CIRM Alleges Misrepresentation of Salary Proposal

The California stem cell agency says we have "misrepresented the issue on the salaries" in our post below, an allegation with which we do not agree.

Here is the statement this afternoon from Ellen Rose, interim communications officer for CIRM:

"You have misrepresented the issue on the salaries in your post. As I stated over the weekend, we are changing the ranges. This does not translate into a salary increase for anyone. We’ve done this to be in line with what we learned from the Mercer survey. Your post makes it seem like salaries are being automatically increased, which is not the case."

Here is our response to her:

"I repeatedly referred to salary ranges, including in the headline. But I will be glad to carry your comments verbatim. Meanwhile, do you want explain the rationale, such as why salary ranges should be increased. If they should be increased, why the 75th percentile? Why increase salary ranges in a year when the state is facing a budget crisis? And why increase the ranges unless there is the intent to pay someone at the level in the not too distant future? There is no point increasing salary ranges if there is no intent to pay at that level.

"Again, I will carry responses to those questions verbatim or to other comments in support of the pay range increase. Thanks."

The boosts in the salary ranges may be warranted, but CIRM has not made a case, particularly for such an ill-timed effort.

Fresh Comments

"Anonymous" has posted a comment on the pay item below and John Simpson. You can read comments by clicking on the word "comments" at the end of the item in question.

CIRM Proposes 50 Percent Pay Range Hikes; Watchdog Says They are Unjustified

The California stem cell agency is set to boost the maximum salary ranges of its top executives by 50 percent, a move that one watchdog group says flies in the face of California's budget crisis.

Under the proposal to be considered Wednesday by a subcommittee of the CIRM board of directors, the top salary range for the president would skyrocket more than $200,000 -- from $412,500 to $618,750. The salary range would also apply in the case of the chairman of the agency, Robert Klein, a multimillionaire real estate investment banker. However, Klein has declined to accept a salary.

Other proposed salary increases would see the top of the range climb from $270,000 to $405,000 for vice chairman, chief scientific officer and chief operating officer, a new position that is currently unfilled. The top of the salary range for general counsel and intellectual property attorney (another new, unfilled position) would jump from $225,000 to $337,500.

The Foundation for Taxpayer and Consumer Rights said the increases "are unjustified in the face of a state budget crisis."

In a statement prepared for release Tuesday, John M. Simpson, stem cell project director for the group, said CIRM was "tone-deaf" in proposing the pay hikes. He said,

"CIRM doesn’t operate with some financier’s private stash of cash. CIRM is a state agency funded by taxpayer dollars. It needs to act like one.”

Simpson also said that CIRM's general counsel already received a 41 percent pay increase in December after only 10 months on the job, boosting her salary from $160,000 to $225,000.

The CIRM document proposing the other executive salary range increases did not offer a rationale nor did an accompanying salary survey paid for by CIRM. We asked Ellen Rose, spokeswoman for CIRM, what the justification was for the increase, She said,

"We are re-aligning the maximum of the ranges to be slightly above the 75th percentile data Mercer provided to be consistent with our Compensation Philosophy."

No further rationale was provided by CIRM for the top pay increases, which amount to more than an average of 16 percent a year since 2005 when the first salary schedule was approved by CIRM directors. At that time, CIRM salaries generated considerable heat because of what critics called their extravagance.

CIRM is a tiny agency with only 26 employees, although it hands out grant money at a rate exceeding $20,000 an hour. It is limited by law to only 50 employees. Its operating budget this year is running about $8 million, about $5.5 million of which is salaries.

The proposed pay raises would have no impact on the state budget. CIRM operates outside of the normal realm of state budget matters. CIRM's budget cannot be cut by the governor or the legislature. CIRM spending (which is financed by state bonds) is untouchable because of constitutional changes approved in Prop. 71. That fact is not likely to be understood by the public. Beyond that, the increases are a symbol of governmental profligacy that will not sit well with many persons, regardless of their position on stem cell research. The pay hikes additionally will hand another cudgel to foes of human embryonic stem cell research.

The chair of the CIRM subcommitteee considering the pay increases on Wednesday is Sherry Lansing, a former Hollywood film studio executive and currently a member of the University of California regents. Several years ago, as a regent she went through a major flap concerning excessive compensation for top executives at many UC campuses.

