A $2 Million Bill: Outside Contracting by California Stem Cell Agency

The $3 billion California stem cell
agency this week posted a list of its outside contractors, who range
from a a $25,000 stem cell licensing consultant to a $550,000-a-year law firm.

The agency expects to spend $2
million during 2013-14 on outside contracting, down from $2.9 million
in 2012-13. This week's report covers the 2012-13 year.

Outside contracting is the second
largest item in the agency's budget, which is slated to spend $17.4
million this fiscal year for operational expenses, up 5 percent
from last year's spending. The largest amount, $12.2 million, goes
for salaries and benefits. (For more on the budget, see here, here
and here.)

Topping the contractor list is the law
firm of Remcho, Johansen & Purcell of San Leandro, Ca., which had
the $550,000 contract. CIRM, as the agency is known, reported that Remcho came in under
budget by $95,595. That contrasts to some previous years when the
firm, which has represented the stem cell agency since its inception,
required additional cash on top of its original contract. James
Harrison of the Remcho firm is its face at the agency and is
designated as the outside counsel to the agency's governing board. In
all, the agency is slated to spend $2.2 million on legal expenses,
including in-house work.

David Earp is the stem cell licensing
contractor. He was paid only $13,125 on his $25,000 contract during
2012-13. It is unclear whether he will be paid the $11,875 balance.
Earp was chief patent counsel and senior vice president for business
development for Geron before it dropped its stem cell program. Earp was heavily involved in the $25 million loan that CIRM made to Geron in 2011. In
February 2008, he testified before CIRM about its then proposed loan
program.

The list of contractors included
$200,000 to the AlphaMed Press of Durham, N.C., as seed funding for a
stem cells translational journal, $156,434 to Hyatt Hotels for the
meeting of CIRM grant recipients, $250,000 to Kutir Corp. of Newark, Ca., for
informational technology services and $290,000 to the Mitchell
Group of Woodland Hills, Ca., also for information technology services.

The list of contractors will be
presented to the CIRM governing board at its meeting next week. The
list does not usually trigger any significant discussion.