Angell, Corruption and Medical Research

The former editor in chief of the New England Journal of Medicine weighed in on the “smell of corruption” in medical research earlier this year in a piece that has some implications for the California stem cell agency.

Writing in the New York Review of books on Jan. 15, Marcia Angell(see photo), now a senior lecturer at the Harvard Medical School, said,

“After much unfavorable publicity, medical schools and professional organizations are beginning to talk about controlling conflicts of interest, but so far the response has been tepid. They consistently refer to ´potential´ conflicts of interest, as though that were different from the real thing, and about disclosing and ´managing´ them, not about prohibiting them. In short, there seems to be a desire to eliminate the smell of corruption, while keeping the money. Breaking the dependence of the medical profession on the pharmaceutical industry will take more than appointing committees and other gestures. It will take a sharp break from an extremely lucrative pattern of behavior. But if the medical profession does not put an end to this corruption voluntarily, it will lose the confidence of the public, and the government (not just Senator Grassley) will step in and impose regulation. No one in medicine wants that.”

That was Angell´s conclusion after a lengthy exploration of the links between drug companies and researchers. As for CIRM, it has a raft of issues involving conflicts of interest and is now on a course that will link it ever closer to industry.

The question is whether the state agency will become the handmaiden of biotech – in effect captured by the industry. The agency should and must work with industry. But business has much different primary objectives than any state agency. Profits must come first for any business. Otherwise, they will cease to exist. In the case of CIRM, its first responsibility is to the people of California. And as we are now seeing on the national scene, the paramount interests of business have not necessarily served the people well.

Angell´s article is a well-documented look at how the people who pay the piper call the tunes. It is well worth reading along with a Feb. 26 exchange in the letters column with some of the folks identified in her piece.

(Editor´s note: We came across the Angell piece in an odd fashion. We discovered it in a pile of old boating magazines, romance novels and mystery potboilers at an informal book exchange for sailors in Mazatlan. Her article is certainly not the regular sort of reading for most of the salty dogs of the sea.)

Time Now for CIRM to Let Sunshine In

California Gov. Arnold Schwarzenegger today set a fine example of openness – one that should be emulated by the California stem cell agency.

His action follows by one day another sterling case of transparency – this one involving a member of the board of directors of the California stem cell agency, Philip Pizzo(on right), whose main job is running the Stanford School of Medicine.

Both men acted to maintain and bolster support for important societal institutions at a time when public confidence in our leaders has been sadly eroded.

It took a bit of a scandal -- disclosed by the Los Angeles Times -- to force the governor to make his move. But today, Californians can check out for the first time online the economic interests of the top state executives appointed by Schwarzenegger. They can also view the officials´ monthly travel expense reports. (The information is a public record, but has not been easily accessible previously.)

The governor put the material online after Michael Rothfield of the Times reported that several top members of his administration charged taxpayers thousands in airfare, hotel and meal costs with little oversight. Two members have since left.

In announcing the new online information, the governor said,

“Since taking office I have taken steps to make government more accountable and responsive to the people. By making the economic, gift and travel information of the senior members of my administration easily available online, we are taking unprecedented steps to open up our government to the people – yet another critical step toward more government transparency.”

On Wednesday, Pizzo announced that Stanford will be posting online “the medical- and research-related consulting activities for some 1,200 physicians and faculty affiliated with the medical school.”

Pizzo, dean of the medical school, said,

"Industry collaborations are critical to furthering research efforts and innovative patient care, but at the same time, concerns over these activities are eroding the public trust. I hope that steps to increase transparency will resonate with those we serve, educate and work with — and reinforce that trust."

The Stanford medical school has been in the forefront of moves to increase transparency in medical research. In 2006, Stanford physicians were barred from ”accepting biomedical industry gifts, including drug samples, anywhere on the medical center campus or at off-site clinical facilities where they practice,” the school says.

The California stem cell agency has promised the highest standards of openness and transparency. In some ways, it is quite open. But it is an agency that was constructed with huge built-conflicts. Its board of directors is dominated by folks from the institutions that have been the chief beneficiaries of CIRM´s largess. As of last October, 18 institutions with representatives on the board (past and present) had received $552 million in CIRM grants.

