Hoover Commission Recommendations

Here is the text of the recommendations for CIRM from California's Little Hoover Commission:

Recommendation 1: The Legislature should restructure the CIRM governing board around principles of efficiency and transparency.

• The Legislature should amend the Health and Safety Code to reduce the board size, shorten terms and restructure membership.
• Decrease board size to 15 from 29. Keep diversity of membership but add independent voices to the board: five patient advocates from unspecified disease groups, two independent business leaders and two independent scientists with no ties to CIRM-funded institutions; two University of California officials, one university official (non UC); two private sector biotechnology executives, and one leader of a California research institution.
• Reduce terms to four years for all members.
• The Legislature should amend the Health and Safety Code to streamline the appointment process for CIRM board members.
• Allow the governor to appoint 11 of 15 board members, subject to Senate confirmation. Legislative leaders should continue to appoint two members. The UC system presidentshould appoint two UC representatives.
• The Legislature and CIRM should realign the roles of chair and president to eliminate overlapping authority and to enhance clarity and accountability.
• The Legislature should modify all statutory references inthe Health and Safety Code to the nominating process, job duties and qualifications for the chair and vice chair to invest this authority with the board.
• The CIRM board should elect a chair and a vice chair from within the existing board, subject to set terms and conditions for re-election/removal.
• The CIRM board should clarify that the president manages all day-to-day operations.
• The Legislature should amend the Health and Safety Code to rename the board to more accurately reflect its composition. The Independent Citizens Oversight Committee should be called the Board of Directors.
  

Recommendation 2: The Legislature and CIRM should improve efficiency and transparency for distributing grant and loan funds.

• The Legislature should amend the Health and Safety Code to remove the 50-employee cap on staffing.
• The Legislature should amend the Health and Safety Code to remove the 15-person limit on peer reviewers. CIRM should modify its triage plan to review grants internally.
• CIRM should explore options for greater disclosure of the peer review process.
• CIRM should poll CIRM’s peer reviewers anonymously about their willingness to participate in the review process if their financial disclosure statements are made available
• to the public. The results of this poll should be made public.
• CIRM should conduct a trial grant application round that identifies all applicants.
• CIRM should provide full grant evaluations to applicants.
• CIRM should amend all meeting minutes to specify individual board members’ votes and recusals, and continue the practice moving forward.

Recommendation 3: The CFAOC and the CIRM governing board should use their authority to enhance oversight.

• The Citizen’s Financial Accountability Oversight Committee (CFAOC), chaired by the State Controller, should exercise its existing authority, or be statutorily authorized if necessary, to conduct performance audits and hold regular meetings to review CIRM’s programmatic and strategic performance, in addition to overseeing CIRM’s annual financial audits.
• The governing board should hold its members accountable by adopting removal provisions in its bylaws.
  

Recommendation 4: The CIRM governing board should begin planning for CIRM’s future through an open process.

• The CIRM governing board should create succession plans for board leadership.
• CIRM’s strategic plan should provide clear transparent
• CIRM should develop a transition plan for the eventual expiration of bond funding.

Excerpts Hoover Commission Investigation of CIRM

Here are some excerpts from the report by California's Little Hoover Commission, the state's good government agency, on the California stem cell agency. First, from the cover letter by Daniel W. Hancock, chairman of the bipartisan commission.

“In the California Institute for Regenerative Medicine, California has made an investment in innovation that is envy of the world. Known as CIRM, the institute is the product of Proposition 71, which promised voters they could turn California into the global epicenter of biotechnology. The institute since has directed more than $700 million toward scientific exploration, in the process, leveraging an additional $900 million in private and institutional money that has built new facilities, lured scientists to California and spurred growth in the state’s life-sciences industry.”

“The Commission found that CIRM’s governance structure is not adequate to protect taxpayers’ interests or serve its own ambitious goals. The Legislature must take this opportunity to reform CIRM’s governance structure to ensure that it can deliver on its mission of developing cures for the benefit of all, as well as provide transparency and accountability for California’s taxpayers who will be paying off the bonds.”

He continued:

“The 10,000-word proposition (that created CIRM) laid out highly specific qualifications and detailed operational duties for its chairperson. Its very specificity prevents CIRM from evolving, institutionalizes inefficiencies and hobbles its ability to transition to new leadership.”

“CIRM’s 29-member oversight committee includes representatives from institutions that have benefitted from grants the committee approved. This structure, along with overly long terms and the inability to nominate its own leaders or hold them accountable, fuels concerns that the committee never can be entirely free of conflict of interest or self-dealing, notwithstanding a court ruling that established the legality of such a structure. Legal is not necessarily optimal,”

Here are excerpts from the body of the report:

On conflicts of interest
“Criticism that CIRM’s governing board remains an insiders’ club undermines the legitimacy of the agency. Some 80 percent of the funds to date have been awarded to institutions with representatives on the ICOC...(T)he frequent occurrence of members recusing themselves because of conflicts of interest shows a structural defect in the governing board.”

