Businesses Give Mixed Response to CIRM Overtures

The San Jose Mercury News has taken a brief look at the reception that business is giving plans by the California stem cell agency to provide millions of dollars for research in the private sector.

Based on a small sampling, the response is mixed. StemLifeLine of San Carlos says it is not planning to apply because of requirements that the state receive a payback on any revenues that may result, according to reporter Steve Johnson.

Advanced Cell Technology of Los Angeles, on the other hand, is interested. It moved its headquarters to California last year because of the possibility of securing funding from CIRM.

Geron of Menlo Park says it is not applying because its technology has advanced beyond the levels funded by the institute.

WaferGen Bio-systems of Fremont is considering applying but is concerned about the revenue sharing.

StemCyte of Arcadia said that it has filed a letter of intent to apply for a disease-team planning grant. The deadline for those letters came Thursday. CIRM , however, that it is not sure that it will be able to supply figures today on the number of applications, including those from business.

CIRM Chairman Robert Klein said,

"We will try to work with industry to find how we can further the interests of California patients and the biotech sector."

Anointment and The 92 Percent Routine at CIRM

Directors of the California stem cell agency last week virtually rubber-stamped the actions of its scientific grant reviewers, going along with them on 92 percent of the applications for $54 million.

The Oversight Committee discussed only nine of the grants, the ones reviewers said were recommended for funding if money was available. Five of those were approved by the committee. It ratified decisions on another 39 with zero debate. None of the committee's actions reversed a decision by the reviewers to deny or approve outright a grant application.

This pattern lies at the heart of whether the scientific grant reviewers, who make the critical decisions on requests for hundreds of millions of dollars in public funds, should be required to disclose publicly their financial interests. After spending months examining CIRM earlier this year, Elaine Howle(see photo), California's state auditor, recommended that the agency seek an attorney general's opinion about whether reviewers should publicly disclose their economic interests.

The agency rejected the suggestion. Interim CIRM President Richard Murphy last summer wrote the auditor that she was raising a "hypothetical" point. He said,

"...(T)he recommendations of the CIRM working groups have never been routinely and/or regularly adopted by the ICOC...."

CIRM has not published its analysis of the grant approval patterns, but our experience indicates that it is close to last week's 92 percent rate.

The power and importance of the grant reviewers were further reinforced last Friday when CIRM disclosed for the first time the identities of 12 applicants for $263 million in lab construction grants. The unusual release of information came more than a month before the grants are scheduled to be approved by the Oversight Committee. CIRM said the 12 were "recommended" for funding by the scientific grant reviewers. The agency said it was releasing their names because it would assist in end-of-the-year fund-raising for matching monies that are critical to the grant application.

Significantly, the names on the five applications rejected by the reviewers were not disclosed. CIRM says it does not disclose the names of the institutions for fear of embarrassing them. But the anointment of the 12 and the release of their names makes it virtually impossible for the non-anointed to make a renewed effort for funding, although by CIRM's official lights, the game is far from over. But how can the supposedly "semi-rejected" possibly muster the critical matching funds minus CIRM's endorsement on Friday? How can they go public with complaints about the fairness of the process? One does not want to antagonize a $3 billion gorilla that controls the lifeblood of research. One can only imagine the frustration at those institutions about how this has been handled.

Under Prop. 71, the Oversight Committee has final legal authority to approve or reject grants. We have long contended that reviewers are making de facto decisions on the grants as they did in last week's case of the $54 million in faculty awards. All of which is not unusual. That is why an agency such as CIRM has expert reviewers. They should know the science best.

The Oversight Committee is also hobbled if it wants to act independently of the reviewer decisions. The panel not only cannot see the entire application for the grant, it does not know the names of the institutions or the researchers involved. The committee is given only summaries that do not identify even whether the researcher is male or female. (However, a knowledgeable person can often determine the names of the institutions and sometimes the researcher by a careful reading of the summaries.)

Currently the reviewers disclose their economic and professional interests to CIRM, which says it will review them be sure no breaches of ethics or law occur. But neither the public nor applicants have any way to ascertain for themselves whether conflicts do in fact occur, other than trusting the tiny CIRM staff to diligently examine the secret documents.

