Showing posts with label littlehoover. Show all posts
Showing posts with label littlehoover. Show all posts

Wednesday, February 27, 2013

California Stem Cell Agency: Comparing the Critiques

State Controller John Chiang has posted a useful, side-by-side comparison of critiques of the $3 billion California stem cell agency, including the Institute of Medicine(IOM) study, along with the responses from the agency.

Chiang, the state's top fiscal officer, has additionally posted the initial remarks Jan. 23 by CIRM Chairman Jonathan Thomas before the stem cell agency governing board on his plan to deal with the sweeping recommendations of the IOM.

Regardless of one's opinion of the board's response to the IOM, Thomas adroitly handled the discussion and vote, not a small accomplishment given the size of the board (29 members) and the legal restrictions involving public meetings. Under state law, Thomas could not lobby significant numbers of the board in advance of the meeting. He was restricted to engineering the approval in a public session, which can easily take on a life of its own given the unwieldy size of the board and the necessity for public comment.

As for the documents posted by Chiang, he is chairman of the Citizens Financial Accountability and Oversight Committee, the only state body specifically charged with oversight of the agency and its board. The web site for the committee is the only location on the Internet where Thomas' prepared remarks and the comparison can be found.

Chiang's comparison chart includes not only the IOM study, but last year's performance audit and the Little Hoover Commission study in 2009. Missing, however, is the state auditor's report in 2007 and its recommendation that the agency seek an attorney general's opinion on whether scientific grant reviewers must file a public financial disclosure form.

Here are links to the various documents: Thomas' prepared comments, Power Point chart used by Thomas, comparison chart of various studies and the transcript of the Jan. 23 meeting during which the governing board approved its response.

Wednesday, December 19, 2012

Exploring the Straw Man Argument Against IOM Reforms at California Stem Cell Agency

Constitutional objections to some of the Institute of Medicine's sweeping recommendations for changes at the $3 billion California stem cell agency amount to little more than a straw man, at least based on a legal memo produced earlier by the agency.

The legal objections to structural reforms at the agency were initially advanced in 2009 when the stem cell agency was fighting an unwelcome analysis of its activities by the state's good government agency, the Little Hoover Commission. The objections were voiced again at a meeting earlier this month by some governing board members, particularly Sherry Lansing, who is also chairwoman of the University of California regents. Her comments came within minutes of the start of the Institute of Medicine's (IOM) presentation to the board.

She said directors' hands “are tied” because of requirements in Proposition 71, the ballot initiative that created the stem cell agency, which is formally known as the California Institute for Regenerative Medicine(CIRM). While Lansing did not elaborate, some of the initiative is written into the state constitution, which can only be amended by a vote of the people. However, Proposition 71 can also be amended by a 70 percent vote of each house of the Legislature and the signature of the governor, which is no small task to achieve.

The 2009 legal memo (see the full text below) dealt with the recommendations of the Little Hoover Commission, some of which were cited and echoed by the IOM. The legal memo contended that the legislature was barred from making major changes in the structure of the stem cell agency governing board because the changes supposedly would not “enhance the ability of the (agency) to further the purposes of the grant and loan programs.” The argument was that only the people could make “non-enhancing” changes. The vague “enhancement” requirement was written into Proposition 71 by its authors, one of whom is James Harrison, the outside counsel to the board, who was also the lead author on the 2009 memo. Harrison is revisiting the supposed constitutional issues in the wake of the IOM study.

However, the objections cited in his earlier memo are dubious and easily overcome. The meaning of “enhance” is so vague as to permit wide interpretations. Certainly, removing public suspicion about conflicts of interest would seem to help move the agency forward. Straightening out the muddled management structure of the agency, with its overlapping responsibilities for the chairman and president, would certainly seem to enhance the functioning of the agency. Assuring that the governing board has the full ability to exercise strong oversight over the conduct of the agency would certainly seem to be an enhancement and long overdue.

At least that is what the most prestigious body of its sort says. The Institute of Medicine studied the agency for 17 months under a $700,000 contract with CIRM. The IOM's charge was to evaluate the performance of the agency and make recommendations for improvements. The IOM recommendations echoed findings not only of the Little Hoover Commission, but some in two earlier studies also funded by the agency.