Accountability
“The detailed provisions of the ballot initiative, which placed the governing board outside of the normal scope of accountability compared to other state agencies and boards, provided stability, diversity and the political protection to get the agency up and running. But today, only five years later, Proposition 71 already looks like a relic of another era.”

Personality Driven
“The actions and personal style of ICOC chair Robert Klein have been at
the core of many of the criticisms of the stem-cell agency, and have made
him a lightning rod for calls for more accountability. That he is a
component of much of the discussion is unavoidable as he drafted,
championed and donated money for Proposition 71 and now serves as
the paid, part-time chairman of the governing board. His passion and
leadership made Proposition 71 a reality, and his financial and political
skills helped CIRM survive its early challenges. At the same time, the
media have chronicled how Mr. Klein has alienated members of the
Legislature and at least one newspaper has called on Mr. Klein to
resign.”

“An agency governance structure that features key positions built around
specific individuals does not serve the best interests of the mission of the
agency or the state of California, however well-qualified the individuals
may be. Such a situation distorts accountability and succession
planning and could, in the event of an abrupt departure of the
individual, leave the agency leaderless for an extended period. A more
efficient and balanced board is possible and more appropriate as CIRM
matures. For CIRM to prosper and sustain itself, such changes are
essential.”

CIRM's Adversarial Defensiveness
From Donna Gerardi Riordan, former director of programs at the California Council on Science and Technology, “By excluding legislators from participating in the creation and design of CIRM, the framers of Proposition 71 were short-sightedly taunting the state’s most powerful
and skillful political players,”

Management
“CIRM has adopted a co-CEO leadership structure between the board chair and the agency president. The board chair oversees several daily administrative duties at CIRM, which gives the chair a dominant role over other members, creates potential conflict with the CIRM president and blurs the lines of accountability.”

More Open Grant Review Process
“CIRM leadership has argued that fewer institutions would apply for
funding if their identities became known and they were not successful.
CIRM, however, should continually strive to improve the openness of its
process. Based on Connecticut’s experience of disclosing all applicants
without negative consequence, CIRM should conduct a pilot project to
evaluate if a more open process would inhibit researchers from coming
forward and applying for CIRM funds. In an upcoming grant round, all
applicants should be identified retrospectively. Disclosing names of
unsuccessful applicants as well as individual reviewers will allow the
public to better track CIRM’s funding processes for fairness and bias.
Judging by the apparent willingness of rejected applicants to identify
themselves and their organizations in public appeals to CIRM, it is
questionable whether the current lockout of applicant identities poses a
real concern. The burden is on CIRM to demonstrate otherwise.”

CIRM's Future
“The rapidly changing political and scientific environment raises questions about whether the organization is flexible enough to adapt to the field it is supposed to lead....

• “How will CIRM know when its job is done?
• “What happens when CIRM runs out of money?
• "Is the mission of Proposition 71 best served by transforming CIRM into a self-sustaining operation?"

Sheehy Comments on Little Hoover Commission Recommendations and CIRM Reaction

We want to call attention to a comment that Jeff Sheehy posted this afternoon on the “CIRM news release” item. Sheehy is a member of the CIRM board. He has served on the board since its inception and serves regularly as the acting vice chair of its grant review group. You can read Sheehy's unsolicited and unmoderated comment at the end of the item in question.

Quick Links: Recommendations for CIRM Overhaul, Media Coverage and Reaction

The Little Hoover Commission's recommendations for sweeping changes in the $3 billion California stem cell agency became public today, generating some interesting news items and reaction from the agency itself.

We were traveling today and have not had a chance to read the 84-page document but will have an analysis tomorrow. Meanwhile interested readers have plenty to chew on.

First, there is the report itself, which can be found here. Then there is CIRM's reaction to it, which came in the form of a press release dated Wednesday June 24. The release has been circulated to at least some reporters, but has not been posted on the CIRM Web site at the time of this writing. The full text is contained in the item below.

John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., issued his reaction at 2:02 p.m. today. You can find that document here.

Ron Leuty of the San Francisco Business Times wrote a relatively lengthy piece about the recommendations. Sandy Kleffman of the Contra Costa Times also filed a fairly substantial article.

We expect to see more coverage in the mainstream media, but Saturday is not a good day if you are looking for newspapers loaded with news. Even in the heyday of newspapers, Saturday papers were thin and did not offer much.

CIRM News Release on Little Hoover Commission Report

Here is the complete text of a CIRM news release circulated to some reporters today in connection with recommendations by the Little Hoover Commission. As of this writing, the release has not been posted on the CIRM Web site.