That episode reflected poorly on UC, and CIRM is likely to suffer the same fate.

(The subcommittee meeting begins at 3 p.m. The public may participate in the sessions at locations in San Francisco, Los Angeles, Sacramento, Carlsbad and Irvine. You can find the specific addresses here.

CIRM's Latest on Navigating the Financial 'Valley of Death'

Coming up on Tuesday is a three-hour meeting involving the California stem cell agency's ambitious proposal for a biotech loan program that could pump as much as $750 million into the state's stem cell business.

The session is scheduled for San Diego with two teleconference locations in San Francisco. It is a must if you are associated with an enterprise interested in the loans or want to shape policy concerning them. And that includes nonprofit organizations, as well as businesses. The Biotech Loan Task Force seems to be heading in the direction of making the loans available to nonprofits as well as private enterprise. Additionally, funds would probably be available to out-of-state companies, so long as the loans were going to California operations.

The idea behind the effort is to leverage the cash available to CIRM and to help organizations bridge what is called the "valley of death" – an economic gap between research funding and traditional financing.

The plan – brainchild of California stem cell chairman Robert Klein – received a major airing last month. Generally the reception was cordial. Few want to rain on a $500 to $750 million parade, the range of amounts that Klein has discussed offering as loans.

At the invitation of CIRM, Gregory Bonfiglio(see photo), managing partner of Proteus Venture Partners of Palo Alto, Ca., laid the groundwork during the hearing. His firm, which has offices in Boston and Cambridge in the UK, is devoted to developing the business of regenerative medicine.

He told the loan task force last month that currently 300 companies exist that are "pure play regenerative." He said 800 clinical trials are underway in the US involving stem cells and regenerative medicine.

Gone are the bad old days – the "trough of disillusionment" – and, he said, "We're now on our way out."

Bonfiglio said,

"How do I know that? What is the current market dynamic? Well, the current market dynamic, triggered again in part to respond to Prop 71, is that you are seeing an incredible amount of activity at the university level. this technology is so compelling that it has captured the imagination of the best and brightest at our major universities. every major university in the United States now with a medical school has a dedicated regenerative medicine program. There are 65 of them in the US alone. There are another ten to twelve in the UK, and there is also very, very promising research going on in Singapore, in Australia, in China, in India."

He also cited additional changing market forces that have created a more favorable economic climate.

One of the caveats to the program was voiced by Richard Murphy, interim president of CIRM. Jeff Sheehy, a member of the CIRM Oversight Committee, echoed some of Murphy's concerns. Murphy said,

"I think the notion that all of this would be evaluated by CIRM staff is really overshooting. As you know, we're limited to 50 people in the organization. We would need to have real partnerships somewhere to be able to do this in a way that these guys would buy into as partners. I suspect that cannot be done in-house, at least with our present structure."

Klein said,

"We could have a delegated underwriting group that becomes the coordinating officer or the coordinating firm that, just as in the real estate field, the delegated underwriters evaluate the appraisals, the market studies, the toxicity reports, etc. In this field the delegated underwriter, a bank, for example, Silicon Valley Bank, could be a delegated underwriter who could agree to service this for us."

In addition to Bonfiglio, industry was represented at the January meeting by Burrill & Co., Advanced Cell Technology, Invitrogen, Silicon Valley Bank, Bay City Capital and Cooley Godward.

While we are not particularly fond of Powerpoint presentations without additional elaboration, Bonfiglio's is available on the CIRM site along with the transcript of his remarks. Combined, they provide a useful perspective on state of the regenerative and stem cell medicine business.

Day-long CIRM Meeting: No Topic Disclosed

The Standards Working Group for the California stem cell agency is holding a mystery meeting on Feb. 28 from 9 a.m. to 5 p.m. at the Kabuki Hotel in San Francisco.

We can't tell you anything about it. All we know is that the meeting has been scheduled. The agenda contains nothing more than the date and location. A few days ago, we asked CIRM about the nature of the meeting. So far, we have received no response.

