Howlers: Loud as Thunder

From time to time, we have discussed the media and its behavior in connection with the California stem cell agency.

The other day, we ran across an apt, media-related commentary in Barbara Kingsolver's new novel, “The Lacuna.”

The remark was offered by one of her characters during a discussion of newspapers with Leon Trotsky in Mexico prior to World War II. One could say that it still applies more than 70 years later.

Here is how it went:

“It's true sir. The newspapers are like howlers on Isla Pixol.”

“What are these howlers?” Trotsky asked.

“A kind of monkey, very terrifying. They howl every morning: First one starts, then a neighbor hears it and starts his own howl, as if he can't help it. Soon the whole forest is bellowing, loud as thunder. It's their nature, probably they have do it, to hold their place in the forest. To tell the others no one has gotten the best of them.”

Communications Subcommittee Meeting Delayed

The California stem cell agency yesterday postponed the first meeting of the directors new subcommittee aimed at improving communications with the public.

CIRM Chairman Robert Klein cancelled the session for personal reasons, the agency said. The session has not yet been rescheduled.

CIRM Director Prieto's Comments

We would like to call attention to comments filed by Francisco Prieto, a member of the CIRM board of directors and a Sacramento physician, concerning our “School Children vs. Stem Cell Scientists” item. His thoughtful remarks offer extra insight into the stem cell agency. Prieto's comments can read by clicking on them at the left or at the end of the item in question.

CIRM Moves Adroitly in Attempt to Sidetrack Legislation

The California stem cell agency is taking a different tack concerning unwanted legislation that would alter the way it does business.

In the past, CIRM directors have opposed all legislation that would affect it. While measures have passed both houses with more than 70 percent votes, the governor vetoed them at the behest of the agency.

However, last week the directors' Legislative Subcommittee decided to ask that legislation by state Sen. Elaine Kontominas Alquist, D-San Jose, be sent to interim study. The move is politically adept. It serves the same purpose as outright opposition. If the agency is successful in sending the bill to interim study, it effectively kills the bill for the next year or so but CIRM does not appear to be stone-walling legislative and other critics. The move instead would put CIRM in the public position of appearing to be listening carefully to those who are raising questions.

The agency's new tactics came to light in response to a question last week that we posed to Don Gibbons, chief communications officer for CIRM, concerning what action the subcommittee had taken.

He said the directors subcommittee acknowledged CIRM is “not perfect.”

Gibbons said,

“Moving the bill to interim study not only involves allowing CIRM to educate the legislature on our progress but also allows the committee chair to call a hearing after the legislature adjourns to provide substantive oversight to review the progress that CIRM has made on all the issues raised by the Little Hoover Commission and the Controller’s Financial Accountability Committee and verify the transparency we all support.”

Alquist's bill, SB1064, is aimed at ensuring affordable access to therapies financed with taxpayer funds and providing for more accountability and openness from CIRM.

Gibbons also said the directors subcommittee voted to seek further study of an umbilical cord blood banking bill that would provide birth certificate fees to CIRM for that purpose.

The full text of Gibbons' statement can be found in the item below.

Text of CIRM Comments on Alquist Legislation

We asked Don Gibbons, chief communications officer for CIRM, last week about action by the CIRM directors' Legislative Subcommittee on legislation concerning the agency. Here is the full text of his response.

“The Legislative Subcommittee expressed concerns about SB1064, introduced by Sen. Elaine Kontominas Alquist of San Jose. The bill would alter the management structure of CIRM in ways the subcommittee suggested the Senator and her staff did not fully understand. Acknowledging that CIRM is not perfect the committee did not recommend embracing or rejecting the bill, but rather to seek a vote in the legislature to move the bill to 'interim study' to give CIRM staff time to educate members of the legislature and their staffs about the related issues.

“Moving the bill to interim study not only involves allowing CIRM to educate the legislature on our progress but also allows the committee chair to call a hearing after the legislature adjourns to provide substantive oversight to review the progress that CIRM has made on all the issues raised by the Little Hoover Commission and the Controller’s Financial Accountability Committee and verify the transparency we all support. In short, we are welcoming legislative oversight and looking forward to the outside scientific review that President Trounson has been putting together for later this year.

“The subcommittee also voted to seek further study of the impact of  AB52, introduced by Assemblyman Anthony Portantino of Pasadena. That bill would move from the Department of Public Health to CIRM the previously legislated authority to receive fee surcharges from birth certificates to fund the  collection and oversight of public banking of umbilical cord blood in California. This study would be internal with the CIRM Science Office directed to look at issues around the science, logistics, and liabilities of such a service with the help of appropriate outside experts.”

School Children vs. Stem Cell Scientists; A Public Perception Problem

From Humboldt to San Diego, thousands of Californians yesterday protested the budget cuts that are ravaging efforts to teach their children to read, write and calculate.

The picture painted in newspapers and on television stands in dramatic contrast to the situation at the financially comfortable California stem cell agency. Its finances are uniquely isolated from both normal state budgetary controls and the state's budget crisis. Consequently next week, CIRM is expected to move forward on a project involving tens, perhaps hundreds of millions of dollars. No details are available, but it is an effort to aid the biotech industry with the costly clinical trials that are necessary to bring products to market. CIRM directors are also expected to put more money on the table to hire an executive to fill a newly created position that is designed to tie the $3 billion program ever closer to industry. A salary of $332,000 a year, currently top of the current range for the job, is apparently not enough of a lure.

