Stem Cell Agency Tightens Ethics Rules

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Responding to his predecessor's ethically controversial departure, the president and chief executive of California's stem cell agency said Thursday he is taking legal steps to minimize conflicts of interests with those who have business before the agency.

C. Randal Mills said he will not take a job with any company funded by the California Institute for Regenerative Medicine for one year after he departs the agency. In addition, he also will not accept gifts or travel payments from any company, institution or person who gets agency funding.

Mills' action, announced at the agency's meeting in Millbrae, will be enforced with a legal agreement he will sign. His action comes less than a month after he replaced Alan Trounson as the agency chief. One week after his departure, CIRM-funded StemCells Inc. announced it had appointed Trounson to its board. StemCells Inc. had received an award of nearly $20 million from the agency to develop a therapy for Alzheimer’s disease.

While Trounson's appointment wasn't illegal, critics said it was unseemly for him to join a company that had received agency funding so soon after he left CIRM. An ethical controversy could harm the agency's chances of getting more funding from California voters, who gave the agency $3 billion with the passage of Proposition 71 in 2004.

Mills said the new rules apply only to himself, because of his central role at CIRM.

"This specifically addresses an issue where an individual in an organization has a disproportionate amount of power, and I want to make sure it's known that power will not be abused," Mills said.

Mills made the right decision, said Jeanne Loring, a CIRM-funded stem cell researcher at The Scripps Research Institute.

"There's a difference between what is legal and what is ethical," said Loring, who attended the meeting. "And he's going to be pushing the needle a lot more toward the ethical side without worrying whether he can get away with stuff."

John Simpson of Santa Monica-based Consumer Watchdog, who has often criticized CIRM for conflicts of interest, also praised the decision.

Mills "clearly recognizes the importance of ethics and personal integrity," Simpson said in an emailed statement. "His action helps correct the damage done to CIRM’s standing by former President Alan Trounson rashly and inappropriately joining the board of StemCells Inc., a mere week after leaving the agency."

Simpson called for the agency to publicly release all emails and letters between Trounson and StemCells Inc., its employees and directors.

Members of the agency's governing Independent Citizens Oversight Committee said Mills has resolved the ethical cloud.

"I believe that we can now put this behind us and focus on developing the cures that patients so much need," said Joe Panetta, a board member who is president and chief executive of Biocom, a San Diego-based life sciences trade group.

Panetta also said by text message that Mills' actions in investigating Trounson's conduct should give the public confidence that "no illicit activity took place."

Board chairman Jonathan Thomas thanked Mills in a news release on the decision.

"As Chairman of CIRM's board, it is my responsibility to ensure the agency operates with only the highest ethical standards," Thomas said. "It was the motivation behind the sweeping changes the board unanimously adopted last year regarding conflict of interest procedures. It was central in our selection of the new President and CEO. And it is reflected today in Randy's actions.”

Board member Sherry Lansing concurred.

“We take even the possibility of a perception of a conflict of interest very seriously and are determined to do whatever is necessary to ensure that we protect the reputation of the agency and the work that we do," Lansing said in the release. "We fully support Dr. Mills in the way he is handling this issue."

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