CIRM Responds to Financial Disparity Questions

The California stem cell agency has responded to questions involving the cutbacks and issues raised in the "Handouts vs. Cutbacks" item below.

Don Gibbons, chief communications officer for CIRM, said Klein is not personally affected by the cuts in funding for affordable housing.

We also asked:

"Does CIRM have anything to say about whether it is appropriate for it to continue handing out tens of millions of dollars or more while facilities for the deaf go unfunded and cutbacks are made in levee reinforcement to protect Sacramento from becoming another Katrina-like disaster, among the thousands of other affected projects?"

Gibbons complete response, which are carrying word-for-word, was:

"The projects being frozen are funded through Pooled Money Investment accounts and CIRM has less than $2 million in that fund.  CIRM bonds have delayed repayment schedules, so have no impact at all on this year’s budget."

Handouts vs. Cutbacks: Strange Financial Tales from the Golden State

Citing the state's severe financial problems, California officials Wednesday shut down $3.8 billion in cash for public works projects, including some closely connected to directors of the state's stem cell agency. The action came coincidentally just one week after the agency gave away $20 million in state funds to stem cell researchers.

The cuts in bond-financed programs struck at projects to aid both the deaf and ailing veterans as well as to assist in genomics research. Also hit were construction projects at medical facilities at UC Davis and UC San Diego, both of which have representatives on the CIRM board.

Funding for hundreds, perhaps thousands, of housing projects was halted, raising the possibility that the moves could personally affect CIRM Chairman Bob Klein, whose real estate investment banking firm specializes in affordable housing.

CIRM spending, however, is a mere piffle compared to the state's $40 billion budget shortfall. But their financial disparity highlights the stem cell agency's unusual nature and the public policy issues that arise when ballot initiatives lock up state funds and create a favored place for some state programs.

The stem cell agency enjoys a relatively rosy position compared to nearly all other state departments. As the result of Prop. 71, which altered the state constitution and state law, CIRM is assured of state bond funding that goes directly to the agency and which cannot be touched by the governor or the legislature. In response to questions from CIRM directors last week, Klein said that the agency had enough money to operate normally at least until the end of June next year. Compare that to predictions that California will not be able to pay its bills by the end of February.

CIRM currently is drawing its cash primarily from the proceeds of a $250 million bond offering that was completed in the fall of 2007.

However, the state is not currently issuing any additional bonds because of the state's budget crisis, which includes $60 billion in debt and the worst credit rating of any state in the nation, according to the Wall Street Journal. Without additional funding, CIRM could run out of money at some point. However, Klein last week told the California Stem Cell Report that CIRM has $160 million to tide it over through the end of June. He also said he is working on a private placement plan for CIRM funding, just in case. Klein said he has already identified some potential participants although he did not spell out details.

Gov. Arnold Schwarzenegger and California lawmakers are wrestling with the budget crisis but have a long history of financial fumbling. At the heart of their failures is a daunting requirement that the legislature must pass a budget or increase taxes only with a two-thirds vote. That gives a minority extraordinary power. In California's case, Republican legislators stand in the way as they have for decades, chanting a mantra of no-new-taxes regardless of the state's needs.

Putting together solutions that will right the foundering Golden State will require compromise and policy changes that ultimately may affect such privileged endeavors as the state stem cell agency. Good arguments exist for steady funding of any sort of scientific research, much less stem cells. But good arguments also exist for steady funding of the state's now troubled institutions of higher learning, once an example for the nation, as well as many other laudable state programs.

CIRM must step carefully in the next few months to avoid becoming a symbol of what is wrong with much of California state government and its finances.

(Note: We have asked CIRM for comment on the issues raised by the disparity between its financial condition and that of the state. We have also asked whether Klein is affected by the housing cuts. We will carry CIRM's response when we receive it. Additionally, the San Francisco Chronicle carried a report this morning that the cutbacks would affect the "state's stem cell research center in San Francisco." No further details were provided, and we could not find anything to support that in the list of projects from the treasurer's office that we reviewed.)

'Armageddon' and Klein's Salary

The new salary for the chairman of the California stem cell agency, Robert Klein, has caught the attention of Nature magazine, which headlined its article on the subject: "Salary for CIRM head despite deficit, Outcry as stem cell agency puts chairman on payroll."

