Stem Cell Institute Correct in Rejecting Applications Over Conflicts of Interest;...

Stem Cell Institute Correct in Rejecting Applications Over Conflicts of
Interest; Institutions, Board Members Involved Must Be Identified, Consumer
Advocates Say

SANTA MONICA, Calif., Dec. 7 /PRNewswire-USNewswire/ -- California's stem cell
agency made the correct decision today when it announced it was rejecting 10
applications for research grants because of apparent conflict of interest
violations in California's $6 billion stem cell program, the Foundation for
Taxpayer and Consumer Rights (FTCR) said.

The non-partisan, non-profit consumer advocacy organization added that to
completely resolve the matter, the stem cell agency must identify the
universities and stem cell board members involved.

"The only way to fix this is complete transparency," said John M. Simpson,
FTCR's Stem Cell Project director. "People have a right to know which board
members still don't understand conflict of interest rules."

The latest improprieties were revealed by the San Francisco Chronicle and came
in the wake of the revelation that John Reed, Burnham Institute president and
stem cell board member, had lobbied to reverse the rejection of a grant to his
institution. Read the Chronicle story here:
here

"It's simple: stem cell board members cannot take part in any way in grants to
their institutions," said John M. Simpson, FTCR's Stem Cell Project Director.
"The board is not some old-boys' club for the benefit of the state's
universities. They are public officials and stewards of the public interest.
Perhaps a few of these deans need to enroll in Ethics 101 at their
universities and get the basics down."

The new violations of stem cell board ethics rules came when some university
deans who also serve on the stem cell board wrote letters supporting
applications for research grants. The grants in question could total $3
million each over five years. During its meeting in Los Angeles next week,
the stem cell board plans to award up to $85 million for the grants which are
aimed at faculty members just starting their independent research careers.

The Chronicle said applications from UC San Diego, UC San Francisco, UC Los
Angeles and the University of Southern California were affected.

"There could be more or the Chronicle could be wrong," said Simpson. "The only
fair thing is for the stem cell agency to lay everything out in the open. We
don't need to name the scientists, but the public has a right to know what
institutions and board members made mistakes."

FTCR has filed a complaint with the Fair Political Practices Commission (FPPC)
about the Reed incident and called for both him and stem cell chairman Robert
Klein to resign. Stem cell board members Jeff Sheehy and David Serrano Sewell
have also called for Reed to step down from the board. State Controller John
Chiang has announced plans to audit the agency and asked the FPPC to
investigate.

The latest improprieties, though serious, are not as egregious as the Reed
affair, FTCR said. The agency's call for applications asked for a letter of
support either from the dean or department chairman. "Board members have
signed conflict of interest rules and clearly should know what's right and
what they can do," said Simpson. "However, this is not the same flagrant
violation as actively lobbying to overturn a decision. Throwing out the
tainted applications should be an adequate punishment."

FTCR also said that the stem cell committee should discuss at its meeting
Wednesday what penalties are right for violations of its rules by board
members. "They've got all these supposed rules that Chairman Klein likes to
call 'the gold-standard,' but they are absolutely meaningless unless there are
consequences when they are broken," said Simpson.

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. 'Golly, we meant well and will do better next time' simply does not
cut it."

FTCR'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.

The Foundation for Taxpayer and Consumer Rights is California's leading
non-profit and non-partisan consumer watchdog group. For more information
visit us on the web at: www.ConsumerWatchdog.org.

SOURCE Foundation for Taxpayer and Consumer Rights

John M. Simpson of FTCR, +1-310-392-0522, x317, or cell: +1-310-292-1902