Klein Rep Says No Financial Ties in Land-Stem Cell Proposal

California stem cell Chairman Robert Klein, who owns a real estate development firm based in Palo Alto, is not financially involved in a land development proposal in Northern California that promises to create a stem cell research center, according to a Klein representative.

In response to questions from the California Stem Cell Report, Amy Daly, executive director of Americans for Stem Cell Therapies and Cures, Klein's private lobbying group, said:

"Bob Klein's company's is not at all involved in this project other than to allow Bob to donate his time to the endeavor. There is no monetary benefit for Bob in this project. He is not getting paid and there will be no financial (or other) benefit to his company as a result of this project."

She also said that CIRM is not connected with the proposal near Sacramento and is "completely separate." CIRM itself has had no comment on the plan. The agency said it knows nothing about it.

Daly's response came as the Center for Genetics and Society Friday published sharp criticism of the plan on its blog "Biopolitical Times."

Jesse Reynolds, project director on biotechnology accountability, wrote that the proposal raises a question of whether another stem cell research center is justified. He continued:

"The second issue is the egregious nature of Robert Klein's conflicting roles. His lobbying group gets a hefty donation, and his imprimatur hints that the new center would be a likely magnet for public financial support. And who knows if he's got his own finger in the pot, given that his business dealings are obfuscated via dozens of corporations and holding companies.

"Meanwhile, he sits as not only a public servant, but as one with significant influence over how billions of public dollars are spent. Although he's promised not to profit from biotech while he's chair of the state stem cell agency, does he consider an investment in the land development part of this vow? And how would the public ever know?

"Regardless, as we've said before, Klein needs to decide whether he is a lobbyist or a public official. He can't be both."

Daly said that Klein and Sacramento developer Angelo Tsakopolous met only recently. She said that they "have not worked on any project in the past."

She wrote,

"As I understand it, they met in January 2007 when they both were in Washington for inaugural activities. Both are strong supporters of Nancy Pelosi.

"Around that same time, Yolo County had put into their general plan a desire to have an economic development proposal. The Tsakopoulos family owns land there and they were hoping to leave some lasting legacy for the county beyond just immediate economic development.

"Bob and Angelo had dinner here in California upon their return and discussed the possibility of a Regenerative Medicine Institute in Yolo County. Angelo and his children were thrilled to have an opportunity to change the world much in the way we believe Proposition 71 will change it. As I mentioned in my email to you yesterday, we are hoping that this Regenerative Medicine Institute, funded by the soon to be formed non-profit, Bridge to Cures, will bridge the funding gap for translational medicine that currently exists and that CIRM has not yet addressed."

She said opponents are trying to stop the project, which will be discussed by Yolo County supervisors July 17, before it moves beyond the discussion stage.

See below for an information sheet on the Yolo stem cell proposal being circulated on behalf of the effort.

Text on Development Plan Involving Klein

Here is the verbatim text of information supplied on behalf of a Northern California land development/stem cell research proposal involving California stem cell Chairman Robert Klein. It was supplied by the Sacramento political consulting and PR firm of Townsend Raimundo Besler & Usher.


Innovation Corridor

California and the nation face a serious shortage of comprehensive sites devoted to cutting-edge biomedical research, life science incubators and allied private enterprise support for university-related research and therapy development. A group of researchers, civic leaders and private entrepreneurs are working on a plan to provide the physical and economic infrastructure to support an international research center for regenerative medicine and biotechnology on Interstate 80 between Mace Boulevard and E. Chiles Road interchanges.

Life and Health Sciences – Leading California Into the Future

California is the world leader in life and health sciences and technological research. Biotechnology was born in California and today is one of the state's most important economic engines. A quarter of a million Californians work for more than 2,700 companies, making biotech a larger employer than the computer, aerospace, telecommunications or motion picture industries.

Demand for Research and Development Centers is Growing

Advanced R & D in the biosciences will be the most significant contributor to the well-being of Americans and to the nation's economic well-being for decades. That promise can only be realized, however, if researchers, civic leaders, universities, government officials and private entrepreneurs work together to overcome serious financial barriers and a shortage of sites where new therapies can be discovered.

Californians recently voted to make $3 billion available for stem-cell research but only $300 million for construction of sophisticated facilities to carry out that research. A leading California life sciences consortium recently found that high costs and a scarcity of approved R & D sites is a growing problem. It urged leaders "…to cooperate to identify areas where facilities (e.g., bio-research parks) can be located, to secure those areas, to provide incentives for development and for companies to locate there, and, most importantly, to maintain a level of ongoing support to keep these areas vital."

Innovation Campuses can Provide Infrastructure to Sustain R&D

Operational mixed-discipline research centers, life science incubators and therapy development centers cannot support themselves. Many potential tenants are start-up companies or non-profits. Most require venture capital, government subsidies, non-profit foundation grants and other support to provide working capital needed to carry a new medical therapy from validated discovery to clinical trial.

