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Cash and Favors: Robert Klein Gives $21,630 to the California Stem Cell Agency

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May 12th, 2013 3:16 am

A seemingly innocuous $21,630 gift to
the California stem cell agency has kicked up new questions about a
controversial $20 million research award and generated a wave of
special favors for the donor that stretched out to include a gold
mining multimillionaire from Canada.

Robert Klein
Elie Dolgin/Nature photo

The gift was made last May by Robert
Klein, chairman of the stem cell agency from 2004 to July 2011, but has never
been publicly reported to the agency's governing board as required by
its own regulations. 

In July, two months after he donated the cash, Klein made an unusual appearance before his old board and  pitched it to override rejection by scientific grant
reviewers of a $20 million application by StemCells, Inc., of  Newark, Ca.  The board subsequently asked for a reevaluation of the proposal, which was again rejected by reviewers. Klein persisted at a September meeting, and the 29-member board decided, on a 7-5 vote,  to go along with him. It was the
first time in its eight-year history that the board has approved an
application that was rejected twice by its scientific reviewers, who scored the proposal at 61 out of 100. 
Klein's donation to the agency, formally known as the California Institute for Regenerative Medicine (CIRM), included more than the cash, which financed trips to a prestigious stem cell conference in Japan for six of the agency's science officers in June 2012. He also arranged the waiver of roughly $3000 to $4000 for their registration fees for the annual meeting of the International Society for Stem Cell Research. Nine agency executives and other staffers were already attending at taxpayer expense, but the six could not attend because of travel budget cuts at the $3 billion agency. (The total of 15 amounted nearly one-third of the agency's staff.)

Klein's donation triggered a number of
special favors from the agency, according to documents provided by CIRM to the California Stem Cell Report under a state Public Records Act request.  Klein wanted to meet with the six science officers, who have a wide range of responsibilities, including managing and developing grant and loan programs, participating in reviews of applications and evaluating research progress. CIRM President Alan Trounson obliged. At the meeting in Japan, the six science officers received a memo approved by Trounson instructing them to meet
privately “one-on-one” with their benefactor and to give him special access to their activities. The meetings were
actually scheduled to also include a third person, Rob McEwen,  who is one of the 100 richest persons in Canada, a $20 million donor to a stem
cell center in Toronto and CEO of the gold mining company bearing his name.

The memo indicated
that the science officers – all California state employees –
should be helpful by identifying areas of “special importance” to
Klein and “other donors.” The CIRM documents show no objection
from the agency to instructions from another member of the public --
Klein aide Melissa King -- to provide her and Klein with written
summaries about the science officers' activities at the convention
along with “details” about their work at CIRM. Email addresses of
the six were also provided to Klein, who may have additionally
received their cell phone numbers although that is not entirely
clear.

At Klein's request, Trounson also
invited McEwen to a closed-door session in Japan involving the
agency's international partners, a session at which presumably
valuable, little known scientific information might be mentioned and
future directions charted. Trounson specifically told McEwen in an
email that it was Klein who asked that the executive be invited to the
session.
Both the agency and Klein deny any
wrongdoing in connection with the donation, which was the only
private contribution to CIRM in the 2011-12 fiscal year. Both say
there was no connection between the donation last May 16 and the
StemCells, Inc., application, which was rejected by reviewers one
month earlier during closed-door meetings April 18-20, 2012.
CIRM's gift regulations bar donations
from persons who have applied for funding or who intend to apply for
funding, but the rules do not speak to gifts from persons who lobby
on behalf of funding for others. The rules require that the governing
board of the agency be informed at a public meeting of gifts accepted
by Trounson on behalf of CIRM. Trounson is required to identify the
donor and conditions imposed by acceptance of the gift. Trounson did
neither prior to Klein's appearance last July on behalf of StemCells,
Inc.
At the July meeting, Trounson
recused himself from public discussions of the StemCells, Inc.,
application, although he did not offer an explanation. However, his
action was connected to his relationship with stem cell scientist Irv Weissman of
Stanford University, who founded the publicly traded company, currently sits on its board
and holds 124,608 shares of the firm. Trounson was a guest once at
Weissman's ranch for four days in July 2011, CIRM said in response to
a question this week.
In the wake of the California Stem Cell Report's inquiries, Kevin McCormack, the agency's senior director
for public communications, said last week that the agency plans to
report the donation to the governing board at its meeting in
the San Francisco Bay Area later this month.
McCormack said the failure to report
the donation prior to the board's consideration of StemCells, Inc.'s,
application was “due to the lack of additional donations, a
transition in CIRM’s finance office and an oversight."(See thefull text of McCormack's statement here.) 
Asked whether
the agency is concerned about the appearance of Klein's donation and
the subsequent board action, McCormack replied,

