Tuesday, July 05, 2011

Politics and Stem Cells California Style: More to Come in the Next Few Years

Seven years ago, backers of the ballot initiative that created the $3 billion California stem cell agency promised that it would take the politics out of stem cell research.

But, as the directors of the research enterprise discovered last month, that is far from the case. California Gov. Jerry Brown and state Treasurer Bill Lockyer exercised their governmental perogatives and lobbied persuasively on behalf of their nominee, Jonathan Thomas, to chair the board for the next six years.

Some of the 29 board members looked askance at what they regarded as arm-twisting. They noted that the formal name of the CIRM governing board is the Independent Citizens Oversight Committee and placed the emphasis on the word "independent." But, like other parts of Prop. 71, the name is more of a political marketing gimmick aimed at voters in 2004 than a reflection of reality.

The fact is that when you have your snout in the public trough, you are always subject to political pressures. That is the nature of government in the United States.

Nonetheless, we should add that former CIRM Chairman Robert Klein, a real estate investment banker, and a handful of his associates who drafted Prop. 71, have been successful in isolating the stem cell agency from other political maneuvers – well-intentioned or otherwise. Under the initiative, the governor and state lawmakers cannot get their hands on CIRM funds or fiddle with its budget. Another provision of Prop. 71 mandates that even the tiniest changes in the law dealing with CIRM require the same kind of supermajority vote that has crippled California's state budget process. Some of Prop. 71's provisions cannot even be changed short of another vote of the people.

All of which has a downside. Under the ballot measure, CIRM dodged conventional state budgetary funding. Instead it required funding through state bonds – borrowed money that flows directly to the agency. But with interest, that means that a $20 million research grant really costs California taxpayers roughly $40 million. And the $490,000 salary of CIRM President Alan Trounson really costs nearly $1 million.

While some CIRM directors took umbrage at the lobbying by Brown and Lockyer, one should expect no less from public officials who have a keen sense of both their power and responsibilities. They are elected because voters generally trust their judgment – at least at the time of the election – and expect them to exercise their authority. Indeed, do-nothing lawmakers are one of the reasons the public is less than enchanted with affairs under the Capitol dome.

As for the next six years, directors of the stem cell agency will be increasingly immersed in political and electoral matters if they want to extend the life of CIRM beyond 2017 or so, when bond funds will run out.

By electing Thomas, CIRM directors clearly indicated their priorities are cash. They are concerned with both short and long term financing of the agency. "Without money, there will be no research," one director told the California Stem Cell Report. Thomas has made a career in bond financing. His scientific background was minimal when compared to rival candidate Frank Litvack, a cardiologist and medical science enterpreneuer.

Thomas is talking about raising money privately, but the main source of funds will be billions more in state bonds. That will require voter approval, and right now that is extremely unlikely given the state's financial crisis and CIRM's limited accomplishments, which have little public visibility. To persuade voters in 2014 or 2016, the agency will need results that will resonate with the public, creating a virtual rush to provide more billions to CIRM.

One of Thomas' major initiatives is do just that, through both aggressive funding of research more likely to produce a clinical therapy and better marketing of the agency to the public. A "communications war" is how he describes it. The agency is now seeking a $200,000-a-year public relations field marshal to direct it.

CIRM will be dancing close to the edge in terms of appropriate use of public funds. Electoral campaigning on the taxpayer's dollar is generally not acceptable and can even be illegal. At the same time, the agency has a responsibility to inform the public about its activities. Should the agency slip over the edge, it could generate a scandal that could doom a new bond measure.

CIRM must also move so that a bond measure will be supported by the governor, treasurer, controller and lieutenant governor, the very same Democratic political officials who nominate candidates for chairman and appoint many of the CIRM board members. The preferred position would be one of support although neutral would be tolerable. Outright opposition by the governor, which is conceivable given the state's financial condition, is likely to be fatal for a bond measure.

Then there is the matter of raising anywhere from $30 to $40 million or more to actually finance the ballot campaign. Who will be the major donors? Will they represent or have ties to current applicants or future applicants for CIRM's billions? Another touchy issue.

Thomas is short on political experience, but standing by is CIRM's Co-vice Chairman Art Torres, former head of the state Democratic Party. In the wings as CIRM's chairman emeritus is Robert Klein, who headed the 2004 campaign for Prop. 71, although his role is likely to be circumscribed at the agency if Thomas is to be truly effective.

The California stem cell agency has made a significant mark in the world of stem cell science, according to its supporters, although it has not fulfilled the generous and overstated promises of the 2004 campaign. Thomas' political and financial challenges are daunting. That is not to mention major scientific issues as well as the strategic direction of CIRM. If Thomas is not successful, the Los Angeles bond financier could be well be the last chairman of the California Institute for Regenerative Medicine. Sphere: Related Content

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