CIRM contends it will lose reviewers if they are compelled to disclose publicly. We concede that a few may leave, but as new CIRM President Alan Trounson has noted, California is hottest spot in the world for stem cell research. A researcher who gives up an inside seat at that table would be giving up a lot.

The scientific reviewers are in fact making the overwhelming majority of decisions on grants being handed out here in California by what is the world's largest source of funding for human embryonic stem cell research. Given CIRM's on-going issues with conflicts-of-interest, it is past time for the agency to publicly disclose the economic interests of its reviewers.

FDA Calls April Meeting for Stem Cell Testing Advice

Clinical trials for therapies using human embryonic stem cells seem to be creeping closer with the latest news coming from the US Food and Drug Administration.

The FDA Tuesday announced a meeting April 10 to seek advice concerning "scientific considerations for safety testing" of such therapies. Two California firms, Geron and Advanced Cell Technologies, say they plan to send representatives to the meeting. Both have also indicated they hope to begin clinical trials next year.

Luke Timmerman and Rob Waters of Bloomberg News reported that Reni Benjamin, an analyst with Rodman and Renshaw in New York, said the FDA meeting is unusual because "the agency typical seeks advice on whether to approve a tested drug, not on how to proceed."

According to the two reporters:

"Geron has communicated extensively with FDA reviewers over the design of the first human trial using embryonic stem cells, partly to convince the agency that putting the cells into people won’t result in the growth of abnormal cell clusters called teratomas, Thomas Okarma, Geron’s chief executive officer, said in interviews with Bloomberg."

Bloomberg said that ACT plans to submit a clinical trials application in the first half of 2008 for a treatment using retinal cells.

Major Staff Turnover at California Stem Cell Institute

More than 25 percent of the staff of California's $3 billion stem cell agency has left since October or is leaving -- a turnover rate that is troubling as new president Alan Trounson prepares to take over.

The departures total seven persons, including top level executives, out of a staff of 26. At least one other top level person is reported to be considering leaving. Publicly, the announced reasons seem benign, as they usually do in such cases, but the turnover is cause for concern. Moreover, some are leaving after only working for CIRM for relatively short periods.

CIRM has always had a small staff and is limited to 50 by law. Long hours have been the rule, not the exception. Oversight Committee members repeatedly have expressed concern about burnout and the staff's ability to accomplish the growing number of tasks that the agency is attempting.

Hiring new employees is time-consuming and expensive. New staffers always have a learning curve to climb, plus institutional memory is lost as the employees depart.

Four departures were announced at last week's Oversight Committee meeting by interim President Richard Murphy, who also announced the hiring of four new persons. The four leaving are Lori Hoffman, chief finance and administrative officer; Rosemary Chengson, finance officer; Dennis Butler, technology officer, and Mario Garcia, grants management specialist. Arlene Chiu, chief scientific officer, and Dale Carlson, chief communications officer, left in October. Kumar Hari, a scientific officer, said this week he is leaving to return to private industry.

In another personnel matter, Murphy announced early in last week's Oversight Committee meeting that he hoped to have a new chief scientific officer on board following approval of the person during an executive session of the Oversight group. However, no name was announced following the executive session.

Murphy did announce the name of a new chief communications officer, who will begin work in mid-February, Don Gibbons, currently associate dean for public affairs(see item below) at Harvard Medical School.

The other three new employees are scientific officers:

Elizabeth Ashe Nigh, a neuroscientist from Harvard Medical School, Uta Grieshammer, a developmental biologist from UCSF, and Mike Yaffe, currently a full professor at UCSD interested in the biology and genetics of mitochondria.

CIRM Hires Communications Chief from Harvard

The California Institute for Regenerative Medicine has hired a new chief communications officer, Don Gibbons, currently the associate dean for public affairs at Harvard Medical School and once the director of communications for the Stanford Medical Center.

Gibbons (see photo) is expected to be at the agency fulltime in mid February. Gibbons has been at Harvard since 1996. He worked at Stanford from 1992 to 1996. Prior to that, he was editor-in-chief at Medical World News, where he worked in various capacities from 1982 to 1991.