Erika Check Hayden wrote that CIRM directors approved the $150,000, halftime salary "even as the state plunges deeper into financial crisis." The term "financial Armageddon" also was quoted as coming from Gov. Arnold Schwarzenegger, who had expressed "deep concern" about the possibility of a salary prior to its approval last Wednesday by directors.

Nature magazine says it has 377,443 readers worldwide, mostly senior scientists and executives.

UCSF Snags $25 Million Stem Cell Donation

Despite the nation's financial woes, some philanthropists continue to pump out money with the latest coming from the Eli and Edythe Broad Foundation for the benefit of UC San Francisco's stem cell laboratory.

Broad, who made his fortune in home building and insurance, popped for $25 million on Wednesday. That brought his total for California stem cell research buildings to $75 million. He previously gave $20 million to UCLA and $30 million to USC.

Erin Allday of the San Francisco Chronicle wrote:

"The Broad Foundation donation, combined with a $35 million grant from the California Institute for Regenerative Medicine and a $16 million donation from Ray and Dagmar Dolby, means UCSF must raise another $47 million to complete funding for the new facility(see photo)."

Broad's contribution now brings him up to the level reached earlier this year by Lorry Lokey, founder of the Business Wire, who has funneled $75 million to Stanford for its stem cell work.

Gov. Arnold Schwarzenegger appeared for the UCSF announcement event along with CIRM Chairman Robert Klein. The donation garnered coverage throughout the state, including reports on television, which almost never covers the California stem cell agency. Google reported about 200 stories at different locations, including Taiwan and Australia. Most of those were the version from The Associated Press.

Richard Paddock of the Los Angeles Times wrote:

"Broad said that his foundation's investments have not suffered as much as other charitable foundations and that it would continue to meet its commitments.

"'I never thought I would say something like this, but we are blessed to be down less than 20%,' he said. 'So, we are going to keep on doing what we're doing and we'll look for better times.'"

Fresh Comment

David Serrano Sewell, a member of the board of directors of the California stem cell agency, has posted a comment on the item below, "Directors to Define Vice Chair Job...." One of his points is that the vice-chair election is not just about salary. I agree. It involves much more, including an as-yet-to-be-determined, clear expression from the full board about the scope of the job. We will have more on the subject of the vice chair's election in coming weeks.

How Would California Stem Cell Backers Do It Differently?

California's Little Hoover Commission, which is looking into governance and conflict of interest issues involving the $3 billion California stem cell agency, has raised some interesting questions that it wants answered in writing.

The questions are the subject of a meeting this Friday afternoon of a meeting of the Legislative Subcommittee of the CIRM board of directors.

In a Nov. 26 letter to CIRM Chairman Robert Klein, Stuart Drown, executive director of the bipartisan state agency, said:

"We’d like to follow up on the discussion about governance that came up during your testimony, in which you agreed to submit additional written remarks in response to Commissioner Loren Kaye’s questions:

"Would you write anything differently in the initiative, particularly in the governance area regarding the structure of the board, the composition, the ratio of independent or outside directors to the interested directors, the appointment processes, removal, conflicts? Is there anything you would, based on your practice now, do differently?

"Are there further changes, since the 2005 adjustments, that you would make now?

"Given the Institute’s very large board of busy people, do you think the ratio of the authority between you and the board as a whole is appropriate?

"The Commission would appreciate your response by December 15."

CIRM said Klein scheduled the meeting of the legislative committee in order to receive input from directors before responding to the Little Hoover request.

If you are interested in hearing the discussion or making comments, teleconference location sites can be found in San Francisco(two sites), Sacramento, Menlo Park, Healdsburg, Elk Grove and Palo Alto. The specific addresses can be found on the agenda. Locations may be changed or added so check the agenda for the latest information.

CIRM Directors To Define Vice Chair Job and Executive Evaluation Process

Directors of the $3 billion California stem cell agency expect to add some finishing details next week to employment arrangements with its chairman, Robert Klein, along with those of the vice chairman and the president.

On Monday, the directors' Governance Subcommittee, chaired by former Hollywood studio executive Sherry Lansing, will consider how they intend to evaluate the performance of Klein, CIRM President Alan Trounson and whomever fills the now-vacant vice chairmanship of the board of directors.

Last week, the board decided the position of chairman is a halftime job and agreed to pay Klein $150,000 a year. Klein, a multimillionaire real estate investment banker, said current economic conditions had compelled him to seek a salary. Klein had worked for free during the last four years.

