Proposition 14 Campaign Coverage: George Bush, 'Blatant Giveaway' and $5.5 Billion More

Northern California's respected KQED news site has aired an overview of Proposition 14, the far-reaching, $5.5 billion measure to continue funding of stem cell research by the state of California.

The piece by Danielle Venton covers a bit of the history of the state stem cell agency, the "debt" it owes to former President George Bush and the progress of the agency, known formally as the California Institute for Regenerative Medicine (CIRM). Venton wrote,

"The pace of innovation has been slower than many hoped. As it turned out, grand discoveries were not around the corner, and to date there is no widespread stem cell treatment approved for the public. To date, CIRM has funded more than 64 trials directly and aided in 31 more. Not all have or will result in treatments.

"But despite the lack of a marquee cure like one for Alzheimer’s or Parkinson’s, the agency has seen some notable triumphs."

Quoted by Venton were Jeff Sheehy, a member of the CIRM governing board; Melissa King, field operations manager for the campaign and executive director of the nonprofit Americans for Cures, and David Jensen, author of "California's Great Stem Cell Experiment" and publisher of this blog.

Proposition 14 would save CIRM from financial extinction. It is slated to begin closing its doors this winter as its original $3 billion in funding is running out. The agency was created by Proposition 71 of 2004, which raised high expectations of cures.  Venton wrote,

"Right now the state still owes about $1 billion toward the debt created by Proposition 71. If Proposition 14 passes, the yearly price tag to pay off the new bond would be about $260 million per year for about 30 years.

"Funding needs for stem cell research also are not as acute as they were back in 2004. The federal National Institutes of Health now funds some basic stem cell research, spending about $2 billion a year, with $321 million of that going toward human embryonic stem cell research. And private ventures, like nonprofits started by tech billionaires, are pouring more money into biotech."

Venton wrote,

"Proposition 14 makes it impossible for the state to use profits from its investment on, say, schools or other funding priorities. Instead, any royalties earned must be fed back into programs to make CIRM-funded treatments more affordable. 

"'What it does is it basically takes all of our returns that we get from this and gives it back to the pharmaceutical and biotech companies,' said Sheehy. 'It becomes just a blatant giveaway to these companies when we should be requiring access and requiring fair pricing.'"

King said that "CIRM fills a neglected funding need," Venton wrote.

"'The NIH (federal funding agency) does not fund clinical trials at nearly the rate that CIRM can and has been,' King said.

"She says that's important because of what she calls the 'Valley of Death,' where promising early-stage research frequently fails to translate into promising treatments that can be tested in clinical-stage research. (What works well in a test tube often does not work well in an organism.) This weeding-out process is costly but necessary. And it’s where CIRM focused a lot of its effort."

$5.5 Billion Stem Cell Ballot Measure: California Backers Taking First Formal Step This Month

CIRM graphic

Backers of a California ballot initiative to provide $5.5 billion more for the state's cash-strapped stem cell agency say they will take their first official step by the end of this month. 

That's when they will submit the proposed measure to California election officials and trigger a many-months-long process. The effort is aimed at ensuring that the nearly 15-year-old research effort survives in a meaningful way beyond next year.

The stem cell agency, officially known as the California Institute for Regenerative Medicine (CIRM), expects to  run out of money for new awards as early as late October.  It has already cut off grant applications except for a joint sickle cell effort involving the National Institutes of Health. 

Robert Klein, a Palo Alto real estate investment banker, and his stem cell advocacy group, Americans for Cures, are leading the way on the initiative. Melissa King, executive director of the organization, told the California Stem Cell Report last week that the wording of the initiative is still being crafted.

King said, however, that she expected the measure to be submitted to the California secretary of state before October. She said that one area still being drafted involves providing assistance for low income patients and their families in rural areas who do not have the wherewithal to travel to and participate in clinical trials.  

The initiative filing will trigger a lengthy process to gather the  633,212 signatures of registered voters necessary to qualify the  proposal for November 2020 ballot. Gathering those signatures is a task performed by specialized firms. It could cost something in the neighborhood of $5 million or more, which Klein will have to raise on his own.