The political reality is that the structure of the agency is not going to change. Given that fact, it behooves CIRM to lay all its cards on the tables. At least that way, the public knows who stands to benefit from the billions CIRM is giving away at a rate of $24,000 an hour.

CIRM should make the statements of economic interests from its directors and top officials available online in easily searchable and downloadable databases along with their travel and other expenses.

The agency should also disclose the economic interests of its scientific grant reviewers. Although they make the de facto decisions on grants, the reviewers´ statements of interest are withheld from the public and the scientists who are the subject of their scrutiny. That is a situation that naturally generates suspicion, especially since their deliberations are conducted behind closed doors.

John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., wrote about the Stanford action on his organization´s blog. Simpson called for more disclosure from CIRM. In a comment to the California Stem Cell Report, Simpson said,

“Bob Klein (CIRM chairman) talks about transparency. He ought to do something about…. Working group members aren't required to file any public disclosure now and that is outrageous. If the governor can post monthly travel reports, so can the stem cell agency. Doing less means that claims of transparency are nothing more than empty rhetoric.”

CIRM is currently a bit strapped for cash, but the governor´s office has already done the hard work of setting up online templates for the disclosure statements. It would take little more to fill in the information.

Evidence of public´s current disenchantment with our leading institutions can be read and heard every day. CIRM can help to restore confidence by following the governor´s lead. CIRM will also help itself by acting in a way that demonstrates its responsiveness to concerns about its conduct and openness.

Comments on the California Stem Cell Report

Late last night, an anonymous comment was posted on this site that contained deeply, deeply offensive language concerning President Obama.

I removed the comments today within minutes of learning of them. I apologize for their appearance and profoundly regret their presence on this website. The comments had no place on this blog or in the discourse about the events in our country.

I also want to share with our readers the current state of the ¨comment¨ function on the California Stem Cell Report. A few years back, I began with un-moderated comments. But libelous and offensive anonymous postings appeared concerning one of the spouses in a marital dispute, who happened to be involved in the stem cell business. As a result, I began moderating comments.

Virtually all of the comments since then have been civil and within the bounds of reasonable discourse. A few amounted to spam. Moderation allowed me to prevent them from ever being posted.

A week or so ago, I removed moderation in hopes of stimulating additional commentary and dialogue. A couple of spam items surfaced and were removed. Then this latest ugly comment came in.

I believe it is an aberration and do not want to let the hate-mongers stifle public debate. So I am going to continue un-moderated comments, at least for the time being. My policy is to allow virtually all comments with the exception of offensive or obscene statements such as the one posted last night. I believe that robust criticism of this blog, its writer as well as others involved in California stem cell matters is to be encouraged. Libel and spam, of course, are not okay.

If you have any thoughts on all this, you can post them as comments by clicking on the word "comments" at the end of this item or you can send them to me privately at djensen@Californiastemcellreport.com.

Novocell Patents and Potential Profits

The latest developments involving Novocell, a San Diego, Ca., firm, and its stem cell patents are explored today in a piece by Terri Somers in the San Diego Union-Tribune.

She reported that the privately held firm "may have found new ways to make money from its technique for coaxing human embryonic stem cells into insulin-producing pancreatic cells." Somers recapped Novocell's patent picture and reported that the company announced on Tuesday that it "received a patent that essentially gives it control over all endoderm cells made from human embryonic stem cells."

She quoted Liz Bui, Novocell's director of intellectual property, as saying the firm hopes to collaborate with larger firms that have previously shied away from stem cell research.

Somers also noted the broad nature of the Novocell patent. She wrote:

"Many patents are for a method, or scientific process for making something, sort of like a high-tech recipe.

"The patent Novocell received is for composition, meaning it is not for how to make the endoderm cells, but the actual cells 'the product of the recipe.'"

