To reduce potential conflicts of interest in the state’s $3 billion stem cell research program, a government watchdog group called Friday for an overhaul of the program’s governing board.
The current 29-member board is too big, has trouble assembling quorums and lacks truly independent voices, the Little Hoover Commission concluded.
The structure "is not adequate to protect taxpayers’ interests or serve its own ambitious goals," the commission said in a letter to Gov. Arnold Schwarzenegger and state lawmakers.
It recommended that the number of board members be dropped to 15 and include four people who have no ties to institutions that receive stem cell grants.
"Criticism that (the) governing board remains an insiders’ club undermines the legitimacy of the agency," the report said.
The recommendations prompted vigorous opposition from Robert Klein, the longtime chairman of the stem cell board. He argued that the changes would lead to a complete board turnover and could significantly delay progress in the agency’s quest to find cures for life-threatening diseases as clinical trials are beginning.
The Little Hoover Commission is an independent state agency that analyzes ways to improve the efficiency and effectiveness of state programs.
Last year, state Sens. Sheila Kuehl and George Runner asked the commission to study the California Institute for Regenerative Medicine, or CIRM, to determine how it could become more accountable to the public. (Both Kuehl and Runner are from Southern California; Kuehl has since left the Senate.)
Its recommendations go to the Legislature, which will decide whether to adopt them. That decision could be complicated by a disagreement about whether lawmakers have the power to make such changes. Klein presented the commission with two legal opinions this week arguing that such revamps would need state voter approval.
CIRM was created in 2004 after nearly 60 percent of voters approved Proposition 71. A controversy ignited almost immediately over the composition of the CIRM board, which includes representatives from leading California universities and research institutes that often receive stem cell grants.
Klein said that including deans of medical schools and others with expertise in health and research ensures wise decisions on how to spend the millions of research dollars.
"We have to know when we’re spending the state’s money that we are using the best scientific and medical judgment possible," he said. "To put people on the board that have no background in the area, you’d waste critical assets that could otherwise lead to a cure."
A group of peer-reviewing scientists first make recommendations about who should be funded. When it is brought to the board, members whose institutions are under consideration are required to recuse themselves.
The Little Hoover Commission noted that 80 percent of the research funds awarded to date have gone to institutions with representatives on the board. Although this is not surprising because these are prestigious organizations, the report said, more transparency is needed to ease public concerns.
"The frequent occurrence of members recusing themselves because of conflicts of interest shows a structural defect in the governing board," the report said.
The commission proposed that the governing board consist of five patient advocates, two independent business leaders, two scientists with no ties to funded institutions, two University of California officials, one non-UC college official, two biotechnology executives and one leader of a California research institute.
It recommends a four-year term limit, with current members leaving when their existing terms expire. Klein noted that with half of the terms expiring in December 2010, it could lead to a major disruption and uncertainty, particularly for 30 research disease teams that are expected to receive grants later this year.
But the recommendations drew praise from John Simpson of Consumer Watchdog, who had sought such changes.
"This is a thoughtful and thorough analysis from a bipartisan group with no ax to grind," he said.
The commission said the role of the chairman and the agency president should be clarified.
Critics have accused Klein of assuming too much power and getting too involved in the day-to-day agency operations.
The commission also called for dropping a requirement that the agency have no more than 50 employees. That has led to an over-reliance on more expensive, outside contractors, it said.
Reach Sandy Kleffman at 925-943-8249 or [email protected]