Good arguments exist for these actions. They may in fact be good policy for the stem cell research program. But they do not reflect the travails of the rest of California state and local government. The Golden State is now scraping the bottom nationally in terms of per capita spending for the education of its children -- who certainly represent the future as much as the 300-plus stem cell scientists and institutions that have received $1 billion from CIRM over the last five years. Indeed, California's financial problems are so severe that some say the state is effectively, if not legally bankrupt. One of the causes is ballot-box budgeting, voter approval of spending initiatives that that cannot be controlled by state lawmakers or the governor. Such is the case with CIRM's finances.

Unpleasant comparisons pose a public perception problem for CIRM. Fortunately for the agency, however, it operates in a media shadow. CIRM is all but invisible in the mainstream press. Reporters are focusing on broader issues and higher profile matters, such as the release of prisoners from jails because of a lack of money. The fact is that CIRM's finances have virtually no current impact on the state's financial crisis. Nonetheless, CIRM's spending carries symbolic importance, which CIRM directors should be cognizant of as they vote to spend millions more that the state must borrow. Their largess could bite back as lawmakers wrestle with legislation to ensure more openness and accountability at CIRM.

Next Thursday's meeting of the CIRM board of directors will, in fact, be in the bowels of the beast, so to speak. The 29-directors are scheduled to convene in a large meeting room in the State Capitol. Their agenda is relatively brief. Traditionally, following the meeting, directors fan out to meet with lawmakers privately.

As far as meaningful public participation is concerned, CIRM discourages that by withholding justification and details on what is to be discussed by directors. That includes the proposal to take part in expensive clinical trials, which was deferred from the February meeting. Also not available is size of the proposed salary for CIRM's new vice president for research and development, who will effectively become the No. 2 executive on CIRM staff. CIRM already enjoys some of the highest salaries in state government. President Alan Trounson earns $490,008 a year and was once listed as the second highest paid state employee outside of the UC system.

The lack of information on the specifics of what CIRM directors are considering is pretty much standard practice for the agency, despite calls for more openness and transparency. The reasons are unclear for CIRM's failure to post information in a timely fashion prior to directors' meetings, which are not even noticed on CIRM's home page on the Internet. The sessions, however, are the most important activities at the agency. That's when the direction of research is set, standards established and money handed out. We may see additional information posted next week, but usually it comes too late for the public or interested parties to make plans to attend the meetings or formulate a considered comment.

On Monday, a new subcommitte of CIRM directors will discuss ways to improve communications and sell its story to the California people. One good first step would to be mandate that background information for meetings be posted at least five business days prior to the sessions. A modest but do-able goal.

Telling the California Stem Cell Story: $1 Million for PR/Communications and More Likely

The California stem cell agency is already spending more than $1 million on selling itself, but its directors could be asked next week to bump up that figure substantially.

The subject will come up Tuesday at the first meeting of the directors' new subcommittee on communications, chaired by Robert Klein, a Palo Alto real estate investment banker who is also chairman of CIRM. Topic one on his agenda is “potential strategic options for communicating with the California public regarding CIRM’s performance.”

With the meeting only four business days away, no specific information is yet available for the public on just what Klein is proposing, which is ironic for a panel that is being called on to improve communications. The session also follows recommendations in January from a sister state panel to CIRM that called for more openness and transparency on the part of the $3 billion enterprise.

The new communications panel was created in December with little debate by directors, who were told that outside experts would assist in the new communications drive.

Missing from next week's agenda is the question of just what CIRM hopes to achieve with its communications/public relations program.

Does it want to change or shape public opinion in California? In the nation? If so, in what way? How can that be measured? The last question is the trickiest for public relations programs, whose goals tend to be squishy. Public relations practitioners often focus on activities as opposed to results.

One implicit, if not explicit goal of the upcoming public relations push is likely to be creation of an environment that would make the legislature eager to provide billions more for CIRM. Another potential goal would be to set the stage for voter approval of another huge bond measure. Without a major public relations push, winning more cash could be difficult given the deep financial problems facing California state government – not to mention a host of other worthy causes seeking state funds, ranging from the state's beleaguered education system to poor persons who need medical care.

Underlying the discussion is the question of the role of public relations at a state agency. Should CIRM be engaged in a taxpayer-financed campaign to perpetuate itself?

All state agencies have a responsibility to communicate effectively with the public. Naturally they peddle a point of view that supports what the agency does. But when do California public servants cross the line between straight-forward communication and aggressive, full-blown marketing/PR campaigns that are commonly found in business and politics.

Beefing up CIRM's PR efforts will not come cheap. The agency is spending about $1.1 million already, according to figures compiled by the California Stem Cell Report. The total includes $616,772 in outside contracts and roughly $500,000 for salaries and benefits for three staff persons, including the $190,008 salary for communications chief Don Gibbons. The figure for outside contracts includes some two-year contracts, including one for $230,000 with Fleishman-Hillard, Inc.

Our total does not include the $200,000 for CIRM sponsorship of the annual convention of the International Society for Stem Cell Research in San Francisco this summer, which could be called a maketing/PR expenditure.

At the Feb. 3, 2010, CIRM directors meeting, both Klein and co-vice chairman Art Torres raised questions about the Fleishman contract. Torres said that the directors communications subcommittee should review it to determine exactly what the firm is doing. Klein also was critical of the news and information clips that are being provided by Fleishman via Gibbons. He circulates the news clips to directors and another version of the clips to CIRM's more than 300 grantees.

Klein's and Torres' comments came during a briefing by Gibbons on the agency's communications effort. He said he and his staff are “reaching for the heart and the brain of the consumer.”