She said that such patents have been controversial, citing the example of those held by Jamie Thomson of the University of Wisconsin. Some have argued that the patents on Thomson's work are so broad that they impede science.

CIRM Enters Battle Over Textbook Guidelines

Deciding what goes into the millions of textbooks used by California school children is a tedious and arcane task. But it is also one that is, at times, fought bitterly and intensely, albeit well away from the public gaze.

The California stem cell agency now seems ready to join that fray.

Reporter Ron Leuty of the San Francisco Business Times wrote this week:

"Backed by the state Board of Education — as well as powerful lawmakers — the California Institute for Regenerative Medicine is ready to reshape the state’s science curriculum and direct a rewrite of textbooks to include sections on stem cells."

Leuty said that the board, which deals with matters in grades kindergarten through 12, voted on March 11 to include stem cell science in the science curriculum.

(One might wonder whether it ever was excluded. But no matter.)

What the action does is set the stage for the state's Curriculum Commission to set guidelines for textbook publishers who peddle their wares for California pupils. Leuty also wrote that that the commission, with the help of CIRM, is charged with setting up a pilot stem cell program in high schools in 2011.

CIRM says it is all about jobs, tying education to training for work in the stem cell industry or related fields. But for others, it is about ideology and "truth." At least that's the way Katie Short of the Life Legal Defense Foundation of Napa, Ca., put it. She told Leuty,

"We would be for the truth being told."

Speaking as one who covered education for a couple of years (including the state Board of Education), we can testify that Short and like-minded folks (the intelligent design crowd) are likely to muster a strong presence as stem cell textbook guidelines are promulgated. It is not a battle for the faint of heart and may require that CIRM hire an outside consultant to be effective.

LA Times Column Rips CIRM as Riddled with Conflicts and Sucking Up Precious Dollars

The first sentence in the article in the Los Angeles Times, California's largest circulation newspaper (1.2 million readers), says,

"In the annals of wrongheaded things done with the best intentions, the California stem cell program has always been in a category of its own."

And that's just the beginning. Next come rife conflicts of interest, spotty public disclosure, a "persistent ethical morass" and a multiplying potential for waste. Not to mention the 2004 ballot initiative that created CIRM through a political campaign of "exceptional intellectual dishonesty," led by the man who is now chairman of the $6 billion research program, Robert Klein (see photo).

The scathing piece was written by Times columnist Michael Hiltzik for Monday's edition of the Times, which says it has 1.2 million daily, generally well-educated readers. The home page of Times website, which has more than 11 million unique visitors a month, also linked to the article.

The activities of the California stem cell agency have rarely graced the pages of the Times. So CIRM is likely to be new subject to many, if not most of its readers, making it easier for a column such as Hiltzik's to have a significant, opinion-shaping impact.

Hiltzik makes his point of view abundantly clear. He writes that CIRM "threatens to suck up precious fiscal resources of a state with none to spare and is rife with conflicts of interest."

He continues,

"The institute is tangled in a persistent ethical morass. From the start, its safeguards against conflicts of interest by members of its 29-person governing board were sketchy, and provisions for vigorous debate over its goals and methods were nil."

Hiltzik says CIRM director John Reed should have been ousted from the board for attempting to overturn rejection of a grant to the organization he heads, the Burnham Institute. Hiltzik quotes figures from the California Stem Cell Report that show 18 institutions with representatives on the board (past and present) have received $552 million in CIRM grants as of last October.

Hiltzik writes,

"Lacking any truly independent members, the board is dominated by Klein and devoid of 'genuine debate,' observes UC Berkeley Law professor Kenneth Taymor, who spent months studying the body. Indeed, reading transcripts of the board's sessions, one sometimes gets the impression that the only vigorous debate among the members involves which historical figure Klein more resembles, Albert Schweitzer or Mahatma Gandhi."

Hiltzik also discusses the ongoing shift at CIRM towards product development. He quotes Arnold Kriegstein of UC San Francisco as saying he fears the move is motived by a "desire to come up with a real clinical triumph they could claim credit for. I'm concerned that in the rush to get there they may be spending a fair amount of funds on projects that are just not ready yet."

