A boondoggle grows in San Francisco?.The initial euphoria inspired by California?s passage of a $3-billion bond program for embryonic stem cell research last November has already faded, replaced by mounting questions about where the money is, whether it will be spent openly and honestly, and whether the program will yield any real benefits for the investors behind the program?i.e., the taxpayers of California.
Since voters approved what was known as Proposition 71, the money?s been tied up by lawsuits, the stem cell institute created by the measure has been fending off legislative demands that it enact transparent conflict-of-interest rules, and doubts have emerged about whether the real beneficiaries of the public largesse will be private venture capitalists. You want a lesson in why it?s a bad idea to enact multi-billion-dollar research programs after multi-million-dollar television ad campaigns? Come examine the stem cell program.
Much of what the electorate has learned since writing its big check has fallen into the ?now they tell us? category. The program was sold as an investment?Californians would get cheap medicines, reduced health care bills, and a windfall from patents and licenses in return for their money.
Since the election, we?ve learned that all those claims (which were embodied in glossy economic reports issued by the Prop 71 promoters) were so much flapdoodle. The institute now says there?s no way it can guarantee any particular share of patent and license revenue?that would be unfair to its academic and commercial partners. And the truth about the state of stem cell science that was systematically concealed by the promoters?that cures would be decades away, if they arrived at all?is now routinely acknowledged by the institute. (The website for the Prop 71 campaign was entitled, shamelessly, ?curesforcalifornia.com.)
Who?s responsible for the stumble? Fingers are being pointed at the institute?s chairman, Robert Klein II, a Palo Alto real estate developer whose son suffers from juvenile diabetes. Klein supervised the drafting of the stem cell initiative, ran the emotion-mongering electoral campaign, and then politicked himself into the chairmanship (assisted by a job definition written into the law and reducing the field to pretty much one candidate: Bob Klein).
Not satisfied with keeping quiet as an honored figurehead, Klein has picked fights with the legislature, insulted honest critics, spent money with abandon, and started to make his fellow committee members very nervous. As was reported by Dave Jensen, a former Sacramento Bee editor whose California Stem Cell Report is the indispensable source on the web for info on the program, some of the members have recently put their feet down.
He recently wrote:
Irritated by the lack of consultation and information on the agency’s budget and spending, they restricted the size of personal service contracts to $100,000 that can be let by Klein and agency employees without board approval. The Oversight Committee also created a governance committee to deal with how the agency does its business.
The agency has spent $2 million so far this year, including more than $1 million in contracts with outside firms or agencies. Earlier some Oversight Committee members expressed displeasure about learning first about the contracts from non-agency sources.
There are two underlying causes of the California program?s false start. One is the Bush stem cell policy, which was based on deception, misunderstanding, and luddism. The Bush restrictions caused a panic over whether American science would be left out of the stem cell race, a panic that was skillfully exploited by the Proposition 71 promoters. Manifestly, the proper source for scientific funding on this scale isn?t a state with myriad other problems crying out for shares of its scanty resources, but the federal government.
The second cause is the state?s initiative process itself, a crude electoral tool that invariably produces crude legislation and is available for manipulation by whoever?s got the biggest war chest. In this case it was the Proposition 71 promoters, much of whose cash came from?surprise!?venture investment firms.
