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Editorial: Stem cell follies: Crank up the spin machine

Sacramento Bee
July 17th, 2005

Just a half year into its troubled existence, California's stem cell research institute has already spent more than $2 million, none of it on research. Alert members of the institute's 29-member oversight board are starting to ask an important question: Where the heck is this money going?

Despite a cash-flow shortage caused by a pair of costly lawsuits, institute chairman Robert Klein II has been spending freely. Four months ago, under Klein's direction, the institute quietly hired Edelman, which bills itself as the "world's largest independent public relations group," at a rate of $27,550 a month. Edelman replaced Redgate Communications, which had already racked up $108,000 in PR work in three months.

Klein didn't use a competitive bidding process in retaining either of these companies. Neither did he seek competitive bids before he hired the law firm of Remcho, Johansen & Purcell for $320,000. At the moment, he and institute President Zach Hall are negotiating a long-term contract with Edelman that could top $500,000.
Oversight board members learned of these expenditures at a meeting in Irvine last Tuesday, and some were furious.

Jeff Sheehy, a communications specialist at UC San Francisco who serves on the oversight board, said spending $27,550 a month on public relations was "appalling," and questioned if the institute was getting anything for its money.

Klein replied that without Edelman, the institute wouldn't be able to respond to major news events.

"The public did not give us bonds to respond to major news events," Sheehy shot back. "It gave (them) to us to do research."

Claire Pomeroy, dean of the UC Davis School of Medicine, questioned how this contracting could occur without competitive bids. Klein responded that Proposition 71, the initiative he wrote to create the stem cell agency, allows the institute to follow University of California policies in issuing single-source contracts.

As usual, Klein's answer was disingenuous. As The Bee's Laura Mecoy has reported, UC campuses can issue "single-source" contracts, but only for specialized work. Public relations work is hardly specialized. Lots of companies do it.

It's likely that by hiring high-priced public relations firms, the institute is simply adding to its image problems. Money that could go to public research is flowing to outside consultants. Had the institute simply hired a pair of experienced, state-employed commmunication specialists, they could have saved money and avoided the appearance of operating, yet again, as a less than fully public agency.

Free of charge, here's some PR advice for the institute:

* Hire a communications staff and get rid of Edelman.

* Deal with the issues that are causing you the most grief. Chief among these is Klein himself, who continues to act like a micromanaging political campaigner instead of the chairman of a prestigious research institute.

* Commit yourself to becoming as transparent as every other California agency. That means a presumption of open meetings, with exceptions written into law. It also means public disclosure of financial conflicts for all employees, peer reviewers and other advisers.

Interestingly, Richard Edelman, who heads the public relations firm that bears his name, agrees on this point. Edelman writes a Web log - edelman.com/speak_up/blog/ - and in April, he typed in these words:

"The PR business must embrace transparency on funding sources and motives. We can insist that organizations provide greater transparency, no matter how inconvenient (it) is to us or our clients."

Hmmm. Maybe Edelman isn't such a bad hire after all. Is he offering this same advice to institute leaders? If so, is anyone listening?

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