There is much more, including a defense of CIRM's strategy by its chief scientific officer Marie Csete.

Hiltzik's observations cannot be written off as the frothings of a journalistic lightweight. The author of three nonfiction books, he shared a Pulitzer Prize in 1999 for reporting on corruption in the entertainment industry. In 2004, he won a Gerald Loeb Award, one of the top national honors in financial journalism, for his columns. Earlier this month, he was a co-winner of another national business reporting prize for a Los Angeles Times series called "Shedding Risk."

It is safe to say that Hiltzik's latest column will not be warmly received by CIRM. It will add fuel to the state's Little Hoover Commission's investigation of CIRM. It will feed legislative efforts to ensure that Californians have affordable access to stem cell therapies that result from CIRM-funded research. And it will hamper both Klein's efforts to privately market state bonds to bail out CIRM and his lobbying efforts for a $10 billion federal, biotech stimulus package.

(Editor's note: What do you think about the Hiltzik column? You can make your comments by clicking on the word "comment" below. The comments are unmoderated and can be totally anonymous. Google, which houses this blog, makes it impossible to identify the authors in such a case. Or you can send your comments to djensen@californiastemcellreport.com for posting.)

Prieto Dismayed by Bee Editorial on CIRM

Francisco Prieto is a Sacramento area physician who serves on the board of directors of the California stem cell agency.

Today he took on his hometown newspaper, The Bee, in connection with its editorial on March 18 deploring the election of two vice chairmen to the board of directors.

In an op-ed piece in the newspaper, Prieto said he was surprised to see it endorsing a Republican from Southern California (Duane Roth) for any statewide position.

Prieto wrote,

"Given The Bee's more usual political inclinations, it seems odd that you would suggest one candidate is superior simply because he is sufficiently well off to decline the salary this position normally carries. No employer has the right to insist an employee work for nothing, and that certainly includes the state of California. It was outrageous to imply that the superior candidate for any position must be the one wealthy enough to forgo a salary.

"Does The Bee really believe that those Californians – most of us – who need our salaries to support our families do not have the right to participate on California boards and commissions? That is a remarkably elitist and anti-democratic point of view.

"I was taken aback by your closing lines: 'the ICOC(the CIRM board) is neither independent, nor a group of citizens …' I can understand questioning our motives and integrity – that comes with the territory. But isn't revoking our citizenship a bit harsh?"

Science Magazine on the State of CIRM

The California stem cell agency "is scaling back, rethinking its priorities and looking at how to mesh its activities with those that will soon be funded by the National Institutes of Health," according to Science magazine.

Writing in the March 27 edition(subscription required), Constance Holden provided an overview of the current status of the beleaguered $3 billion agency. It will run out of money next fall unless it can privately market California state bonds.

Holden characterized as "bold" the bond sale effort by CIRM Chairman Robert Klein, whom she described as "perennially optimistic."

Holden also wrote that John Robson, CIRM vice president for operations, said:

"...(O)ther CIRM officials 'are not as optimistic as Bob' about finding buyers, but they should be able to carry through their modified plans if sales bring in at least $200 million. Even then, he says, grants for basic research will have to be reduced, from $60 million to $20 million, until at least the end of 2010."

Holden also discussed the $210 million disease team grant program, whose deadline for applications was Thursday.

Holden wrote:

"Some scientists worry that the emphasis on applications is coming too soon. 'I am concerned that some of this rush to the clinic is premature,' says Arnold Kriegstein of the University of California, San Francisco. 'My concern is … they’re taking risks with potentially very little gain.'"

The headline on the Science magazine article said, "CIRM Close-Hauled, Seeks Bonds to Sustain Headway."

For those not familiar with sailing terminology, "close-hauled" refers to a point of sail upwind or "to weather." It is often the most uncomfortable point of sail with the boat pounding into large waves and heeled over so far that the crew must hang on constantly.

The reference also brings to mind another saying from the world of the sea, "Gentlemen never sail to weather." Our comment: Sometimes they don't have a choice.

