cpt-emnn296-5551212

Halper and Lee first cite the appropriate points of law under which they are bringing their petition:

"The Independent Citizen’s Oversight Committee (hereafter “ICOC”) has the duty to consider each of the requested regulations, and the authority to hold hearings and adopt them, under Sec. 125290.40(j) of the Health and Safety Code, Division 106, Part 5, Chapter 3, and the Administrative Procedure Act, Government Code Sections 11340.6 and 11340.7. Its written response to the Petition must be rendered within thirty days of the date of filing."

Then they position themselves as eligible to bring their petition under these provisions of law, saying:

"We, Philip R. Lee, MD, and Charles Halpern, JD, citizens and taxpayers in the state of California, hereby petition the ICOC to set a date for a public hearing on the following proposed regulations."

Here are the proposed new regulations they are asking the ICOC to set a date for a public hearing to discuss:

"CONFLICT OF INTEREST STANDARDS

"1. The Chair, Vice-Chair, Acting President, President, and employees of the California Institute of Regenerative Medicine (hereafter “CIRM”), shall be subject to the Standards of Ethical Conduct, attached as an Appendix to this Petition. They are based on Secs.5501.109 and 5501.110 of the National Institutes of Health Supplemental Standards of Ethical Conduct, approved as Interim Final Rules by the Acting Secretary of Health and Human Services on January 26, 2005, Chapter XLV of Title 5 of the Code of Federal Regulations, Part 5501, and adapted for application to the CIRM and ICOC.

"COMPENSATION AND HIRING

"2. No employee or officer of the ICOC or CIRM or shall receive a salary higher then the highest paid Institute Director at the National Institutes of Health ($290,000). No employee, other than the Chair, Vice-Chair, and President, shall receive a salary higher than the Secretary of Health and Human Services of the state of California ($131,000). All hiring shall be done through an open process, with jobs posted so as to attract candidates from communities of color, women, and disadvantaged groups.

"WORKING GROUPS

"3. No members shall be appointed to any Working Group until the ICOC has established the conflict of interest rules that will apply to that Working Group.

"4.Members of all Working Groups shall perform their duties, including financial disclosure, consistent with all requirements of the Political Reform Act, Title 9 (commencing with Sec.81000) and Section 1090 of the Government Code.

"5. All meetings and records of the Scientific and Medical Research Facilities Working Group and the Scientific and Medical Accountability Standards Working Group shall be open to the public consistent with the Bagley-Keene Open Meeting Act and the Public Records Act, with such exceptions as provided by those Acts.

"6. The Scientific and Medical Research Funding Working Group shall conduct all its meetings in public, consistent with the Bagley-Keene Open Meeting Act and the Public Records Act, with appropriate modification as the ICOC may establish, in order to permit closed meetings when necessary to assure that scientific peer review, as that term is defined in NIH Sec. 5501.109(b)(7), is thorough and effective.

GRANT-MAKING PROCEDURES

"7.No grants or loans will be considered until grant guidelines are adopted by the ICOC, and potential applicants have been given an opportunity to prepare applications and to apply. Such guidelines shall specify selection criteria, the substantive scope of the grant program (e.g. whether all grants must be for embryonic stem cell research), the size of the grants being considered, matching requirements (if any), and the availability of grants for capital projects. In addition, no grants or loans will be considered until guidelines are in place which assure that the financial interest of the state and its taxpayers are specified and protected."

What they are asking for, in short, is that no grants be awarded, and no members be appointed to any Working Groups, until the ICOC publicly considers and then adopts ethical and legal standards to govern the behavior of the Working Group members and the awarding of the $3 billion in grants.

The aforementioned "Standards of Ethical Conduct", attached as an Appendix to the Halpern-Lee Petition, are set out below:

Proposed Regulation #1
Standards of Ethical Conduct

Based on National Institutes of Health Supplemental Standards of Ethical Conduct, approved as Interim Final Rules by the Acting Secretary of Health and Human Services on January 26, 2005, Chapter XLV of Title 5 of the Code of Federal Regulations, Part 5501.

In order to make comparison easy, we have retained the numbering system of the NIH Regulations. We have also adopted definitions in the Code of Federal Regulations, where appropriate.

