After three years and an expenditure of $600 million, the governance of California's stem cell research institute is starting to get the scrutiny it deserves from an independent panel.
On Thursday, the Little Hoover Commission held its first hearing into the Institute for Regenerative Medicine, the quasi-public agency financed with $3 billion in bonds that voters approved in 2004.
The hearing revealed, once again, that this institute's 29-member governing board is rife with potential conflicts; that it is overly large and unwieldy; and that it awards multimillion-dollar grants in a manner that favors secrecy over accountability.
The most striking testimony came from Kenneth Taymor, executive director of the UC Berkeley Center for Law, Business and the Economy.
Taymor, who has been watching the institute's operations for three years, noted that nearly everyone on the institute's governing board – medical school deans, university officials – has some sort of financial interest in the grants being awarded.
Even with officials recusing themselves, the board's deliberations, he said, have the feel of "a club that was allocating money among themselves" based on preordained decisions.
Experts at the hearing also testified about the unusual executive structure of this institute, in which operational duties are shared between the institute's president and its chairman. Each position has its own staff and reports back to the governing board.
But because of the way Proposition 71 was written (by developer and stem cell activist Robert Klein II), the governing board can't fire the chairman or have control of his staff or operations.
Klein, of course, designed this structure for a reason: He alone has served as its chairman.
This is troublesome stuff, yet it doesn't appear the Little Hoover Commission will recommend sweeping structural changes, even though the institute still has more than $2 billion left to spend.
Downsizing its governing board, eliminating conflicts and stripping the institute's chair of operational authority would require a constitutional amendment to Proposition 71. Based on their discussion Thursday, members of the Little Hoover Commission don't want to go that far.
That's too bad. Without real reforms, Klein and his board will continue to operate like a club, spending taxpayer dollars without the normal safeguards of other public agencies.
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