Luring CIRM Bond Buyers: What Cost to the State?

What sort of interest rates will the California stem cell agency have to offer to privately sell taxable state bonds to fill its research coffers?

They could be a bit higher than the 5.5 percent or so that CIRM Chairman Robert Klein has discussed publicly.

That's because of the juicy rates provided to investors this week on tax-exempt California general obligation bonds.

Here is what Liam Denning wrote today in the "Heard on the Street" column in the Wall Street Journal.

"California's issue was priced for success, at an effective coupon of 6.1% on its 30-year bonds. For Californians, that equates to a taxable yield of more than 9% -- a spread of more than 550 basis points over equivalent Treasurys.

"Little wonder individual investors scooped up half the issuance, helped along by a high-profile advertising campaign. But the risk-reward balance was the main driver. California may be just a single-A credit, but in muni-land that still implies ultra-low default rates and a call over the state's considerable tax-raising powers. The prospect of tens of billions of federal stimulus dollars provides further comfort -- and probably precludes the need for more formal intervention.

"Somewhat perversely, the very prospect of higher taxes to refill state coffers makes munis more attractive to individuals, particularly the growing number of retirees burned by the stock market crash."

Of course, the private sale of the bonds is a different matter than the recent bond sale. But it is not all clear that potential purchasers of CIRM bonds would be willing to accept less than what was provided this week.

Higher interest rates are not a trivial matter for the state. CIRM is generally referred to as a $3 billion agency, which refers to its bonding and funding capacity. However, during the Prop. 71 campaign, estimates of the total cost, including interest, doubled that to $6 billion. That figure assumed the use of tax-exempt bonds. Using taxable bonds could add another $700 million to the $6 billion, according to one estimate.

None of the bonds that have been issued thus far for CIRM are tax-exempt. The whole issue of what was promised during the campaign and Bob Klein's statements on tax-exempt bonds led to something of a flap a few years ago involving allegations of deceit. You can read about it here.

Whatever the cost, CIRM does not appear to have much of a choice other than to privately market the bonds. The alternatives appear to be a shut-down or severely curtailing its operations.

Big California Bond Sale Augurs Well For CIRM

The state of California sold a whopping $6.4 billion in bonds today, a financial move that should help to give a positive spin to efforts to sell state bonds privately to finance the state's beleaguered stem cell research agency.

California was originally scheduled to sell $4 billion in general obligation bonds, but Bloomberg News' Jeremy Cooke reported that dealers boosted the sale by 64 percent and completed it a day earlier than expected.

Individual investors snapped up $3.2 billion in bonds before they were offered to institutional investors.

Interest rates were about 0.2 percent higher than similar securities and ranged from 3.2 percent to 6.1 percent, Cooke reported.

The high interest rates made the bonds attractive but will cost the state more.

CIRM plans to use taxable state bonds, as opposed to the tax-exempt bonds that were sold today. That means they will have to offer higher interest rates than those offered today.

The stem cell agency relies on state bonds for its funding. It will run out of cash next fall unless it can successfully market bonds privately. The state has told the agency it has a backlog of needs and CIRM's are well down the list.

Stem Cell Affordability Legislation Introduced in State Senate

Legislation aimed at ensuring affordable access by Californians to therapies developed as a result of taxpayer-funded stem cell research is once again before California lawmakers.

This year's measure is SB343 by Sen. Elaine Alquist, D-San Jose, and is now before the Senate Health Committee, which she chairs. (Alquist is at left with a friend who is now in the White House.)

A somewhat different version of the bill was vetoed by Gov. Arnold Schwarzenegger last year after it was opposed by the California stem cell agency. However, last year's legislation, SB1565, won approval of both houses by enormous margins, 37-1 in the Senate and 64-7 in the Assembly.

Enormous margins are required to enact any legislation affecting CIRM because Prop. 71 specified that 70 percent approval of both houses is necessary to enact even the tiniest changes in the law, such as removing the requirement that the chair of the agency is responsible for the CIRM annual report. The unprecedented, super, supermajority requirement does not exist for any other California legislation, including enactment of a budget or imposition of taxes.

