In medicine, it's better to prevent a chronic illness than it is to treat one.

Likewise, in politics, it's better to avoid a conflict of interest than it is to suffer the fallout.

But those lessons seem to be lost on the California Institute for Regenerative Medicine, the state's stem-cell research agency, which exists at the intersection of politics and medicine.

Voters created the institute in 2004 by passing Proposition 71, which authorized a $3 billion state bond sale to raise money for stem-cell research. The agency is governed by a 29-member board, and nearly every board member represents a research institution or an advocacy group with a direct stake in how the bond money is allocated.

To date, the stem-cell agency has distributed about $1.7 billion, with 90 percent of the money going to institutions represented on the board.

The appearance of a conflict should be obvious to anyone, but the board members appear to be oblivious.

They ignored complaints from legislators, consumer groups and the state's Little Hoover Commission, and they're poised to do the same with a review they commissioned.

At the stem-cell agency's request, a 13-member committee was convened by the national Institutes of Medicine. It had no trouble spotting the conflicts.

In a report issued this month, the committee echoed past concerns about conflicts of interest. Its recommendations included removing board members from the panel that reviews grants.

It also called for an independent advisory board, made up of experts who aren't eligible for funding, to advise the institute on scientific priorities. Finally, the committee said stem-cell board members are too closely involved with day-to-day operations of the agency.

"They make proposals to themselves, essentially, regarding what should be funded," Harold Shapiro, a former president of Princeton University who chaired the review committee, told the Los Angeles Times. "They cannot exert independent oversight."

Yet when the report was presented to the stem-cell agency's board, the Times reported that several members scoffed. "I don't believe the (report's) conclusions on conflicts of interest or bias could be more incorrect," board member Jonathan Shestack said. "There isn't a whiff of bias, actually."

Maybe the wind was blowing the other way.

Shapiro's committee did not judge the merits of the programs funded by the board. Scientists say stem-cell research holds great promise for improving treatment of spine injuries and diseases including cancer and multiple sclerosis.

California voters opted to provide funding at a time when the federal government was withholding research money. The institute points to its role in establishing California as a center for a growing new field, with research centers at Stanford, UC Davis and other universities.

But none of that is justification for flouting conflict-of-interest standards common in other public agencies. The stem-cell agency needs to cure itself.