Bids for stem-cell grants in jeopardy;

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4 universities may have broken rules on conflict of interest

The San Francisco Chronicle

California’s stem cell agency may toss out grant applications seeking millions of dollars for researchers at UCSF and other prestigious universities because they included letters of support from deans who also sit on the citizens’ board that governs the $3 billion program.

Sources close to the grant-making process said that staffers at the California Institute for Regenerative Medicine flagged the applications for conflict-of-interest violations, despite a requirement that each request contain a letter of support “signed by the Dean or Departmental Chair.”

Among the institutions that have been notified their grant applications are in jeopardy, according to sources who spoke only on condition that they not be named, are UCSF, UCLA, the University of Southern California and UC San Diego.

At stake are grants in the first round of a new $85 million program to pay salaries of stem cell researchers. The initial awards are to be approved on Wednesday by the Independent Citizens’ Advisory Committee — the state stem cell governing board, which will meet in Los Angeles.

The grants would create high-paying positions, and universities hoped to use the money to attract top-flight stem cell researchers from around the world. Typical grants are for between $1.5 million and $2 million over a five-year period for each researcher.

Although the grant application called for letters of support from the deans or department chairmen, the conflict-of-interest policy for the stem cell institute also specifies that its board members “shall not make, participate in making, or in any way attempt to use their official position to influence a decision regarding a grant…”

Therefore, schools that followed one set of state instructions may well have violated another set of rules — putting at risk millions of dollars in potential research. Institutions not represented on the board, or that had department heads rather than deans write the support letters, avoided the problem.

The apparent contradiction in the rulebook is the kind of problem that critics say was built into the stem cell initiative passed by voters in 2004. Concerned about avoiding even the appearance of conflicts of interest, the governing board debated its rules extensively during a meeting in April 2005.

It remains unclear what will happen if the grant applications are rejected. One option, according to sources, is to simply have the four universities reapply at a later date — a delay of at least six months. Another option would be to reject all of the grants and have everyone update their applications because of the confusion regarding the letter-of-recommendation rules.

Melissa King, spokeswoman for the state stem cell program, declined comment.

A UCSF spokeswoman said that no one was available to comment on the issue Thursday evening. Nor were representatives of UCLA, USC or UC San Diego able to comment.

There has been a heightened concern about potential conflicts of interest in the awarding of the state stem cell grants because of the disclosure last month that a member of the stem cell institute governing board had lobbied to reverse a staff decision rejecting a grant that would have benefited his institution.

State Controller John Chiang has ordered an audit of the state stem cell institute after it was reported that governing board member Dr. John Reed, chief executive of the Burnham Institute for Medical Research in La Jolla (San Diego County), had written a letter to the chief scientific officer of the stem cell program protesting the rejection of a $638,000 grant.

Reed has since said that it was an unintentional error on his part, but it has led a consumer group and some fellow board members to call for him to step down. Jeff Sheehy, a UCSF spokesman who serves on the stem cell board as an advocate for HIV patients, said last month that Reed should consider resigning, and has asked that the issue be brought up at the board meeting in Los Angeles next week.

David Serrano Sewell, another member of the governing board, said on Thursday that Reed needed to resign. “I’ve given a great deal of thought to this. It has nothing to do with his abilities as a scientist. But his continued presence on our board undermines our ability to do our job.”

Earlier this week, Burnham spokeswoman Andrea Moser said that Reed was “still determining his course of action.”

The latest conflict-of-interest problem appears to be limited only to those universities where deans submitted letters of support — and some applicants apparently avoided the problem by having the recommendations signed by department chairmen.

Dr. Philip Pizzo, dean of the Stanford University School of Medicine, said he had not heard of any problems with grant applications. “I can only say that as a member of the (stem cell governing board), I am well aware that I must recuse myself from any grant application, proposal or action related to Stanford or any other individual or setting where I could have a conflict of interest,” he said.
E-mail Sabin Russell at [email protected].

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