Gov. Christine Gregoire is proposing changes to relax the state ethics law, as part of an effort to encourage closer ties between researchers...

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OLYMPIA — Gov. Christine Gregoire is proposing changes to relax the state ethics law, as part of an effort to encourage closer ties between researchers at public universities and their counterparts in the technology industries.

In a news conference yesterday, Gregoire said the centerpiece of her economic development plan calls for channeling some of the state’s tobacco settlement into a $350 million, 10-year fund to fuel ideas at the state’s research institutions. She said the fund could lead to 20,000 new jobs over time, and to cures for diseases.

But Gregoire’s plan also includes eliminating legal restrictions that block university scientists from collaborating with counterparts in the for-profit biotech industry. She called for changes to the Ethics in Public Service Act, which she helped draft as Attorney General in the mid-1990s.

“We don’t have to have something that serves like a barrier unlike any other around the country,” she said.

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University scientists and outside entrepreneurs have long complained about the rules. Biotech legend Leroy Hood left the University of Washington in 1999 to form his own nonprofit research center, partly because it offered more flexibility to forge ties with startup companies and venture capitalists.

The University of Washington, over the last several years, also has faced sharp criticism from businesses for a cautious approach to commercializing inventions. Even though it ranks among the nation’s top research universities in grant funding, it trails many of its peers at spinning its discoveries into new companies and products.

The ethics law generally forbids public employees from accepting special privileges from their positions, or from using public resources for private financial gain. It has been used, for instance, to discipline former University of Washington football coach Keith Gilbertson for accepting excessive gifts for his family from a booster.

But Marilee Scarbrough, a member of the ethics board the past four years, said she can not recall a complaint about a university researcher becoming too close with industry.

Still, the rules go too far, even stifling simple contacts with academic researchers, say biotech executives such as Bruce Montgomery, chairman of the Washington Biotechnology and Biomedical Association and chief executive of Corus Pharma, a Seattle startup. If he wants to discuss an invention with a university professor in Washington, the professor has to leave his or her university office and make a call on a personal cellphone in the hallway, said Montgomery. A professor’s computer can’t be used to send a reply to business correspondence.

Because of the rules, he said, some faculty avoid getting involved with industry altogether.

By contrast, at public universities in states such as California, he can call a professor and “they will babble away” on their public telephone, he said.

Gregoire said she hopes to change the attitudes here toward commercialization.

“A well-intended state ethics law today serves as a barrier to our research institutions and technology transfer,” Gregoire said. “It’s an unintended consequence of a well-meaning ethics law. We can clean that up, and abide by the ethics that are necessary for our research institutions by abiding by the federal law.”

The bill is being drafted at Gregoire’s request by Rep. Phyllis Kenney, the Democratic chair of the House Higher Education Committee.

Kenney said in an interview that it would allow universities to set up their own processes to manage ethical issues. The Governor would have to sign off on the procedures, and if complaints arose, she said, the state’s Executive Ethics Board could still have oversight over the Governor’s process.

Kenney said the problem with existing law is that many people within the university are not clear about what is and is not an acceptable outside relationship.

“If you’re doing research, it’s hard if you can’t pick up the phone and ask a question of someone in industry without worrying about whether you’ll violate the state ethics law,” Kenney said.

University of Washington President Mark Emmert said at the press conference that the life-sciences fund will help research institutions collaborate with “the very innovative and progressive businesses that have developed in the Puget Sound region and across the state, to take advantage of the research and scholarship that comes out of our universities.”

“We promise we will do everything we can to leverage those resources as much as possible,” he said.

Gregoire left the possibility open that industrial researchers could collaborate with public researchers, on projects supported by the state life-sciences fund. She said those “public-private partnerships” are essential to scientific progress.

Roger Bumgarner, a UW associate professor of microbiology who advises a venture-capital firm, said the change to the ethics rules may help.

“The best thing is when people say what they’re doing in the open, and have it vetted,” he said. “If you make it so restrictive, faculty either won’t do anything [involving work outside the university] or they will ignore the rules.”

Luke Timmerman: 206-515-5644 or ltimmerman@seattletimes.com