At its meeting at UC Irvine last week, the CIRM board deftly sidestepped potentially negative fallout from from the pay matter. The issue had become somewhat charged after Gov. Arnold Schwarzenegger expressed "deep concern" concerning the salary reports.

Under CIRM's salary ranges, if Klein were to serve fulltime, he would be entitled to as much as half-a-million dollars-a-year, which could raise PR and policy issues at a time when California is facing an economic crisis.

In an interview Tuesday, Lansing said Klein is entitled to fringe benefits provided to all state employees but that he will not receive performance awards or merit pay under the compensation plan for CIRM employees.

Actions next week on the vice chairman's position could also help to determine who is likely to fill that slot. Next year, CIRM directors will choose a vice chairman between two candidates: Art Torres(left photo), currently head of the state Democratic Party, and Duane Roth(right photo), who currently serves on the CIRM board and is head of Connect, a San Diego businesses development organization with close ties to the life science industry.

Lansing said that the subcommittee will discuss duties of the vice chairman and what his responsibilities are likely to involve. One question that may come up is whether the board should approve a salary for the job. CIRM salary ranges provide for $180,000 to $332,000 for the position.

Roth says he will not seek compensation as vice chairman. Torres says he will need a salary.

Teleconference locations for the meeting where the public can sit in and comment are available throughout the state: San Francisco, Los Angeles, Stanford, Sacramento, La Jolla and Irvine. The specific addresses can be found on the agenda. They may change or increase before the Monday meeting so it is good to check in advance.

CIRM Panel to Consider Hoover Questions

California stem cell Chairman Robert Klein is seeking some help this Friday from members of the agency's board of directors in connection with the Little Hoover Commission's inquiry into the $3 billion research effort.

Members of the public will also have a chance to comment at several teleconference locations throughout California. The forum is a meeting of the directors' Legislative Subcommittee. The agenda item reads: "Consideration of request from Little Hoover Commission for additional information regarding CIRM governance, board appointment structure, and other policies."

We have been told that the Little Hoover Commission, a bipartisan state agency devoted to improving the performance of government, posed questions on which Klein is seeking board input.

The current teleconference locations are in San Francisco, Sacramento, Healdsburg, Irvine, Elk Grove and Palo Alto. More may be added before the day of the meeting or even on the day of the meeting. The current listing and specific addresses can be found on the agenda.

Business Snags $5.3 Million from CIRM

IRVINE, Ca. -- Six California companies snapped up $5.3 million last week in grants from the California stem cell agency, marking the first major industry funding from the $3 billion state research enterprise.

Up until the latest round of grants, only one company, Novocell Inc. of San Diego, had won a grant and that was for only $50,000.

However, the CIRM board did not approve business applications at the same rate as those from the nonprofit sector. Only one out of seven business proposals (41 in all) won approval last week compared to one out five nonprofit pitches(77 in all).

(The board put off action until next month on some grants so the figures could change when final action is taken.)

The six companies snagged about 26 percent of the nearly $20 million in grants for developing research tools and technology. The six also represented about 26 percent of the 23 grants that were approved.

CIRM President Alan Trounson said,

"These awards represent the entry of the biotechnology industry into CIRM-funded initiatives to accelerate progress."

Nonetheless, other companies appeared at the CIRM board meeting here to complain about the fairness of the review process, which they said was tilted towards academia. One company, DNAmicroarray Inc. of San Diego, suggested changes in definitions for "principal investigator" on grant applications that would reflect differences between business and the nonprofit sector.

Here are the companies and their awards:

VistaGen Therapeutics of South San Francisco, $971,558, PI Kristina Bonham; Fluidigm Corp. also of South San Francisco, $749, 520, PI Marc Unger; Gamma Medica-Ideas of Northridge, Ca., $949,748, PI Douglas Jay Wagenaar; Novocell Inc.of San Diego, $827,072, PI Evert Johan Kroon; Invitrogen of Carlsbad, $869,262, PI Ying Liu, and Vala Sciences of San Diego, $906,629, PI Patrick McDonough.

As of this morning, only one of the companies had generated a press releases about its CIRM grant, while at least some of the academic grant recipients were online as early as Wednesday with their good news. The release by Vala said, among other things, that its grant will be executed in close collaboration with laboratories at the Burnham Institute for Medical Research led by Vincent Chen and Mark Mercola.

