The CIRM Chair Race: Candidate Thomas Touts His Public Finance Experience

In his first appearance before directors of the $3 billion California stem cell agency, bond financier Jonathan Thomas, a candidate for the chairmanship of the agency, stressed his professional background as an investment banker and attorney and his service on government boards.

Thomas sidestepped the issue of whether he was an advocate of the controversial dual executive arrangement at CIRM. The overlapping roles of the chair and president have been sharply criticized by the state's top fiscal officer, John Chiang, and the state's good government agency, the Little Hoover Commission.

In a statement to the directors' Evaluation Subcommittee on Friday, Thomas did not directly mention the dual executive situation. But in a comment referring to the other candidate for chair, Frank Litvack, Thomas said,

"Though some have sought to label us as favoring 'oversight' on the one hand versus 'hands-on' on the other, I believe that both of us would in fact look to exercise oversight and, in addition, to exercise all of the numerous statutory responsibilities set forth in the language of Proposition 71. The big question here isn’t about labels…it’s about who is best prepared to carry out these combined efforts."

Thomas is chairman of Saybrook Capital of Santa Monica, an investment firm specializing in distressed government bonds. CIRM's only real source of cash is California state bonds, rated the lowest in the nation.

Thomas elaborated on his connections with Advanced Cell Technology of Santa Monica, Ca., one of two companies in the United States with an hESC product in a clinical trial.

He said,

"As I proceeded through my career in law and finance, I took particular interest in stem cell research and looked for a company to work with in that arena. In 2000, I began tracking Advanced Cell Technology (or “ACT”), a then fledgling-company pursuing therapeutic products from embryonic stem cell research. After extensive review of their intellectual property portfolio and lengthy due diligence, I led an early round financing to cover the Company’s operating expenses. I have tracked ACT over the years and am familiar through it with the ups and downs typical of the biotechnology industry. Now, 11 years later, ACT has two of the three products derived from embryonic stem cell research currently in clinical trials. It will be interesting to see how things play out."

Thomas reiterated that he would divest his current holdings in the company, which has applied several times for CIRM funding but has never won a grant.

Thomas stressed his background in public finance, which he said is "an esoteric corner of the finance industry, different in many important and nuanced respects from finance in the corporate sector." He said he has served as an adviser to government bodies and served on the Los Angeles Harbor Commission and the Alameda Corridor Transportation Authority, both for seven years.

Thomas said,

"I am keenly aware of the State’s financial difficulties. If problems arise with getting allocations from the Department of Finance for enough bonds to meet the Agency’s cash flow needs, I am very familiar with the ins and outs of private placements as an alternative funding source and know all the individuals and institutions to make that happen.

"I have been through many bond elections. Should the Agency decide to pursue a second general obligation bond measure, I will be fully prepared to help lead that effort."

Responding to a request by the California Stem Cell Report, Thomas today provided the following copy of his remarks. He said our email request last week had been sidetracked by a spam filter into a spam folder.

Remarks by Jonathan Thomas to CIRM Evaluation Subcommittee 6-3-11