§ 5501.109 Prohibited outside activities, applicable to employees and officers of the California Institute for Regenerative Medicine and the Independent Citizens’ Oversight Committee.
(a) Applicability. This section applies to all employees and the Chair, Vice-Chair, President, and Acting President (collectively referred to as “employees”).
(b) Definitions. For purposes of this section:
(1) Compensation has the meaning set forth in 5 CFR 2635.807(a)(2)(iii).
(2) Continuing professional education means a course, a program, a series of courses or programs, or other educational activity provided to members of a profession, as defined in 5 CFR 2636.305(b)(1), or academic discipline and designed principally to maintain or advance the skills and competence of practitioners in a field of specialized knowledge and to expand an appreciation and understanding of the professional responsibilities, fiduciary obligations, or ethical aspirations incumbent upon members of the group.
For those members of a profession or academic discipline that does not subject its members to licensure or continuing education requirements, the term continuing professional education includes those educational activities that exemplify a purpose and content similar to those offered to or required of members of a licensed profession.
(3) Educational activity provider means a supported research institution, a health care provider or insurer, or a related trade, professional, or similar association that offers accredited continuing professional education (or, in the case of a profession or academic discipline whose members are not subject to licensure and which does not have program accreditation requirements, an education program determined by the designated agency ethics official or his designee or, in consultation with the designated agency ethics official or his designee, the CIRM President or the CIRM President’s designee to be substantially equivalent to an accredited continuing professional education program), but does not include a substantially affected organization.
(4) Employment has the meaning specified in 5 CFR 2635.603(a).
(5) Health care provider or insurer means a hospital, clinic, skilled nursing facility, rehabilitation facility, durable medical equipment supplier, home health agency, hospice program, health maintenance organization, managed care organization, or other provider of health care items and services as defined in sections 1877(h)(6) or 1903(w)(7) of the Social Security Act (42 U.S.C. 1395(h)(6) or 1396(w)(7)) and any entity organized and licensed as a risk-bearing entity eligible to offer health insurance or health benefits coverage.
(6) Related trade, professional, or similar association means a trade, professional, consumer, advocacy, or other organization, association, society, or similar group that is significantly involved in advancing the interests of persons or entities engaged in activities related to or affected by the health, scientific, or health care research conducted or funded by the CIRM.
(7) Scientific peer review is the evaluation of scientific research findings for competence, significance, and originality by qualified experts who research and submit work for publication in the same field and which provides systematized accountability for adherence to ethical guidelines commonly accepted within the relevant research community for disseminating scientific information.
(8) Substantially affected organization means:
(i) A biotechnology or pharmaceutical company; a medical device manufacturer; or a corporation, partnership, or other enterprise or entity significantly involved, directly or through subsidiaries, in the research, development, or manufacture of biotechnological, biostatistical, pharmaceutical, or medical devices, equipment, preparations, treatments, or products;
(ii) Any organization a majority of whose members are described in paragraph (b)(8)(i) of this section; and
(iii) Any other organization determined by the designated agency ethics official or, in consultation with the designated agency ethics official, by the CIRM President or the CIRM President’s designee that is substantially affected by the programs, policies, or operations of the CIRM.
(9) Supported research institution means any educational institution or non-profit independent research institute that:
(i) Is, or within the last year has been, or within the next year is likely to be, an applicant for or recipient of a CIRM grant, cooperative agreement, or research and development contract;
(ii) Is, or within the last year has been, or within the next year is likely to be, a proposer of or party to a cooperative research and development agreement (CRADA) with the CIRM; or
(iii) Any organization a majority of whose members are described in paragraphs (b)(9)(i) or (ii) of this section.
(10) Unrestricted educational grant means funds received by or available to an educational activity provider from another source that are granted without stipulated conditions for their use other than the limitation that the funds shall be used to advance an educational program of the grant recipient. For purposes of this section, an educational grant shall not be considered unrestricted if the funding source for a continuing professional education program directly or indirectly:
(i) Selects or recommends the moderators, speakers, or presenters at the sponsored event;
(ii) Independently provides additional funding to the moderators, speakers, or presenters in connection with the educational activity;
(iii) Determines or recommends the audience composition;
(iv) Specifies or recommends the topics to be addressed, or
(v) Controls or recommends the planning, content, or implementation of the program in a manner inconsistent with guidelines established by a relevant professional association or accrediting organization that are designed to ensure that such activities are accurate, balanced, educational, free from commercial bias, nonpromotional, and independent of the influence of the funding source.
