EDITORIAL: More conflicts revealed at stem cell institute

With a new chairman, Jonathan Thomas, the California Institute for Regenerative Medicine claims it has turned a page. Thomas has vowed to be aggressive in avoiding conflicts in dispersing millions of public dollars for stem cell research.

Yet serious conflicts continue to be revealed involving CIRM. The latest one throws into question a $20 million grant awarded last year to StemCells Inc., a company that wants to transplant neural stem cells to treat Alzheimer's disease.

The institute's oversight board approved the award in September, following a lobbying effort by Robert Klein, a former chairman of the oversight board who authored Proposition 71, the initiative that created the stem cell institute. Klein, last year, donated $21,000 to CIRM so it could send six of its science officers to a conference in Japan, where Klein had special access to them.

Prior to this lobbying campaign, the institute's outside scientific reviewers recommended twice against awarding the money to StemCells Inc. Yet following Klein's efforts, the oversight board overruled them, agreeing on a 7-5 vote to approve the award.

It was the first time that the board had approved a grant its reviewers had twice rejected, according to David Jensen, who broke the story on his California Stem Cell Report blog.

That is not all. As Jensen has revealed, a top member of the oversight board who voted for the grant was receiving consulting fees from Klein at the time the grant was awarded. That person is CIRM Vice Chairman Art Torres, a former legislator and chairman of the state Democratic Party.

According to his economic disclosure statements, Torres was paid at least $31,000 in 2011 and 2012 by Klein Financial Corp., K CP Cal and Klein Ventures LLC, all of which share the same address as Klein's office in Palo Alto. Torres, in a written response to Jensen, denied that his work for Klein influenced his decision on the $20 million grant.

None of this helps CIRM's reputation in being fair and impartial in spending $3 billion in public funds. It surely won't help the institute's standing with the Legislature and the public, should it need help staying in operation when its funding is exhausted in a few years.