CIRM Trio Says Alquist Legislation Creates Unnecessary Jeopardy

Three top leaders of the California stem cell agency today said new legislation aimed at making it more accountable and ensuring affordable access to taxpayer-funded therapies would instead jeopardize the agency's accomplishments.

In a word, they said, the measure is unnecessary.

Their opposition was delivered in a five-page letter to Democratic state Sen. Elaine Kontominas Alquist of San Jose, chair of the Senate Health Committee. She introduced the legislation earlier this week, declaring that CIRM was “essentially accountable to no one.”

The opposition letter was signed by CIRM Chairman Robert Klein, a Palo Alto real estate investment banker, and vice chairmen Duane Roth, a San Diego area businessman, and Art Torres, formerly head of the state Democratic Party and retired legislator.

They noted that the full, 29-member CIRM board of directors had not yet taken a position on the legislation. But they said in a letter on CIRM stationery that they wanted to “express our individual concerns regarding the bill’s potential economic impact on the state’s new tax revenues and new jobs created by CIRM.”  They declared,

“More importantly, we are concerned about the bill’s potential impact on finding treatments and cures for diseases and traumas that Californians struggle with everyday.”

Perhaps the key section of the letter, which was highlighted in boldface, said,

“In what is a model for all of state government, CIRM operates within a 6 percent cap on expenses – efficiency unrivaled even in the private sector. CIRM has placed California at the forefront of international breakthroughs in medicine without any net state general fund appropriations or debt service expenditures through December 2009. CIRM continues to serve Californians by advancing research and therapies, creating thousands of jobs, fostering the growth of the biotech industry, and generating over $100 million in new state revenue.”

The CIRM trio did not even endorse the legislation's removal of the 50-person cap on CIRM staff, which agency officials have said they sorely need. The three acknowledged that the restriction "poses challenges.”

But they said the board is “actively exploring other alternatives to address this and remains committed to the 6 percent cap on administrative expenses.” The letter did not elaborate on those alternatives and none have been discussed publicly. The cap was imposed by voters when they approved Prop. 71, which Klein often says he wrote.

The letter described CIRM as “California's most accountable state agency.” It said CIRM has given away more than $1 billion, mostly for research grants, and generated “tens of thousands of job years.”

The letter said that CIRM is already engaged in some of the activities that the legislation would mandate. That includes planning for changes at the top in December when Klein says he is going to leave, as well as planning for the time when the agency's remaining $2 billion will run out. So far, CIRM has handed out $1 billion in less than three years. The money comes from cash that the state borrows via bonds and flows directly to CIRM, untouched by the normal controls of the governor or legislature.

The letter said that the CIRM directors'  Legislative Subcommittee, chaired by Klein and including Roth and Torres, will meet soon to consider Alquist's legislation, SB1064.  The 10-member panel will make recommendations to the full board, which could take a position as early as its March 11 meeting in Sacramento.

Interested parties and members of the public will have a chance to personally address the board then. Individuals can also write or email the members of the board concerning the legislation.

The full letter, which is not on the CIRM Web site, can be found here.