Regional Leaders Working with Yolo County to Identify Potential Innovation Corridor

The Yolo County Board of Supervisors has identified the Interstate 80 corridor between East Chiles Road and Mace Boulevard as a planning study area for a university-related research and development corridor. Regional leaders are working with the county to explore a practical plan to support the county's goal of a local environmentally sensitive, university-related R&D site.

Innovation Place Foundation to Provide the Incubator

Governed by a panel of leading local and international researchers, entrepreneurs and university representatives, an Innovation Place Foundation would develop a not-for-profit regenerative medicine and biomedical research incubator; support allied research in clean energy, agriculture and environmental sciences; and administer a for-profit mixed-discipline research park.

The foundation would operate with more than $200 million to provide working capital for research and therapy development advancing validated discoveries to clinical trials. Financial support would come from a share of the proceeds of ancillary and adjacent commercial and residential development that would follow SACOG Blueprint guidelines, provide a jobs-housing balance and protect agriculture and open space in step with Yolo County's heritage.

Klein and His Role on Proposed Stem Cell Research Center

The Northern California land deal/stem cell research center involving California stem cell chairman Robert Klein calls for him to head a new nonprofit group that would be endowed by the family of developer Angelo Tsakopolous.

In response to a query from the California Stem Cell Report, Amy Daly, executive director of Klein's lobbying group, Americans for Stem Cell Therapies and Cures, said,

"As you may be aware, there is a gap in funding in the life of therapy development where many good ideas for therapies and cures die for lack of funding. It is this funding gap that we hope to address with this project. California Institute for Regenerative Medicine has focused (and we believe will continue to focus) much of ithat come from early research and safely see them to the point in time where they are picked up by biotech and VCs (venture capitalists).

"We hope to inspire international collaboration by having board members from world-class institutions from around the world. These institutions, as well as UC Davis and other California institutions, will also have the opportunity to have satellite lab space near the incubator space that we are building for the therapy development."

She continued:

"This project will create a non-profit to bridge that funding gap and we believe it will be called Bridge to Cures. The family donating the land and endowment funds, the Tsakopoulos family, have asked Bob to chair the board of Bridge to Cures. The structure of the board will be similar to the Independent Citizens Oversight Committee with the addition of Angelo and Kyriakos Tsakopoulos and Eleni Tsakopoulos-Kounalakis. We expect that the board will choose to have working groups make recommendations to them similar to the working groups of California Institute for Regenerative Medicine. We hope to inspire international collaboration by having board members from world-class institutions from around the world. These institutions, as well as UC Davis and other California institutions, will also have the opportunity to have satellite lab space near the incubator space that we are building for the therapy development."

Daly's full statement is below.

Amy Daly Statement on Bridge to Cures

We queried Amy Daly, executive director of the Americans for Stem Cell Therapies and Cures, concerning the proposal for a land development project and stem cell research center near Sacramento. Here is her response verbatim.

Bob and Angelo had been spending time talking about this project to fund therapy development around the same time that Americans for Stem Cell Therapies & Cures was holding a fundraising dinner at the home of Robin and Marsha Williams to retire the outstanding campaign debt. The suggested donation for a couple to attend this dinner was $125,000. Angelo is very supportive of stem cell research (as you can see by his incredible generosity with this project) and so he and his wife attended this dinner.

As far as the project referred to in the Sacramento Bee today, there are
many details that were discussed but not included in the article.

"No one tried to strangle Herceptin, but it came near to starving in the
cradle."

As you may be aware, there is a gap in funding in the life of therapy
development where many good ideas for therapies and cures die for lack of
funding. It is this funding gap that we hope to address with this project.
California Institute for Regenerative Medicine has focused (and we believe
will continue to focus) much of its funding to fill the funding gap in early
research. We hope to take the ideas that come from early research and safely
see them to the point in time where they are picked up by biotech and VCs.
An example of this funding gap is found in the history of the development of
Herceptin, as noted here:
http://www.nytimes.com/books/98/09/20/reviews/980920.20henigt.html?_r=1&oref
=slogin.

Without philanthropic financial support for Herceptin during that funding
gap, it would not have been developed to the point where Genentech picked it
up. It is now the number one choice for the treatment of certain types of
breast cancer and saves countless lives.

This project will create a non-profit to bridge that funding gap and we
believe it will be called Bridge to Cures. The family donating the land and
endowment funds, the Tsakopoulos family, have asked Bob to chair the board
of Bridge to Cures. The structure of the board will be similar to the
Independent Citizens Oversight Committee with the addition of Angelo and
Kyriakos Tsakopoulos and Eleni Tsakopoulos-Kounalakis. We expect that the
board will choose to have working groups make recommendations to them
similar to the working groups of California Institute for Regenerative
Medicine. We hope to inspire international collaboration by having board
members from world-class institutions from around the world. These
institutions, as well as UC Davis and other California institutions, will
also have the opportunity to have satellite lab space near the incubator
space that we are building for the therapy development.