Because “so little” is left of the traditional media, Gibbons said that “bypassing” it is “very important to us.” He said the “gold standard” is face to face communication. He told directors he was preparing computer slides for them to use to speak to groups about CIRM. Another “very, very warm and fuzzy” presentation is also in the works to be used by patient advocacy groups, Gibbons said.

Gibbons cited a report sent to directors at the beginning of the year. It said that from December 2007 to December 2009, CIRM was “mentioned” in 1,233 articles in “various media.” Six favorable opinion pieces or editorials appeared in California newspapers. No negative coverage was reported, although some occurred.

Directors were also briefed on CIRM's online and social media efforts, including its own much improved Web site and presences on Facebook, Flickr and YouTube. The CIRM Web site receives about 11,000 “unique visitors” a month. According to Wikipedia, the term “unique visitor” is “a statistic describing a unit of traffic to a Web site, counting each visitor only once in the time frame of the report.”

About 55 percent of the audience comes from California, including many from CIRM itself and grantee institutions or recipients. Ninety persons, including a “large number” of disease advocacy groups, have signed up for CIRM's electronic monthly digest.

CIRM is making efforts to drive more traffic to its online sites, but that is one of the more difficult chores facing folks in cyberspace. CIRM's numbers are low compared to major news sites, which run into the millions, but its subject is specialized. Few persons wake up in the morning with a compelling need to check out the latest on CIRM's doings.

A high profile breakthrough in research would generate more online traffic as would a scandal. Major stories in the mainstream media also generate significant, new traffic on Web sites. Despite their declining numbers, newspapers remain the backbone of the news business in this country. A front page piece in the Los Angeles Times, which has all but ignored the stem cell agency, could dramatically push up CIRM's numbers at least temporarily.

The fundamental communications challenge for CIRM may well be time, as it is for all media. People only have so much time in their days. What they read and what they do on their computers is linked to what they consider important to their lives and what is high in the public eye. In other words, what people talk about.

In 2004, then President Bush was an unconscious ally of the folks who wanted to create CIRM via a ballot initiative. Without Bush's opposition, hESC research would have remained tucked away in the public consciousness. Bush's stem cell orders instead triggered a tumultuous national debate that raised the visibility of stem cell science and set the stage for voter approval of Prop. 71.

Today, the federal government is funding hESC science. President Obama has rescinded Bush's ban. The grand debate has slipped away, although the adamant foes continue to work their constituencies. Without a strong catalyst, CIRM is likely to have a difficult time raising its profile and building a public relations position that would justify billions of dollars more for stem cell research in California.

The public can take part in Communications Subcommittee meeting at teleconference locations in San Francisco, Irvine, Los Angeles(3), Menlo Park and Emeryville. Addresses can be found on the agenda.

(Editor's note: Gibbons communications presentation begins on p. 121 of the transcript of the Feb. 3, 2010, board of directors meeting. The slides that went with the presentation can be found here(slides 38 through 66). The December report on communications can be found here.)

Analysis of CIRM Challenges on HealthyCal

HealthyCal, a Web site dealing with health issues facing California, has published an analytical overview of the California stem cell agency written by the publisher of this Web site.

It begins:

“A little more than five years ago, visions of seemingly magical stem cell cures danced in the minds of California voters. Lured by the promise of human embryonic stem cells and the intransigence of the Bush administration, Californians voted to borrow $3 billion and give it away to scientists to come up with therapies for ailments ranging from Alzheimer’s to diabetes.

“In approving Prop. 71, voters repudiated the Bush administration ban on funding of human embryonic stem cell research. The voter initiative also created the California Institute for Regenerative Medicine (CIRM), an enterprise unlike any in state history and one that is uniquely independent of the governor and the legislature. It is also an agency that is facing a new set of challenges as it enters its second five years of existence.”

You can read it all here.

The Hidden Cost of Long Hours

The chairman of the California stem cell agency, Robert Klein, likes to point out that the tiny staff at the $3 billion enterprise works long hours to deliver the goods for its directors and the hundreds of researchers and others who enjoy the state largess.

In December, CIRM President Alan Trounson provided a few specifics. He told CIRM directors that some CIRM employees were at work until 11 p.m. He added,

"This morning, it was two in the morning, they were still responding to e-mails from me, so you have to say there's something very special about this group of people."

What Klein and top CIRM management do not mention is the hidden cost of the midnight oil.

What this kind of pace means is that people put off taking legitimate vacations and rack up uncompensated time off, which must be paid for at some point. According to its own annual audit, CIRM owes $370,067 to its employees for “unused compensated leave.” That includes vacations that have not been taken, “annual leave” and compensatory time off for those long hours. Already the agency has paid out $203,022 between 2006 and 2008 to 22 departing employees, according to state figures compiled by California Watch.

(The non-profit newsgathering organization put together the figures for a story by Chase Davis that was carried in some California newspapers today. He reported the state has paid out an estimated $100 million to departing state employees over about 3.5 years, ignoring rules that bar the workers from amassing such huge benefits.)

The CIRM staff, which now numbers in the mid-40s, indeed deserves considerable praise for its diligence. But the reasons for the long hours and resultant stressed staff – not to mention costs down the road – are not so deserving of praise. One can begin with Prop. 71, which is a 10,000-word tribute to micro-management, and immutable micro-management at that. Written by Klein and several other people, it imposed the 50-employee cap that is now deemed by Trounson and others to be endangering the quality of the work at the organization. CIRM wants the cap removed, but that will require an unlikely feat – agreement of 70 percent of both houses of the legislature and the governor. CIRM's top leadership also recently indicated that it would oppose the only legislation to eliminate the cap.