Gibbons has a bachelor's degree in biology with an emphasis in journalism from Indiana University. He will be paid $190,000 or $195,000 annually depending on the size of his relocation package.

Communications responsibilities at CIRM are currently being handled on contract on an interim basis by Ellen Rose, formerly with Alza, a drug delivery subsidiary of Johnson and Johnson. She is working half-time. CIRM on Monday posted an RFP for a $60,000 contract for more temporary PR help.

Fresh Comments

"CIRM" has left a comment on the "Shame, Shame, Shame" item below. " We have also posted a response to it. "Anonymous" has left a comment on the "Lesson" item from Dec. 15.

Sham Arguments Harm CIRM's Credibility

The release of the names of 12 institutions seeking $263 million in public money from the California stem cell agency doesn't measure up to the agency's self-professed goal of meeting the highest standards of openness and transparency.

Yes, it is a good first step, whatever its motivation. Yes, it seems to surpass the openness of the NIH. But as we have noted before CIRM is subject to far less oversight than the NIH and seems to have far greater conflicts of interests among its directors. But if the intention is to provide the basis for thoughtful comment from either the public or CIRM's important constituencies, the release of the information falls short.

All that is publicly available are names. The public, which is financing this effort, does not know how much money is being sought nor even rudimentary details of how the applicants propose to use the cash.

CIRM's position is that to release the information at this point could mean that losing institutions would be embarrassed. However, by releasing the names last week, CIRM has conceded that its position is nothing more than a sham. Presumably some of those named on Friday will lose out and be "embarrassed."

CIRM apparently decided that embarrassment was overshadowed by the need to help applicants raise matching funds for the grants before the end of the year.

It is time for CIRM to release not only the names of the institutions, but also the amounts they are seeking as well as the applications from the institutions(confidential information could be deleted).

The agency is still wrestling with the fallout from controversy about its conflicts-of-interest, which have possibly cost 10 researchers about $31 million. It is an issue that will be with CIRM for its entire existence because the conflicts are built into the agency, ironically, by law. More than a majority of the CIRM's directors have links to institutions that could benefit by this latest round of grants for lab construction. They have already set the rules and criteria for giving away the money. All of which naturally raises concerns about self-dealing or worse.

That situation is not likely to change. The only reasonable way to assure public credibility and allay suspicions is for CIRM to lay all the stem cell cards on the table. Especially since it has conceded that releasing the names is not really that embarrassing after all.

Shame, Shame, Shame

If you accept CIRM's arguments for withholding grant applicant information, the San Diego Stem Cell Consortium has taken an enormous risk that it could shame itself in public.

The consortium says it is seeking $50 million from CIRM for new lab construction, according to a report by Terri Somers of the San Diego Union-Tribune. The new building would give 110 scientists a place to work. It would be built on UC San Diego property with construction beginning in 2009. The San Diego Supercomputer Center and Craig Venter, the biologist who was a primary driver of the Human Genome Project, also plan to contribute to the project.

All of that is considered confidential information by California's stem cell agency, which plans to give away $263 million in public money next year for new lab construction. CIRM considers the information so sensitive that the release of it would severely embarrass the consortium if its request for funds is turned down.

Balderdash, is what we say.

Gritty Stuff in Trounson Story

For those of you still wondering who Alan Trounson is – or for those who want to known more – reporter Deborah Smith has produced an interesting profile with some gritty details.

Writing in the Sydney Morning Herald, she described Trounson at one point while he was on a flight from Singapore as a "slightly crumpled, middle-aged traveler." She wrote that years ago someone painted "Trounson is a mass murderer" on the walls of his home. And she reported that private detectives have "trawled" through his financial dealings and quizzed his former wife.

Trounson's comment, "That was very strange. They were tough times."

Trounson begins work in the next couple of weeks as president of California's $3 billion stem cell agency agency, the world's largest source of funding for human embryonic stem cell research.

Fresh Comments

"Ron" has posted a new comment on the first Kessler firing item below. John Simpson has posted a comment on the Kessler lesson item just below.

A Lesson for CIRM From Dr. Kessler

The coverage of the firing of David Kessler as the dean of the medical school at UC San Francisco provides an example of mishandled PR that has some application to the California stem cell agency.

