Ethics Panel Probe Finds Stem Cell Board Member Violated Ethical Standards

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Warning Issued to Burnham Institute’s John Reed After Consumer Watchdog Complaint

Santa Monica, CA — California’s ethics commission has found that a member of the state stem cell agency’s oversight board violated ethics rules when he intervened with agency staff members in attempt to win a research grant for his institution, the Burnham Institute for Medical Research.

In a three-page warning letter for Burnham President John Reed, the Fair Political Practices Commission (FPPC) found that “Dr. Reed intended to influence a decision that had the potential to affect his economic interests.”  In the letter FPPC Enforcement Division Chief Kourtney C. Vaccaro, said the incident “raises ethical concerns”, but said the case would be closed with the warning letter.  

“Dr Reed is advised that failure to comply with the provisions of the Act can result in enforcement action against him, including monetary penalties of up to $5,000 for each violation,”  Vaccaro wrote in the letter dated Jan. 7.  Read the FPPC letter here.

The FPPC investigation began after John M. Simpson, Consumer Watchdog’s Stem Cell Project director, filed a complaint with the FPPC.  Documents obtained by the California Stem Cell Report’s David Jensen, showed that after the staff of the California Institute for Regenerative Medicine (CIRM) had determined that a researcher affiliated with Burnham institute did not meet qualifying requirements for a particular research grant, Reed improperly intervened seeking to get the staff to change their ruling.

When he wrote a six-page letter asking CIRM staff to change their minds, Reed was a member of the stem cell board, the Independent Citizens Oversight Committee (ICOC).  Members of the 29-person board cannot be involved in grant decisions directly affecting their institutions.

When the FPPC announced it would investigate Reed’s action in December 2007, Reed voluntarily recused himself from all ICOC activity until a decision was reached.

“I filed the complaint more than a year ago to ensure that the ICOC maintains the highest ethical standards,” said Simpson. “I hope Dr. Reed and all members of the board  have learned from this.  Assuming they have, Dr. Reed can now return to the ICOC after more than a year’s absence and make a positive contribution to the board.”

Proposition 71, passed by 59 percent of Californians in 2004, created an oversight board fraught with potential conflicts of interest. "Most of the people handing out the money are the very same people from the institutions that get the money," said Simpson. "That means the conflict rules in place must be strictly adhered to and there must be consequences when they are violated.”

Consumer Watchdog’s Stem Cell Oversight and Accountability Project is working to ensure that California’s landmark stem cell research program offers accessible and affordable cures and treatments to the taxpayers who have funded it. The program will award $3 billion in grants over a decade. Bond financing charges mean the project, the largest source of stem cell research funding in the world, will cost California taxpayers $6 billion.

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Consumer Watchdog, formerly The Foundation for Taxpayer and Consumer Rights, is a nonpartisan, nonprofit organization.

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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