Last week's meeting also marked the first time that CIRM directors allowed "extraordinary petitions" to challenge negative decisions on applications by the Grants Working Group. Three were received in time to be considered. Three others were also received but not by the deadline for consideration by CIRM staff and the board. The deadline falls five working days before the board meeting..

In each of the three cases, CIRM President Trounson said he could not find "compelling evidence" to change the score of the application or the decision of the working group. The full board can bring up petitions for public discussion but did not choose to do so.

Two petitions were filed by private businesses, International Stem Cell Corp. of Oceanside and DNAmicroarray Inc. of San Diego and one by the Salk Institute of La Jolla. Here are links to the petitions: International Stem Cell (filed by Jeffrey Janus, president, and William Adams, CFO), DNAmicroarray (filed by Babak Esmaeli-Azad, president) and Salk (filed by Juan Carlos Izpisua Belmonte, professor, Gene Expression Laboratory).

Adams also appeared before the CIRM board, citing "fundamental problems" involving the way business applications were treated. Some members of the board have expressed sympathy with the view that there is a tilt towards academia in the review process. CIRM is attempting to find more grant reviewers with a business background.

Reporter Terri Somers of the San Diego Union-Tribune wrote a story on the business grants. Bruce Bigelow of Xconomy.com also had a brief item, declaring that CIRM had "opened its spigot for funding business ventures."

Klein's Salary: News Coverage is Modest

IRVINE, Ca. -- Approval of a $150,000, half-time salary for CIRM Chairman Robert Klein generated light news coverage both Wednesday and today.

The San Diego Union-Tribune actually had a reporter, Terri Somers, on the scene here in Irvine, where CIRM directors met the last two days. It was the only mainstream media outlet to cover the session, which included more far-reaching decisions than salary matters, such as an aggressive plan to spend $210 million to push development of clinical therapies.

Somers' story quoted Klein, Duane Roth, who has been nominated for the vice chairman's job, and John M. Simpson, stem cell project director of Consumer Watchdog of Santa Monica, Ca., on the salary issue.

Simpson, who has looked at askance at high salaries at CIRM, said the most important matter was not the money for Klein but the fact that board defined the chairman's job as half-time. Prop. 71 gives the chairman a host of responsibilities, some of which conflict with the president's. Klein also has very much acted as an executive chairman, including micro-managing details at CIRM, according to some observers.

Other stories were written by Shane Goldmacher of The Sacramento Bee and Ron Leuty of the San Francisco Business Times. Here are links to Leuty's story and Goldmacher's account.

The continuing light news coverage of CIRM is a sign of the hard economic times at the mainstream media, particularly newspapers. It also reflects the declining novelty factor at CIRM. The organization was created four years ago by voters and now is approaching the news value level of nearly all state agencies. And that is virtually nil.

Traditionally state agencies, with rare exceptions, are all but ignored by the mainstream media. Given the difficult decisions news organizations currently must make concerning deployment of ever declining resources (reporters), coverage of CIRM is certain to shrivel in the future. The exception would be a scandal or a major scientific breakthrough.

CIRM Identifies Winners of Tools and Tech Grants

Here is a link to the CIRM news release concerning action by its board on Tuesday and Wednesday, including a list of the names of grant applicants approved in the $20 million tools and technology round.

Also included is information on the $210 million disease team round as well as the $60 million basic research round, which were approved by the board.

CIRM Issues Statements of Praise for Klein

The California stem cell agency has released statements praising California stem cell Chairman Robert Klein in the wake of today's decision by CIRM directors to pay him $150,000 for half-time work.

The following came from George Daley, former president of the International Society for Stem Cell Research and associate professor at Harvard Medical School.

"I am happy to say that Bob Klein has not only been the major driving force behind expanded funding for stem cell research within California, but he has been a tireless booster for stem cell research internationally. By the sheer energy and dedication to his cause, Bob is remaking California into the international center for stem cell research. In my recent visit to major laboratories at UCSF and UCSD, I saw first hand how the Prop 71 funding is changing science for the better. I have no doubt that in the future, when we look back on the prime drivers of the revolution in stem cells, we'll have to all acknowledge Bob Klein's profound contributions."

