California's stem cell agency clarify auditing procedures for both the institute and grantees.

His recommendation is contained in a 20-page review of fiscal standards prepared for distribution to the oversight committee at its meeting tomorrow. The review examined procedures at the NIH, the National Science Foundation and the relatively new and small Stem Cell Research Foundation.

Westly notes that despite longstanding standards at the NIH and NSF, both agencies “still periodically encounter problems that raise questions over the use of grant funds by some of the grantees.” He suggests that CIRM use the agencies' standards as a starting point.

Westly's report says CIRM should “clarify audit requirements for (both) the institute and its grantees.”

“The initiative specifies that the institute shall annually commission an independent financial audit of its activities from a certified public accounting firm. However, what constitutes a financial audit could be interpreted differently, from a very limited-scope financial statement audit to a comprehensive financial and compliance audit. In addition, given that the initiative specifies that the Institute shall commission the audit 'of its activities,' it is unclear as to whether the audit would include the activities of the grantees, which, in our opinion, pose a higher risk,” the report says.

“Therefore, if the financial audit does not include the activities of the grantees, the institute should make arrangements for such activities to be audited. One option would be to adopt the federal single audit requirement by having those grantees receiving grant funds in excess of a certain amount arrange for an independent audit. Another option would be to create an audit function within the Institute to perform grant audits. The institute could also directly contract with other audit organizations for such audits.”

What is an Audit?

State Controller Steve Westly is recommending that California's stem cell agency clarify auditing procedures for both the institute and grantees.

His recommendation is contained in a 20-page review of fiscal standards prepared for distribution to the oversight committee at its meeting tomorrow. The review examined procedures at the NIH, the National Science Foundation and the relatively new and small Stem Cell Research Foundation.

Westly notes that despite longstanding standards at the NIH and NSF, both agencies “still periodically encounter problems that raise questions over the use of grant funds by some of the grantees.” He suggests that CIRM use the agencies' standards as a starting point.

Westly's report says CIRM should “clarify audit requirements for (both) the institute and its grantees.”

“The initiative specifies that the institute shall annually commission an independent financial audit of its activities from a certified public accounting firm. However, what constitutes a financial audit could be interpreted differently, from a very limited-scope financial statement audit to a comprehensive financial and compliance audit. In addition, given that the initiative specifies that the Institute shall commission the audit 'of its activities,' it is unclear as to whether the audit would include the activities of the grantees, which, in our opinion, pose a higher risk,” the report says.

“Therefore, if the financial audit does not include the activities of the grantees, the institute should make arrangements for such activities to be audited. One option would be to adopt the federal single audit requirement by having those grantees receiving grant funds in excess of a certain amount arrange for an independent audit. Another option would be to create an audit function within the Institute to perform grant audits. The institute could also directly contract with other audit organizations for such audits.”

Ethics: From Compensation to Informed Consent

Bio-ethicist Alta Charo will be speaking this week to the California stem cell agency, and the topic will not be "Star Trek," although she is fond enough of the program to mention it on her web site.

Going where no University of Wisconsin law professor has gone before (which is in front of CIRM), Charo expects to discuss possible creation of a stem cell bank by the agency, among other matters. In remarks prepared to be distributed to Oversight Committee members, she said:

“Forming a physical or virtual stem cell bank could be of great value to the community of researchers in California (and indeed, the nation and the world). Facilitating the task of documenting the ethical standards under which lines were derived will help collaborators to work more efficiently, given the variations in national and international research rules in this field. In addition, a cell bank could set standards for the quality of the characterizations and the accompanying medical information associated with the lines.”

Charo's main thrust, in her prepared material, is to raise questions that should be answered as CIRM begins its funding of research. The areas she touched on include human subject protection, informed consent, patient privacy, compensation bans and possible establishment of an additional committee.

“While most institutions have the committees required by federal law for currently mandated reviews (including IRBs for human subjects protections; Privacy Boards for HIPAA protections; IBCs for recombinant DNA research; IACUCs for animal research) few have any committee specially created to monitor and coordinate compliance with these mandates by hES cell researchers,” she wrote. “Nor do many have a special committee to register the level of activity at the institution, to offer investigator training in stem cell research ethics, or to serve as a venue for discussion, review or even approval of potentially problematic forms of the research. A key question, then, is whether CIRM wishes to encourage or require institutions to create such committees, or whether it plans to have CIRM provide one centrally for all CIRM-funded research. In the alternative, this question could be left entirely to the discretion of individual institutions, who could set up such committees, designate existing committees to expand their functions to incorporate some of these tasks, or simply do without such added oversight entirely.”

Charo is Elizabeth S. Wilson - Bascom Professor of Law and Bioethics at the University of Wisconsin at Madison, where she is on the faculty of the Law School and the Medical School's Department of Medical History and Bioethics.

Her web site shows a long and distinguished career and demonstrates a certain lightness. On it, she reports that she is fond of Star Trek, poker, roller coasters, old movies and salsa music and includes links to appropriate sites in those areas.

The Chairman on Criticism

Robert Klein, chairman of the California stem cell agency, gave an interview to Marisa Lagos of the San Francisco Examiner. It was printed in a question-and-answer format. He was asked about the criticism that his agency is facing. Here is his reponse:

“Ninety percent of the criticisms are from people who opposed Prop. 71. Now, there is 10 percent of the criticisms that are very healthy viewpoints. And even with those people who oppose Prop. 71, when we go through nine months of public hearings for permanent standards, we will try and address their concerns to make sure they understand all the different regulations that will protect individuals. ... What the public doesn't understand is there's layer after layer of protection. There's federal law, there's state law, there's hospital regulations ... and institutional review board standards. ... In addition, the National Academy of Sciences on approximately April 1, [plans] to put out model standards for the nation, that we would hope to look at and adopt with some enhancements, to really create a very high-level model for the whole country to follow in stem cell research standards.”

Restrictions Eased in HQ RFP

Contra Costa Times readers may have been the only ones in the state to receive the latest news this morning on plans for the permanent headquarters of the California stem cell agency.

Reporter Sandy Kleffman said Daly City, San Diego and Sacramento were among cities “monitoring” the committee meeting on the specifications for the headquarters, which are scheduled to be issued formally on Feb. 28 with a decision by May.

She also wrote:

“As they debated what to include in their list of preferences, committee members sought to avoid the perception that they had pre-selected a site by making requirements too restrictive.

“The initial draft of documents said preference would be given to locations within 45 minutes of four or more leading universities or research hospitals. It also said weight would be given to sites with a nearby pool of at least 25,000 biomedical professionals, as long as the majority of them were not engaged in the production of medical devices.

“But some people complained that this left too many cities out of the running. So committee members decided to simply give preference to cities near major universities and a biomedical talent pool, without specifying numbers.

“Preference will also be given to cities that can provide space for major stem cell conferences and that have ready access to Sacramento by plane, train or car. Institute leaders said their staff members will communicate frequently with state officials and they want to minimize travel time.”

The draft RFP also contained a provision that the HQ should be within two hours of the state Capitol. A technical reading of that would bar San Diego, given that it takes more than two hours from the time you enter the San Diego airport to arrive in Sacramento because of the need to clear security. It is not known whether that provision remains in the RFP.