For Immediate Release Contact: Don Gibbons
415-396-9117
415-740-5855 (mobile)


CIRM Responds to Recommendations of the Little Hoover Commission

Sacramento, Calif., June 24, 2009 – The leaders of the California Institute for Regenerative Medicine (CIRM), the state stem cell agency, said today that they were disappointed that the Little Hoover Commission chose to release a report with recommendations that, if enacted by the legislature, would slow the agency’s progress toward cures.

The agency believes that many of the recommendations made by the commission are based on an incomplete understanding of the agency’s operation and are so sweeping they would require another ballot initiative to amend Proposition 71, which created the agency. If enacted by the Legislature and signed by the governor the recommendations would dramatically disrupt and delay the agency’s push to achieve its mission of delivering therapies to patients. In addition, any attempt to enact the changes through legislation rather than by a vote of the people would likely result in a court challenge, which would be costly and time consuming.

The Commissioners have publicly acknowledged that CIRM’s existing structure is quite successful in allocating research funds in a manner that has garnered respect from researchers in the state, nationally and internationally. The Commissioner’s have also acknowledged that multiple audits and court reviews have shown that CIRM is managing potential conflicts of interest well.

“To disrupt and delay the agency’s critical work for a year, or even six months, because of what the Commission’s staff has called ‘perception’ issues is unacceptable,” said Robert Klein chair of CIRM’s governing board. “Let them talk perception to patients who miss out on a therapeutic breakthrough that would have saved their lives because the agency has been paralyzed by a sweeping reorganization. The will of seven million voters who approved this highly functional structure should be respected. I would hope the legislature will not devote any of its valuable time to this measure that has little chance of benefiting the state while it has great potential to do harm.”

Specific fallacies of the report:
• The board is too large and unwieldy. With 29 members it is similar in size to the UC Regents (26) and the California Judicial Council (28). On all three boards, size has afforded a diverse membership that brings a needed breadth of expertise.
• There are no independent voices and as a result there are perceptions of conflicts. There are many board members with no ties to organizations that receive grants and those who are from institutions do not participate in even the discussion of grant applications from their institutions. The Court of Appeals noted, “by approving Proposition 71 the voters have determined that the advantages of permitting particularly knowledgeable persons to decide which research projects to fund outweigh any concerns that these decisions may be influenced by the personal or professional interests of those members.
• Reduce politicalization of the board by letting the governor make all but four appointments. The current process, which divides the appointing authority between the State’s four constitutional officers and the UC Chancellors, is a much more effective means of assuring no one political agenda can shape the board and in turn the science CIRM funds.
• The division of authority between the board chair and the agency president is not effective. Proposition 71 created a clear division of responsibility with an executive chair providing financial leadership and a president providing scientific leadership. Current president Alan Trounson and board chair Klein have both publicly stated that this division is working well for the agency.

One of the key objectives of Proposition 71 was to provide stability and predictability to a research-funding program. The inevitable delays that would be caused if the Commission’s recommendations were enacted by the legislature would disrupt California laboratories the length of the state and slow progress to cures.

Related Media:
Videos explaining stem cell research are available on the CIRM YouTube site.
Stem cell images are available at the CIRM Flickr site. These are available for use with credit to the scientist listed in the caption.


About CIRM CIRM was established in November, 2004 with the passage of Proposition 71, the California Stem Cell Research and Cures Act. The statewide ballot measure, which provided $3 billion in funding for stem cell research at California universities and research institutions, was overwhelmingly approved by voters, and called for the establishment of an entity to make grants and provide loans for stem cell research, research facilities, and other vital research opportunities. To date, the CIRM governing board has approved 279 research and facility grants totaling more than $693 million, making CIRM the largest source of funding for human embryonic stem cell research in the world. For more information, please visit www.cirm.ca.gov.

Hoover Commission Report on CIRM Overhaul Out Today

California's Little Hoover Commission is expected to release its full recommendations today for sweeping structural changes at the $3 billion California stem cell agency.

We will be traveling and will not be posting anything on the report until very late today or possibly tomorrow. But you can find the report at the Little Hoover Commission Web site when it is released. John M. Simpson, stem cell project director of Consumer Watchdog of Santa Monica, Ca., is also expected to have something on his organization's site.

Patient advocate Don Reed already has posted some reaction and information on the Daily Kos. He does not look favorably on the commission's work.

Minimal Media Coverage of Csete's Resignation

They didn't stop the presses at the San Francisco Chronicle this week for news of the resignation of the chief scientific officer at the $3 billion California stem cell agency, although it is a bit of a local story for the newspaper.

No mainstream media have covered Marie Csete's pending departure as far as we can tell. But it surfaced in a couple places on the Internet that have international audiences, which this blog has as well. The news was also, we understand, the subject of some discussion at a meeting of CIRM grant reviewers in San Francisco the last two days. No information has been posted concerning Csete's resignation on CIRM's own Web site.

