Monday, July 16, 2007

Klein, Chimeras and the Yolo Land Deal

In the eyes of some, the unusual lobbying by the chairman of the $3 billion California stem cell agency on behalf of an effort to swap farmland for a new, nonprofit stem cell research institute is not necessarily unethical or inappropriate.

No public hue or cry has erupted over the issue. Yes, two stem cell agency watchdogs have expressed dismay or outrage. One newspaper said Robert Klein should give up his state post if he continues to pursue the lobbying effort. But another good government advocate privately said he did not detect illegal or even unethical conduct.

So what's at stake here? One question centers on whether Klein has something to gain that conflicts or appears to conflict with his role as a state employee. Another question involves whether he is using inappropriately his position as chairman of the CIRM. Would he have been asked to lobby for the land deal if he were not overseeing the agency?

The answer to that question is: Probably not. Klein would be little more than another Darrell Issa if he were not the chair of CIRM's Oversight Committee. “Darrell who?” you might ask. Issa, like Klein, played a major role into a ballot measure that has had an enormous impact on California. In Issa's case, he financed, with $1.7 million of his own money, the effort that placed the gubernatorial recall on the 2003 ballot and sent Arnold Schwarzenegger to the state house. Issa was widely believed to be considering a run for governor. But today he remains an obscure California congressman.

Klein would have lapsed into similar obscurity without his high visibility post at CIRM. He now travels to Australia and Korea to hobnob with international stem cell scientists. He is profiled by Fortune magazine. He is an articulate, aggressive global salesman for human embryonic stem cell research.

But that is almost totally due to his state post. He heads his own private, national stem cell lobbying group in California, but that does not provide the prestige and power that accrues as the result of heading a concern that is giving away money this year at the rate of $29,000 an hour.

Tomorrow(7/12), Klein plans to bring his state-endowed prestige and power to bear on five Yolo County supervisors, some of whom have greater political ambitions and need to raise funds. Failure to act favorably on the 2,800-acre land use change could dry up some potential sources of funding, some of whom may well have ties to Klein, who is a prodigious fundraiser. Those considerations will certainly be going through the minds of supervisors as they hear him speak.

A spokeswoman says that Klein will not benefit financially from the deal that would make farmland along Interstate 80 between Sacramento and UC Davis available for development. In return, Yolo County, one of the top tomato producers in the nation, would be home to a stem cell research center with a $300 million or so endowment. Klein would chair the new institute. The Sacramento Bee reported that Klein is “cagey” about whether he would hold his state position at the same time. However, the proposed nonprofit would certainly look to CIRM for funding of at least some of its activities. Even if Klein has left CIRM by the time those grants are sought, he will still enjoy considerable, residual clout as the result of his CIRM connections. The situation is akin to those Pentagon officials who leave the government and go to work for enterprises seeking lucrative Defense Department contracts.

Klein is a multimillionaire real estate investment banker, who continues to operate his own business. He and Angelo Tsakopolous, the Sacramento developer and major political contributor seeking the land use change, go back a few years, but Klein's aides say they have never done business together. Klein's association with Tsakopolous has already proved beneficial. The developer's firm, AKT, gave $125,000 to Klein's lobbying group, Americans for Stem Cell Therapies and Cures, last April. If the Yolo deal is successful, it could lead to joint real estate work in the future. Tsakopoulos is a firm believer in building good relationships.

From Klein's point of view, he believes more research is better. To fail to bend his best efforts to promote the field and develop more resources would be to short change a campaign he has already devoted years to. Should he remain aloof from an ambitious project because of the tender sensitivities of some? No, he would answer. That's not the way to bring cures to millions of suffering people.

In stem cell circles, scientists talk of the “yuck factor” and chimeras, the mythological beasts composed of more than one animal. Some say that if a stem cell experiment creates such a creature and generates a “yuck” response, the experiment should be dropped.

Klein, who is a man of many parts, generates a “yuck” for his Yolo lobbying, his harshest critics say. We do not entirely disagree. His multiple roles raise questions about his primary priority. Serving as chairman of CIRM was perceived under Prop. 71 as a fulltime position complete with a $412,500 salary (which Klein to his credit does not take). Klein wrote substantial portions of that law. It is now time for him to respect its intent.

(Correction: An earlier version of this said CIRM was scheduled to approve grants at a rate of $54,000 an hour this year.) Sphere: Related Content

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