The missteps in the release of the information had little to do with the skills of those in the UCSF communications department, but probably a great deal to do with miscalculations at the top – at least from our perspective.

Kessler, on the other hand, skillfully drove the media coverage. The result was news stories across the country, including the New York Times, the Washington Post, the San Francisco Chronicle and ours below, that were dominated by Kessler's version of the affair. The chancellor's perspective came late and lamely.

How does all this apply to CIRM? It has do with perception, fast public reaction and top executives who listen carefully to knowledgeable communications professionals who also have access at the very top on a regular basis. At this point, CIRM seems to be headed in a somewhat different different direction, relegating its top communications person to the third tier in an organization structure that only has five layers.

Here is what happened in the Kessler case.

On Thursday the chancellor at UC San Francisco fired Kessler. It was obviously an event that the chancellor had anticipated well in advance – not a spur-of-the-moment decision. Kessler had already refused to resign, according the media reports. It was clear he was not likely to leave quietly.

On Friday morning, he sent out an email to colleagues at UC San Francisco that said he was being dismissed because of his efforts to uncover financial irregularities. That email quickly went out across the country and to the news media.

Meanwhile, UC San Francisco did not have anything to say. Friday afternoon, after the first news surfaced, an innocuous statement was put out by the chancellor. It did not address the issues raised by Kessler. Late Friday afternoon, the chancellor put out a stronger statement, declaring that Kessler's allegations had been investigated earlier and had no merit.

But that response came too late to change the focus of the coverage, which was heavily tilted towards Kessler's view of the world.

How could it have been handled differently by the chancellor? We are assuming that he did not consult his PR folks in advance. Instead, he could have anticipated the obvious attention his decision would receive. With that in mind, he could have issued an already prepared statement promptly after the dismissal, perhaps as early as Thursday. He could have anticipated the move by Kessler and had a response ready to roll out immediately instead of hours later. But that would have required the early input of the PR folks at UC San Francisco – PRIOR to the actual firing.

Keep in mind that we are not talking about the merits of Kessler's firing or the allegations – only the public perception and news coverage. From UCSF's institutional perspective, it has been tarred unfairly by Kessler. From Kessler's perspective, he has turned a negative event into something that reflects considerably more positive on him.

Given the controversial nature of the research funded by CIRM and its built-in conflicts of interest, bad news is always a good possibility. It behooves the organization to think carefully about how it plans to deal with that eventuality.

Fresh Link to More on Lab Grants

Here is a link to the news release by the Foundation for Taxpayer and Consumer Rights on today's disclosure of the identities of 12 of the institutions seeking $262 million from CIRM.

We must renege on our earlier promise to publish more on this subject today. Other responsibilities have risen to a higher level.

Kessler Fired at UCSF, No Longer Can Serve at CIRM

David Kessler, one of the nation's leading public health advocates and a director of the California stem cell agency, has been fired as dean of the School of Medicine at the University of California, San Francisco.

In an email today to colleagues, Kessler indicated that his dismissal was linked to his efforts to deal with "financial irregularities."

The note said,

"Shortly after arriving at UCSF as Dean, I discovered a series of financial irregularities that predated my appointment. I reported these issues to appropriate university officials at the time, and have endeavored to work with the university ever since to solve these problems. The university characterized me as a whistleblower. During the summer, Chancellor (J. Michael) Bishop requested my resignation. I continued to try to solve these problems. Yesterday, Chancellor Bishop terminated my appointment as Dean, effective immediately."

Bishop released a note to personnel at UCSF later in the day, saying,

"I write to inform you that Professor David Kessler has left office as Dean of the UCSF School of Medicine and Vice Chancellor for Medical Affairs. I thank him for his energetic service to the university and his substantial achievements on behalf of UCSF. Professor Sam Hawgood has graciously agreed to serve as Interim Dean, effective immediately. I ask that you give him your wholehearted support. An international search for a successor to Dean Kessler will be initiated promptly."

Kessler holds his position on the CIRM Oversight Committee because he is an executive officer of a UC medical school. His termination means that he can no longer sit on the CIRM board.