Ron Leuty of the San Francisco Business Times wrote two pieces, one a straight-forward news story and the other something of a reaction piece.

Monya Baker at The Niche, Nature magazine's stem cell blog, wrote that she was “impressed with (Csete's) very practical approach to the unglamorous parts of helping move stem cells into human testing.”

Jim Till put up an item on the blog of the Canadian stem cell consortium. And Peter Jamison of the San Francisco Weekly also posted a piece.

CIRM Rips Hoover-recommended Reforms as Disruptive

The California stem cell agency has fired off a legal memo to the state's good government commission, declaring that its proposed changes in CIRM would impose illegal and “drastic and disruptive” alterations in the stem cell research effort.

The memo from CIRM's outside attorneys came as the Little Hoover Commission today approved its wide-ranging report, which is expected to be released in full tomorrow.

Among other things, the Hoover proposals call on the legislature to reduce the size of the CIRM board, reduce the super-majority quorum requirement, eliminate salaries for the chairman and vice chairman and eliminate the dual executive situation created by Prop. 71.

All of those provisions, in one form or another, hamper the operations of CIRM. Even the salary matter has diverted the board from its primary mission of funding research. Today, nearly five years after CIRM was created, the board is still struggling with an incomplete evaluation process for the chairman and vice chairman. Those positions are filled by a vote of the board.

Nonetheless, James Harrison and Kari Krogseng of Remcho, Johansen and Purcell of San Leandro, wrote on Tuesday (June 23),

“The Little Hoover Commission’s proposals would effect drastic and disruptive changes to CIRM’s governance and operating systems. Such changes run counter to the voters’ intent, and do not further Proposition 71’s purposes.”

The 10-page legal memo hung most of its arguments on a provision in Prop. 71 that states that it can only be amended by the legislature if the changes “enhance the ability of the institute to further the purposes of the grant and loan programs.”

Harrison's memo said the Hoover proposals could only be enacted through another ballot measure, a move that a subcommittee of Hoover commissioners clearly opposed earlier this month.

Americans for Cures, the private stem cell lobbying group of CIRM Chairman Robert Klein, also produced a 14-page legal memo that the reached the same conclusion as Harrison.

The memo was written, also on Tuesday, by Richard Martland and Kurt Oneto of the Nielsen, Merksamer, Parrinello, Mueller & Naylor law firm of Sacramento, Ca. The firm has a lobbying contract with CIRM but we presume no state funds were used for the Martland memo.

The document had this interesting tidbit in it:

“The (Hoover Commission) proposal would effectively permit the ICOC (the CIRM board) decision-making process to be captured by a small minority and would deprive ICOC decisions of the benefit of input from the broad spectrum of views currently represented on the committee. It is inconceivable that voters who approved an organization with 29 members would have imagined that 5 members would ultimately be able to make binding decisions on its behalf.”

However, that is exactly what happens. We pointed out a good example last week in which only six of the board members were permitted to vote. All the rest in attendance were excluded not only from voting but from participating in the debate.

(Editor's note: The copies of the memos were supplied by the Little Hoover Commission to John M. Simpson of Consumer Watchdog of Santa Monica, Ca., who relayed them to us. The Merksamer memo contains a confidentiality warning. However, when it was submitted to the Hoover Commission the memo became a public record.)

Scientist Says Csete Resignation is Regrettable

Here is another comment from a California scientist on the resignation of Marie Csete from CIRM. The researcher must remain anonymous for obvious reasons.

“It is indeed regrettable that Dr. Csete has chosen to leave CIRM. Given CIRM's mandate to move stem cells into the clinic, a Chief Scientific Officer with Dr. Csete's clinical and research credentials, especially as they apply to human transplantation, is absolutely essential. It is perhaps telling that of the over 300 grants issued by CIRM only about 10% (by my accounting) are focused on actual preclinical or clinical studies. Although CIRM was established as a way to bolster the perceived inadequacies of the NIH, that rationale has now, in now small measure, evaporated. The advantage that CIRM has, compared to the NIH, is that they are in a position to fund, almost exclusively if they wish, preclinical studies, especially high risk studies that would not get funded by the NIH. It is these studies that will help determine whether or not a given idea about how stem cells might be used clinically actually has a chance of working. If CIRM and the ICOC are continuing to focus on basic biology studies, at the expense of preclinical work, even as it might apply to the upcoming Disease Team Grants, then I, were I in Dr. Csete's shoes, would also leave.”

Csete Resignation: Researcher Calls it Tragic

Here is a comment on Marie Csete's resignation from a well-respected researcher who must remain anonymous. Comments from other readers are welcome. They can be posted anonymously, if desired, via the “comment” function at the end of this item. Or they can be sent to me for posting at djensen@californiastemcellreport.com.