Big run-ups in unused time off also reflect an organization's inability to perform routine tasks routinely. When the staff's energy is often consumed by last minute and late hour scurrying-about, it leaves little room to deal with genuine emergencies or allow time for thoughtful analysis. In the case of CIRM, where careful thinking should be valued, it has prevented its science officers and others from staying in the forefront of the stem cell field through attendance at key scientific conferences. CIRM has declared the importance of such efforts and has budgeted generously for them. But much of the funding remains unused.

Some CIRM directors also have worried publicly about staff burn-out. The fact that 22 former employees are on the list of those receiving time-off payments may be evidence for that concern, given that the staff size has probably averaged somewhere in the 30s for the past five years. One can only wonder why more persons were not hired early on. But hiring itself is a time-consuming process, one that CIRM's top executives may have found difficulty in finding time for.

Hard work and diligence should be recognized. CIRM should also recognize that it cannot and should not rely on its employees to give up regular vacations and time off to burn the stem cell candle at both ends.

Stem Cell Agency Launches High School Education Effort

The California stem cell agency this week announced its online high school study program, which is aimed at helping to provide workers for the biotech industry.

Art Torres, co vice chairman of the stem cell agency, said that California is "a fertile ground for stem cell science," but added that to "realize the full potential of this burgeoning field" requires development of "an educated workforce."

In a news release, CIRM said the high school science program provides “a robust source of educational materials with a wide variety of teaching formats and levels of presentation.” Four units were provided on the CIRM Web site. The agency said the program can be taught in a day or fill a week. Another component is in development.

The program is tied to legislation that requires the state Department of Education to post on its Web site the model curriculum launched by CIRM.

In response to a question, Don Gibbons, chief communications officer for CIRM, said the program cost $45,500 to produce, including the component under development.

We also asked about CIRM's outreach to promote use of the program and whether the agency had an email list for all high school science teachers in the state.

Gibbons replied,

“We previewed it (the program) at the Nat. Bio Teachers Assoc. last November in Denver. The California chapter of that group is just forming and we will ship materials to their organizing meeting in two weeks in Roseville. We developed a list of county science coordinators around our school outreach for Stem Cell Awareness Day and will be reaching out to them, as well as the 50+ teachers who asked for a CIRM researcher guest lecture that day. The state has a master site for high-speed access to on-line resources and we will be posted there. We will be seeking to present at the Cal Sci Educ Conf this October. Etc.”

The CIRM announcement was covered Thursday by the San Francisco Business Times in a brief article by Ron Leuty.

CIRM Directors to Take Position on Affordability, Accountability Measure

Directors of the California stem cell agency on March 4 will take their first public look at new legislation aimed at ensuring affordable access to therapies financed by taxpayers, including proposals to improve accountability and openness at the state research effort.

Also on the table at the meeting of the directors' Legislative Subcommittee is legislation to create a state board to deal with umbilical cord-blood matters.

Already three leaders on the CIRM board, Chairman Robert Klein, vice chairmen Art Torres and Duane Roth, have publicly opposed the affordability and accountability legislation as unnecessary. The CIRM board has successfully resisted every effort over the last few years by lawmakers to make changes in agency operations.

However, this year CIRM has declared that it needs to bypass the voter-approved limit on its staff at 50 persons, an action that the legislation would allow. The restriction was written into the law via Prop. 71 by Klein and others along with caps on agency spending. On the surface, removing the cap would seem to require a 70 percent vote of the legislature, also imposed by Prop. 71. But Klein says the agency is considering unspecified alternatives that would not require a vote of the legislature to avoid the restriction.

Earlier this month, Sen. Elaine Kontominas Alquist of San Jose, chair of the Senate Health Committee, introduced the accountability legislation (SB1064), declaring that CIRM is “essentially accountable to no one.” Introduction of the measure followed recommendations from a sister state panel to CIRM, calling for increased openness and transparency. The action apparently triggered two harsh newspaper editorials concerning CIRM.

The umbilical cord blood measure (AB52) is authored by Assemblyman Anthony Portantino, D-Pasadena. In addition to creating a new state board beginning next January and raising fees on copies of birth certificates to fund it, the measure specifically mentions CIRM. It says,

"California pioneered the first sibling donor cord blood pilot project, and is a world leader in the more general area of stem cell research and its medical applications through the establishment and funding of the California Institute of Regenerative Medicine (CIRM). This makes California ideally situated to become the leader in harnessing the therapeutic potential of nonhematopoietic cord blood-derived stem and progenitor cells."

In addition to the Legislative Subcommittee location at CIRM headquarters in San Francisco, the public can participate in the session at teleconference locations in La Jolla, Davis and Menlo Park. The specific addresses should be posted on the agenda in the next day or two. Comments also may be submitted to the board via email.

CIRM Director Azziz Looking to Move to Georgia

If you are interested in serving on the board of directors of the $3 billion California stem cell agency, you might want to get your application in early to Gov. Arnold Schwarzenneger. But if you don't work for Cedars of Sinai Medical Center in Los Angeles, you may be out of luck.

It appears that Ricardo Azziz, one of the governor's appointees, will soon be leaving for the Peach State. Azziz holds what might be called the Cedars seat on the CIRM board.

Azziz (see photo) is the only finalist for the presidency of the Medical College of Georgia, according to media reports this week in the Augusta Chronicle and on Channel 12 in Georgia.