Kessler served as FDA commissioner from 1990 to 1997. He was dean of the School of Medicine at Yale prior to joining UCSF in 2003.

A story written by this author on the Kessler firing also appeared on Wired.com earlier today.

Correction

The item below omitted Stanford University from the list of institutions advancing to the next round.

Names Disclosed of 12 Applicants for $260 Million in Lab Grants

The California stem cell agency today identified the 12 institutions recommended for consideration in the second round of competition for $260 million in grants to build new stem cell research labs.

They are the University of California campuses at Berkeley, Davis, Irvine, Los Angeles, Merced, Santa Barbara, Santa Cruz and San Francisco, the University of Southern California, Stanford, the Buck Institute and the San Diego Consortium for Regenerative Medicine, which includes UC San Diego, Burnham, Salk and Scripps.

The institutions were recommended for funding by the Grants Working Group, which conducted a scientific review of the proposals earlier this year. They will go to the Oversight Committee in January and, if successful, to the Facilities Working Group in the spring. Then the plans will come back to the Oversight for final action in April.

The California Stem Cell Report and the Foundation for Taxpayer and Consumer Rights have advocated release of the names for months.

John M. Simpson, stem cell project director for FTCR, said, today's announcement was "completely inadequate."

In response to a query, he said,

"We don't know what the universities asked for. We only know what the scientific reviewers in their closed, clubby, secret meeting decided to recommend.

"Even worse, we don't know the five institutions that were excluded from CIRM's club of chosen ones.

"This is no way to spend more than $250 million in public money. Frankly it looks like the only reason the names are being released is so the lucky institutions can go forward and hit private donors up for more money before the tax year ends."

In response to a question, Ellen Rose, interim communications officer for CIRM, said the institution was releasing the names "because we want to give them as much time as possible to most effectively fund-raise for the project leverage portion that they will be raising for the new facilities."

CIRM plans to look more favorably on applicants that have raised large sums to contribute to the building projects.

The agency did not release the names of the five institutions that were turned down. We will have more on the CIRM announcement later today.

(Editor's note: An earlier version of this omitted Stanford from the list of 12.)

Murphy on CIRM: The Long Trek and Growing Pains

Earlier this week, Richard Murphy, the interim president of the California stem cell agency, told the group's directors things are better than they might seem in media reports about conflicts-of-interest at the institute.

We asked him for a copy of his remarks, which are carried below. We should note that Murphy (see photo) has been with the agency since the beginning, first as a director and then as president since August.

"Before I begin, Mr. Chairman, I would like to share with the ICOC my observations on the recent events that have occurred at CIRM.

"Over the past several weeks, we have been through some challenging issues that have involved CIRM and ICOC members, issues that been fully discussed by the press and by CIRM’s many critics. I know we benefit from constructive suggestions but in considering our critics, I am also reminded of the words of composer Jean Sibelius who once said: “Remember, a statue has never been set up to honor a critic.”

"In my view, our recent problems arose not because ICOC members were intentionally trying to compromise CIRM’s rules but rather from inadvertent and innocent mistakes or because of ambiguities in how CIRM’s guidelines interface with state regulations. We need to be especially mindful of Footnote 1 in the ICOC’s own Conflict of Interest guidelines which can easily be interpreted to support the actions of the Deans in wring support letters. We need to deal with the problems that have arisen and clarify the ambiguities that gave rise to them.

"In addition, it is important to emphasize that we are a new and precedent-setting organization for we are the first state agency in the history of this country to fund medical research at this high level.

"Certainly, we always need to learn, to improve and to be better at predicting where unexpected hurdles and ambiguities can arise. But let us not be deterred from our mission by honest mistakes and let us not forget that the issues we confronted pale in comparison to CIRM’s achievements.

"The ICOC should take great pride in knowing that in the three short years since the election of November of 2004, CIRM’s list of accomplishments is remarkable. CIRM has

"Defeated in court opponents who tried to derail the will of the people who voted for Proposition 71

"Created a first-rate funding agency for supporting scientific research.