Many more signatures than the minimum are gathered because significant numbers of the signatures are commonly determined not be valid.

The ultimate deadline for qualification is June 25 of next year, 131 days before the Nov. 3 election. But the signatures will have to be submitted well before then.

The stem cell agency was created in 2004, also by a ballot initiative, with $3 billion in state bond funding. The new initiative will likewise use bond funding, which roughly doubles the cost to taxpayers because of interest expense on the borrowed cash.

The 2004 ballot campaign was supported by Hollywood stars and Nobel Prize-winning scientists. It generated grand expectations that stem cell therapies were right around the corner. While CIRM is currently involved in 56 clinical trials, it has yet to back a therapy that is widely available. Clinical trials are the last step before a medical treatment is approved for widespread use and have a high failure rate. 

Klein led the campaign in 2004 and became the first board chairman of the agency. Klein has been gathering information, statistics and support for the effort at his Palo Alto offices. 

In June, he told the California Stem Cell Report:

"This medical revolution holds the promise of restoring health and quality of life for many of California’s individuals and families suffering from chronic disease and injury.

"However, the last tactical mile to bring this broad spectrum of therapies to patients will require more funding and the thoughtful support of California’s public as the human trials and discoveries are refined and tested, overcome numerous obstacles or complications, and ultimately serve to improve the life and reduce the suffering of every one of us."

Backed by California Stem Cell Agency: $5 Million Measure for Spinal Cord Research Advances in Sacramento

Legislation supported by stem cell research advocates to provide $5 million for work on spinal cord injuries easily cleared its first hurdle this week in Sacramento.

On a 15-0 vote, the proposal, AB 214, was approved Tuesday by the Assembly Health Committee and sent to the Appropriations Committee for placement on the "consent calendar."  Such a move could speed action on the bill.

Assemblyman Kevin Mullin, D-San Mateo, authored the bill, which is backed by Americans for Cures, the Palo Alto stem cell advocacy group created by Bob Klein, the first chairman of the $3 billion California stem cell agency.

The agency, known formally as the California Institute for Regenerative Medicine (CIRM), is also listed as a supporter of the legislation. Other supporters included Aivita Biomedical of Irvine, Ca, the California Life Sciences Association and the Miami Project to Cure Paralysis.

The CEO of Aivita is Hans Keirstead, a stem cell researcher formerly with UC Irvine.

No opposition was listed in the legislative staff analysis of the bill.

The measure provides $5 million to support the Roman Reed Act of 1999, named after a man who was paralyzed as the result of a spinal cord injury. Roman and his father, Don Reed, are long-time backers of the stem cell agency's work.  The elder Reed is a vice president of Americans for Cures.

The legislative analysis carried this comment sourced to the bill's author:

"The previous allocations of approximately $15 million in state funding to the Roman Reed program was leveraged over five times that amount in new grants benefiting spinal cord research all across the state. It’s time to reinstate a modest amount of state funding so these efforts can continue."

Multi-Billion Dollar Ballot Measure for California Stem Cell Agency in 2018?

California's $3 billion stem cell research effort is scheduled to run out of cash in three short years, but the likelihood seems to be increasing that voters will be asked again to come up with additional billions for the state's stem cell agency.

In fact, the chairman of the stem cell agency, Jonathan Thomas, is saying flatly this week that his predecessor, real investment investment banker Bob Klein, intends to place a funding measure on the November 2018 ballot.

Klein led the ballot initiative campaign in 2004 that created the unusual -- for a state -- stem cell research program, officially called the California Institute for Regenerative Medicine (CIRM). The agency is financed with cash that the state is borrowing. increasing total costs to roughly $6 billion because of the interest expense.

Jonathan Thomas, left, with Don Reed,
vice president of public policy, Americans
for Cures, Klein's advocacy group --
CIRM photo

Thomas' statement was contained in a letter to the governing board that recapped his work since he was elected by the board in 2011 to replace Klein. One section of the letter dealt with funding of the agency.