In addition to serving on the 29-member CIRM board, Azziz is currently chairman of the Department of Obstetrics and Gynecology at Cedars-Sinai Medical Center in Los Angeles and serves as professor at the David Geffen School of Medicine at UCLA and vice chair of the Department of Obstetrics and Gynecology at UCLA.

Azziz has served on the CIRM board since September 2006. He replaced Keith Black, director of the neurosurgery at Cedars.

Cedars has received $5.7 million in grants from CIRM, out of the $1 billion the agency has given away in less than three years.

Azziz noted that the Georgia medical school was in “crisis.” He said,

"And that's really the best time when a leader can step in and add his or her feeling, add his or her flavor, to the direction of the institution. So I think it is as good a time as any and probably better than most."

Sort of the same situation that Obama had when he became president and what the next governor of California will have as well.

The current California governor has been slow in filling vacancies on the CIRM board, so it could be some months before a replacement is named. It is also not clear when Azziz would assume his responsibilities in Georgia.

CIRM Trio Says Alquist Legislation Creates Unnecessary Jeopardy

Three top leaders of the California stem cell agency today said new legislation aimed at making it more accountable and ensuring affordable access to taxpayer-funded therapies would instead jeopardize the agency's accomplishments.

In a word, they said, the measure is unnecessary.

Their opposition was delivered in a five-page letter to Democratic state Sen. Elaine Kontominas Alquist of San Jose, chair of the Senate Health Committee. She introduced the legislation earlier this week, declaring that CIRM was “essentially accountable to no one.”

The opposition letter was signed by CIRM Chairman Robert Klein, a Palo Alto real estate investment banker, and vice chairmen Duane Roth, a San Diego area businessman, and Art Torres, formerly head of the state Democratic Party and retired legislator.

They noted that the full, 29-member CIRM board of directors had not yet taken a position on the legislation. But they said in a letter on CIRM stationery that they wanted to “express our individual concerns regarding the bill’s potential economic impact on the state’s new tax revenues and new jobs created by CIRM.”  They declared,

“More importantly, we are concerned about the bill’s potential impact on finding treatments and cures for diseases and traumas that Californians struggle with everyday.”

Perhaps the key section of the letter, which was highlighted in boldface, said,

“In what is a model for all of state government, CIRM operates within a 6 percent cap on expenses – efficiency unrivaled even in the private sector. CIRM has placed California at the forefront of international breakthroughs in medicine without any net state general fund appropriations or debt service expenditures through December 2009. CIRM continues to serve Californians by advancing research and therapies, creating thousands of jobs, fostering the growth of the biotech industry, and generating over $100 million in new state revenue.”

The CIRM trio did not even endorse the legislation's removal of the 50-person cap on CIRM staff, which agency officials have said they sorely need. The three acknowledged that the restriction "poses challenges.”

But they said the board is “actively exploring other alternatives to address this and remains committed to the 6 percent cap on administrative expenses.” The letter did not elaborate on those alternatives and none have been discussed publicly. The cap was imposed by voters when they approved Prop. 71, which Klein often says he wrote.

The letter described CIRM as “California's most accountable state agency.” It said CIRM has given away more than $1 billion, mostly for research grants, and generated “tens of thousands of job years.”

The letter said that CIRM is already engaged in some of the activities that the legislation would mandate. That includes planning for changes at the top in December when Klein says he is going to leave, as well as planning for the time when the agency's remaining $2 billion will run out. So far, CIRM has handed out $1 billion in less than three years. The money comes from cash that the state borrows via bonds and flows directly to CIRM, untouched by the normal controls of the governor or legislature.

The letter said that the CIRM directors'  Legislative Subcommittee, chaired by Klein and including Roth and Torres, will meet soon to consider Alquist's legislation, SB1064.  The 10-member panel will make recommendations to the full board, which could take a position as early as its March 11 meeting in Sacramento.

Interested parties and members of the public will have a chance to personally address the board then. Individuals can also write or email the members of the board concerning the legislation.

The full letter, which is not on the CIRM Web site, can be found here.

State Lawmaker Says CIRM 'Accountable to No One'

A leading California state senator said today that the state's $3 billion stem cell agency is “essentially accountable to no one” and declared that more accountability and transparency are needed.

Sen. Elaine Kontominas Alquist, D-San Jose and chair of the Senate Health Committee, made the statement in a news release touting her legislation to help ensure that Californians receive a “fair return” on their investment, which will total $6 billion with interest.

Alquist said,

“I was an early supporter of California’s groundbreaking stem cell initiative, and know that our public investment on behalf of the State of California will lead to new frontiers of treatment to heal people with chronic diseases.

“However, CIRM is essentially accountable to no one given the way the initiative was written. Californians entered into a partnership with CIRM when they approved Proposition 71 in 2004, a partnership that was meant to be mutually beneficial. By accepting public bond dollars, CIRM also accepted public accountability, public transparency, and a public return on their investment.”

She continued,

“If a cure or life-saving medicine is discovered using taxpayer dollars, we must be sure that all Californians benefit from that research. Californians are the shareholders of this venture. In this economic environment, the Legislature has a duty to ensure that every public dollar is accounted for and spent wisely."

The news release highlighted three key provisions of her bill, SB1064:

• Ensuring Californians have affordable access to drugs developed by Prop 71 funds.
• Ensuring intellectual property revenue made from Prop 71 funded grants and loans return to the state’s General Fund.
• Requiring the Citizen’s Financial Accountability Oversight Committee and the Controller’s Office to conduct performance audits.