The following came from Richard Murphy, who served as a consultant and interim president for CIRM as well as a member of its board of directors:

"As a member of the ICOC and as Interim President of CIRM, I witnessed first hand Bob Klein's incredible commitment to the stem cell initiative in California. He brings together business expertise, an entrepreneurial spirit, and a fierce commitment to use stem technology to improving the health of people with incurable diseases. He has spent countless hours during the day, nights,and weekends bringing all the complex parts of this initiative together, and without him Proposition 71, CIRM, and California's world leadership of stem cell research would not exist. I feel privileged to know him and to have worked with him. Given his commitment to this cause, there is no question he will continue this work in the future, as CIRM encounters the inevitable challenges that will arise. California and the world are fortunate that Bob Klein has done what he has, and I am confident he will continue to work in the future towards the benefit of all of us."

CIRM Board Approves $150,000 Salary for Chairman Klein

The board of the California stem cell agency today approved a $150,000, half-time salary for its chairman, Robert Klein, who has served in that position for four years, working without pay.

Board members said that it was impossible to compensate Klein sufficiently for his contributions to the agency. They said the salary was based on what they believed was dictated by the nature of the position – not the individual.

The salary was approved on a unanimous voice vote by the board, which gave Klein a standing ovation prior to approving the salary.

The CIRM pay range provides for a salary as high as half-million dollars annually for the chairman. Gov. Arnold Schwarzenegger last week expressed "deep concern" about reports concerning the salary.

Klein, who owns a real estate investment banking firm, has said he can no longer afford to donate his time.

The only critical voice on the salary came from a member of the public, patient advocate Don Reed, who said it was not nearly enough.

CIRM board member Claire Pomeroy, dean of the UC Davis School of Medicine, said the decision on Klein's salary was not related to a vacancy in the vice chairmanship position. That position is entitled to a salary as high as $332,000.

Two candidates for the job have been nominated -- Duane Roth, who will not accept a salary, and Art Torres, who needs one. That position will not come up until next month at the earliest.

$20 Million Handed Out by CIRM and First Ever Successful Conflict Appeal

IRVINE, Ca. -- Directors of the California stem cell agency today approved $20 million for research grants to develop tools and technology for stem cell research, but not before overturning the decisions of reviewers on two grants.

The applications were removed from the list that reviewers said should be funded. They were moved to a category that will be considered next month. The action came as CIRM directors worried about the financial condition of the agency and of the state of California, which is facing a $28 billion budget shortfall.

CIRM Chairman Robert Klein assured the board that the agency had sufficient funds to operate at least through June. The agency derives its funding from state bonds. The cash that comes from those bonds cannot be touched by the governor or the legislature. However, the state has stopped selling bonds because of the nation's ongoing financial crisis.

The agency did not provide the names of the scientists and institutions whose grants were removed from the funding list, but their numbers are 1050 and 1062.

The board also approved a $1.7 million new cell line grant. It was the first-ever successful appeal of a negative decision by the CIRM Grants Working Group on conflict-of-interest grounds. As we reported earlier, the application was removed in June from consideration of the new cell lines applications.

CIRM President Alan Trounson told directors today that the applicant appealed the negative decision on the basis of a personal conflict of interest on the part of a reviewer. He said "circumstantial evidence" existed that the application "may not have been fairly reviewed."

He said that such allegations are hard to prove and that such conflicts "may not be recognized by both scientists."

Ed Penhoet, a member of the CIRM board, said that scientists often have strong disagreements and that should not be taken as necessarily involving malice.

CIRM has not yet released the names of either the recipients of the tools and technology grants nor that of the new cell line grant applicant

Correction

The "$1.7 Million Grant" item on Dec. 8 incorrectly identified the chairman of the CIRM Working Group as Dana Orkin. His correct name is Stuart Orkin.

California Governor Nominates Roth as CIRM Vice Chair

IRVINE, Ca. -- Gov. Arnold Schwarzenegger has nominated a San Diego biotech veteran as vice chairman of the $3 billion California stem cell agency, setting the stage for a contested election between him and the chairman of the state Democratic Party.

Terri Somers of the San Diego Union-Tribune late Tuesday reported the nomination of Duane Roth(see photo), who now sits on the board of directors of the agency. He says he would not accept a salary, which could run as high as $332,000 annually. Art Torres is the other candidate and has said he needs a salary, but we have been told he thinks a figure of $332,000 would be excessive.

Roth is the head of Connect, a group that assists start-up tech companies. Torres is a veteran politico and former state lawmaker.