Thomas wrote,

"Bob has already announced that he intends to put a measure on the November 2018 ballot. We keep him updated on CIRM's progress so that he is fully informed."

Thomas added that he and two key CIRM staffers have "initiated discussions with a number of philanthropists and foundations interested in medical research who could be potential sources of funds to keep CIRM going in the event Bob's measure is not successful."

The California Stem Cell Report has queried Klein about his plans. The full text of his response will be carried when it is received.

Robert Klein, Americans for Cures
photo

Klein has publicly mentioned a possible bond measure in the past, most recently in 2014, including a figure as high as $5 billion. It is unclear whether he has spoken more specifically on the matter since then.

Klein maintains a stem cell advocacy group, Americans for Cures, which has an active web site and an impressive list of scientific advisors, including Irv Weissman of Stanford, Rusty Gage of the Salk Institute and Owen Witte of UCLA.

Klein's 2004 stem cell campaign cost $34 million to convince California voters that the state needed to begin its own human embryonic stem cell (hESC) research effort in the wake of then President Bush's restrictions on federal funding in that area. The campaign created the impression that cures were close at hand, according to opponents and media observers. The agency is yet to back a therapy that is available for widespread use.

The election of Donald Trump as president is widely expected to trigger new, Bush-like restrictions on human embryonic stem cell research that could create the same sort of climate that helped lead to the success of the 2004 ballot initiative in California. 

CIRM's Klein Honored by BIO

The largest biotech industry organization in the world this week honored Robert Klein, the first and only chairman of the $3 billion California stem cell agency, as its Biotech Humanitarian of 2010.

Jim Greenwood, president of the Biotechnology Industry Organization (BIO), said of Klein,

“His vision and determination to create alternatives to federal funding for stem cell research helped make the sate of California a global leader in disease research, giving hope and inspiration to millions of patients and families around the world,"

Klein, a Palo Alto real estate investment banker, directed the election campaign that resulted in the passage of Prop. 71 in 2004. The ballot initiative, of which Klein was a key author, created the stem cell agency, an entity which is unprecedented in California history. It also was the first government agency to use borrowed funds (state bonds) to finance scientific research.

Since 2005, CIRM has handed out more than $1 billion in grants and loans to more than 300 recipients.

The BIO award carries a $10,000 prize. Klein donated the funds to Americans for Cures, his personal stem cell lobbying group.

Klein has said he will step down as chairman of the stem cell agency at the end of this year. No names have yet surfaced as a potential successor.

Klein Lobbying Group Employee Organizing pro-CIRM Turnout for Hoover Inquiry

Patient advocate Don Reed is attempting to drum up a CIRM-sympathetic turnout at next Thursday's Little Hoover Commission hearing into the California stem cell agency.

Writing on his blog, Reed also acknowledged he is on the payroll of the private lobbying group of CIRM Chairman Robert Klein, Americans for Cures. Reed, who is a vice president of the group, said he receives a "small stipend." Reed regularly speaks on issues before the CIRM board of directors during their meetings.

As far as the Hoover Commission inquiry is concerned, Reed said,

"Personally, I am a little worried about making changes in something good. That is like going into the hospital for open heart surgery—when there is nothing wrong with you."

Reed also looked askance at the appearance of John M. Simpson of Consumer Watchdog and Jesse Reynolds of the Center for Genetics and Society as witnesses next week. Reed said,

"...I object to the choice of two critics as representing the entire consumer population of California. It is my understanding both men are paid lobbyists. (There is nothing wrong with that; they could make a similar comment about me.  I work for a group called Americans for Cures Foundation, which supports stem cell research, and receive a small stipend from that organization.) But to choose such vocal critics without a balance is to ignore the 59.2% of California which voted in favor of Proposition 71."

Klein Confirms Resignation, Lobbying Connections Remain

The chairman of the California stem cell agency has personally confirmed that he has resigned as head of his personal stem cell lobbying group, Americans for Cures, which has been nearly silent on the subject since July 14.

Robert Klein's exit as president of the group came after it excoriated an influential California lawmaker on a widely read political blog, the Daily Kos.

