Category Archives: Stem Cell Therapy

A conflict of interest on a grant application before the $3 billion California stem cell agency last year led to the resignation of the grant review committee's longstanding chairman, John Sladek of the University of Colorado.

The incident occurred last April but was not publicly disclosed by CIRM until the California Stem Cell Report (CSCR) raised a question earlier this month.

Sladek is professor of neurology, pediatrics and neuroscience at the University of Colorado in Denver and a former president of Cal Lutheran University in the Los Angeles area. He had served on the stem cell agency's grant review group since 2005 and as its chairman from 2009 until April of last year.

Responding to an email from CSCR, James Harrison of Remcho, Johansen and Purcell of San Leandro, Ca., outside counsel to the stem cell agency, said that CIRM's staff uncovered the conflict in April after the grant review session was concluded on March 17. Harrison described it as a "technical violation."

He said,

"While preparing the public summary for Basic Biology III (grant round)applications, CIRM staff discovered that Dr. John Sladek was one of several co-authors on scientific publications with a researcher who was listed as a consultant on a CIRM grant application."

Harrison said,

"This is a technical violation of CIRM's conflict of interest rules, which prohibit a member of the Grants Working Group ("GWG") from participating in the review of an application if the member has co-authored papers with a salaried investigator listed on a CIRM application within a three year window."

Harrison said Sladek's conflict did not violate the state's political reform act nor did he have a financial interest in the application.

Harrison continued,

"Nonetheless, in the spirit of setting an example of strict compliance, Dr. Sladek tendered his resignation from the GWG."

Asked for comment, Sladek said that Harrison's account was accurate and that he had nothing to add. (Both Harrison's and Sladek's verbatim comments can be found here.)

In December, the CIRM board of directors approved, on a unanimous voice vote of the 21 directors present out of 29, a resolution commending Sladek for serving in "exemplary fashion."

The stem cell agency disclosed specifics of the conflict of interest violation after the California Stem Cell Report discovered a vague reference to it in the transcript of the January meeting of the Citizens Financial Oversight and Accountability Committee, the only state entity specifically charged with oversight of the agency and its directors.

Members of the committee had raised questions about conflicts of interests at CIRM. At one point, Harrison said,

"We have also had occasion where we have had a conflict of a very technical nature on the grants working group which we addressed pursuant to our procedure and reported to the legislature."

It was that remark that triggered the request for more details.

Asked about the report to the legislature, Harrison said CIRM wrote a letter to the legislative leadership about the incident. We have asked for a copy of the letter, which we will carry when we receive it.

As of this writing, the review summary for the grant application (RB3-02119) in question was not available on the CIRM web. Normally all the summaries are posted. We have queried the agency concerning its absence.

Harrison also said that in the seven-year history of CIRM no other instances exist of grant review committee members having been determined to be in a conflict of interest after participation in a review.

Our comment: CIRM is to be commended for taking care of this situation quickly last April. Sladek correctly resigned promptly. However, failure to disclose the incident at the time does not reflect well on the California stem cell agency nor does it inspire confidence in the agency's now improving openness and transparency.

CIRM is an enterprise that has substantial built-in conflicts of interests – all legal courtesy of Prop. 71, the ballot initiative that created CIRM. Institutions linked to CIRM directors have received $1.1 billion of the $1.2 billion the agency has given away. A display of reticence in this conflict-of-interest case does little to quell the suspicions of those who have criticized the agency for "cronyism," including the journal Nature and some in the biotech business community and elsewhere. As for the description of the incident as a "very technical" violation, that amounts to a bit of PR. Either it is a violation or it isn't.

Sladek's violation is the sort of thing not well understood by the public. Most public attention is focused on financial conflicts of interest in science. However, professional conflicts of interest involving scientists are among the most invidious. The California Stem Cell Report regularly hears complaints and suspicions about such dealings at CIRM: Big-name scientists receiving favored treatment, academic researchers unfairly evaluating applications from business researchers, younger researchers being shunted to background and more. All this as a billion dollars worth of applications have been evaluated behind closed doors with no public disclosure of the economic or professional interests of the reviewers. The stem cell agency would do well to improve its openness and transparency, particularly as it moves into ticklish and expensive relationships with industry. The first step would be to post on its web site the disclosure forms filed by its grant reviewers but withheld from the public by CIRM.