“CIRM's inability to retain Dr. Csete is tragic. Her scientific stature worldwide and her knowledge and relationships with the FDA made her the most valuable member of CIRM's scientific team. She was the one who scientific and medical leaders respected and trusted. With Dr. Csete's departure, CIRM immediately loses much of its credibility as an organization that puts good science, not politics, first. CIRM needs to pull itself together, decide that high ethical standards and strong scientific leadership are its highest priories, and clean house quickly.  

“They need to bring in a strong COO and respected scientific leadership. Otherwise, Bob Klein's legacy, his remarkable vision, will be crushed under the weight of foolish egotism and political favoritism. Taking a page from American politics, CIRM needs an Obama, not a Bush, as its scientific leader. Dr. Csete provided the no-drama Obama leadership that CIRM so desperately needs. She should have been promoted, not allowed to resign.”

Csete Quits CIRM on Eve of Huge Grant Round

In an unsettling move, Marie Csete has resigned as the chief scientific officer for the $3 billion California stem cell agency, only 15 months after she joined CIRM in the $310,000-a-year post.

Csete's departure comes as the agency is about to embark on its most ambitious and largest round of research grants – a complex, $210 million “disease team” effort aimed at pushing research towards clinical trials.

CIRM Board Chairman Robert Klein has described the round as critical for CIRM, both in terms of producing results and in generating support for the private sale of state bonds to support the agency.

John M. Simpson, stem cell project director for Consumer Watchdog, this afternoon disclosed Csete's departure on the blog on his organization's Web site.

In an email to members of the CIRM board, Csete(photo at left) said,

“I have decided to resign my position at CIRM as of August 1, 2009. I am sorry and disappointed that I was unable to say goodbye to you at the last ICOC (the CIRM board) meeting. I look forward to seeing your many successes! “

In response to a query, Simpson said,

"This is a sad day for CIRM. Dr Marie Csete, like Dr. Arlene Chiu before her, is the backbone of CIRM's scientific endeavors. It's particularly troubling that two top women scientists have left the agency after relatively short tenures. It raises serious questions about the agency's management under Chairman Bob Klein and President Alan Trounson. They owe the board a detailed explanation."

No successor appears to be in the wings. In a message to board members on behalf of Klein, Melissa King, executive director of the board, said,

“We will be working on a succession plan for Marie. Bob would like to talk to each of you to get your thoughts, and he and I will work on that in the coming days.”

On the surface, Klein's plan to call board members would appear to be a violation of the ban on serial meetings of public bodies such as the CIRM board. We suspect it will be justified on the basis that it deals with personnel matters, although it also overlaps into policy areas.

Csete's possible departure had been rumored for at least a month or more. She gave no reason for her resignation in the copies of the email messages that we have received. According to those we talked to, she was reportedly dissatisfied with CIRM's management and possibly with the reception afforded her scientific advice.

Simpson said the board should demand an explanation of her departure from Klein and Trounson.

Filling a high level post such as Csete's always takes a fair amount of time, but CIRM has been very slow in the past in filling top level positions, including that of president.

Prior to joining CIRM, Csete was John E. Steinhaus Professor of Anesthesiology at Emory University, with adjunct appointment in cell biology, and program faculty appointments in biochemistry, cell and developmental biology, neurosciences and the Emory/Georgia Tech Biomedical Engineering Program. She was additionally the director of liver transplant anesthesiology at the Emory University Hospital in Atlanta and director of the Emory/Georgia Tech Human Embryonic Stem Cell Core, and co-director of the Emory MD/PhD program.

In announcing Csete's appointment in March 2008, Trounson said,

”Her training and experience as both a basic researcher and clinician is critical to our strategy of advancing discoveries into the translational pipeline. In addition, her expertise in the field of transplantation and understanding of immunology issues will be highly relevant to advancing new discoveries in the stem cell field toward therapies and cures. ”

The announcement also said,

"'No one knows more about or is more skilled at dealing with the intersecting worlds of real-life clinical transplantation and basic stem cell research than Dr. Csete,' commented David J Stone, MD, Adjunct Professor of Anesthesiology and Neurological Surgery at the University of Virginia School of Medicine."

In the item below, you can read CIRM email messages concerning Csete”s departure.

Text of Email on Csete Resignation

Here are copies of CIRM email messages regarding the resignation of Marie Csete.


Subject: Marie Csete

Dear ICOC Members,

Bob wanted you to have these messages (below), from Marie and Alan. We will be working on a succession plan for Marie. Bob would like to talk to each of you to get your thoughts, and he and I will work on that in the coming days.