“No, the two items are entirely
separate with no connection. Item 1  involved Bob Klein making a
donation to allow science officers to attend a critically important
scientific meeting on stem cell research.  The science officers had originally planned on attending but then were told they
could not because of cuts in our out-of-state travel budget – Bob
Klein’s donation, without using state funds, enabled the science
officers to attend.  Item 2 is an ICOC (board) decision to fund
a research project that they felt had promise and was important for
the people of California.”

As for the special treatment of Klein
in the wake of his donation, the agency did not respond to inquiries
asking for an explanation.
Klein said in
an email that his donation was not connected to StemCells, Inc. He said that as late as June he had “no idea”
that the its application had been rejected by reviewers. Klein said that he committed to the donation
in “April or May.”  (The full text of Klein's comments re the application can be found here and here.)

Prior to leaving CIRM in 2011, Klein was a non-voting  member of the CIRM grant review committee, which consists of out-of-state scientists and seven CIRM board members. His service on the committee included the period when it approved a planning grant for StemCells, Inc., to prepare its application for the $20 million.

Klein noted that he did not pick the six science officers for the Japan trip. One of them was the lead science officer on the award round involving StemCells, Inc. A second was also heavily involved, according to  the transcript of the July 2012 board meeting. Science officers, however, do not vote on or score applications. Klein characterized the CIRM staff as recommending against approval of the grant so “they were clearly not influenced” by his donation.

Klein said his meetings with the six
science officers were aimed at determining whether they believed the
cost of attending the stem cell convention justified what they
learned at the meeting. He said a second goal was to aid universities
and other researchers, mainly in Canada, “in advancing their
contributions from an existing donor or donors.” Canada is one of
CIRM's research partners.

Klein defended the involvement of
McEwen, who Klein said has contributed to the stem cell group conducting the meeting. Klein said McEwen does not engage in technical
discussions and added,

“On a conceptual basis it was
important for him to understand the spectrum of medical advances
towards therapies. His additional contributions to Canadian
non-profits could assist Canada in collaborating with California on
more international research, with California only funding the
research done in California and the donor helping to fund the
research done in Canada. No specific grant applications were
discussed. Finally, the discussion with the international partners
focuses on the funding process and funding collaboration it does not
discuss any individual.”

Private funding of activities by state
employees has stirred up controversy over the years in California.
The most recent example was Gov. Jerry Brown's much-reported trip to
China this spring, which was financed by private donations. Articles
in the Los Angeles Times and The Sacramento Bee both noted that
private funding arrangements have plenty of critics.
Columnist George Skelton of the Times
wrote,

 “It just looks unseemly — a pack of lobbyists and other
favor-seekers paying big bucks to traipse after the governor,
schmoozing and gaining invaluable access.”

Reporter David Siders carried a quote in The Bee
from Jock
O'Connell, international trade adviser for the economics
consulting firm Beacon Economics, who said,

“They're donating because they want
to curry favor with the incumbent administration."

Asked whether CIRM planned to accept
donations for trips in the future, McCormack replied that the agency
is “always open to donations from generous supporters” provided
they meet the state's legal requirements.

Source:
http://feedproxy.google.com/~r/blogspot/uqpFc/~3/FefPhO0IEiY/cash-and-favors-robert-klein-gives.html

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