Second-hand reports surfaced (the first on July 14) that he was resigning as president of the group, which shares the same address as his real estate investment firm as well as the same fax number.

Since then, Americans for Cures has not responded to repeated requests asking for confirmation of Klein's departure. Nor did Klein tell state Sen. Sheila Kuehl, object of the attack, that he was resigning, as he had said he would.

But Robert M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., encountered Klein last week at the meeting of the CIRM Standards Working Group. Simpson said,

"I asked Klein what his status with the group was when I saw him on Friday. He said that he had resigned the night he learned about the Kos article and came back from vacation.

"I told him that his name was still on the website. He said he'd call them to have it removed."

Since then, the reference to Klein as president has been removed from the website by Americans for Cures, along with a list of all its directors.

On July 24, we wrote about Klein's failure to announce his resignation, commenting that the initial, second-hand reports may have amounted to some sort of trial balloon that Klein hoped would trigger calls for him to remain as head of Americans for Cures.

Don Gibbons, chief communications officer for CIRM, today volunteered the following reaction to our trial balloon comment,

"The Americans for Cures web site has been corrected regarding the president. That theory you put forth on the issue goes beyond speculative paranoia."

With his resignation, Klein has recognized that his connections with Americans for Cures are not compatible with his role as a public servant and chairman of an agency that is giving away $3 billion of California taxpayer's money.

Klein's resignation, however, is less than a half-measure and does not even well serve his own best interests. If it is an attempt to distance himself from the organization, it falls far short. If he continues to serve on the board of directors of the lobbying group, if the group continues to share Klein's office fax number and address, if he continues to control hiring and policy and generate financing for the group, Klein remains accountable for whatever the group does. Particularly for any actions that do not coincide with the best interests of the people of California or CIRM.

Klein volunteered for his role at CIRM and has not been paid for his work for nearly three years, which is all to his credit. Would that more California businessmen and women donate their time and energy to help solve some of society's difficult problems.

But when Klein accepted his job as a public servant, other activities became incompatible. One of those is directing a lobbying group that operates in the same area as CIRM.

As we reported earlier, Klein's dual roles represent an inherent conflict of interest. It is as if a high level executive with the California Medical Association also served on the state Medical Board. It is impossible to know whether their official actions represent their own views or the views of the special interest group.

Growing an Arm, a Leg and an Ear

Some of you may have wondered about the "Veterans for Cures" effort by Robert Klein's private advocacy group mentioned in the item below.

Here is what it is likely linked to – a $250 million military effort to grow body parts or at least the thinking behind it.

U.S. Army Surgeon General Lt. Gen. Eric Schoomaker (see Defense Department photo above) earlier this month told reporters about how researchers are growing a new ear for a Marine, using stem cells from his own body. Reporter Lisa Burgess of Stars and Stripes reported that the Schoomaker said,

"It's like baking a cake."

So far none of the military cash is slated to go to California, but that could change as researchers here see the potential for grant funding.

Here is another piece on the Defense Department program on a blog by a Belgium consulting firm, Pantopicon.

Klein's Private Group Plans Expanded National Stem Cell Push

Americans for Cures, the private stem cell activist group tied to the chairman of California's governmental stem cell agency, is embarking on a new, 50-state strategy to beef up efforts to "pass pro-cures legislation and defeat anti-cures legislation."

The advocacy group, which says that it does not perform lobbying, says it is setting up affiliates in each state and wants to hear from persons who want to help out (write inform@americansforcures.org).

Complete details for the national effort are being worked out, but Americans for Cures plans to create a Web page for each state affiliate (here is a sample) along with a rundown on the status of research and that state's laws. The affiliate would be "a single point of contact in each state, and may be one person or a group. That point will be the ‘network hub' for stem cell advocacy, to keep us informed, and to organize in the affiliate state," the co-directors of the group, Amy Daly and Constance McKee, said in an email to their supporters.

The group is also planning a "Students for Cures" group and a "Veterans for Cures" group.

