Those matters have surfaced as part of this week's meeting of the directors of the $3 billion institute, which was born nearly four years ago in what is one of the ultimate political acts – an initiative campaign in which voters thrust aside lawmakers, seize control of the reins of government, write legal code themselves and raise and allocate billions of dollars.
All fueled by campaign promises – in the case of Prop. 71 – that not only will sick people will be cured but California residents, businesses and researchers will receive special treatment.
Well, not exactly, CIRM now says, particularly in the case of California businesses.
The stem cell agency delivered the bad news as the result of a request by Sacramento attorney, John R. Valencia of the firm of Wilke, Fleury, Hoffelt, Gould & Birney, on behalf of an unnamed California-headquartered life sciences corporation. Valencia also represents, among others, the California Healthcare Institute, which, in turn, represents California's biomedical industry. That organization has members on its board of directors who also serve as directors of CIRM.
Valencia made a seemingly simple request of CIRM: define "California supplier." The term is found in Prop. 71, which states:
"The ICOC (CIRM's board of directors) shall establish standards to ensure that grantees purchase goods and services from California suppliers to the extent reasonably possible, in a good faith effort to achieve a goal of more than 50 percent of such purchases from California suppliers."Unfortunately, the two words in question are not otherwise spelled out in the initiative. And it is clear now that CIRM wants few restrictions on where it goes for outside, private contracting. Valencia, however, argues that CIRM can find virtually everything it needs in California, which is not called the Golden State for nothing.
It is not a trivial matter. In his letter to CIRM, which comes before its directors on Wednesday, Valencia points out that it could ultimately run to $300 million.
Valencia says it is "vitally necessary" to define California supplier. He says the definition is virtually required by Prop. 71 whose overall objective is to advance California economic interests. He wrote:
"Why send hundreds of millions of California taxpayer dollars outside the state, where it does nothing to create California jobs, economic growth or tax revenue?"Tamar Pachter, general counsel to CIRM, has an answer, which boils down to this: CIRM is not legally required to give preference to California suppliers beyond what is stated in Prop. 71 as well as existing law. It's a "goal" not a "mandate," she writes in response to Valencia's request. Weasel words in Prop. 71 -- she explains, although that is not her terminology -- provide plenty of wiggle room. Those terms include "reasonably possible," "good faith effort" and "goal."
We can chalk up that verbiage to CIRM Chairman Robert Klein, who led the initiative campaign and claims responsibility for writing Prop. 71, although other attorneys were involved as well.
More than one issue underlies this matter. One is the question of campaign promises. Some say that CIRM should be measured against the promises of the campaign, however overstated they may have been. Others say that no one should be so naïve as to believe that the sweet talk of a campaign has any connection to the ultimate reality.
Another matter involves the practical realities of running an enterprise involving stem cell research, clearly a global endeavor. Parochial requirements concerning California preferences make CIRM's task more difficult – not easier.
Nonetheless, the stem cell institute must recognize its obligation to California voters in clear and unmistakable ways – perhaps not necessarily in this particular case. But it had its way with voters in 2004. Failing to be responsive could have unfortunate consequences. Hell hath no fury like a voter scorned.
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