Accusations against the chair and another member of California’s stem-cell institute should be referred to the state’s Fair Political Practices Committee, State Controller John Chiang said today at a meeting of the financial committee for the California Institute of Regenerative Medicine (CIRM). A public advocacy group had called for Robert Klein and John Reed to resign after learning that Reed, who is also president of the Burnham Institute, asked CIRM to reconsider its decision that the recipient of a previously awarded grant was not, in fact, eligible for funding because he was not an on-site, full-time employee of the Burnham Institute.

UPDATE on 11/28: Here is the letter from Chiang’s office to investigate the charges.

Following Klein’s advice, Reed wrote a letter to CIRM staff in charge of administering the grant stating that David Smotrich, a clinician affiliated with Burnham, should be eligible for the award of $638,000. CIRM staff did not consider the request, and the grant was not awarded.

However, John Simpson of the Foundation for Taxpayer and Consumer Rights said that Reed should resign because, as a member of CIRM’s oversight committee, Reed should not have made requests on behalf of his institution. Simpson also called on Klein, who has no affiliation with the Burnham, to resign, saying he demonstrated poor judgment.

Klein said that both he and Reed now realize that Reed should never have written the letter. Richard Murphy, acting president of CIRM, said the matter was “Much ado about nothing.” He said that Reed felt that a technical error had been made when CIRM rejected the grant and called Klein on his cell phone to ask what to do. Klein, trying to keep out of the matter himself, told Reed to write a letter. The circumstances came to light after David Jensen of the blog the California Stem Cell Report filed legal requests to see correspondence about CIRM grants that had been withdrawn and rejected.

Simpson said calling for Klein’s resignation was difficult to do. “We owe him a deep debt of gratitude,” Simpson said, but “he needs to wake up to the fact that this is not his own fiefdom.” He said that CIRM, whose board members include the heads of institutions that will receive CIRM grants, has “built-in conflicts of interest”. These members have all signed a conflict of interest policy that prevents them from acting on decisions directly affecting their institutions and should be held accountable when they do not comply, he said.

Klein is often praised for his vision and energy in promoting stem-cell research, but is also criticized for a tendency to micromanage and over-reach. Zach Hall, the previous president of CIRM, left partly because of power struggles. Arlene Chiu, chief scientific officer, announced her resignation earlier this year, as did public communications officer Dale Carlson, who had wanted CIRM to announce that Smotrich’s grant would not be awarded. The organizational structure of CIRM has also been criticized, with CIRM’s president open to an unusual amount of public scrutiny and restrictions. ( A research group overseen by the incoming president of CIRM was recently cleared of fraud but accused of negligence.)

Before and after the meeting Simpson and Klein could be seen talking spiritedly to each other, but they did not seem hostile. In conversations I overheard, one committee member told Simpson that CIRM members shouldn’t be expected to have the savvy of public officials. Klein told Simpson that lives could be lost if research was prevented, and Simpson said repeatedly that those entrusted with public funds need to be held accountable with public scrutiny. (CIRM will receive $3 billion in bond funds over ten years at a cost to the state of around $6 billion.)

Addressing the meeting, state controller John Chiang generally praised CIRM, but said that the issue involving “prohibited communication” needed to be fully reviewed so as not to distract from “important, powerful, and beautiful” work. He said that he would ask the Fair Political Practices Committee to investigate. Simpson, who had made a similar request, said this meant an investigation was very likely and could begin within weeks.

Both Murphy and Klein said they looked forward to the investigation. “We welcome guidance so that we can learn,” said Klein.