Alquist's bill has been changed somewhat from SB1565 to permit a waiver of the affordability requirement in some unusual cases. One of CIRM's objections last year was that SB1565 was inflexible.

The CIRM directors' Legislative Subcommittee will consider its position on SB343 at a meeting March 31. Teleconference locations where the public can participate include San Francisco (two sites), Healdsburg, Washington, D.C., Menlo Park, Palo Alto, Calistoga, Elk Grove and La Jolla. Specific addresses can be found on the agenda.

Also up for consideration on March 31 is SB471 by Sen. Gloria Romero, D-East Los Angeles. The measure states that all education policy makers in the state, including those involved with kindergarten through the 12^th grade, should collaborate with CIRM to advance its educational initiatives. Those include an upcoming CIRM program on stem cell science and regenerative medicine.

Alquist's bill has been referred to her Health Committee. Romero's has not yet been assigned to a committee for hearing.

Klein Promoting Stem Cell Issues in Washington

This item has been removed. The Robert Klein involved in it is not connected with the California stem cell agency, we have been told.

Snippets: CIRM Bonds, Clinicial Trials and TV Coverage

California Bond Picture – The state is moving ahead to unfreeze $500 million in funds to keep bond-funded projects on track. The Pooled Money Investment Fund approved the action on Wednesday, helping to restore a partial sense of normality to the Californa bond scene, according to John Myers of KQED. That's a tiny bit of good news for CIRM and its efforts to market bonds privately. Tom Petruno of the Los Angeles Times also reported today about the sale of California tax-exempt bonds next week to individual investors with interest rates of 5 percent or so. That makes them extremely attractive to California residents, who do not have to pay federal or state taxes on the interest. However, CIRM's bonds will be taxable, which will push their rates higher, costing the state more but making them appealing investments to the enterprises that may purchase them. No mom-and-pop sales on the stem cell bonds.

CIRM Board Audiocast – The CIRM board meeting drew 165 listeners last week to its audiocast, with 121 using the web address, the stem cell agency told us. The 45 others used a phone connection. The figure compares to 108 at the highest level at the January board meeting, the first time an audiocast was available. This is a worthwhile effort by CIRM, offering much wider access to its proceedings. Normally a public audience of about one-tenth the size of the audiocast listeners actually attends CIRM board meeting. However, the audiocast did suffer last week from a lack of promotion. The notice of the audiocast needs a mention on CIRM's home page for at least several days proceeding the board meeting. And it wouldn't hurt to get the various constituent groups to let their members and other interested parties know that an audiocast is available.

Secondhand Smoke on CIRM – Robert Klein, chairman of the California stem cell agency, came under heavy fire this week on the Secondhand Smoke blog by Wesley J. Smith, an author and self-professed "trouble maker." Smith said Klein's leadership was "reminiscent of the entire financial mess at the federal level in a microcosm," among other things. Also this week, The Sacramento Bee carried a less vitriolic op-ed article by Smith on stem cell issues.

TV Time – The California stem cell agency scored some significant TV time in San Francisco on Tuesday with a 2 minute and 43 second piece. The ABC station, KGO, aired the story, which was keyed to a CIRM meeting aimed telling the public more about stem research. Carolyn Johnson did the narration. Stanford's Renee Reijo Pera held forth. Unfortunately Johnson reported that research at Stanford is funded "privately" by CIRM. As we all know, CIRM is in a very public funding situation. Nonetheless, TV coverage of CIRM is rare, and the agency should be tickled with the story.

CIRM on Clinical Trials – A 20-page summary of last month's clinical trials workshop conducted by CIRM is now available online. Readers would want to couple it with the transcripts from the session of the Standards Working Group at which it was discussed. They can be found here and here. The use of somatic cells and reporting requirements for oocyte donation were also part of the meeting.

Torres-Roth Election: An Adroit Move for CIRM

Without so much as lifting a finger, Art Torres has already had a salubrious financial impact on the California stem cell agency.

