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May 24, 2013
Editorial: More conflicts come to light at stem cell institute

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(May 24 -- By the Editorial Board)

With a new chairman, Jonathan Thomas, the California Institute for Regenerative Medicine claims it has turned a page. Thomas has vowed to be aggressive in avoiding conflicts in dispersing millions of public dollars for stem cell research.

Yet serious conflicts continue to be revealed involving CIRM. The latest one throws into question a $20 million grant awarded last year to StemCells Inc., a company that wants to transplant neural stem cells to treat Alzheimer's disease.

The institute's oversight board approved the award in September, following a lobbying effort by Robert Klein, a former chairman of the oversight board who authored Proposition 71, the initiative that created the stem cell institute. As part of that effort, Klein last year donated $21,000 to CIRM so it could send six of its in-house science officers to a conference in Japan, where Klein had special access to them.

Prior to this lobbying campaign, the institute's outside scientific reviewers recommended twice against awarding the money to StemCells Inc. Yet following Klein's efforts, the oversight board overruled them, agreeing on a 7-5 vote to approve the award.

It was the first time that the board had approved a grant its scientific reviewers had twice rejected, according to David Jensen, who broke the story on his California Stem Cell Report blog.

And that is not all. As Jensen has revealed, a top member of the oversight board who voted for the grant was receiving consulting fees from Klein at the time the grant was awarded. That person is CIRM Vice Chairman Art Torres, a former legislator and chairman of the state Democratic Party.

According to his economic disclosure statements, Torres was paid at least $31,000 in 2011 and 2012 by Klein Financial Corp., K CP Cal and Klein Ventures LLC, all of which share the same address as Klein's office in Palo Alto.

Torres could not be reached Friday. But in a written response to Jensen, he denied his work for Klein influenced his decision on the $20 million grant. "My decision to support an award to StemCells Inc. ... was based on the merits of the application and the hope it offers to patients who suffer from Alzheimer's, a disease that affects millions, including Bob Klein's late mother," Torres said. "I have no financial interest in StemCells Inc., nor does Bob Klein, and my decision to support the award has no connection whatsoever to the work I do with Bob Klein."

This isn't the only CIRM conflict that has come to light in the last month. As Jensen has reported, a scientific reviewer for the institute failed to disclose his personal and financial relationship with a scientist whose grant application he was reviewing.

The scientific reviewer, Dr. Leroy Hood, of the Institute for Systems Biology in Seattle, was part of an outside team of experts CIRM had asked to review applications for a genomics center in California, including a $24 million bid by Irv Weissman of Stanford University. Hood reviewed that application but failed to disclose, as he should have under CIRM rules, that he co-owned property with Weissman in Montana and had professional connections with him.

CIRM's staff failed to detect the conflict before Hood participated in the reviews - a serious oversight. The conflict, which the institute quietly revealed to lawmakers in February, has forced the institute to "do over" the review of genomics centers, with Hood not participating.

None of this helps CIRM's reputation in being fair and impartial in spending $3 billion in public funds. It surely won't help the institute's standing with the Legislature and the public, should it need help staying in operation when its funding is exhausted in a few years.

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