For CIRM directors now to reject the IOM findings and turn away would be to indicate that their earlier admiration and respect for the IOM was something of a sham or, more likely, now inconvenient.

As for removing ambiguity about what does or does not enhance the agency's mission, the 29-member board could simply adopt a resolution declaring that all the IOM recommendations would enhance the CIRM mission.

One of major obstacles to acting on the earlier recommendations for changes was Robert Klein, the first chairman of the agency board. Klein, an attorney and real estate investment banker, also directed the writing of Proposition 71 and wrote portions of it himself. He would often make numerical code citations to the initiative during agency board meetings.

Klein is now gone from the board, leaving in 2011 at the end of his term. He was replaced by Jonathan Thomas, a Los Angeles bond financier, who has ushered in a new and different era at the stem cell agency. Some might say a more reasonable era. He says he and governing board take the IOM study seriously. 

The report is scheduled for discussion Jan. 23 at a public workshop at the Claremont Hotel in Berkeley, Ca., the day before the regular board meeting. .

The IOM's recommendations have won theeditorial endorsement of all the California newspapers that have so far written about them. The newspapers believe that the proposals would indeed enhance the agency's mission and are, in fact, necessary if the agency is to survive beyond 2017, when the money for new grants runs out.

Directors of the stem cell agency are currently mulling the future of their efforts. If they are to be successful in raising additional hundreds of millions of dollars – be they private or public – the directors must confront the findings of the IOM in a forthright manner. And they must move to dispel the cloud that now hangs over the stem cell agency.

(Editor's note: The full text of the 2009 legal memo can be found below. Also below is another related legal memo from Americans for Cures, a stem cell lobbying group sponsored by Robert Klein at the same time he was chairman of the stem cell agency. Despite the language on the Americans for Cures memo, it is a public record. It became a public document when Klein submitted it to the Little Hoover Commission.) 

Thursday, June 25, 2009

CIRM Rips Hoover-recommended Reforms as Disruptive

The California stem cell agency has fired off a legal memo to the state's good government commission, declaring that its proposed changes in CIRM would impose illegal and “drastic and disruptive” alterations in the stem cell research effort.

The memo from CIRM's outside attorneys came as the Little Hoover Commission today approved its wide-ranging report, which is expected to be released in full tomorrow.

Among other things, the Hoover proposals call on the legislature to reduce the size of the CIRM board, reduce the super-majority quorum requirement, eliminate salaries for the chairman and vice chairman and eliminate the dual executive situation created by Prop. 71.

All of those provisions, in one form or another, hamper the operations of CIRM. Even the salary matter has diverted the board from its primary mission of funding research. Today, nearly five years after CIRM was created, the board is still struggling with an incomplete evaluation process for the chairman and vice chairman. Those positions are filled by a vote of the board.

Nonetheless, James Harrison and Kari Krogseng of Remcho, Johansen and Purcell of San Leandro, wrote on Tuesday (June 23),
“The Little Hoover Commission’s proposals would effect drastic and disruptive changes to CIRM’s governance and operating systems. Such changes run counter to the voters’ intent, and do not further Proposition 71’s purposes.”
The 10-page legal memo hung most of its arguments on a provision in Prop. 71 that states that it can only be amended by the legislature if the changes “enhance the ability of the institute to further the purposes of the grant and loan programs.”

Harrison's memo said the Hoover proposals could only be enacted through another ballot measure, a move that a subcommittee of Hoover commissioners clearly opposed earlier this month.

Americans for Cures, the private stem cell lobbying group of CIRM Chairman Robert Klein, also produced a 14-page legal memo that the reached the same conclusion as Harrison.

The memo was written, also on Tuesday, by Richard Martland and Kurt Oneto of the Nielsen, Merksamer, Parrinello, Mueller & Naylor law firm of Sacramento, Ca. The firm has a lobbying contract with CIRM but we presume no state funds were used for the Martland memo.

