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California Stem Cell Board Member Violates Conflict Rules; Should Resign From Committee, Consumer Group Says

FTCR Files Complaint About Burnham's John Reed with Fair Political Practices Commission

SANTA MONICA, Calif., Nov. 21 /PRNewswire-USNewswire/ -- Stem Cell oversight committee member John C. Reed, must resign from the board for violating conflict of interest rules, The Foundation for Taxpayer and Consumer Rights (FTCR) said today.

Reed intervened and attempted to influence the awarding of a research grant to a doctor affiliated with the Burnham Institute, where Reed is president and chief executive.

FTCR, a non-partisan, non-profit consumer advocacy group, also filed a formal complaint with the Fair Political Practices Commission (FPPC) seeking an investigation.

The FPPC is charged with enforcing the Political Reform Act. The stem cell board's Conflict of Interest Policy, Proposition 71, which created the agency, and the Political Reform Act, Government Code 87100, all preclude a member of the board from taking part in, or trying to influence, decisions about grants to an institution he represents.

"The law is clear," said John M. Simpson, FTCR's Stem Cell Project director. "Representatives of institutions are not to take part in decisions about awards to their institutions. John Reed flouted the law and wrote a six-and-a-half-page letter to the stem cell institute's Interim Scientific Director Arlene Chiu arguing Dr. David Smotrich should receive an award."

The letter was revealed as the result of a Public Records Act request by David Jensen of the California Stem Cell Report.

Smotrich was awarded a two-year $638,000 SEED research grant by the stem cell committee at its February meeting. The SEED grants were meant to "jumpstart" stem cell research in California. Before the grants are actually paid out, the applications are vetted by the stem cell agency staff to make sure all eligibility requirements are met.

One of the requirements for the SEED grants was that the principal investigator be "either senior or junior faculty and must be a full-time employee of the grantee organization." Smotrich, though classified as a clinical associate of Burnham, does not receive a salary from the Institute. Moreover, he does not have his laboratory at Burnham.

In a letter to Jean Freiser, Burnham's director of Sponsored Research, Tamar Pachter, stem cell institute counsel, wrote that the eligibility requirements were not met and the grant could not be funded. On Aug. 2 Reed wrote the stem cell institute claiming that denial of the grant to Smotrich "set a dangerous precedent that adversely affects all clinician-scientists."

"Nobody doubts Smotrich's abilities or the scientific value of this project," said Simpson. "But when you hand out millions of dollars in public money, you have to play by the rules. He didn't meet the eligibility rules advertised for this grant and waiving them would have been unfair to everyone else. It's shocking that Reed would jump in like this."

Despite Reed's efforts, the stem call agency staff stood firm. They offered Burnham an opportunity to withdraw the grant, but when the institute declined to do so, it was rejected. The action was announced at the October oversight board meeting.

"I'm glad the agency's staff enforced the rules. Apparently they understand their responsibilities to the public as a state agency even if some of the oversight board members do not," said Simpson.

FTCR noted that Proposition 71 that created the stem cell institute established an oversight board that is fraught with built-in conflicts of interest. Most of the members are representatives of the very institutions expected to receive most of the research grants.

"This means that whatever meager conflict of interest safeguards exist, they must be strictly adhered to and enforced," said Simpson. "If abuses like Reed's aren't squelched immediately, who knows what backroom deals will be cut amongst board members? This wasn't trivial. Reed should resign -- or be removed -- from the committee and pay a fine."

Reed was appointed to the 29-member Independent Citizens Oversight Committee of the California Institute for Regenerative Medicine by then State Controller Steve Westly.

FTCR's Stem Cell Oversight and Accountability Project is working to ensure that California's landmark $6 billion stem cell research program offers accessible and affordable cures and treatments to the taxpayers who have funded it.

The Foundation for Taxpayer and Consumer Rights is California's leading non-profit and non-partisan consumer watchdog group. For more information visit us on the web at: and

SOURCE Foundation for Taxpayer and Consumer Rights
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