Stem Cell Mischief and 'Research Sites'

For the first time in the brief life of the California stem cell agency, businesses based throughout the United States or elsewhere have had a chance to bid for some of the $3 billion in research funds being given out by the Golden State.

There is one catch. The firms must have established a "research site" in California by Feb. 5 of this year, which was the deadline for applications in the $25 million new cell lines program. If applicants did not have a site already in California, they had only about two months to set up one after the request for applications went out in late November.

CIRM reports that 12 businesses have applied, but provides little other information. Nor is the agency checking any time soon to see whether the business applicants, in fact, have "research sites" in California. That will come months from now, after CIRM directors approve the grants, which is scheduled for June. Following approval the CIRM staff will begin an administrative review, which in the past has taken additional months.

Perhaps we are overly suspicious, but given the tight timetable for creating a "research site," it seems that now is the time to check on the existence of these sites. Attempting to do so six months from now is problematic at best and is certainly not a good example of what might be called "due diligence." If there is a difference of opinion next summer between CIRM and an applicant about the existence of the site in February, the evidence trail could be cold and murky.

CIRM cannot tell us whether any firms headquartered outside of California have applied. Ellen Rose, a spokeswoman for CIRM, said the application does not ask for that information.

The application forms, in fact, do not even ask for a specific street address of the "research site," a term which is undefined in the CIRM documents we examined. The application asks only for the institutional mailing address of the organization for purposes of receiving the grant.

Rose said,

"Confirmation of applicant research sites in California is not something we do before accepting the application for review. This is a long technical process, which we will embark on only if the grants are recommended for funding during further administrative review."

She also said,

"The burden is always on the applicant to demonstrate eligibility. If a company can't demonstrate evidence of a California site on Feb. 5, then it is not eligible - this was the same for applicants that were new (either new to California or just new) non-profits, that have applied for grants going back to the first SEED and comprehensive grants."

Perhaps all the business applications come from well-established California firms. (The public cannot know because their names are deemed to be secret by CIRM decree.)

But it would seem to be in CIRM's own best interests to scan the applications within the next few days to sniff out any likely attempts at deception. If mischief is afoot, detecting it six months from now could be an ugly and unproductive business.

PR Laundering Update: Subcontracting Unusual, Says Industry Publication

Marc Longpre of PR Week wrote a piece on Thursday concerning the flap over the Rubenstein PR contract involving CIRM and charges of "laundering."

The article contained the following paragraph:

"Several PR pros told PRWeek that while being subcontracted through a law firm happens on occasion in the private sector, they had never heard of such an instance with a taxpayer-funded organization. Still, one source said that because of the small amount of money involved, the urgency of the matter, and the short-term nature of the arrangement, it did not seem to be a 'big deal.'"

California Governor Says Invitrogen and Biotech Leading The Way

California Gov. Arnold Schwarzenegger was out plumping for the biotech industry this week during a visit to Invitrogen, a stem cell firm located near San Diego.

The firm was Arnold's poster child Monday for growth in a time of increasing talk about recession and lack of jobs. Invitrogen has added 200 new employees to its staff of 4,300 at a time when economists worry about rising unemployment in the Golden State

In some ways, the Schwarzenegger appearance is the flip side of the piece on Monday in the Boston Globe that offered a more jaundiced view of stem cell economic activity in California.

The governor cited the $3 billion stem cell agency and its three-year-old grant program, the largest research effort for human embryonic stem cell research in the world.

"The rest of the world is somewhat jealous," he said.

Schwarzenegger added, "It's all about job creation."

His office mounted an impressive array of biotech industry statistics on the governor's web site, along with a video of a portion of his Invitrogen visit.

Missing, however, from the statistics is an important figure: the size of the California workforce, 18.4 million persons. Adding a relative handful of jobs here and here is going to do little to ease immediately the problems of a lack of economic growth. Even the total biotech workforce – 235,000 – is relatively small potatoes. That said, building economic growth is a brick-by-brick endeavor. No magic solutions exist. But hyping the stem or biotech industry can backfire, as CIRM well knows. California's stem cell agency is still feeling the blowback from the excessive rhetoric of the Prop. 71 campaign.