Best,
Melissa
~~~~~~~~~~~~~~~~~~~~~~~

MESSAGE FROM MARIE:

To ICOC Members:
I have decided to resign my position at CIRM as of August 1, 2009. I am sorry and disappointed that I was unable to say goodbye to you at the last ICOC meeting. I look forward to seeing your many successes!
Best
Marie


MESSAGE FROM ALAN TO CIRM STAFF:

As you have heard from Marie, she plans to leave CIRM at the end of July. In just a little more than a year she has made highly valuable contributions to our science operations coalescing a new set of core grants and organizing a number of workshops that have invigorated our scientific discourse and changed the direction of many of our programs. She has been a highly respected representative of CIRM at countless meetings nationally and internationally. I think you all would agree that our mission has been advanced by her efforts. Please join me in thanking her and wishing her luck going forward.

Alan

Stem Cell Board Tackles Troublesome Issues Next Week

The men and women who oversee the $3 billion California stem cell agency will meet next Wednesday to act on some of “festering” issues that triggered a robust exchange at last week's board meeting.

The discussion highlighted a host of problems, ranging from whether the agency should staff up to its 50 person legal limit to micromanagement built in by Prop. 71, the ballot measure that created CIRM. 

One key problem is the super-majority quorum requirement embedded in state law that now makes it difficult for the CIRM board to act legally. The quorum matter, however, can only be changed by legislation, which is all but impossible to pass because of language in Prop. 71. 

Next week, CIRM board is only scheduled to address complaints that the board is not adequately supported. During the San Diego session, several board members indicated they would prefer to deal with the matter in private. 

The upcoming meeting, available at teleconference locations statewide, includes an executive session that will allow the board to speak candidly about specific individuals and also quite probably prevent the public from understanding the full nature of all the issues. We understand the desire to take the matter behind closed doors. 

Some of the comments last week did not reflect well on CIRM's leadership. We also understand that because of state open meeting laws the CIRM board operates under restrictions that make it difficult to do business. 

Consider, for example, the legal ban on serial meetings. Those could be private telephone calls or emails between board members that could result in a majority of board members having conferred on an issue. The Institute for Local Government explains,

“The communication does not need to be in person and can occur through a third party. For example, sending or forwarding e-mail can be sufficient to create a serial meeting, as can a staff member’s polling governing body members in a way that reveals the members’ positions to one another.”

Such restrictions are hard for folks from the private and non-profit sector to understand. They are certainly a departure from the way business is handled in most non-governmental enterprises. And the restrictions on serial meetings are but just one example of the requirements of the state's open meeting law. 

That said, some of the problems that were aired last week would have long been solved long ago if they had been dealt with in a forthright and public manner. Going behind closed doors creates a cover of secrecy and non-accountability. 

The result in this case was the frustration and outpouring that emerged last week. The issues raised in San Diego are certainly public business. They go to the effectiveness of the stem cell agency and how well its board exercises its responsibilities. A skilled attorney can, nonetheless, find a way to provide a personnel justification to exclude the public. But it probably would do little good to upbraid individuals either in a public or private board meeting. 

Given the festering nature of the problems, it makes more sense to tackle them once again in public. Doing so enhances the board's credibility and helps to maintain public confidence in CIRM operations. 

The public can take part in the discussions at teleconference locations in San Francisco (2), Los Angeles (2), Sacramento, Elk Grove, La Jolla, Healdsburg, Irvine and Stanford. See the agenda for specific addresses.

Hoover Commission Moving Forward This Week on CIRM Changes

California's Little Hoover Commission meets this week to consider recommendations for changes in the operations of the California stem cell agency, perhaps even adopting final findings.

The committee will go over the draft report on CIRM Wednesday afternoon in Sacramento. Stuart Drown, executive director of the good government agency, said the commission could adopt the recommendations or ask the staff to make revisions.

If the revisions are minor, he said the staff could bring them back for a final vote on Thursday afternoon. If changes are major, the report will be brought back to the commission in August.

The commission has withheld copies of the recommendations, but it did discuss them publicly earlier this month at a subcommittee hearing. Under the preliminary recommendations, the size of the CIRM board would be reduced from 29 to 15, the dual CEO situation would be eliminated, salaries for the chairman and vice chairman would be halted and the super-majority quorums for board action would vanish.

One longtime CIRM supporter has described the recommendations as “ludicrous” and a “disaster.”

The Hoover Commission has no power to impose changes. They would have to be enacted by the legislature or made voluntarily, if possible, by CIRM. Many of the recommendations, if not most, could take place without changes in state law.

CIRM PR Puffs Fanciful Budget Number

Here is a link to the press release that the California stem cell agency issued concerning its board meeting last week. In it, the agency persists in trying to paint the budget as a 3 percent decrease, rather than a 25 percent increase.