Last week, Torres(at left), the leader of the state Democratic Party and a former, longtime state legislator, was elected co-vice chair of the agency. As a result, CIRM has dropped its efforts to hire an in-house legislative relations staffer. That position has a salary range that tops out at $138,800. Torres is being paid $75,000 for halftime work.

On Tuesday, we noticed that the job opening was missing from the CIRM web site. We queried Don Gibbons, chief communications officer, whether the position was filled. He responded,

"We are saving money. The position is not needed with Art here."

Dropping the recruitment effort is modestly beneficial financially now and for the foreseeable future, given the agency's financial plight. But CIRM is chronically understaffed – capped at 50 persons by a nearly immutable state law. The agency relies heavily on outside contractors for its work – a situation fraught with well-documented financial and managerial peril at any level of government.

As for the election of Torres and Duane Roth as dual vice chairs, we think it was an adroit move, one that will benefit CIRM, certainly in the short term. A potential political problem was avoided. Much-needed internal heft was added to CIRM's governmental relations efforts along with its relations with the biotech industry. Torres will also bring a long-needed, experienced voice in governmental affairs to the highest levels of CIRM.

But as in all things, the devil is in the details of execution. If Roth and Torres butt heads significantly, either sooner or later, it could be a serious diversion from CIRM's main objectives. That is not to mention whether CIRM Chairman Robert Klein, who controls what the men do, can delegate responsibility and authority effectively without micromanaging their work. That goal for Klein should be high on the evaluation priorities by the CIRM directors' Governance Subcommittee.

Earlier this week, The Sacramento Bee editorialized that the dual vice chair situation is a poor idea because it makes it harder to check Klein's broad powers. A single vice chair would be more powerful, The Bee argued. There is a certain logic to that argument. However, the vice chairs are largely Klein's creatures. He is the one who is charged with setting their agendas, although the board of directors has a role as well. Should Klein feel that either Roth or Torres are impinging on his prerogatives, we have no doubt that he will move to freeze them out.

On the other hand, Torres is a veteran political operator and will soon develop his own constituencies and alliances both within the board as well as with outside organizations and lawmakers, both in Washington and Sacramento. Roth also already has his own constituencies within the biomedical industry and on the board.

One final note on Torres and his salubrious impact: Any savings resulting from leaving vacant the governmental affairs position will be minimized by Torres' travel and other expenses, which we assume will be relatively high and involve multiple trips to the nation's capital.

Fresh Comment

Lawrence Ebert has filed a comment on the "Sharing the Weath" item. Among other things, he says,

"An issue with the 'paying for things twice' viewpoint is that the costs of 'making the invention' (the research and patenting costs) are generally DWARFED by the development/marketing costs. If someone can't get return on THOSE costs, they won't invest."

Fresh Comment

John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., has filed a comment on the "AIG Share-The-Weath." Among other things, he invokes the late Adm. Hyman Rickover in support of requiring recipients of federal research grants to share any profits that might result. And he cites Jennifer Washburn's book, "University Inc.: The Corporate Corruption of Higher Education." Simpson also wrote on the blog on his organization's web site that a change away from the old, business-first political mood "is necessary if we're to restore economic equality in this country."

Faster Posting of Comments Enabled on This Web Site

In order to encourage a dialog on this web site, we have removed the comment moderation feature from the California Stem Cell Report. Your comments will now be posted directly and automatically to the site. You can post them anonymously, but we encourage all to post using your own names.

If you run into any difficulties using the comment function or do not see your comment posted after 10 minutes or so, please let me know via email at djensen@californiastemcellreport.com. You can also send comments for posting to that email address. I will be glad to put them up. Or if you want to excoriate me privately or provide information, you can use that same email address.

Timing Right for Sharing the Wealth on Federal Stem Cell Research

How are those folks over at 70 Pine Street in New York City helping those at 1750 Ocean Park Boulevard in Santa Monica, Ca.?

Unknowingly, they are creating a ripe opportunity in the nation's capital to extract a piece of the stem cell action from the recipients of government largess.