The governor is a powerful media draw. He noted that six cameras filmed his visit, although he attributed that to interest in Invitrogen and stem cell research. Reporter Terri Somers of the San Diego Union-Tribune was also there. You can read her report here.

Readers from overseas and out-of-state may well learn something from watching the Arnold video. It conveys some of the enthusiasm, energy and commitment to California's stem cell research effort.

Some CIRM Grant Applicants Disqualified

A number of organizations fell by the wayside in bids for CIRM millions in the new cell line and disease team planning grant programs.

CIRM reported 123 enterprises submitted letters-of-intent to apply for the grants. But only 109 applications were later accepted by the stem cell agency.

We asked CIRM whether it had disqualified any of the applications. Apparently so. Here is the response from Ellen Rose, interim communications officer for CIRM.

"There is typically a drop in numbers from letters of intent and applications. In some cases people don't follow up their LOI's and in others, applications were not submitted correctly or on time."

Secret PR for Legal Proceedings? A Comment

Last week, the California stem cell agency was lambasted for "laundering" public relations activities through its outside attorneys.

We called the item to the attention of Jeff Raimundo, a partner in Townsend Raimundo Besler & Usher of Sacramento. Raimundo is a former political reporter and longtime PR practitioner whose operations have spanned California.

Here is his comment:

"This one is not an easy question, in my view. At some point you have to take them at their word, because it does make a difference in how I would see this. Ordinarily, I would agree that PR contracts, products, etc. should be part of the public record and available for scrutiny. Even in those situations, I believe, 'drafts' of documents are exempt from disclosure under the California Public Records Act, so they probably don't need to worry about some 24-year-old junior account executive's ruminations being mistaken for some sort of sage advice or policy recommendation (which is exactly what happens too often with premature disclosure).

"In the case of PR around legitimate, legal proceedings, however, I think it should be kept secret. When we've done this in the past, the lawyers really have been our clients. They want to be able to deal with the trial lawyers' very well-honed and experienced PR apparatus in the case of liability lawsuits and with the prosecutors' (especially federal) equally professional PR operations in the case of criminal actions. Again, I would limit that PR counsel to legal issues only and not include peripheral issues like CIRM board actions or such PR activities as the announcement of new research grants."

Last week, we also reported about an indication that the governor's office may have been involved in the matter. Ellen Rose, a spokeswoman for CIRM, said, however,

"The governor's office was not involved in formulating strategy or in hiring Rubenstein."

The governor's office has not responded to our query.

More Than 100 Requests for CIRM Millions

California's stem cell agency and its dauntless grant reviewers have more than their share of work cut out for them this spring.

More than 100 new applications for some of CIRM's swag have arrived at its headquarters in San Francisco. They include the first ever applications from private businesses.

The applications come on top of the ambitious $262 million in lab grants, which are scheduled to be awarded this spring and which are the largest single round of grants in CIRM history.

Fifty fresh applications, including 12 from business, have been received for the $25 million new cell line program. Only 16 are scheduled to be awarded so the competition will be tough. The number of applicants is down from those announced for letters of intent. Fifty-seven organizations, including 15 businesses, wrote intent letters.

Alan Trounson, president of CIRM, said in a news release,

"We are pleased to have received applications to support research across the spectrum of approaches used to derive pluripotent stem cell lines. Advances in new technologies such as induced pluripotency, while promising, are in their infancy in terms of being able to drive therapies and cures for disease and injury. Therefore, to ensure that research moves forward in all of the areas that have potential to deliver medical advances to patients, these grants will fund the derivation of new cell lies from both the well-established means of human embryonic stem cells, which remain the gold standard for research into pluripotent cells, as well as new technologies."

Another 59 applications were received for 20 disease team planning grants of up to $55,000 each in a program totaling only $1 million. However, the planning grants are prelude to $122 million in disease team grants. Sixty-six organizations sent letters of intent for the planning phase. Nine businesses actually applied, although 10 earlier sent letters of intent to apply..

Trounson said,

"Our ultimate goal is to fund research that will deliver stem cell therapies and cures to patients. By funding this innovative disease team approach that encourages early collaboration among experts in the many disciplines and functions involved in moving a concept from preclinical research into the clinic, we hope to facilitate rapid advances across a broad spectrum of diseases. A key objective of the subsequent Disease Team Research Award will be for teams to produce an approvable regulatory filing enabling human clinical testing within four years after the award."