Somers quoted Schwarzenegger as saying in a letter to the CIRM board:

"'As I'm sure you already know, Duane is a hard-working board member who has long been an advocate for stem cell research and active member of the life sciences community. He is thoroughly familiar with (the California Institute for Regenerative Medicine) and his elevation to the vice-chair position would promise a seamless transition."

Somers wrote:

"The governor first nominated board member Claire Pomeroy, vice chancellor for human health sciences at UC Davis and dean of its medical school, for the vice chairman post. But Pomeroy asked that her nomination be withdrawn, citing time constraints and a desire to avoid potential conflicts of interest because UC Davis programs are eligible for institute funding."

The vice chairmanship is currently vacant after Ed Penhoet, a multimillionaire businessman, resigned to take a non-paying position on the CIRM board. Penhoet has never taken a salary for his CIRM work. Nor has CIRM Chairman Robert Klein, also a multimillionaire businessman.

However, CIRM directors are scheduled today to act on a salary request by Klein, who says he can no longer afford to work for free. It could place Klein in an awkward position to accept a salary while the vice chairman goes unpaid.

The CIRM board is not expected to make a decision on the vice chairmanship today.

Torres Says He Needs Salary From CIRM

IRVINE, Ca. -- Art Torres, chairman of the California state Democratic Party, says he will need a salary if he is to serve as vice chairman of the $3 billion California stem cell agency.

In an item by Shane Goldmacher for Capitol Alert, the online service of The Sacramento Bee, Torres was quoted as saying:

"'I do need a salary because I am not a wealthy person,' he said, adding that 'what that compensation should be is up to the board.'"

The vice chair is eligible for as much as $332,000 annually.

Goldmacher also reported:

"He (Torres) touted his connections - he was first elected to the Assembly in 1974 - as beneficial for promoting the mission of the stem-cell agency.

"'That's over 34 years of relationships and experience that is important to communicate the needs of this mission,' he said.

"Torres is also building upon those connections to win the vice-chairmanship. (Lt. Gov. John) Garamendi's nomination letter states that Assembly Speaker Karen Bass, Senate President Pro Tem Darrell Steinberg, and Speaker of the House Nancy Pelosi have all endorsed Torres for the post.

"Torres appears to have some support on the board, as well.

"'I'm keeping an open mind, but (Torres) is well-qualified for this position,' said David Serrano Sewell, who fills the patient advocate slot for multiple sclerosis on the stem-cell panel. 'He has the legislative, business and volunteer experience. Just as important he has the relationships with legislators in Sacramento and Washington D.C., built over 20 years, that will greatly benefit our mission.'"

$1.3 Million Price Tag on CIRM Chair and Vice Chair Compensation

IRVINE, Ca. -- An executive salary deal involving CIRM Chairman Robert Klein and a paid vice chairman, quite likely the man now heading the state Democratic Party, could cost the California stem cell agency something on the order of $1.3 million a year.

That includes $840,750 in salary and 50 percent of that figure to cover fringe benefits for both men. The $1.3 million total also assumes that both Klein and the vice chairman receive the top end of the salary range for those positions: $508,750 for Klein and $332,000 for the vice chairman.

Art Torres, head of the state Democratic Party, veteran politico and former state lawmaker from the Los Angeles area, has been nominated by state Treasurer Bill Lockyer to fill the vice chairman slot. Torres apparently has the support of two other state constitutional officers, who are the individuals who nominate vice chair candidates. Gov. Arnold Schwarzenegger, who has expressed "deep concern" about the executive salary proposals, has not yet announced his nominee.

John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., said he has heard that Torres will expect a salary. Torres' term as chairman of the Democratic Party expires in April. According to what Simpson has been told, Torres would work for free until that date.

We have queried Torres concerning the matter and will carry his comments when we receive them.

The CIRM board votes on a vice chairman from among the nominees put forward by the state constitutional officers. A contested election, involving a candidate who would not accept a salary vs. one who would, could put Klein in an awkward position. His salary is likely to be approved by CIRM directors meeting here this afternoon and Wednesday, and it would be unseemly to have the multimillionaire chairman taking pay while the vice chairman does not.

The actual vote on the vice chairmanship is not expected any sooner than late January or possibly later.

Based on the last figures we saw for the CIRM budget, it does not appear to include funds for compensation for the chairman and vice chairman.

