Stem Cell Board Chairman Bob Klein and member Jeff Sheehy clashed heatedly over a former board member’s highly paid consultancy to the state agency at a recent meeting of the Governance Subcommittee.

I lit the spark on Friday when I asked what Dr. Richard Murphy was doing under the description of "Strategic Consulting" for a fee $155,000 from April 15 through Dec. 31.  Was he revising the California Institute for Regenerative Medicine (CIRM) strategic plan?  That was a large part of it, President Alan Trounson said.

I said that one reason the current plan, which admittedly needs to be tweaked, won broad support was because it was developed with substantial public input with hearings around the state.  I said that should happen with any revision.

Without great specificity, Trounson said he intended to have public discussion of the new plan.

With Murphy’s contract on the table, Sheehy asked how long it would last. "I’m not comfortable having a former board member with a long time, high paying consultancy," he said.

Indeed, I suggested last August that this sort of behavior was creating the image that an Old Boy’s network was running the $6 billion agency.

Murphy was on the stem cell agency’s board — the Independent  Citizen’s Oversight Committee (ICOC ) — when he was president of the Salk Institute. He stepped down from the ICOC when he left Salk in 2007.

Murphy then became interim CIRM president for a consulting fee of $300,000 after Klein had a falling out with then CIRM acting president Lori Hoffman. She was subsequently pushed out of the agency. Murphy held down the CIRM fort until Trounson could move from Australia and assume the presidency this spring.

After arriving, Trounson kept Murphy on as a strategic consultant making $80,000 for three-and-a-half months. The contract started April 15 and ran until July 31. It was extended to the end of the year for a total of $155,000.

Klein said Murphy might represent the agency in dealings with the FDA or possible efforts to collaborate with the National Institutes of Health as well as researchers in Alberta, Canada.

He added that he expected CIRM would face an examination of its procedures by California’s Little Hoover Commission and that Murphy could help dealing with that.

"I’m worried about appearances and relationships with grantees," said Sheehy. "I don’t believe it’s approppriate."

Tongue in cheek, Sheehy said that if he could step down from the ICOC and receive a  consultancy with the agency as lucrative as Murphy’s, "tell me where to sign up."

"There’s an assumption of unique abilities that I’m having trouble putting my ahead around," Sheehy said.

Trounson said the consultancy was "not contemplated to go on forever."

"You don’t like Dr. Murphy," Klein told Sheehy. "Let’s stick to the mission."

Sheehy said that "he deeply resented" the suggestion his concern stemmed from "personal animus."  

"We need a more open process," he said.

ICOC member Phil Pizzo, dean of the Stanford Medical School, said that he did not want to micromanage Trounson’s running of the agency and as long as the budget was not exceeded, hiring in general should be left to the president. But then he added  there should be "some dialog about what is appropriate generically — not specific to Rich Murphy —  to be paid for consultancies by former board members. What are best practices for people who are on boards?"

Others said polices for consultancies for former staff members also needed to be discussed.

Wisely the committee members agreed to take both topics up at a future meeting.