Conflict of Interest: CIRM to End Contract with Consultant Linked to Grant Recipient

By Dr. Matthew Watson

The California stem cell agency will
not renew a contract with a "special advisor" who has been
nominated to the board of directors of a firm that is sharing in a $14.5 million grant from the agency.

She is Saira Ramasastry, managing
partner of LifeSciences Advisory, LLC, of Emerald Lake Hills, Ca.
Ramasastry has worked for CIRM since May of 2010. Last month, she was
nominated to the board of Sangamo BioSciences, Inc., of Richmond, Ca.
Her responsibilities with CIRM have included "industry analysis
and consultation." Sangamo cited her experience with CIRM in its
press release on her nomination. She was also employed as a
consultant by Sangamo, according to the firm.

Ramasastry's dual roles raise obvious
conflict of interest questions. The case highlights the issues
that can arise between CIRM and the biotech industry as the agency
moves to engage industry more closely. CIRM's response additionally
demonstrates a lack of awareness of the potential for serious
mischief or worse when dealing with consultants.

The California Stem Cell Report asked
CIRM on May 6 for comment on the Sangamo-Ramasastry matter. The
questions included whether Ramasastry disclosed to CIRM her work for
Sangamo and whether CIRM took any action per the agency's conflict of
interest code. CIRM did not respond to the question of whether
Ramasastry ever disclosed her ties to Sangamo, which expects to
receive $5.2 million from the CIRM grant if it runs a full four
years.

Here is the text of CIRM's reply today
from spokesman Kevin McCormack.

"Saira Ramasastry was an
independent contractor. As required by law, we do ask independent
consultants to complete Form 700s(statements of economic interests)
if they participate in an agency decision making role. Her role did
not fall into that category - she was identified as a 'special
advisor' in connection with our external review process - and so she
did not have to fill out a Form 700. Her contract with CIRM comes to
an end at the end of June, and she will not be elected to Sangamo's
board of directors until July. Obviously once she is a member of the
Sangamo board she will not be consulting or advising CIRM because of
our strict conflict of interest rules."

(Editor's note: The board election is
June 21, according to the company, not July.)

Our take: CIRM is heavily dependent on
outside contractors. Expenditures for their services are the second
largest item in CIRM's operational budget, exceeded only by salaries
and benefits of regular employees. The responsibilities of outside
contractors cover a wide range of sensitive tasks including computer
system security, development of software that deals with proprietary
information from grant recipients, analysis of confidential business
operations of grant and loan applicants and much more.

The agency needs to know who their
consultants are working for besides CIRM. Whether they make decisions
for CIRM is beside the point. Gathering information that is not
normally accessible to the public can be extremely valuable to
businesses and their competitors as well as applicants for
CIRM's $3 billion. In Ramasastry's case, she was privy to a great
deal of confidential or economically useful information during her work on CIRM's external
review and likely much more.

The use of California's Form 700 is
hardly adequate to assess conflict of interest issues involving
private consultants. The form was developed in the 1970s to deal with
elected officials primarily and provides only the grossest sort of
look at financial holdings and income.

CIRM's current move to embrace industry
requires more scrutiny of conflicting interests – not less. NextThursday the CIRM board will deal with some of its conflict ofinterest rules. It is fine opportunity to ask for a sharper analysis
of conflict issues and consultants with an eye to strengthening CIRM
regulations and ensuring protection of the agency and its grantees'
work – not to mention the interests of the people of California.

Source:
http://californiastemcellreport.blogspot.com/feeds/posts/default?alt=rss