The bill would also lift the 50-person cap on CIRM staff, a change that the agency dearly desires. However, Alquist did not mention that proposal in the news release. (We should note that the cap is redundant because Prop. 71 also imposes a limit on administrative expenses.)

We asked CIRM on Wednesday for a response to the legislation, but nothing has been forthcoming. We will carry the agency's comments when we receive them.

For more details on the measure, see the “stem cell agency reform” item.

California Lawmakers to Weigh Stem Cell Agency Reform

Just a few weeks after a key state panel recommended more accountability and transparency at the $3 billion California stem cell agency, a leading California lawmaker has proposed far-reaching changes in  the five-year-old organization.

The measure – SB1064 by Sen. Elaine Alquist, D-San Jose – would require performance audits and thorough financial and leadership transition planning at CIRM. It would alter the selection of CIRM's top leadership, ban pre-judging grant proposals and funnel any royalty revenue away from CIRM.

The proposal may well avoid the dismal fate of past legislative efforts involving CIRM. Gov. Arnold Schwarzenegger vetoed those bills after stiff opposition from the agency. However, the measure by Alquist(left), chair of the Senate Health Committee, contains a large carrot for CIRM: removal of the 50-person cap on the size of the organization. The cap was written into Prop. 71 in an effort to make it more appealing to voters. But now CIRM says the restriction could endanger the quality of work at the agency and wants it changed.

CIRM had no immediate reaction to the legislation. It said a formal response was being prepared and would be available later today or tomorrow. Alquist's office also had no immediate statement available.

Asked for comment, John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., said,

“Sen. Alquist's bill makes sensible adjustments to the California Stem Cell Research and Cures Act including requiring transition plans for leadership changes and the end of the current bond financing. The ICOC (the CIRM board) would be wise to embrace it. I hope I'm wrong, but I predict the wagons will be circled and this will once again be portrayed as threat to CIRM's very existence.”

The measure embodies many of the recommendations of the Little Hoover Commission, the state's good government agency. The Citizens Financial Accountability and Oversight Committee (CFAOC), a sister to CIRM, last month recommended adoption of some of the Hoover suggestions, declaring that the agency needed to be more open to the public. (Both CIRM and the CFAOC were created by Prop. 71 in 2004). The CFAOC action also appeared to have triggered two newspaper editorials and a column in the Los Angeles Times deploring CIRM's lack of transparency and accountability.

Among other things, the legislation would:

• Require grant recipients and their licensees to submit to CIRM a plan to assure affordable access to therapies developed using CIRM funding.
• Require that all revenues resulting from CIRM's intellectual policy agreements go into the state's general coffers instead of possibly into CIRM's treasury.
• Require development of a financial transition plan to be submitted to the governor and legislature. (CIRM has already committed one-third of its $3 billion in bond funding with another $300 million or so expected to be committed by the end of this year.)
• Require the state controller, the state's top fiscal officer, to commission annual, independent performance audits of CIRM at the agency's expense.
• Change the duties of the chair and president of CIRM, specifying that the chair does not engage in day-to-day management. The CIRM board would be given authority to decide the chair's responsibilities.
• Remove nomination of candidates for chair from statewide constitutional officers, such as the governor.
• Require CIRM to formulate a succession plan to deal with changes in its leadership. (The current chairman, Robert Klein, says he plans to leave his post in December.)
• Reduce the terms of the CIRM chair and vice chair from six to four years.
• Require all grant applications to go through CIRM's grant review group, which would end a pre-application triage that CIRM has been using.
• Require that meeting minutes include voting records of each member of the CIRM board.

The Alquist bill is likely to be changed as it wends its way through the legislature. It requires a 70 percent vote of both houses, a rare and difficult requirement for any piece of legislation.

We will carry CIRM's response and statements from Alquist when we receive them.

Attention Scientists: CIRM Is Changing Grant Rules

With little notice, the California stem cell agency is moving quietly to make significant changes that are likely to affect hundreds of scientists seeking a share in the $3 billion that the agency is handing out.

The matter comes under the innocuous heading of “submitting supplemental materials.” But just how successfully a competitor exploits the new procedures could have a major impact on whether his or her grant wins approval from the de facto decision makers, the CIRM grant review group.

The changes are scheduled to come up next Monday at a meeting in San Francisco of the grant group, the sessions of which are almost never attended by members of the public. The reason for the lack of attendance is that the sessions are devoted almost entirely to closed-door deliberations of applications.

However, in the case of the supplemental material matter, by law it must be considered in an open, public session. Interested parties may comment and make suggestions for changes. Although the agenda for the meeting makes no mention of the opportunity, any person or business can also send comments to the grants group in advance of the meeting and ask them to be considered.

The one-page justification for the grant application change and its provisions appears to have been posted last Thursday night (Feb. 11, 2010) on the CIRM Web site. However, no notice of the specific meeting or the proposed changes is provided on the home page of the CIRM Web site. That's in keeping with the standard practice of the agency, which tucks away notices on its Web site of its public meetings, even when they involve hundreds of millions of dollars in taxpayer funds.

This case and an earlier transparency failure involving the January CIRM board meeting followed a call last month by a key state panel for more openness on the part of the agency. The panel's recommendations appeared to have triggered two newspaper editorials and a separate column in the Los Angeles Times expressing deep concern about CIRM's lack of accountability. One editorial likened the agency to a “private fiefdom.”

