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Scandals Waiting to Happen: Institutional Conflicts of Interest at California Stem Cell Agency

Posted by Pete Shanks on September 8th, 2016


Alan Trounson is pictured giving a talk.

Untitled Document

David Jensen, who writes the essential California Stem Cell Report blog, published a detailed front-page article in the Sacramento Bee on September 2 with the eye-catching headline:

Stem cell company paid $443,500 to former head of state agency that funds research

As has previously been reported, Alan Trounson joined the board of StemCells Inc. in 2014, about a week after he resigned from a six-year stint as President of the California Institute for Regenerative Medicine (CIRM) to return to Australia. CIRM, which is funded by California taxpayers, had previously allotted some $40 million of grants to the company, based just across the Bay from Stanford.

As Jensen recounts, some of those grants had raised questions; one was made despite having been twice rejected by the grant committee. In addition, Irving Weissman, the Stanford University-based co-founder of the company, has received research grants amounting to $30.5 million from the agency. Weissman notoriously appeared in 2004 television ads promoting the establishment of CIRM, while wearing a white coat and identifying himself as a doctor (which he also is), but not as a stem cell entrepreneur. Weissman’s academic institution, Stanford University, has received over a quarter of a billion dollars from CIRM, including over $40 million for a new building.

The new information that Jensen turned up in SEC filings was how much StemCells Inc. paid Trounson after he joined its board: $59,500 in cash over a year and a half (far more than any other board member) and nominally $384,000 in stock options. (The stock has since tanked completely.)

Did Trounson or StemCells Inc. do anything illegal? Quite likely not. Was this transaction appropriate? Absolutely not! It’s scandalous, but it’s the kind of scandal that was built into CIRM from its very inception. Nature, in September 2004, during the run-up to the state election that established CIRM, opened an article this way:

Opponents of California's $3-billion plan to fund embryonic stem-cell research say that the proposal would give researchers carte blanche to rewrite well-established ethical guidelines to suit their needs. They say the research institute planned under the initiative will be exempt from legislative supervision and, if established, will be able to make its own rules about conflicts of interest and informed consent.

Among those opponents was the Center for Genetics and Society, whose extensive pre-election analysis is archived here. In January 2006, CGS examined CIRM’s first year and published a detailed “report card” [pdf]. The overall grade we gave CIRM was C–, and on several issues, including minimizing conflict of interest, we handed out a D.

Jesse Reynolds, then Director of Project on Biotechnology Accountability for CGS, deserves particular credit for drawing attention to the conflicts of interest embedded in the structure of the stem cell agency. He attended numerous public meetings of CIRM, testified for investigations of the agency before the California legislature and the state’s “Little Hoover Commission,” wrote many op-eds, and helped to push for reforms.

A few journalists, activists and academics have also been documenting the problems with CIRM from the start. Jensen has been indefatigable (and quite balanced in his approach). Los Angeles Times columnist Michael Hiltzik keeps pounding away at conflicts of interest in particular; see columns from 201420122009, and 2004Consumer Watchdog's John Simpson has always been particularly strong on issues of governance. Ruha Benjamin’s 2013 book, People’s Science: Bodies and Rights on the Stem Cell Frontier, is an excellent investigation of the issues, as is Good Science: The Ethical Choreography of Stem Cell Research by Charis Thompson.

CIRM was also scrutinized by the Institute of Medicine in 2012. Its report affirmed the existence and significance of the conflicts of interest and structural flaws that CGS and other public interest voices had identified even before the agency was approved by the 2004 ballot measure on which backers spent some $35 million. CGS’s invited testimony to the Institute of Medicine, and its press release welcoming the IOM’s report, provide details.

CIRM is now slowly running out of the $3 billion of public funds allocated to it in 2004, and is expected to wind up in 2020. It has provided an object lesson in how not to set up and run an independent public-funded agency. These latest revelations should end any speculation about extending its charter.

Previously on Biopolitical Times:

Image via Flickr/Monash University Gippsland Campus





Posted in Bioethics, Biopolitics, Parties & Pundits, Biotech & Pharma, California, Civil Society, Egg Retrieval, Media Coverage, Pete Shanks's Blog Posts, Stem Cell Research


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