Controller calls for audit of state's stem cell
By Ari Burack
November 27, 2007
A financial audit of California's multi-billion dollar stem
cell research agency ordered today by the State Controller has
nothing to do with recent conflict-of-interest allegations on
the part of agency board members, a spokeswoman with the controller's
office said today.
"It's completely separate," said controller's office
spokeswoman Hallye Jordan.
State Controller John Chiang made the announcement at a meeting
this morning of the San Francisco-based California Institute of
Regenerative Medicine's financial oversight committee.
After voters approved Proposition 71 in 2004, CIRM was tasked
with providing $3 billion of public money for grants and loans
for stem cell research at universities and research institutions
According to Jordan, a recent court decision approving the constitutionality
of Proposition 71 has allowed CIRM to begin disbursing a significant
amount of grant and loan money, and the Controller feels a thorough
audit by his office, in addition to the group's own yearly audit,
is in order. Jordan added that the audit was not a signal of any
"Considering the Institute has already made grants to 23
research agencies and the Treasurer has sold $250 million in bonds
for additional research, it is imperative that the research financing
move forward in an ethical and transparent manner," Chiang
said in a statement released after the meeting.
"Immediate action is necessary to guarantee the Institute
is effectively overseeing grants, and that grant recipients are
using State funds appropriately an in a manner consistent with
the stem cell initiative," Chiang added.
The audit will examine how grant money is allocated, and whether
there is adequate oversight after grants are awarded.
Chiang also sent a letter today to the state's Fair Political
Practices Commission, asking for an investigation into recent
allegations that Dr. John Reed, a member of CIRM's 29-person governing
board, tried last summer to reverse a decision by the agency rejecting
a grant proposal from a scientist who works for him at the Burnham
Institute of Medical Research in La Jolla.
"Whether they are perceived or real blemishes, we must resolve
any conflict of interest questions quickly so we can protect the
important and powerful work that is taking place in stem cell
research," said Chiang.
John Simpson of the Santa Monica-based watchdog group the Foundation
for Taxpayer and Consumer Rights said today that his group filed
a formal complaint against Reed with the FPPC last week.
"He should resign," said Simpson, who manages the Foundation's
Stem Cell Oversight and Accountability Project.
With an additional allegation that CIRM governing board chairman
Robert Klein had given advice to Reed to contest the grant rejection,
Simpson added, "It would clear the air if he (resigned) as
According to Simpson, who said he does not oppose CIRM but merely
wants to help ensure the results of stem cell research end up
"affordable and accessible" to consumers, the way Proposition
71 was written may inevitably create conflicts of interest.
"Most of the people on the board are the very representatives
of the institutions that are going to be receiving the money,"
"CIRM needs to understand that they're a state agency...public
officials who are guardians of the public's money," Simpson
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