(11) Unrestricted financial contribution means funds received by or available to a publisher, academic press, editorial board, or other entity affiliated with or operated by a supported research institution, a health care provider or insurer, or a related trade, professional, or similar association from another source that are provided without stipulated conditions for their use other than the limitation that the funds shall be used to advance peer-reviewed writing or editing by the funds recipient. For purposes of this section, a financial contribution shall not be considered unrestricted if the funding source for peer-reviewed writing or editing directly or indirectly:
(i) Selects or recommends the author, reviewer, referee, or editor;
(ii) Independently provides additional funding to the author, reviewer, referee, or editor in connection with the writing or editing activity;
(iii) Determines or recommends the targeted audience of the writing or editing activity;
(iv) Specifies or recommends the topics to be addressed, or
(v) Controls or recommends the planning, content, or distribution of the written or edited product in a manner inconsistent with ethical guidelines commonly accepted within the relevant research community for disseminating scientific information which are designed to ensure that such writing or editing is accurate, unbiased, nonpromotional, transparent with respect to disclosure of potential conflicts, and independent of the influence of the funding source.
(c) Prohibitions–
(1) Prohibited outside activities with substantially affected organizations, supported research institutions, health care providers or insurers, and related trade, professional, or similar associations. Except as permitted by paragraph (c)(3) of this section, an employee of the shall not:
(i) Engage in employment with a substantially affected organization, a supported research institution, a health care provider or insurer, or a related trade, professional, or similar association;
(ii) Teach, speak, write, or edit for compensation for any substantially affected organization, supported research institution, health care provider or insurer, or related trade, professional, or similar association; or
(iii) Engage in any self-employed business activity that involves the sale or promotion of products or services of a substantially affected organization or a health care provider or insurer, except for the purpose of commercializing invention rights obtained by the employee pursuant to Executive Order 10096, 15 U.S.C. 3710d, or implementing regulations.
(2) General exception. Nothing in paragraph (c)(1) of this section prevents an employee from engaging in employment with, or teaching, speaking, writing, or editing for, a political, religious, social, fraternal, or recreational organization.
(3) Specific exceptions. Notwithstanding the prohibitions in paragraph (c)(1) of this section:
(i) Teaching. An employee may engage in and accept compensation for teaching a course requiring multiple presentations as permitted under 5 CFR 2635.807(a)(3).
(ii) Clinical, medical, or health-related professional practice. An employee may engage in and accept compensation for the outside practice of medicine, dentistry, pharmacy, nursing, or similar health-related professional practice that involves the personal provision of care, treatment, or other health-related professional services to or in connection with individual patients, provided that:
(A) The provision of health-related professional services to such individuals is not part of any ongoing research project conducted or funded by the CIRM;
(B) The employee does not establish a private practice relationship with a subject of an CIRM-conducted or CIRM-funded clinical trial or protocol;
(C) The employee does not personally refer private practice patients to the CIRM; and
(D) The professional practice does not involve substantial unrelated nonprofessional duties, such as personnel management, contracting and purchasing responsibilities (other than “out-of- stock” requisitioning), and does not involve employment by a medical product manufacturer in the conduct of biomedical research.
(iii) Continuing professional education. An employee may engage in and accept compensation for a teaching, speaking, writing, or editing activity that is unrelated to the employee’s official duties within the meaning of 5 CFR 2635.807 if the activity is performed as part of a continuing professional education program conducted by an educational activity provider. If a substantially affected organization provides financial support for a continuing professional education program conducted by an educational activity provider, this exception is inapplicable unless the substantially affected organization is involved only as the funding source for an unrestricted educational grant.
(iv) Authorship of writings subjected to scientific peer review or a substantially equivalent editorial review process. An employee may engage in and accept compensation for a writing or editing activity that is unrelated to the employee’s official duties within the meaning of 5 CFR 2635.807 if the resulting article, chapter, essay, report, text, or other writing is submitted to a publisher, academic press, editorial board, or other entity affiliated with or operated by a supported research institution, a health care provider or insurer, or a related trade, professional, or similar association for publication in a scientific journal, textbook, or similar publication that subjects manuscripts to scientific peer review or a substantially equivalent editorial review process. If a substantially affected organization funds the publishing activities of a supported research institution, a health care provider or insurer, or a related trade, professional, or similar association, this exception is inapplicable unless the substantially affected organization is involved only as an unrestricted financial contributor and exercises no editorial control.