The scientific members of the group that reviews the grant applications in private come from outside California to avoid possible conflicts of interest. However, their statements of economic interests are not made public by CIRM. The other members of the panel are patient advocates who sit on CIRM's board of directors.

The group's recommendations go to CIRM's board of directors (the Oversight Committee), which has final authority. However, it has never rejected a recommendation for funding from the grant review group, as far as we can remember.

Bean Town Perspective: California Still Waiting for Stem Cell Results

The Boston Globe looked at California this morning and said the $3 billion stem cell research effort in the Golden State is a "lesson" and a "reality check" for Massachusetts.

Reporter Tod Wallack wrote that three years after the creation of CIRM, "Californians are still waiting for some results."

He continued,

"'It's too early,' said Alan Trounson, president of the California Institute for Regenerative Medicine, the agency charged with administering the stem cell funds. 'There are very few substantial developments [in medical science] that have happened in less than 25 years. There have been some, but they tend to be rare.'"

Wallack also noted the conflict of interest problems at CIRM, although he mistakenly reported:

"The stem cell agency rejected several applications for grants because they contained letters of support from advisory board members."

Those letters were written by members of CIRM's board of directors (medical school deans) who are prohibited by CIRM policy from writing such letters. The board is far from an advisory group. It makes the decisions on who receives grants.

The Boston piece downplayed the impact of CIRM's efforts, perhaps a reflection of a parochial East Coast perspective. Pumping money into stem cell research at the rate of $20,000-plus an hour, however, is no small achievement, even though it does not measure up to the perceptions created by the campaign rhetoric surrounding Prop. 71 more than three years ago.

Margolis: Beware the Embryonic Cheerleaders

The Stem Cell Blog run by Stanford's Chris Scott carried an interested commentary the other day from Don Margolis, founder of the adult stem cell company, VesCell, who tackles some of the issues related to reprogramming of adult stem cells.

Among other things, Margolis invokes cancer, criticizes "embryonic cheerleaders" (presumably not unborn pom-pom girls) and attacks "censorship" of those who differ with the heralds of hESC.

Margolis also hails the "refreshing" honesty of such folks as Jamie Thomson, George Daley, Doug Melton and Shinya Yamanaka. You can find the piece here.

Tackling Stem Cell Collaboration

Last week, the Mission Bay conference center at UC San Francisco was the scene of a meeting to discuss issues related to stem cell research. We asked one of those involved in organizing the event, Krishanu Saha, to give us a summary of the session. Here is Saha's report.

"In a successful workshop on Feb. 6 organized by the Berkeley Stem Cell Center and the Berkeley Science, Technology and Society Center, scientists, lawyers, ethicists, academic leaders, and patient advocates across California and the US gathered in San Francisco to discuss collaboration in stem cell research (see the "research roadblocks" item on Feb. 2).

"The morning consisted of three panels that described the problems in three interacting domains - the technical, proprietary, & ethical - of California's stem cell research climate. The need for sharing data on stem cell lines themselves was raised by a panel of practicing scientists, and later echoed by panels of intellectual property experts and ethicists.

"Intellectual property in stem cell tools was debated by both members of academia and industry, especially in regard to CIRM's policy. Legal experts and ethicists detailed the challenges of practicing within a patchwork of regulations across states and with tissue/cell donors.

Patient advocates and industrial leaders stressed their involvement in developing better healthcare during lunch, and in the afternoon, discussion shifted to how institutions could collaborate to deal with the problems laid out earlier. Both within stem cell research and other life sciences, several models of collaboration across states, academic institutions, and hospitals were discussed in an open forum.

"Participants agreed that there was a clear need for collaboration among stem cell research institutions and that California institutions will likely be intensely involved. Creating a database among institutions was seen as a potentially feasible first step, however further conversations will be necessary to determine the membership, costs, incentives, and types of data to include.

More information, including an important policy paper regarding this issue and a summary of the workshop, can be found at http://stsc.berkeley.edu/Events/2008StemCellResearchFeb6.htm.

