Editorial: Tangled loyalties at top of stem cell institute

Internal conflicts have hurt and hampered the oversight committee of California's $3 billion stem cell institute since voters created it in 2004 by passing Proposition 71.

As designed by Robert Klein, the author of that initiative, a majority of this 29-member oversight committee consists of administrators and scientists whose institutions have a stake in the taxpayer money the board hands out for stem cell research.

Although members of the "Independent Citizens Oversight Committee" are required to abstain from all decisions that could directly affect them or their institutions, at least one has now been caught using back channels in an attempt to influence a major grant.

John Reed, a respected scientist and oversight board member who heads the Burnham Institute in La Jolla, became disappointed earlier this year when the institute's staff ruled that a Burnham-affiliated researcher was ineligible to receive a $638,000 grant. Institute reviewers and the oversight board (with Reed abstaining) had already approved the grant, but the institute's staff later determined the researcher was not a full-time Burnham employee.

In an Aug. 2 letter, Reed filed a protest and urged the institute staff to reverse its decision. In doing so, he violated the institute's conflict of interest rules.

"Members of the ICOC shall not make, participate in making, or in any way attempt to use their official position to influence a decision regarding a grant, loan, or contract with their employer," the rules clearly state.

Yet Reed went ahead and filed the letter anyway, largely because he was urged to do so by ICOC chair Robert Klein – the same Robert Klein who wrote Proposition 71.

More than anyone, Klein should have known that Reed's inquiries and letter were inappropriate and would put him in a precarious legal situation. He certainly would have known had he first consulted the institute's general counsel, Tamar Pachter, who later determined that the staff should disregard the letter because of the obvious conflicts.

The incident – revealed by David Jensen of the California Stem Cell Report through an open records request – illustrates the impossible situation Klein has created for his institute and its mission of financing cutting-edge research. Scientists and administrators are expected to serve as unbiased grant funders while also serving their own institutions. Reed's actions confirm that these dual roles cannot co-exist.

Some institute watchdogs and at least one board member are urging Reed to resign, and he should – to demonstrate that the institute's rules have meaning. But the bigger problem is Klein, who created an excessively large oversight board – largely to win political support for Proposition 71 – that is a governance nightmare.

Klein, as we've said for some time, needs to step down. His divided loyalties, his disregard for public processes and his imperious nature have driven off institute staff and created a bunker mentality at what should be a world-class scientific institute.

Beyond that, the Legislature needs to reorganize the oversight board, making it smaller and less rife with conflicts. Although stem cell research still garners wide support, taxpayers want assurance their $3 billion will be spent based on the merits of projects, not behind-the-scenes lobbying.