Robert Klein, the California Stem Cell Agency and a $5 Billion Proposal

The California stem cell agency last week put a little distance between it and its former chairman, Robert Klein, who is currently touting a new, $5 billion bond measure to rescue the agency from its financial demise.

The agency's comments came in response to a news story about comments that Klein, a Palo Alto real estate investment banker, made at a symposium at UC San Diego's Moores Cancer Center.

Bradley Fikes of the San Diego U-T wrote a story on Feb. 20 about the appearance that was headlined “$5B initiative proposed for stem cell research.” Fikes said,

“Supporters of California’s multibillion-dollar stem cell program plan to ask for $5 billion more to bring the fruits of research to patients.”

Fikes reported that Klein said “he’s going to be talking with California voters about the proposal. If the public seems receptive, backers will work to get an initiative on the 2016 ballot to extend funding for the California Institute for Regenerative Medicine(CIRM).”

Klein, who left the agency nearly three years ago, has talked for several years about another bond measure on top of the $3 billion, 10-year borrowing effort approved by voters for CIRM in 2004. His latest statements are the first in which he has publicly specified a figure.

In the wake of Fikes' story, the California Stem Cell Report asked the agency for a comment on Klein's remarks and his current role at the agency. Kevin McCormack, senior director for communications, replied Friday,

“Bob has been talking about a new bond initiative for a couple of years now so this is not altogether surprising. However, our focus remains where it always is, on our mission and the progress that is being made by CIRM-funded researchers to find new treatments and cures for patients, and we are continuing to explore avenues to sustain that progress.”

Currently the agency is looking into some sort of public-private arrangement that could finance its operations beyond 2017, when funds will run out for new awards. The 2004 initiative limited the agency's $3 billion bond authorization to only 10 years. CIRM is counting the 10 years as beginning from the date the first bonds were sold.

So far, the assumed public contribution for CIRM's future is a fraction of what Klein is touting – only $200 million.

Klein's public appearances around the state talking up another bond measure raise questions about how his efforts fit with the planning of the agency itself and the financial explorations of the current chairman, Jonathan Thomas, a Los Angeles bond financier, and other members of the CIRM board. California policy makers, potential wealthy donors, foundations and corporations may well be confused about whether Klein is speaking for the agency either directly or indirectly.

Given McCormack's carefully worded statement, it is reasonable to assume that CIRM is not entirely enthusiastic about Klein's bond measure pronouncements.

Additionally, premature discussion of more state borrowing, which has been criticized by Gov. Jerry Brown, could lead to a hardening of positions at an early stage. In 2011, when Klein initially broached another bond issue, the San Jose Mercury News said in an editorial,

“What planet are these guys from?....Going back for more would make no sense regardless of the economy....”