The chairman of CIRM, Robert Klein, is also president of Americans for Cures, which operates out of the offices of his real estate investment banking firm. It is unusual for a top state official to lead a group that solicits possibly tax-deductible contributions and attempts to influence government policy and legislation in the same area as his agency. More than one critic has called on him to resign from one of the posts.

(On a slightly different subject, Americans for Cures' new website has some videos involving persons with a variety of ailments. We watched the Alzheimers segment. It was quite powerful.)

Klein Group Says It Does Not Lobby

The American for Cures Foundation, whose president, Robert Klein, is chairman of the $3 billion California stem cell agency, has taken issue with our description of it as a lobbying group.

Amy Daly, executive director of the group, says that it does not lobby and that the California Stem Cell Report is reporting inaccurately.

She sent along the following from co-executive director Constance McKee:

"At your(Daly's) request, I have carried out additional research on Mr. Jensen’s 'definition' that would include our work as a lobbying firm. We do not make representations directly to Congress or its committees, nor do we ask for or accept any fees on behalf of others to do so. We educate individuals as to science and issues, and suggest how they themselves can advocate for stem cell research..... I could find no legal or tax definition under which our activities could be accurately described as 'lobbying.'

"You might be interested in the Supreme Court’s narrow definition of lobbying. Clearly that is not what we do.

"'The U.S. Supreme Court has rejected congressional efforts to regulate grassroots communications as a form of 'lobbying,' on constitutional grounds. In 1953, in a suit involving a congressional resolution authorizing a committee to investigate 'all lobbying activities intended to influence, encourage, promote, or retard legislation,' the Supreme Court narrowly construed 'lobbying activities' to mean only 'direct' lobbying (which the Court described as 'representations made directly to the Congress, its members, or its committees'), and rejected a broader interpretation of 'lobbying' out of First Amendment concerns. [United States v. Rumely, 345 U.S. 41 (1953).]"

Americans for Cures is obviously relying on a narrow legal definition of the word lobbying. However, lobbying has broader meaning. Merriam Webster's Third Unabridged Dictionary notes that lobbying includes conducting "activities (as engaging in personal contacts or the dissemination of information) with the objective of influencing public officials."

The legal definition of lobbying is of great importance to Americans for Cures. Too much lobbying could lead to a loss of its nonprofit status, according to the Nonprofitexpert.com web site.

Nonetheless Americans for Cures makes it clear on its web site that its goals include influencing public policy, declaring that it seeks to help "encourage" decision-makers to fund stem cell research. Indeed, Daly appeared briefly before the CIRM Oversight Committee in January and addressed the question of how the committee should proceed in handling an attempt to overturn a negative decision on a grant application. The group's recent conference in San Francisco promised attendees that they would be taught how "key federal and state programs are funded, and what they can do to make their voices heard," including "specific actions" that advocates "can take to accelerate research and cures."

Some people thing that lobbying is pernicious. We do not. The problems with lobbying result from poor ethical practices, abuses related to power and money and the failure to consider all points of view. Citizens, businesses, nonprofit organizations and other groups can and should be deeply involved in the governmental process. The voices of all are needed in order to formulate the best laws, regulations and policies.

Learning How to Tell the Stem Cell Story

The private lobbying group of the chairman of the California stem cell agency is holding a two-day session this Saturday and Sunday in San Francisco and promises to help advocates learn more about how to make their voices heard.

The group is the Americans for Cures Foundation, whose president is Robert Klein, who also serves as chair of the $3 billion state of California Institute for Regenerative Medicine. It is unusual for the head of a state agency to also have his own advocacy group in the same field, as we have noted previously.

Klein and Alan Trounson, president of CIRM, are both scheduled to speak along with a number of scientists as well as advocacy experts.

The session is reasonably priced -- $100 for both days, If that is too much, it's a good bet that a call to the group could lead to assistance.

The agenda is heavily loaded towards hands-on advocacy and selling the message. We suspect it would be a good value for those who want to learn more about telling the stem cell story.

We should also note that Klein's group has a redesigned and much improved web site, which is worth checking out.