(4) Transitional grace period. Provided that the activity is not otherwise prohibited by statute or regulation, an employee may continue to engage in outside activities that would otherwise be prohibited by paragraph (c)(1) of this section for a period not to exceed 30 days from the effective date of this rule. An employee may request additional time up to a maximum of 90 days if:
(i) The outside activity had been reviewed by the President
(ii) The employee submits a written request within 30 days of the effective date of this rule seeking authorization to continue the outside activity for such additional time as the employee requests (not to exceed the maximum 90-day grace period authorized by this section);
(iii) The employee demonstrates that additional time is necessary to allow the employee to conclude responsibly his outstanding obligations;
(iv) The President concludes that good cause exists for permitting an extended grace period beyond the initial 30 days authorized by this section.
(5) An employee who meets the criteria of paragraphs (c)(4)(i) and (ii) of this section may continue to engage in the outside activity pending the final resolution of the request, but in no event shall such activity continue beyond the 90-day grace period. If the extension request is denied, the employee shall cease the activity no later than five days after the employee receives notice of the denial.
§ 5501.110 Prohibited financial interests, applicable to employees and officers of the California Institute for Regenerative Medicine and the Independent Citizens’ Oversight Committee.
(a) Applicability. This section applies to all employees and the Chair, Vice-Chair, President, and Acting President (collectively referred to as “employees”).
(b) Definitions. For purposes of this section:
(1) Officer means the Chair, Vice-Chair, President, and Acting President of the California Institute for Regenerative Medicine.
(2) Substantially affected organization has the meaning set forth in § 5501.109(b)(8).
(3) Time of acquisition means the date on which the employee actually acquired the financial interest or on which the financial interest became imputed to the employee under 18 U.S.C. 208, whether by purchase, gift, bequest, marriage, or otherwise, except that with respect to a financial interest that was acquired prior to the employee’s entrance on duty as an employee of the CIRM, the “time of acquisition” shall be deemed to be the date on which the employee entered on duty. For assets held as of the effective date of this section by employees on duty at CIRM or the ICOC at such time, the “time of acquisition” will be deemed to be the effective date of this section.
(c) Prohibition applicable to officers. Except as permitted by paragraph (e) of this section, an officer of the CIRM or ICOC, and the spouse or minor child of such officer shall not have a financial interest in a substantially affected organization.
(d) Prohibition applicable to non-officer employees. Except as permitted by paragraph (e) of this section, an employee who is not an officer, or the spouse or minor child of such employee, shall not have a financial interest in a substantially affected organization unless:
(i) The total cost or value, measured at the time of acquisition, of the combined interests of the employee and the employee’s spouse and minor children in the affected organization is equal to or less than $15,000;
(ii) The holding, if it represents an equity interest, constitutes less than 1 percent of the total outstanding equity of the organization; and
(iii) The total holdings in substantially affected organizations account for less than 50 percent of the total value of the combined investment portfolios of the employee and the employee’s spouse and minor children.
(e) Exceptions for certain financial interests. Notwithstanding the prohibitions in paragraphs (c) and (d) of this section:
(1) An employee or spouse or minor child of an employee may have a financial interest, such as a pension or other employee benefit, arising from employment with a substantially affected organization.
(2) An employee, or spouse or minor child of an employee, may have an interest in a substantially affected organization that constitutes any interest in a publicly traded or publicly available investment fund (e.g., a mutual fund), or a widely held pension or similar fund, which, in the literature it distributes to prospective and current investors or participants, does not indicate the objective or practice of concentrating its investments in substantially affected organizations, if the employee neither exercises control nor has the ability to exercise control over the financial interests held in the fund.
(3) In cases involving exceptional circumstances, the Chair, after consultation with the Attorney General, may grant a written exception to permit an employee, or the spouse or minor child of an employee, to hold a financial interest in a substantially affected organization based upon a determination that the application of the prohibitions in paragraphs (c) or (d) of this section is not necessary to ensure public confidence in the impartiality or objectivity with which CIRM programs are administered. Such exemption, with the Chair’s reasons, shall be made available to the public.
(f) Reporting and divestiture. For purposes of determining the divestiture period employees shall have a reasonable period of time to divest financial interests prohibited under paragraphs (c) and (d), but in no case more than 90 days from the date of the adoption of this regulation.