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Cell Out: Management issues plague distribution of $3 billion in state stem cell research funds

by Idan IvriLos Angeles City Beat
March 24th, 2005

With the November passage of Proposition 71, the state stem cell initiative, California voters once again jumped out front on a global issue, freeing $3 billion to kick off widespread competition for research dollars and scientific innovation. But it has unleashed more competitive maneuvering than many anticipated, with signs that the state body created by the measure is now the personal fiefdom of the man behind the proposition, Robert Klein.

Embryonic stem cells _ cells from a developing fetus which have the potential to differentiate and specialize into any of the tissues or organs in the body _ were a lightning rod in the 2004 elections, backed by such Alzheimer_s advocates as the Reagan family and resisted by President George W. Bush, who objected to research that involves human embryos. So Proposition 71 was regarded as a triumph of medical research over ideology, and established a new California Institute of Regenerative Medicine (CIRM) to oversee the distribution of the research money for worthy projects.

But now, as two lawsuits directly challenge the constitutionality of Proposition 71 before the California Supreme Court, management dilemmas are creeping up on the CIRM. Even some of the initiative_s backers now question the CIRM for failing to address troubling conflict of interest and accountability issues. The most powerful symbol of those concerns is the controversial Klein, head of the Independent Citizens_ Oversight Committee (ICOC), the 29-member board overseeing the institute, and the former head of the Yes on 71 campaign.

_He was one of the chief authors [of Prop. 71], he was its largest donor, he was a significant donor to three of the four elected officials who _ ended up unanimously nominating him [as] the chair of the ICOC,_ says Jesse Reynolds of the Center for Genetics and Society, a progressive nonprofit group.

The Center for Genetics and Society was a critic of 71 and is tough on the CIRM today _ and not for the religious or philosophical reasons so common in critiques of embryonic stem cell research. _There are no provisions against conflicts of interest, there are closed-door meetings, legislative oversight is banned, and the scale of this type of research as proposed is going to require thousands of women to provide eggs for research,_ says Reynolds.

As it became apparent that the CIRM might be taking advantage of the unusual autonomy from legislative control granted by Prop. 71, one of its staunchest supporters, State Senator Deborah Ortiz (D-Sacramento), convened a legislative hearing on March 9 to examine its implementation. Klein refused to attend, sending interim president of the CIRM, scientist Zach Hall, in his place.

In a letter from Klein to Ortiz obtained by the San Francisco Chronicle, Klein implied that anything he might say at the hearing could be used against the institute in the two lawsuits which were filed two weeks earlier. (The suits prevent the CIRM from selling any bonds and _ by extension _ making grants and getting on with its work.) Klein_s no-show did not inspire confidence in Sacramento. And Sen. Ortiz has since teamed up with virulently anti-embryonic stem cell Republican George Runner (R-Antelope Valley) to propose two new bills and a constitutional amendment to address a variety of issues.

Ortiz and Runner want CIRM employees and ICOC members to be subject to the same conflict of interest rules as other California public employees. Because the ICOC consists of representatives from the same institutions that are vying for CIRM grants, the worry is that they would be tempted to direct grants to their colleagues.

Ortiz also wants to subject the institute_s meetings to California_s open-meeting laws, ensure that the state receives royalties from any treatments developed by the CIRM, and limit multiple-egg donations from any one woman to the agency. In another seemingly prudent move, the senators also want the state auditor to conduct periodic audits of both the CIRM and the ICOC.

These potential conflicts were written into the language of Proposition 71, but were never questioned by Ortiz until after the November election. _When Proposition 71 was written, [Senator Ortiz] had concerns, but her feeling was that we could work with the implementation after it was passed, and that_s what she_s doing,_ says Hallye Jordan, spokesperson for Ortiz.

Jordan says Ortiz understood why it was important for the CIRM to have such a large amount of autonomy: _That was backlash from the Bush administration._ With President Bush heartily opposed to new lines of embryonic stem cell research, a weak state-level initiative could have been a bull_s-eye for federal attack.

Now, however, Ortiz has come to believe that the CIRM needs to be brought to heel to protect the state_s investment. _If the organization could do that [within its own rules] that would be good, [but] there was some stumbling at the beginning,_ says Jordan.

_This is a huge program that they are building from scratch,_ she adds, describing the Ortiz-Runner legislation as assistance rather than admonition: _We are totally confident that [CIRM] is going to go the right way _ this is to provide some guidance._

_I think Senator Ortiz has raised some very important and significant issues,_ says Julie Buckner, spokesperson for CIRM. _We hope to work collaboratively with Senator Ortiz and Senator Runner._ Buckner also added that the issues raised by Ortiz could definitely be resolved within the existing context of CIRM, and that new legislation or amendments were unnecessary.

Reynolds points out a better approach: _Early on, the institute could have done a better job of listening to its constructive critics. They could have engaged with the legislature. Klein could have cooperated with Ortiz_s concerns._ Instead, Reynolds says, Klein worked behind the scenes to delay the hearing.

Sacramento maneuvering notwithstanding, the ecstatic response from cities statewide to a Request For Proposals to build CIRM_s new headquarters is evidence that considerable excitement about the institute_s work still exists. UCLA, for example, has announced a $20 million investment in a new Institute of Stem Cell Biology and Medicine.

Los Angeles is a likely site for the CIRM headquarters, though the Hahn administration seems to have done little to woo the project. Los Angeles sent its proposal on March 16, the day of the final deadline, promising a significant but generally less elaborate package than that of some other cities.

While cities like San Jose, San Francisco, and San Diego are falling over each other to offer CIRM the most alluring array of free upscale office space, furniture, utilities, business and recreational services (free broadband and videoconferencing, anyone?), parking, security, and other perks, Los Angeles_s slimmer offer consists of 17,000 square feet of free office space in City National Plaza, use of the L.A. Convention Center, a $1 million grant for administrative support, and occasional private jet use.

_There_ll be a lot of energy and a lot of jobs,_ Dr. Owen Witte, director of UCLA_s institute told the Daily News. If the CIRM gets its act together and Los Angeles gets lucky, maybe some of it will land here in L.A.

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