CIRM Chairman Robert Klein at one point last week described comments on the budget by board member Jeff Sheehy as a “gross distortion.” In reality, the distortion is coming from Klein and CIRM. As we have noted, Klein's use of fanciful figures raises questions about the reliability of other financial information that he presents to the board.

You can read more about the budget via these links: 25 percent increase, festering issues, budget puffery, budget poorly documented.

Link to Bee Editorial Repaired

The “time is ripe” item below (June 21) had a bad link to The Bee editorial. The link has been fixed, and you can find the editorial here.

Bee Says Time is Ripe for Klein to Leave

The Sacramento Bee Saturday said Bob Klein's departure as chairman of the California stem cell agency is “long overdue.”

Writing in an editorial, The Bee said Klein 's tenure “has not been in the best interest of either taxpayers or the stem cell agency.” Klein announced earlier this month he would not seek re-election as chairman at the end of his term in 2010.

The Bee is the only daily newspaper in the state Capitol and is widely read by lawmakers and policy makers. It has long been critical of Klein. The editorial also appeared in the Fresno Bee, which is owned by the parent company of both papers, and may well appear elsewhere in the McClatchy newspaper chain. (Fresno is Klein's home town.)

The Bee said,

“Chairing a 29-member board that is far too large and rife with conflicts of interest, Klein has operated the institute in a smothering manner, with little regard to transparency or lines of authority.

“Since 2005, Klein has run off talented scientists, such as former CIRM President Zach Hall. He has helped direct millions of dollars to contracts for law firms and public relations consultants – money that could have gone to science.

“Whenever any lawmaker or outside group scrutinizes his decisions or expenditures, Klein cranks up his political attack machine. While serving as a public official, Klein has led or has been affiliated with at least two nonprofit groups that have gone after legislators who sought to reform CIRM.”

The Bee also declared that CIRM should closely examine its internal expenditures, citing coverage of its budget by the California Stem Cell Report.

The editorial generated some reader commentary, including a posting from journalism professor Michael Fitzgerald that said,

“Perhaps Mr. Klein has suffered from hubris, but give him some credit. There would not be a stem cell institute if it wasn't for his efforts.”

Most of the other comments were less generous.

Festering Issues Surface at Contentious Stem Cell Meeting

SAN DIEGO – A bit of a rumpus broke out Thursday at the board meeting of the California stem cell agency. Nominally, the dispute was about hiring an additional staffer to help support the 29 persons who serve on the board that oversees the $3 billion enterprise.

But the heated discussion raised a host of issues, some of which have been festering behind closed doors for years. They included staff support for the 10 patient advocates on the 29-member board, the two-tier board structure, conflicts of interest, super-quorum requirements, ill-conceived legal limits on staff size, CIRM hiring plans, micromanagement and the agency's budget for the coming year.

“Festering” was a word used more than once by board members. It was connected to concerns of patient advocates about the lack of CIRM staff support for their CIRM-connected responsibilities. The discussion also highlighted the fact that other board members can designate alternates to attend meetings, but the patient advocate members cannot.

Those who are permitted to use alternates are executives at research institutions, universities or businesses. They also can use their own staffs to assist with their CIRM responsibilities. But some of the patient advocate members do not have jobs that allow them to do that.

One patient advocate director, Marcy Feit, CEO of ValleyCare Health Systems of Pleasanton, Ca., pointed out that patient advocates must attend more CIRM meetings -- of which there are many -- than other directors because that is the only way that CIRM, in many cases, can get its business done. She described the workload as “incredible.”

The meeting attendance problem arises because of the board's super-majority quorum requirements, which are embedded by Prop. 71 in state law. Conflicts of interests also regularly disqualify many board members from being counted as part of a quorum, voting and even participating in debates. One example occurred at the Wednesday meeting of the board, when only six board members could vote on $41 million in funding for training grants. All the rest in attendance were barred from the discussion.

Why do the conflicts of interest exist? Because Prop. 71 required the appointment to the board of the very persons whose institutions and enterprises benefit from CIRM largess. And Prop. 71 is all but impossible to change, also because of language the ballot measure wrote into the law.

Patient advocate director Jeff Sheehy, a communications manager at UC San Francisco, triggered Thursday's contentious discussion when he said he would not vote for the proposed budget unless another person was added to the support staff for the board. Currently, virtually all of the support goes through a single person, Melissa King, executive director of the board.

While Sheehy and other patient advocates had high praise for King, they said CIRM staff often was not responsive to their concerns. They said “significant difficulties” have arisen when they have tried to get information from staff.

Patient advocate director Jonathan Shestack, a Hollywood film producer, said that the problems have been festering “since the five-month mark” in CIRM's life. Shestack said,

“The truth is for many patient advocates they have other jobs that do not support the work here.”

