CEO’s Blunder Magnifies Research Ethics Debate

    A leading member of California’s stem cell research
    governing board was recently criticized for a letter of appeal he submitted
    last summer to reverse a board decision rejecting a grant proposal made by his
    La Jolla research group. The alleged conflict of interest, meanwhile, has
    rekindled statewide debate over medical researchers’ participation in the
    allocation of their own funding.

    In August, Burnham Institute for Medical Research President
    and CEO John Reed contested the rejection of a $638,000 grant that would have
    gone to a Burnham-affiliated researcher. Reed sent an appeal to Arlene Chiu,
    chief scientific officer of the California Institute for Regenerative Medicine
    — a body governed by the Independent Citizens Oversight Committee, of which
    Reed is a member.

    John Simpson, director of the Foundation for Taxpayer and
    Consumer Rights, is one of several individuals calling for Reed’s resignation,
    as well as that of ICOC Chairman Robert Klein, who advised Reed to submit the

    “You can’t kind of shuffle your feet and say, ‘Aw, shucks.’
    This is serious,” Simpson said. “Reed is a wonderful scientist and a good
    executive at Burnham, but I think this is something that needs to be nipped in
    the bud before it becomes the normal way that things are done at the ICOC.”

    Simpson expressed a similar sentiment regarding Klein’s
    involvement in the incident.

    “[Klein] gave Reed advice to break the law,” he said. “They
    should both go.”

    Michael W. Kalichman, director of the UCSD Research Ethics
    Program and the San Diego Stem Cell Research Ethics Consortium, said that Reed
    has an obvious conflict of interest in the matter. However, he said he believed
    that Reed’s decision to send the letter represented a misunderstanding of
    specific regulations rather than an error in judgment, and sees no reason for
    any resignations.

    “There is nothing on the surface that is wrong about having
    a conflict of interest,” Kalichman said. “The question is, what do we do when
    we have that conflict? It’s clear that on the surface this doesn’t look good,
    but it’s not as black and white as I think some people want to portray it.”

    Simpson attributed some of the conflict to Proposition 71,
    whose November 2004 passage established the California Institute for
    Regenerative Medicine and the ICOC. He said the committee’s large size and the
    number of appointed members who compete for the money are fundamental
    structural flaws.

    “We’re working with the law as it exists, but [CIRM] was
    designed under Prop. 71 with built-in conflicts,” he said.

    Kalichman disagreed, saying that it is reasonable to grant
    oversight responsibilities to experts such as Reed.

    “The alternative would be to put people in who don’t know
    what the best choices are,” he said.

    In a Nov. 21 interview with the publishers of the California
    Stem Cell Report blog, CIRM Interim President Richard Murphy said that since
    the board had already made its decision when it received Reed’s letter, the
    confusion was simple to address and no penalty is necessary.

    “As soon as CIRM staff received the letter, counsel advised
    Dr. Reed that he must refrain from contacting the staff and board members
    regarding a grant to Burnham and advised staff to disregard Dr. Reed’s letter,”
    he said. “It therefore had no effect on CIRM’s process.”

    At the annual meeting of the Citizens Financial
    Accountability Oversight Committee in San Francisco on Nov. 27, Simpson argued
    that Reed and Klein should step down. State Controller John Chiang responded by
    sending a letter to the Fair Political Practices Commission requesting an
    inquiry into the allegations.

    “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,” Chiang

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