As for the supplemental material plan itself, CIRM proposes a limited opportunity both in time and space for researchers to beef up their grant bids. The general idea is to provide an opportunity for submission of “critical new information” that has come up since the application was filed. It would include citations to journal publications and research “accepted for publication” but not yet published. Also to be permitted would be a single page of “preliminary data” related to the proposed project along with two letters of support for “new collaborations.”

The entire CIRM proposal can be found here.

No Ten Year 'Sunset' on CIRM Horizon

California's unprecedented, $3 billion stem cell research program is widely perceived as a 10-year effort, but, like much conventional wisdom, that view is simply wrong.

The agency, created as the result of a 2004 political campaign, theoretically could continue to function for eons. The only relatively immediate, “life-and-death” question facing CIRM involves the cash needed to continue its grant and loan programs, which have already pumped out $1 billion to California researchers.

The fiscal hitch comes from Prop. 71, the initiative that spawned the California Institute for Regenerative Medicine. The measure provided for only $3 billion in state bond funding. When that borrowed money runs out, CIRM will have to find more -- if it wants to continue operations. But CIRM does not, in fact, face a mandatory “sunset” provision that will bring down the curtain on its offices near the San Francisco Giants baseball park.

Mainstream news organizations have continued, nontheless, to describe the state's stem cell research as a 10-year effort, including at least two reports in recent months.

The error seems to stem from the 2004 campaign, when it was in the interest of Prop. 71 supporters to allow voters to believe that they were not voting to create a big-bucks bureaucracy that would exist in perpetuity. The campaign was run by Bob Klein, who wrote much of the ballot measure and who is now chairman of CIRM.

News stories at the time commonly described the measure as having a 10-year limit. Those stories went uncorrected, presumably because the Prop. 71 campaign did not want to make an issue of it. In fact, the Prop. 71 campaign Web site carried this statement:

“Funds will be allocated incrementally over 10 years (~$295 million per year) for California-based stem cell research at leading universities and research institutions.”

The campaign Web site has now vanished into cyberspace and its domain name is for sale. But the campaign document can be found on the Web site of the world's largest organization of stem cell researchers, the International Society for Stem Cell Research. The society reports to this day that California is engaged in a 10-year program.

Last week, we discussed CIRM's life expectancy with James Harrison, the agency's outside attorney, at a meeting of the CIRM board at the Hotel Whitcomb in San Francisco. He assured us that there is no “sunset” looming for CIRM.

Later we asked him to provide his perspective via email, the full text of which is in a separate item below. Harrison is with Remcho, Johansen & Purcell of San Leandro, Ca., and is one of the authors of Prop. 71. He said,

"We wrote Prop. 71 to protect the voters' mandate against ideologically motivated litigation that could deny Californians the opportunity to have ten full years of medical and scientific advances for therapies. With ten full years of funding, the public will have an opportunity to evaluate CIRM's performance and the value of Prop. 71 to California's patients and the health care budget. At the end of this period, CIRM expects to be able to demonstrate an extremely persuasive performance.”

Harrison continued,

"Numerous (media) interviews were given to explain how Prop. 71 would adjust for delay by extending the effective time frame. Similarly, many interviews focused on the ability to reduce funding in a particular years if the scientific quality dropped in that year, with the funds saved to be used in later years, perhaps adding a year or two to the program term."

The California voter pamphlet, which goes to all registered voters statewide, also said in 2004,

“The measure states its intent, but does not require in statute, that the bonds be sold during a ten-year period.”

The pamphlet, however, came during both a presidential election year and a California election that was loaded with ballot measures. Both voters and reporters paid scant attention to it.

As for the language in the “intent” section of the measure, it says that Prop. 71 would

“Authorize an average of $295 million per year in bonds over a 10-year period to fund stem cell research and dedicated facilities for scientists at California’s universities and other advanced medical research facilities throughout the state.”

As far as we can tell, that is the only reference in the 10,000-word measure to a 10-year limit.

So what does all this mean? The intent language and the campaign's action/inaction could encourage a cantankerous attorney to make legal mischief by arguing in court that CIRM must wind up its affairs within the decade specified. We suspect such an effort would fail, but it would waste time and money at CIRM.

More importantly, the matter touches on the agency's credibility, which is likely to be examined as part of its bid for future funding. CIRM has already embarked on a course (creation of a communications task force and its disease team grants) to gin up support for more cash. If CIRM's credibility is suspect, some potential benefactors – be they lawmakers or philanthropists – may view the agency's new pitch with skepticism.

Klein already has been labeled as less than straightforward in connection with campaign claims. In one case involving allegations of deceit, the San Francisco Chronicle reported that Klein failed to disclose during the campaign negative financial details to the tune of $1 billion. Klein did not respond publicly to the 2005 article.

John M. Simpson, stem cell project director of Consumer Watchdog of Santa Monica, Ca., today put CIRM's life expectancy in the broader context of the California's budget crisis.  Writing on his organization's blog, he said that when CIRM asks for more public cash,

"...(It) will be necessary to ask whether, after committing $6 billion, counting interest on taxpayer money, CIRM deserves more.  The question will be: Given California's other challenges, can it afford more money for stem cell research?  I don't know what the answer will be then.  If the choice were being made today, my answer would be definitely not."

(You can read recent news stories here and here that contain a reference to a 10-year program. You can read campaign news stories that contain a reference to 10 years here, here and here. The item below carries the verbatim text of what Harrison sent the California Stem Cell Report concerning the life expectancy of CIRM.)

Statement on CIRM's Life Span From the Agency's Counsel

Here is the text of the statement to the California Stem Cell Report from James Harrison of Remcho, Johansen &  Purcell of San Leandro, Ca., CIRM's outside counsel, on the life expectancy of the stem cell agency. 