The players at 70 Pine are the executives at AIG, fast supplanting Enron as the most reviled company in modern American history. The Santa Monica address houses the offices of Consumer Watchdog, a nonprofit organization that has called for sharing the profits from any federally funded stem cell or other research.

A year ago, such a pitch would have died aborning. Today, given the scandals concerning AIG and other corporate failures, the political mood has changed and will change more – all in the direction that no one in the business community will like.

Trust in American business may be at its lowest point in history among the "informed public," according to one poll. Only 38 percent say they trust business to do the right thing, down 20 percent from last year. Presumably the figure would be even lower among the general public.

In a letter to President Obama, last week, Consumer Watchdog cited the California stem cell agency as an example for the feds to emulate in terms of sharing the wealth from any therapies that result from government-funded research. Under certain circumstances, CIRM grant recipients must pony up some cash if they bring a product to market profitably. No such requirement exists for the tens of billions of dollars handed out by the NIH.

The bailout brouhaha creates a golden opportunity for Consumer Watchdog and like-minded organizations to enact share-the-wealth requirements for federal research grants. The logic is compelling. Venture capitalists demand their share of the booty when they fund individuals or businesses. Why shouldn't the government, especially in these difficult financial times.

Consumer Watchdog and its allies could even make the case for attaching such requirements to the $10 billion biotech stimulus package being pushed by CIRM Chairman Robert Klein and the powerful Podesta lobbying group.

CIRM Director Sewell Criticizes Bee Editorial

CIRM Director David Serrano Sewell today posted a comment on The Sacramento Bee web site defending the election of Art Torres as a co-chair of the agency's board.

Sewell, who last week described Torres as a personal mentor, also challenged the newspaper editorial's comments on the power wielded by CIRM Chairman Robert Klein. Sewell wrote in part,

"When will your obsession with Klein end? While it's a source of amusement for many, it's getting old. Frankly, it borders on stalking."

Sewell also said,

"Torres has spent his entire career speaking the truth to power, and that won't change. Who better to serve as a check, a career public servant or a big pharma executive? I wonder what the public thinks."

If the other comments on The Bee's editorial today are to be taken as representative of the public – and they are not – they do not think much of Torres, CIRM or the governor.

(Editor's note: An earlier version of this item carried a photo of Sewell. We have removed it as his request.)

The Bee: Dual Vice Chairs at CIRM Enhance Klein's Power

The Sacramento Bee today said the election of two vice chairs on the board of the California stem cell agency gives its chairman, Robert Klein, "more power than ever."

The Bee made the comment in an editorial that also said that the CIRM board of directors – formally and fancifully known as Independent Citizens Oversight Committee -- is far from independent.

The editorial said splitting the vice chair position between Art Torres and Duane Roth meant that it would be difficult for the vice chair to serve as a check on Klein's broad authority and power. The Bee noted,

"If the stem cell institute had a normal structure, with a strong president handling administrative duties, the selection of the institute vice chair would be less consequential."

The Bee concluded,

"It's a further demonstration that the Independent Citizens Oversight Committee is neither independent, nor a group of citizens, nor much of an overseer of $3 billion in public monies."

Early this morning, only one Bee reader had commented on the editorial. The anonymous reader said,

"What are we to expect? It is only government money and does not belong to anyone, so why not use it to feather the nest of termed out favorites of the ruling class? "

The reader appeared to be referring to a running flap in California over the appointment by the governor and others of termed-out legislators to paid positions on various state boards.

For the record, the print version of The Bee, the only daily newspaper in the state Capitol, has not carried a story on the election of Roth and Torres. A brief mention did appear on one of The Bee's blogs.

The lack of coverage probably had something to do with the paper's shrinking staff. Ten days ago, The Bee laid off 128 employees, 11 percent of its staff. Like other newspapers in both the McClatchy chain and around the country, this was only the latest. Since June, The Bee has eliminated positions for 301 men and women, 26 percent of its staff. Sixty-five jobs have been lost in the newsroom, which now numbers 190 persons.