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Here are the verbatim statements from James Harrison, outside counsel to the California stem cell agency, and John Sladek concerning Sladek's conflict of interest and resignation as chair of the agency's grant review group.

Harrison made these initial remarks first and provided a few other details later.

"While preparing the public summary for Basic Biology III (grant round)applications, CIRM staff discovered that Dr. John Sladek was one of several co-authors on scientific publications with a researcher who was listed as a consultant on a CIRM grant application.
"This is a technical violation of CIRM's conflict of interest rules, which prohibit a member of the Grants Working Group ("GWG") from participating in the review of an application if the member has co-authored papers with a salaried investigator listed on a CIRM application within a three year window.

"It should be noted, however, that Dr. Sladek's participation in the review of the application would not have constituted a conflict of interest under the Political Reform Act's conflict of interest standards because Dr. Sladek did not have a financial interest in the application. In addition, the amount of funding involved - approximately $3,000 of salary per year for three years, less than one percent of the total award - was not material, and Dr. Sladek did not stand to receive any financial benefit from the application. Finally, Dr. Sladek's participation in the review did not affect the outcome because the application was not recommended, or approved, for funding.

"Nonetheless, in the spirit of setting an example of strict compliance, Dr. Sladek tendered his resignation from the GWG."

Sladek's response to a question for comment:

"Mr. Harrison’s account  is accurate and there really isn’t anything to add other than I was pleased to serve CIRM and California  for several years and wish them well as they pursue such an important mission with respect to the potential for therapeutic applications to human disease and disorders. Thank you for your inquiry."

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Qatar Conference Center

If our readers in the Middle East are looking for a first-hand assessment of the state of stem cell research, they might want to take in the four-day conference this week in Qatar, which features the president of the $3 billion California stem cell agency.

Alan Trounson is one of a number of international stem cell notables at the session at the new Qatar Conference Center in the tiny nation in the Persian Gulf. The country is putting on the conference as a means of developing its own stem cell research capabilities.

Qatar had a gross national product of $129 billion in 2010, with a per capita income of $138,000, according to the U.S. State Department. The population is about 1.7 million, more than 75 percent of whom are foreigners with temporary residence status.

In addition to Trounson, other California and CIRM-connected researchers are speaking at the conference in the Qatar center, which just opened in December.  They include David Baltimore, Nobel Laureate and a former director of the stem cell agency. A company Baltimore co-founded, Calimmune, of Tucson, Az., is sharing in a $20 million CIRM grant. Other CIRM grant recipients or representatives of recipient companies appearing at the conference are Irv Weissman of Stanford; Deepak Srivastava of the Gladstone Institute, and Ann Tsukamoto Weissman of Stem Cells Inc. of Newark, Ca.

Social activities at the conference include sand dune "bashing" in off-road vehicles, camel tracking along with a look at their "robot jockeys" and a visit to the original Arabic Oryx farm.

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The state of California plans to sell $2 billion in bonds next Thursday, but the California stem cell agency, which is entirely dependent on state borrowing, will have to wait until later this spring to see more cash.

J.T. Thomas, chairman of the stem cell agency, said he expected to see CIRM benefit from the next bond sale in April. The agency currently has sufficient funds to operate until about June, plus an arrangement with the state for continued funding if a timely bond sale is not completed.

The $3 billion stem cell agency was created in 2004 through a ballot initiative that authorized its funding through the sale of state bonds over a 10-year period. The interest on the bonds raises the total cost of the agency to taxpayers to about $6 billion. Likewise, the cost of a $20 million grant is actually more like $40 million.

Financially beleaguered California's interest costs have sharply increased in recent years as the state has borrowed $53.8 billion from 2007 to 2010. This year, interest costs will come to about $5.4 billion, nearly 6 percent of the state budget. Nine years ago, it was $2.1 billion or 2.9 percent, according a piece by Randall Jensen (no relation to this writer) of the Bond Buyer newspaper.

The expense of borrowing shrinks the amount of state money available for public schools, helping the medically indigent and other state purposes.

Next Thursday's bond sale will go to refinance debt at lower rates. This year, Gov. Jerry Brown and state Treasurer Bill Lockyer plan to sell only $5.2 billion in general obligation bonds, roughly one-fourth of what the state issued in 2009.

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