"We wrote Prop. 71 to protect the voters' mandate against ideologically motivated litigation that could deny Californians the opportunity to have ten full years of medical and scientific advances for therapies. With ten full years of funding, the public will have an opportunity to evaluate CIRM's performance and the value of Prop. 71 to California's patients and the health care budget. At the end of this period, CIRM expects to be able to demonstrate an extremely persuasive performance.

"To permit this evaluation to occur and to protect against delays arising from events beyond the agency's control (such as the litigation, which delayed the program for two and one half years), the measure was drafted to provide some flexibility. Thus, the measure sets forth limits on the percentage of funds that the agency can commit over the first 10 years of grant making (section 125290.70(a)(1)(B)), but permits funds that are not allocated in a particular year to be carried over to the following years. Likewise, the bond act authorizes the issuance of $350 million per year in bonds, but permits any remaining amount to be carried over into subsequent years. (Section 125291.45(b).)

"To date, CIRM has committed approximately one billion and expects to commit the remainder over the course of the next 7 years, which is consistent with the ten year time frame, as adjusted by the delay caused by the litigation. Of course, if there are other delays, such as federal regulatory roadblocks or other events beyond CIRM's control, this time frame could be extended.

"The loan program could also extend this time frame. To extent that CIRM recovers money from the loan program, the funds will be used to make new grants and loans to help successful proofs of concept reach patients, thereby providing the voters with more research funding than they've paid for.

"Throughout the campaign, the proponents of Prop. 71 explained that it was their intent for the funds to be committed over a period of ten years to permit the voters to evaluate the agency's performance, but they noted that if there were delays, the measure was designed to permit ten full years of funding as a basis for evaluating the value of Prop. 71.

"Numerous interviews were given to explain how Prop. 71 would adjust for delay by extending the effective time frame. Similarly, many interviews focused on the ability to reduce funding in a particular years if the scientific quality dropped in that year, with the funds saved to be used in later years, perhaps adding a year or two to the program term."

Eugene Washington to Join CIRM Board

An academic executive who was a key figure in developing UC San Francisco's first-ever strategic plan is scheduled to become the newest member of the board of directors of the $3 billion California stem cell agency.

He is A. Eugene Washington, who became dean of the UCLA School of Medicine this month. Prior to assuming the job, he was executive vice chancellor, provost and professor of gynecology, epidemiology and health policy at UCSF. In 2005, he co-chaired the development of UCSF's first campus-wide strategic plan.

Mona Gable profiled Washington in a piece last month in UCLA Today. She quoted Nancy Adler, vice chair of the UCSF Department of Psychiatry and director of the Center for Health and Community, as saying,

“He has a capacity to see things in innovative ways and to get people to work together to do things. He’s really a consensus builder. Sometimes that can be waffly, but his capacity to have a strong vision and bring people along to share in it, rather than impose it on them, is what characterizes him.”

As executive vice chancellor, he oversaw areas dealing with conflicts of interest, industry contracting and information technology in the UCSF office of research. That experience may serve him well given CIRM's enormous reliance on outside contracting and its ongoing issues with its grant management system.

Washington's appointment has not been formally announced, as far as we can tell, although it was discussed at last week's CIRM board meeting. His predecessor, Gerald Levey, the former UCLA dean of medicine, has retired. However, Levey, who has been on the CIRM board since its first meeting, will be serving as Washington's alternate on the 29-member CIRM board. Given that situation, it is unclear whether Washington will be in regular attendance at CIRM.

Southern California Newspaper Calls for Greater Transparency at CIRM

Another negative newspaper editorial popped up this week concerning the California stem cell agency. The piece called for more accountability and openness on the part of $3 billion research effort. And, the editorial said, if the agency goes to court to fight reforms, lawmakers should place the proposals on a statewide ballot.

The article in the Riverside Press Enterprise cited recommendations from the Little Hoover Commission, the state's good government agency, and the Citizens Financial Accountability and Oversight Committee, a sister agency to CIRM. Most recently, the citizens committee last week called for some reforms, a move that triggered a less than favorable column – for CIRM – in the Los Angeles Times, the state's largest paper, and a harsh editorial in the San Diego Union-Tribune.

The Riverside editorial said,

“California's stem cell research agency is not a private fiefdom, but a public entity answerable to taxpayers. Legislators should follow the recommendations of a state watchdog, and impose rules that would bring accountability and openness to an agency spending $3 billion of public money.

“Those steps should start with restructuring the agency's governing board to provide more independence, reduce conflicts of interest and hold members responsible for their actions. And the Legislature should oblige the agency to make decisions more transparently when awarding research grants.”

The piece continued,

“...(N)ot surprisingly, the institute has been dogged by widespread suspicion of conflicts of interest. The agency says that board members abstain from voting on matters that affect them. But the need for frequent recusals suggests an inherent structural flaw in the board,

“How the agency disburses money is largely hidden from public view, as well. The institute only identifies those grant applicants who collect money. But publicizing all the applicants, not just the successful ones, would protect against self-interest or favoritism in funding decisions. Connecticut's stem cell program follows that practice, and so should California's.

“The stem cell institute claims that most of those reforms would require a new ballot measure, but that argument is suspect. The measure allows the Legislature to make changes that further the intent of Prop. 71. Steps that provide greater public trust and protect against insider dealing surely further the agency's mission -- not to mention the public interest.

“And if the agency goes to court to fight such reforms, the Legislature should simply put them on the ballot.”