CIRM Loans Turning Into Cash

(Editor's note: The following was based on incorrect information from the state treasurer's office. The notes were repaid and no windfall exists.)

The California stem cell agency appears to be the beneficiary of an $11 million windfall.

It comes in the form of cash from the Gordon and Betty Moore Foundation -- $10 million – and another $1 million from California venture capitalist J. Taylor Crandall.

Both had invested those sums in bond anticipation notes (BANs)issued by CIRM and were to have been repaid following the agency's California Supreme Court victory over its foes.

However, the state treasurer's office says the notes have "surrendered" by both the foundation and Crandall, meaning CIRM gets to keep the cash. The other purchasers of the bond anticipation notes have been repaid. And so has the state's $150 million loan to CIRM.

In response to a query from the California Stem Cell Report, Tom Dresslar, a spokesman for state Treasurer Bill Lockyer, said,

"We don't have any new bond issues planned. The timing of the next issue largely will be determined by CIRM's requirements. We understand CIRM may make some facility grants soon. Initial funding for those grants would come from the state's Pooled Money Investment Account."

Crandall is managing partner of Oak Hill Capital Partners and has "senior responsibility" for its technology, media and telecom groups.

The Moore Foundation is the creation of Gordon Moore (see photo) and his wife. Moore is one of the founders of Intel. Ed Penhoet, vice chairman of CIRM, was president of the foundation at the time of the BAN purchase.

UCLA to Receive Multimillion Dollar Stem Cell Gift

Don't stand under the stem cell money spigot -- especially with your mouth open. You might drown. First came the news of the pending sale of California stem cell bonds. Now comes the announcement that multimillionaire Eli Broad is going to make a whopping gift to UCLA.

So big that California Gov. Arnold Schwarzenegger is going to preside at the announcement on Monday, which will be televised live at 10 a.m. PDT on the governor's web site. The exact amount is not known, but Broad gave $25 million to UCLA's crosstown rival, USC for stem cell research, but apparently that was not enough to justify a gubernatorial presence. Of course, the governor may have just had a vacant spot in his calendar, and the amount may be less than the $25 million.

Broad also loaned $2 million to the California stem cell agency when it was strapped for funds because of lawsuits.

Broad and his wife, Edythe, were among the 50 most generous philanthropists in the country, according to a Business Week ranking in 2005. They have given close to $2 billion to various charities. Bravo to them. They help set an example that could well be emulated by others.

Governor's Cyberspace Splash on ESC Research

California Gov. Arnold Schwarzenegger put the state's stem cell issues at the top of his Web publicity agenda for several days earlier this week.

The governor's Internet site carried, on its main media page, video, audio and text on the $45 million in research grant awards by CIRM. A complete video of the news conference in Burlingame on Friday along with the governor's weekly radio address (Spanish and English) was and is still available. The site carried four still photos of the news conference. Claire Pomeroy, a member of the CIRM Oversight Committee and dean of the UC Davis medical school, is also featured in a video blog.

A few notes on matters not necessarily highlighted in the news coverage. It was abundantly clear that governor is committed to making another large loan to the agency if it remains bogged down in legal battles. A reporter questioned whether he was prepared to make another $150 million loan if needed. The governor's response was that he was committed "all the way."

Schwarzenegger also noted "the state teaches the federal government what to do." He said, "We don't wait." The California example, he noted, is rubbing off on other states. ESC research is a "people's issue." As for his role in the matter, he said, "I am a public servant."

Stem cell Chairman Robert Klein was ebullient during the news conference. But he also noted there will be "problems and failures" in the research. "We will learn from them," he said.

Also featured on the video was patient advocate Don Reed, who made heartfelt comments, along with his son, Roman Reed, who is paralyzed. The younger spoke as well, but was not near a microphone for the first segment of his comments.

The Private Touch in ESC Research

The Washington Post today caught up with some of the doings at the California stem cell agency, reporting that private, "almost unprecedented contributions" have saved the day at CIRM.

The story by Sonya Geis said the loans have also helped fuel other giving for embryonic stem cell research in California, echoing a point made in the San Diego Union-Tribune series, "The Stem Cell Wars."

"Private money is also building new stem cell labs on university campuses across the state. Los Angeles philanthropist Eli Broad gave $25 million to the University of Southern California for a stem cell institute, sound-technology pioneer Ray Dolby gave $16 million to the University of California at San Francisco, and local donors are contributing to a $75 million expansion at the University of California at Davis.

"'I was amazed by the number of wealthy Californians who have stepped up and decided to support a public agency,' said Owen Witte, director of the new Institute for Stem Cell Biology and Medicine at the University of California at Los Angeles. 'I've never heard of anything like this.'"

Geis erred on one point, however. She said "affluent Californians gave $31 million" to CIRM. The money was actually loaned to the agency and is to be repaid with interest. However, if CIRM loses the lawsuit against it, the lenders will not be repaid.

Correction

A Nov. 21 item, "Nearly Awash," contained incorrect figures on some of the individual purchases of CIRM bond anticipation notes. Those figures have been corrected in that item. CIRM has also corrected the figures on its website.