"Assembled a grants working group composed of some of the country’s best scientists from leading research institutions to help us evaluate grant applications

"Established ethical guidelines for working with stem cells that have become world standards

"Created intellectual property policies that will ensure that the people of California will benefit medically and also financially from the investment they have made in stem cell research.

"We have also processed over 400 grant applications, and committed over $200 million dollars in grants for research, training, and facilities. Each of you have a copy of the list of awards which are described 2007 Awards and Applications Approved For Funding.

"By the summer of 2008, we are predicted to have committed approximately $500 million dollars in funds for the support of stem cell research, which will make us the world’s largest supporter of embryonic stem cell research, and the envy of the world in our ability to fund this type of research.

"And, in the competition you will vote on today, CIRM will fund what many have called the lost generation of medical scientists, outstanding young MD and PhD scientists who have been delayed in establishing independent research laboratories because of cutbacks in federal funding.

"And CIRM has achieved these milestones with a skeleton crew of staff most of whom are new to this field and learning on the job. Fortunately, our staff’s commitment, intelligence, and willingness to work long hours have paid off in allowing CIRM to move far more expeditiously than any of us might have expected.

"In summary, Mr. Chairman, we must always endeavor to correct short-comings, but let us not forget that CIRM has now begun the long trek towards realizing Proposition 71’s vision of developing stem cell therapies to relieve the suffering wrought by intractable diseases. The journey will be long, but when we look back, the difficulties we have experienced recently will be seen as inevitable growing pains while our achievements will be seen as major steps forward, with far-reaching health consequences for us all."

Wired.com, CIRM Meetings and Coverage

Wired.com has posted a piece by yours truly on Wednesday's meeting of the Oversight Committee of the California stem cell agency.

Some of you may wonder why so much "old news" is contained in it. The reason is that Wired.com has not carried any stories on the subject for days, so much of what appears to be "old" to regular readers of this blog is deemed to be "new" to Wired.com readers.

The practice is common in the news business. Based on the premise that one should never assume that readers are familiar with a topic, news stories generally include a healthy dollop of background. In the case of a story with continuing new developments, they must be recounted when a reporter dips into the subject area after being away from it for awhile.

'Great to be in California' Says Recipient of $2.2 Million Stem Cell Grant

News coverage of Wednesday's California stem cell agency meeting – with its $54 million in research grant awards and conflict-of-interest flap – was light today.

Only one newspaper reporter attended the meeting along with one TV and one radio reporter. However, other newspapers picked up the story remotely, including Terri Somers of the San Diego Union-Tribune.

She focused on the grants going to San Diego area area researchers, along with quotes from recipients. She wrote:

"Lei Wang(see photo), 35, an assistant professor in Salk's Chemical Biology and Proteomics Laboratory, will receive $2.6 million for his proposal to develop new technologies for the precise investigation of molecular events in stem cells.

"Although his proposal was scored the highest of all 49 considered, Wang said it would not have been granted funding by the NIH. What the regenerative medicine institute's scientific reviewers found to be 'bold and exceptionally innovative' would be considered too risky by the NIH, he said.

"David Traver(see photo), 38, an assistant professor of biological sciences at UCSD, will receive about $2.2 million for research into how stem cells of the blood-forming system are generated.

"'It's great to be in California,' Traver said. "My colleagues in the field are envious of this amazing thing the taxpayers of California have done.'"

Wang's comment will resonate at CIRM, which wants to encourage research that will break out of the mainstream.

The only newspaper reporter at the meeting was Bradley Fikes of the North County Times of San Diego County. He wrote:

"Leaders of California's $3 billion stem cell program struggled with a rash of alleged conflict of interest problems Wednesday, even as they awarded $54.4 million in grants to 22 young scientists."

Meanwhile, in a column in The Sacramento Bee on Tuesday, longtime political columnist Dan Walters mentioned the California stem cell agency in a discussion of "unseemly activities" at some of "semi-public, semi-private fiefdoms" that exist in state government.

He touched on the problems with the state's First 5 California Children and Families Commission and Rob Reiner and wrote:.

"A more current example is another agency also created by ballot measure and headed by the man who sponsored the campaign, the Institute for Regenerative Medicine, which has $3 billion in state bond funds to finance stem cell research.