He added that “I for one gave up at a certain point” trying to get the information and support that he needed. He said board members cannot go easily to staff to find explanations about complex bond financing or scientific issues.

Patient advocate director David Serrano Sewell, a deputy city attorney for San Francisco, resisted a suggestion from one board member that Thursday's discussion take place in private instead of at a public meeting. He said that efforts have been made in the past to resolve the problem both cordially and in private. But he said they have failed.

Some directors objected to Sheehy's attempt to add help for the board. They said it amounted to micromanagement and would be “demotivating” for top CIRM management. Sheehy flared at comments by Ed Penhoet, former co-founder of Chiron, that singling out a specific individual to be added to staff constituted micromanagement. Sheehy said the Penhoet's comments were “condescending,” something that Penhoet said later that he did not intend.

Board Chairman Robert Klein said the concerns of the patient were legitimate. He said,

“The organization is under stress.”

Sheehy said, however, that Klein has failed to address the concerns for much too long.

Director Michael Friedman, CEO of the City of Hope in Los Angeles, noted that CIRM has not reached its legal cap of 50 employees, suggesting it could be fully staffed to help solve some of the issues. Director Ted Love, president of Nuvelo of San Carlos, Ca., asked,

"Are we trying to do much too inexpensively?”

He said the staff should not be subjected to “extraordinary unbearable long-term situations.”

CIRM President Alan Trounson indicated that staffing was a bit of a juggling act. He said more persons would be needed in the science office as CIRM gives out more money and adds more complex research to its oversight responsiblities.

At one point, Klein, who says he wrote Prop. 71, said,

“I made the mistake perhaps of setting a 50 person cap.”

Sheehy was upset about the inadequate budget documents presented to the directors' Finance Subcommittee last week. And he said the budget material presented this week also was not up to snuff. He said basic year-to-year financial comparisons remained missing along with “global” figures that would show complete totals for spending in various categories, such as legal and communications. Sheehy said he had asked for budget figures by function, which were not provided. And he declared that the proposed budget amounted to a “dereliction of our fiscal duty.”

Klein bridled at the comment, which he called a “gross distortion.” He said,

“I understand your frustrations but we have a mission. Let's not destroy our mission.”

Ultimately the budget was adopted on a 19-4 vote with the requirement that a 5 percent contingency fund be included. Added also was a requirement that Klein and Trounson come up with a plan within two weeks to solve the board support problem. The board will convene in a teleconference meeting to consider the proposal.

Following Thursday's session, Penhoet said,

“The board deserves more support if they think they need it.”

But Sheehy said, also after the meeting, he had little faith that the issue would be properly resolved, given past performance.

Klein's Misguided Budget Puffery

SAN DIEGO – Robert Klein, chairman of the $3 billion California stem cell agency, is a man who should know his numbers.

He is a real estate investment banker and sometimes even seems to revel in the arcane world of state bond financing.

But he persisted at this week's CIRM board meeting here, along with CIRM president Alan Trounson, in trying to characterize CIRM's budget for the coming fiscal year as a 3 percent decrease.

The reality is that it is a 25 increase over what is being spent by CIRM this year.

The peg on which Klein hangs his dubious, PR spin is that the budget is 3 percent less than the unrealistic spending plan proposed 12 months ago. But Klein's posturing defies well-accepted accounting and budget standards for describing year-to-year budget changes.

It is difficult to understand why Klein is trying characterize CIRM's spending plan as something it isn't. One can dispute some of the expenditures, but the total amount the agency is spending on operations is not excessive. Indeed, it may even be too little, as suggested by some CIRM directors.

Klein's misguided puffery does not serve him or CIRM well. It only generates skepticism about other CIRM actions and creates suspicion that the agency may be engaged in activities that cannot stand the light of day.

Mouse Breeding Plan Receives $3.8 Million from CIRM

SAN DIEGO – The California stem cell agency this morning approved a $3.8 million grant to breed special mice in the Sacramento area to be used by stem cell researchers.

The vote on the grant was 19-1.

Jackson Laboratory, the grant applicant, said in its application,

“The lack of mouse models of disease in which the immune system has been suppressed significantly hinders the efforts of investigators in California and elsewhere to develop new HuSC-based disease therapies. An additional impediment is the lack of efficient access to the quantities of mice required for such studies, and to mice whose health, reproducibility, and research effectiveness has been assured. In the proposed project at (Jackson), we will develop multiple state-of-the-art, immune-deficient mouse models of human disease that can be used for testing HuSC therapies, and we will establish the production processes for making these models readily available to California researchers.”

Reviewers earlier recommended approval of the grant if funds were available. But they were sharply split in their scores they assigned to the grant.

Marie Csete, chief scientific officer for CIRM, made a case for approval of the grant, saying it would aid researchers. Board member Ed Penhoet, a co-founder of Chiron, said the grant was a “good investment.”

The mouse grant was the only one approved out of the “tier two” applications for early translational grants.