This is an incredible opportunity to help further stem cell research and
mitigate human suffering and I am proud that our non-profit has chosen to
support this effort.

Klein Involved in Major Land Deal-Stem Cell Research Center Proposal

California stem cell chairman Robert Klein and a prominent Sacramento area land developer are involved in a proposed 2,800-acre land deal near the capital that would also create a stem cell research center with a projected endowment of $200 million.

Reporter Mary Lynne Vellinga broke the news in The Sacramento Bee this morning. The developer is Angelo Tsakopolous, who has been active in Democratic fundraising and a major Sacramento developer for decades.

Tsakopolous' company, AKT Development, also contributed $125,000 on April 17 to Klein's private stem cell lobbying group, Americans for Stem Cell Therapies and Cures, which grew out of the Prop. 71 campaign committee. The contribution was not reported in The Bee story.

The Bee story "raises serious and troubling questions, some of which originate from Bob Klein's dual role as chairman of the ICOC and a stem cell political advocacy," said John M. Simpson, stem cell project director for the Foundation for Taxpayer and Consumers Rights. He told the California Stem Cell Report:

"I've said repeatedly that the dual role is inappropriate and word of this deal and the suggestion that Klein is involved in it while taking contributions is even more troubling."

Klein's activities with the lobbying group have stirred other concerns in the past about conflicts in the case of a man to heads a state agency giving away $3 billion in public funds. (See below for links to previous items on this subject.) Klein still presides over his own development firm, which is based in Palo Alto at the same address as the lobbying group.

The stem cell agency said it had no comment on the development proposal. "We don't know anything about this," said Dale Carlson, chief communications officer for CIRM.

Vellinga wrote that the proposal appears to be in the concept stage, but Tsakopolous and his supporters have hired a well-known political consulting and PR firm, Townsend Raimundo Besler & Usher, and promoted the plan with Yolo County officials.

Vellinga reported:

"The plan is similar in approach to efforts Tsakopoulos has made in Sacramento and Placer counties, where he offered to fund an NBA arena and a university, respectively, with the proceeds from new development on agricultural land that is now off limits to building.

"As outlined Wednesday by Tsakopoulos' spokesman, Jeff Raimundo, the Yolo proposal is short on specifics, such as how much housing, office or retail space he would seek permission to build on about 2,800 acres of land he controls between the city of Davis and the Vic Fazio Yolo Wildlife Area.

"In meetings with Yolo officials, including a dinner held at the Sutter Club in downtown Sacramento, Tsakopoulos and his supporters have stressed the benefits of the stem cell facility but have offered little detail about what it would take to finance it."

Vellinga continued:

"'Bob and Angelo thought this up,' Amy Daly, executive director of the Alliance for Stem Cell Research, said of the new idea for a research center. 'My understanding is that Angelo is looking for a legacy he can leave. He wants to do something big. And Bob lives, eats and breathes stem cell research.'

"Daly, who worked with Klein on the stem cell initiative, also is helping promote the Tsakopoulos plan. She said there is a significant funding gap for research that's beyond the basic stage but not ready to hit the market. The new center could fill that gap, she said."

Daly also worked for the California stem cell agency as director of patient and medical organization relations from Jan. 14, 2005, to Nov. 25, 2005.

Raimundo told the California Stem Cell Report that Yolo County supervisors "first started the dialogue about a biomedical research corridor." Raimundo said the project had a goal of generating a $200 million endowment for the center, although there were no details how the funds would be raised. He said any development would likely include residential and commercial building.

He told CSCR:

"This is a real convergence of a county that wants to boost its economic development and is willing to look at biomedical research complexes along I-80, a biotech community looking for research incubators in a comprehensive university-oriented R&D complex with allied ventures, and a willing and enthusiastic landowner.

"No specific plan has been created yet, but what ultimately is built here will be determined by the county as part of their general plan update."

Simpson, of FTCR, said,

"I'm extremely doubtful of a commercial real estate project that tries to ride on the coattails of 'stem cell research.'

"Many questions need to be answered about this deal by both Angelo Tsakopoulos and Bob Klein.

"A good start for Klein would be to decide if he wants to be chairman of the ICOC or of his political advocacy group. He should not serve as both."

Here are links to some previous items on Americans for Stem Cell Therapies and Cures. "Ongoing Threat," "Background Statement," "Two Hats" and "Unseemly Position."

(Personal disclosure from the California Stem Cell Report: Raimundo is a friend and former colleague at The Bee. Vellinga is also a former colleague. I have met Tsakopolous on several occasions and have directed news coverage of some of his enterprises. I have exchanged email with Markos Kounalakis, Tsakopolous' son-in-law and president of the Washington Monthly, and once submitted an article to that magazine that I ultimately withdrew from consideration because of the length of the editing process.)