Two months ago, this page provided leaders of California's $3 billion stem cell institute with a map for heading off legislative intervention. They ignored such advice. Now they are paying for it.
On Thursday, the powerful Senate Appropriations Committee approved Sen. Deborah Ortiz's measure to reform Proposition 71, which created the institute. The full Senate will soon take up her measure, possibly Tuesday.
Every state taxpayer should closely watch the outcome. Stem cell research holds enormous promise, but Proposition 71 includes inadequate guarantees that the $3 billion won't be funneled to certain universities, corporate interests and advocacy groups that helped pass the ballot measure.
Robert Klein II, who wrote Proposition 71 and now heads the institute, complains the Senate hasn't given him a proper hearing. That claim is disingenuous. As we noted on March 18, Ortiz invited Klein to appear before the Senate Health Committee. He backed out as his supporters lobbied senators to cancel the hearing. The tactic backfired. Legislators were outraged by this high-handed treatment.
Institute leaders could make this problem go away by focusing on a few key issues, especially the out-of-state scientists who will hold huge sway in how multimillion-dollar grants are dispersed.
This peer review group, already appointed, includes distinguished academics from Harvard and other top-flight institutions. But even distinguished academics may have conflicts. Do they hold consulting jobs with biomedical firms who might seek grants? What are their stock holdings?
We don't know. Neither does the public. Under a policy Klein has promoted, grant reviewers are only required to disclose potential conflicts to the institute's internal staff. Klein says these employees will aggressively police any conflicts. This is the same short-staffed group that hasn't set up an organization chart, hasn't devised a budget and has trouble responding to records requests.
The proper policy - required of all appointed public officials in California - is for grant reviewers to fill out a Form 700 disclosure, listing their investments, income, gifts and property. Only then will the public feel comfortable that grant reviewers are making decisions free of any financial entanglements.
Unfortunately, Ortiz appears to be caving on this issue. Initially, her bill would have required public disclosure of conflicts. Now, she has backed off that requirement, and has amended her bill to allow only the state auditor and institute officials to review disclosure forms.
Ortiz's desire to compromise is understandable, but she is giving up too much. Klein hasn't yet justified why grant reviewers, meeting in closed sessions, should not have to reveal their financial interests. With $3 billion at stake and a chance to do this right, Ortiz and the Senate should put the public interest first.
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