Arnold Involved in CIRM Legal/PR Strategy?

CIRM documents in the Remcho/Rubenstein PR "laundering" affair suggest that the office of California governor Arnold Schwarzenegger may have been involved at one point – or that somebody connected to either the agency or Rubenstein wanted to engage the governor's aides.

An Oct. 15, 2006, email from Patrick Smith, executive vice president of Rubenstein Associates, to Richard Murphy, interim CIRM president, concerning a conference call about the Monash investigation in Australia contained this sentence:

"Do you (Murphy) want to include someone from the governor's office?"

It was not clear from the 54 pages of documents concerning Rubenstein's business with CIRM what generated that reference. Normally the governor's office does not become engaged in legal or PR strategy sessions of state agencies unless something exceptional is taking place.

It also was not clear from the documents whether gubernatorial aides actually did assist in CIRM's discussions.

We asked Smith what generated the mention of the governor's office in his email and whether the governor's aides became involved. Here is Smith's response verbatim:

"We do not discuss client matters."

We are querying CIRM and the governor's office about the matter.

New Comment

"Anonymous" has spanked yours truly in a fresh comment on the "laundering PR advice" item below. You can read it by clicking on the word "comments" at the end of the item.

Rubenstein Responds to 'Laundering' Charges

We asked Patrick Smith, executive vice president of Rubenstein Associates, for a response on "laundering" charges made below by the Foundation for Consumer and Taxpayers Rights. Following are the questions and his verbatim response.

"Do you think it is appropriate for your firm to 'launder' its advice to governmental agencies through the agency's attorneys? Is this common practice for your firm? Is it a good PR strategy for your client to engage in such surreptitious maneuvers? What is the nature of the contract that CIRM reports it is negotiating with your firm? Does your firm have any links with Rubenstein Public Relations? Please feel free to add any additional information that you think is appropriate."

Smith's response:

"Given the tone of your questions, which assume a negative before you have determined the fact, one wonders if this is a wasted effort. It is not uncommon in situations such as this for law firms to retain p.r. Counsel to ensure that any public statement or action is coordinated with the legal strategy, especially when a confidential investigation is involved."

"Laundering" PR Advice at $3 Billion California State Agency

The California stem cell agency has hired a prestigious New York City PR agency and, according to one watchdog group, has "laundered" its PR advice through lawyers in order to avoid public scrutiny.

The firm is Rubenstein Associates, whose founder, Howard Rubenstein (see photo from the firm) has been described as the "godfather of New York PR." The firm's clients include Super Bowl Champions New York Giants, the New York Yankees, Bloomberg LP and Pfizer.

The Foundation for Taxpayer and Consumers Rights disclosed on Thursday the $10,000 contract with CIRM's outside counsel. The FTCR said that some of the details of Rubenstein's work can be found in 54 pages of CIRM records that the FTCR secured as a result of a public records act request.

The group said,

"The stem cell agency used the tactic (of routing the contract through an attorney) to claim legal 'confidentiality' on public relations strategies...."

The watchdog group said,

"Eight of the 54 pages, which seem to be about specific advice on handling the news media, were redacted because they are 'documents exempt from disclosure on the grounds of attorney-client privilege and attorney work product,' according to Tamar Pachter, general counsel for the stem cell agency."

John M. Simpson, FTCR stem cell director, said,

"'What they've done is launder the public relations advice to a state agency through their outside attorney, Remcho, Johansen & Purcell. Once again the leadership of the California Institute for Regenerative Medicine has shown concern about image, rather than substance, and a continued commitment to secrecy."

Ellen Rose, a spokeswoman for CIRM, said,

"Rubinstein's advice was sought in relation to the news items that appeared in the Australian Herald-Sun about a researcher under investigation for improprieties who worked in the stem cell laboratory run by CIRM's incoming President Dr. Alan Trounson. There was no suggestion that Dr. Trounson was under investigation or involved in any wrongdoing.

"Rubenstein was hired because at the time, CIRM had no communications officer to provide advice and research on the Australian articles and related legal matters. They were hired via our outside attorney because the confidential investigation taking place in Australia may have had legal ramifications for CIRM and knowledge about what was taking place in this area was important for CIRM legal counsel to understand."