The document had this interesting tidbit in it:
“The (Hoover Commission) proposal would effectively permit the ICOC (the CIRM board) decision-making process to be captured by a small minority and would deprive ICOC decisions of the benefit of input from the broad spectrum of views currently represented on the committee. It is inconceivable that voters who approved an organization with 29 members would have imagined that 5 members would ultimately be able to make binding decisions on its behalf.”
However, that is exactly what happens. We pointed out a good example last week in which only six of the board members were permitted to vote. All the rest in attendance were excluded not only from voting but from participating in the debate.

(Editor's note: The copies of the memos were supplied by the Little Hoover Commission to John M. Simpson of Consumer Watchdog of Santa Monica, Ca., who relayed them to us. The Merksamer memo contains a confidentiality warning. However, when it was submitted to the Hoover Commission the memo became a public record.)

Wednesday, December 17, 2008

How Would California Stem Cell Backers Do It Differently?

California's Little Hoover Commission, which is looking into governance and conflict of interest issues involving the $3 billion California stem cell agency, has raised some interesting questions that it wants answered in writing.

The questions are the subject of a meeting this Friday afternoon of a meeting of the Legislative Subcommittee of the CIRM board of directors.

In a Nov. 26 letter to CIRM Chairman Robert Klein, Stuart Drown, executive director of the bipartisan state agency, said:
"We’d like to follow up on the discussion about governance that came up during your testimony, in which you agreed to submit additional written remarks in response to Commissioner Loren Kaye’s questions:

"Would you write anything differently in the initiative, particularly in the governance area regarding the structure of the board, the composition, the ratio of independent or outside directors to the interested directors, the appointment processes, removal, conflicts? Is there anything you would, based on your practice now, do differently?

"Are there further changes, since the 2005 adjustments, that you would make now?

"Given the Institute’s very large board of busy people, do you think the ratio of the authority between you and the board as a whole is appropriate?

"The Commission would appreciate your response by December 15."
CIRM said Klein scheduled the meeting of the legislative committee in order to receive input from directors before responding to the Little Hoover request.

If you are interested in hearing the discussion or making comments, teleconference location sites can be found in San Francisco(two sites), Sacramento, Menlo Park, Healdsburg, Elk Grove and Palo Alto. The specific addresses can be found on the agenda. Locations may be changed or added so check the agenda for the latest information.

Friday, September 26, 2008

California Efficiency Panel To Scrutinize CIRM

California's Little Hoover Commission has decided to examine the state's $3 billion stem cell research effort.

Stuart Drown
, executive director of the group, said the first hearings will be held Nov. 20 with another likely Jan. 22. In response to a query from the California Stem Cell Report, Drown said,
"The commission has been asked to look at governance and transparency, but may look at other issues as well, including a discussion on ways to insure the most effective use of bond money. The commission currently is involved in a study of bond oversight. In setting up the study of the state's stem cell research activities, the commission has directed staff to ensure the study adds value to the current discussion through constructive recommendations and avoids merely repeating work done by others."
CIRM is funded through California state bonds at a total cost to the state of $6 billion. Funds are routed directly to CIRM, bypassing both the governor and the legislature.

The impetus for the study came from legislation by Sens. Sheila Kuehl, D-Santa Monica, and George Runner, R-Antelope Valley, requesting the inquiry. The primary focus of the bill, however, is affordability of stem cell therapies funded by CIRM. The Little Hoover Commission, a bipartisan group, is charged by law with promoting "efficiency, economy and improved service" in California state government.

Writing on his organization's blog, John M. Simpson, stem cell project director of Consumer Watchdog of Santa Monica, Ca., said,
"Some stem cell research advocates have lobbied hard against the (Kuehl) bill, partly because they objected to a Little Hoover Commission study.

"I don't get it.  We are talking about $6 billion in public money. What could be more important than ensuring it's spent fairly and so that all Californians benefit from the research they're paying for?

"You'd think anybody who wants that would welcome an outside independent look and suggestions on how to make things work better.  The good news is no matter what Gov. Schwarzenegger does with SB1565,  the Little Hoover Commission has decided CIRM is worth a study."
SB1565 is now on the governor's desk.

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