"From its onset three years ago, the agency has been managed by businessman Robert Klein as a secretive, quasi-private pot of money that would be disbursed by mysterious procedures. It's especially troublesome that many of those serving on the agency's board are heads of universities and other institutions seeking research grants. It's another scandal waiting to happen."

Walters's perspective is one that would be more common among reporters who might write about CIRM should the agency surface with a higher level controversy.

In addition to Los Angeles TV station KTLA, John Brooks of KFWB radio covered the CIRM meeting on Wednesday. Here are links to the stories by Jim Downing of The Sacramento Bee and Steve Johnson of the San Jose Mercury News.

CIRM Directors Mull Conflict Flap

The conflict of interest controversy involving the California stem cell agency came directly before its Oversight Committee today as it wrestled with the agency's response and its impact on what was once an $85 million grant program.

The research effort was scaled back to $54 million (see item below) in the wake of alleged conflict-of-interest violations by five directors(Oversight Committee members), who also serve as heads of medical schools or research institutions.

But the agency took no further immediate action to tighten its procedures in connection with its ethical policies. However, it announced it would rewrite some portions of the conflict of interest rules to eliminate ambiguities that it believes confused some medical school deans.

Much of the morning meeting in Los Angeles was devoted to a general defense of CIRM's performance over the last three years by its chairman, Robert Klein, and its interim president, Richard Murphy. They reiterated their position that the conflict of interest violations were "innocent mistakes."

Klein said the agency has been involved in an "extraordinary effort." Murphy said, "We need to keep our critics in perspective." He said the conflict of interest problems "pale in comparison to our achievements" which are "the envy of the world."

Oversight Committee member Jeff Sheehy said, however, the problems were a "really serious matter" that should not be downplayed. He said, "I would be happier if we had more transparency."

Another Oversight Committee member, Ted Love, said the matter has been taken seriously, adding that the "media does not always properly represent things." Murphy also said he was not minimizing the problem.

Members of the Oversight Committee were especially troubled by the impact on the 10 scientists who lost out on millions of dollars through no fault of their own. But even that discussion illustrated the structural conflicts of interests that are built into CIRM by Prop. 71.

Twenty-nine persons sit on the Oversight Committee. They set the rules and criteria for giving grants to the institutions that employ them. As the directors tried to find a way to be fair to the 10 innocent researchers, CIRM's legal counsel told the committee members that only eight of those present could even discuss the issue because all the rest had legal conflicts of interest.

Later in the day, only eight were allowed to vote on adding $35 million to the $227 million lab construction grant program scheduled for next year.

The Oversight Committee meeting came only hours after the Los Angeles Times, the state's largest newspaper, editorialized on CIRM's state of affairs. The newspaper said:

"Anyone spending $3 billion in public money has to do it impeccably. When the governing board meets today, it should take this a step further by reprimanding those who flouted the rules -- and changing its policies so the public can know their identities."

The agency did reveal today the identities of the five institutions but took no further action. Klein told the California Stem Cell Report that CIRM delayed the information because it was waiting for a letter from the University of California on the matter. (Here is a link to the letter that asserts there were no violations of CIRM's ethical policy.)

The Times continued: "...(T)he Legislature could help by reconfiguring the governing board, making it smaller and balancing it with a strong contingent of elected officials and consumer watchdogs. Any change will take a 70% vote, usually a political impossibility. But the problems are nagging enough, and the stakes high enough, that the Legislature must overcome party divisions to create a leaner, more accountable institution.

"The agency has entered the exciting phase of funding research that might one day lead to new treatments. Klein and his entrepreneurial style deserve full credit for this, but he must welcome fundamental fixes and put a higher priority on running a public agency as truly public."

A footnote to today's event: Only one newspaper reporter covered today's meeting, Bradley Fikes of the North County Times in San Diego County, as well as Los Angeles TV station KTLA. One media watcher said budgetary constraints involving travel along with holiday vacation plans limited the coverage by other newspapers.

Names of Faculty Award Recipients

Here is a link to the CIRM news release on the names and the institutions of the faculty award recipients. http://www.cirm.ca.gov/press/pdf/2007/12-12-07.pdf