State Democratic Party Chief Nominated as CIRM Vice Chair

The head of California's Demoratic party, Art Torres, has been nominated as a candidate for the vice chairmanship of the state's $3 billion stem cell agency.

State Treasurer Bill Lockyer, also a Democrat and Torres colleague, offered the former state legislator to fill the post, which carries a salary range of $180,000 to $332,000. If elected by the board, Torres would take the position vacated by Ed Penhoet, who resigned to assume a non-paying membership on the board. Penhoet did not accept a salary.

It was not clear whether Torres(see photo) would accept a salary or continue in his position as chairman of the California Democratic Party should he be elected to the CIRM post.

Terri Somers of the San Diego Union-Tribune reported on the nomination this morning. She wrote:

"The institute's board will select a new vice chairman from a group of candidates nominated by the state's constitutional officers. Torres said yesterday that he also expect to be nominated by Lt. Gov. John Garamendi and Controller John Chiang."

In a letter Friday to CIRM Chairman Robert Klein, Lockyer said,

"Art has always been a champion for funding basic scientific research, including early funding for AIDS research. After leaving public office, he continued his patient advocacy serving on the boards of the AIDS Healthcare Foundation and OneLegacy organ transplant foundation. As chair of the California Democratic Party, he led it in endorsing Prop. 71 and ensured the measure was prominently highlighted in campaign material to over a million California voters."

Torres had a 20-year career as state senator and assemblyman, representing an area in Los Angeles. His leadership positions in the Legislature included chairmanship of the Assembly Health Committee.

Once rejected $1.7 million grant is resurrected

In "a highly unusual" situation, directors of the California stem cell agency this week are likely to approve a $1.7 million grant application that was pulled off a previous round after scientific reviewers turned it down.

In June, CIRM President Alan Trounson removed the application from the list of those being considered for new cell line grants. During a brief exchange at the June meeting of CIRM directors, Chairman Robert Klein said that "there was a problem with it, that it technically has to be re-reviewed." Trounson said he directed that the application be reexamined after he discussed it with the chairman of the review group, Stuart Orkin of the Dana Farber Institute.

There was no further comment in June by CIRM directors on the proposal, numbered 642-1 and labeled "derivation of new ICM-stage hESCs."

In the initial consideration of the application, reviewers raised several scientific questions and concerns about the proposal, according to the summary posted on the CIRM web site. No scientific score for the application was disclosed by CIRM, which considers scores for rejected proposals not suitable for public release.

One member of the Grants Working Group, Chad Cowan of Harvard, was barred from participating in review or discussion of the applicant because of a conflict of interest. CIRM did not specify the nature of the conflict.

The latest summary of the review of the application says that its "technologies and methodologies are not novel and not particularly innovative." But the review also said other aspects of the proposal are "laudable" and that it has "significant potential."

The application was given a scientific score of 80 out of a possible 100. No reviewers were excluded from participation in the most recent review of the application. Cowan is currently listed as an alternate member of the Grants Working Group. It is not known whether he participated in the latest review of 642-1.

The identity of the applicant and his affiliated institution is being withheld by CIRM. The agency makes a practice of withholding the names of successful applicants until the full board acts, although exceptions to the policy have come up. Names of rejected applicants are never released.

Last July, we asked Don Gibbons, CIRM's chief communications officer , for more information on the re-review, which may be the first such public case.

Our questions included:

"Is the grant being re-examined in connection with provisions in the grant administration policy that state that appeal grounds are 'strictly limited to circumstances in which a demonstrable financial or scientific conflict of interest' played a role?

"If not, what sort of additional information justified redoing the review?

"Did the information come to CIRM first? Who generally provided the information: the applicant or ??? Was it forwarded with or without a recommendation to the chairman of the Grants Working Group? What action did he take?"

Gibbons replied at the time that it was the "president's decision." Gibbons said,

"This grant was a highly unusual circumstance; something that has not happened before and something we don’t expect to happen much, if ever, in the future. We are not treating it as an appeal through the GAP. New information came to us, and the president, in consultation with the chair of the working group, decided that it merited sending the grant back to the working group for further review."

Following approval of the grant Tuesday or Wednesday, CIRM is expected to release the name of the researcher and the institution.

(Correction: An earlier version of this item identified the chairman of the Working Group as Dana Orkin. His correct first name is Stuart.)