Letter He Wrote Triggered Complaint, Investigation

The state Fair Political Practices Commission sent a warning letter to Burnham Institute President John Reed after investigating a complaint that he violated state conflict-of-interest law.

Reed, a board member of the state stem cell institute, was investigated after he sent an appeal letter to the institute staff last year when it decided Burnham was not eligible for a particular research grant. The letter did not prompt the stem cell institute’s staff to change its decision.

Reed technically did not violate state law because his appeal was not even considered by the stem cell institute staff, the commission ruled.

But the commission found that his letter violated the spirit of the law, which is supposed to keep officials from using their positions to influence a decision that could result in a financial gain. In this case, the financial gain would have been to the Burnham Institute in Torrey Pines.

“In our view, by submitting a ‘letter of appeal’ to (the stem cell institute) staff, Dr. Reed intended to influence a decision that had the potential to affect his economic interests,” said the commission letter, which was sent last week.

However, Reed was seeking to use his influence to appeal a decision that by letter of law could not be appealed and changed, the commission said.

“Although this matter raises ethical concerns, we are closing this matter with a warning letter,” the commission said.

In its letter, the commission advised Reed that failure to comply with conflict-of-interest law can result in an enforcement action against him, including penalties of up to $5,000 for each violation.

Reed wrote his letter to the stem cell institute’s staff after it determined that the Burnham Institute was not eligible for a grant because the head scientist on its project, fertility doctor David Smotrich, was not a full-time employee.

Smotrich was an adjunct member of Burnham’s faculty.

The Burnham Institute does not have a medical school, so it does not have practicing physicians on its full-time staff in the way that universities with medical schools do. Reed said he was seeking to explain this technicality to the stem cell institute’s staff.

Robert Klein, chairman of the stem cell institute, had recommended that Reed send the letter.

Although the letter did not prompt the institute staff to reconsider its decision, the nonprofit Consumer Watchdog organization complained to the political practices commission that Reed violated the state conflict-of-interest law. State Controller John Chiang also asked the commission to investigate.

The commission’s warning letter ended a dispute that prompted Reed to recuse himself from all meetings and decisions of the stem cell institute for the past year.

“I filed the complaint more than a year ago to ensure that the (stem cell institute board) maintains the highest ethical standards,” said John Simpson of Consumer Watchdog, based in Santa Monica. “I hope Dr. Reed and all members of the board have learned from this. Assuming they have, Dr. Reed can now return to the (institute board) after more than a year’s absence and make a positive contribution to the board.”

Reed and Klein both have acknowledged that sending the letter was a mistake.

Reed was traveling and unavailable for comment yesterday.

The controller’s office said Chiang hopes the stem cell institute can now avoid further conflicts.

Contact the author Terri Somers at: (619) 293-2028; [email protected]