The initial, documented overture to Rubenstein came on Oct. 12 last year. However, Bob Klein, chairman of CIRM, has been quoted as saying the Australian investigation was known to CIRM as early as sometime in September or perhaps even August, long before CIRM's former communications director had left.

The practice of using attorneys to cloak certain matters is not entirely uncommon, at least with Rubenstein. Howard Rubenstein told the New York Times in 2006, in connection with celebrity scandals, that if they involve any sort of illegality, he advised "hiring a lawyer who could sit in on meetings, thus giving both star and publicist the benefit of attorney-client confidentiality."

However, this a matter involving a public agency, public dollars and public trust – not some troubled Hollywood personality. The amount is picayune compared to CIRM's overall spending; it gave out grants last year at a rate exceeding $20,000 an hour. But concealing relatively innocuous PR advice can only lead to speculation about what other, more important matters are being hidden because of CIRM's unnecessary desire for secrecy.

Also an issue for concern is the FTCR disclosure that CIRM is currently negotiating another PR contract with Rubenstein. Rose says, however, that it would be with CIRM directly. But given the dubious nature of the Remcho/Rubenstein arrangement, any further dealings with the New York firm would seem to require special scrutiny.

We have queried Rubenstein concerning their views on concealing PR advice to government agencies behind a legal veil. We will carry their comments when we receive them.

You can read reporter Steve Johnson's story in the San Jose Mercury News on the contract here.

Correction

In the "research roadblocks" item on Feb. 2, we incorrectly described one of the sponsoring groups as the UC Berkeley Stem Cell Center. It is correctly called the Berkeley Stem Cell Center, which is a collaboration of UC Berkeley, Lawrence Berkeley National Laboratory and Children's Hospital Oakland Research Institute. Thanks to Lily Mirels for pointing this out.

Klein's Role in Raising Matching Lab Grant Funds

Attention lab grant applicants: Bob Klein wants to give you a hand in raising matching funds to help you secure millions of dollars for your project. Just give him a call.

Klein, as most of you know, is chairman of the agency that this spring will be giving away $262 million for new stem cell lab construction. He is also one of the 29 members of the CIRM Oversight Committee that will ultimately decide which of the lab grant applicants will receive cash to build their projects.

One of the criteria for receiving a multimillion dollar grant from CIRM is a requirement for matching funds – the more dough you can bring to the table, the more competitive will be your application.

Last month we asked Klein about scuttlebutt that he was assisting some applicants in raising matching funds. Basically he said yes, but noted that he is not dealing with any of the specifics of the applications – just helping to raise funds.

He said that one of his roles as chairman of CIRM is to raise funds for stem cell research. He said that if potential donors for a lab grant project call him concerning matters of public record, he has been willing to speak with them. Of course, he noted he is prohibited from discussing the application itself.

We asked him if all applicants knew that he was available to help in raising matching funds. He pointed to the transcript of the Facilities Working Group in November in which he indicated he was willing to assist. He said all applicants have been told to read the transcripts of the facilities group.

Klein said his goal is to raise as much money as possible so that all the applications can be approved. He also said that some applicants with large amounts of resources may be asked to reduce the amount of money they are seeking so that all applicants can be funded.

Obviously, Klein's assistance raises questions about fairness. Are all applicants aware that he is available to assist? He said he may notify them. Is it appropriate for a member of the Oversight Committee to be so directly involved with applicants that he must later sit in judgment on? Klein said his overriding concern is to raise funds for stem cell research and help develop cures for millions.

Here is the text of the November transcript that Klein cited. It came during an exchange with a CIRM attorney, who affirmed that Klein's comments below were correct.

"I previously talked to various members of this, chairman and vice chairman, I think, and/or other members, to make sure that we were considering the fact that there may be donations from donors who come to us. And those donors who are related to some applicant who has publicly on file an application, while we can't talk to the donor about the application, the donor can ask us to see the history, which is a public record, of what grants have been approved for that institution or other historical information related to that institution.

"So the point is we can't talk to the institutions about their applications, but it's my understanding that doesn't mean we can't answer questions as to publicly available information of donors who want to know about the particular institution where we have a public history of making grants that we can point them to."