Rich and Rounded....That's the Way It Is

Charles Halpern is not a man pleased by much about the California stem cell agency. But, according to reporter Carl Hall of the San Francisco Chronicle, Halpern, a former law school dean and longtime agency critic, sounded happy that the agency settled on San Francisco for its permanent headquarters.

“He said the Bay Area's penchant for political activism will ensure 'a rich and rounded discussion' of every move the institute makes,” Hall wrote.

"'There's a whole network of civil society institutions around here that care about this stuff,' Halpern said. 'So it's a good thing the (institute) will be located in the hub of that kind of intellectual and critical discussion. That's a very positive thing. Only through a well-informed public dialog will this program be able to succeed.'"

Hall's piece also warned that folks should lower their expectations about cashing in on an immediate stem cell gold rush.

“Stem cell research is too early-stage to qualify as the next pillar of the regional economy, UCSF Chancellor J. Michael Bishop said during an interview Saturday. 'There's not much of an industry around stem cells yet,' he said. 'We haven't even figured out how to make the stem cells do what we need them to do to be useful clinically. Until that is done, it's a pretty shaky base for startups.

"'I'd like be more rah-rah, but that's the way it is.'"

Readers Write

We welcome comments and will publish them. You can respond directly by clicking on the word "comments" following each item. Or you can send them to djensen@californiastemcellreport.com. The following is from Tom Hall, a retired history professor from Berkeley:

"I've been visiting your blog site for the past week or so and very impressed with what I am finding on it. The Halpern letter was a real service. Not only does he raise some important points (the $10 million construction issue for instance) but he does a nice job of raising general issues -- does Klein have some secret agenda or is he just flying by the seats of his pants? It seems to me that politically, Klein's greatest strength is the apparent fact that no one wants to mount an initiative that would either repeal the stem cell enterprise or place it firmly under public control."

Behind the Stem Cell Scene

Columnists Matier and Ross of the San Francisco Chronicle popped up with a tidbit this morning on the stem cell HQ affair and the scientist and rag merchant who played background roles. Here is what the writers had to say:

“All the money and lofty arguments aside, San Francisco's landing of California's prestigious new stem cell research institute may have hinged on one very practical consideration.

“Zach Hall, the center's interim chief executive officer, lives in San Francisco -- and had privately made it clear to anyone who would listen that he was in no mood to move to San Diego.

“As a matter of fact, friends say his desire to be closer to home in the city -- where his wife has a full-time job at the Symphony -- was one reason he quit his last job commuting three times a week to the USC medical school and took the interim stem cell post.

“By the way, much of the credit for San Francisco's stem cell victory is being given to Gap founder Don Fisher, who -- just as things were looking a bit grim -- rallied local developers to provide rent-free space for the headquarters.

“UCSF Vice Chancellor Bruce Spaulding, who was part of the informal team that worked on the bid, said the developers needed to be convinced of the long- term financial benefits of landing the project.

“'For all the mayor did, Spaulding said, 'the guy who made the argument most eloquently and powerfully was Don Fisher.'”

The "Murkier" $100 Million Workaround

Questions are already being raised about the plan to fund the California stem cell agency with $100 million in philanthropic contributions.

Stem cell chairman Robert Klein sketched out the plan on Friday as a way to work around lawsuits that place a cloud over bonds that might be issued on behalf of the California Institute for Regenerative Medicine. (See our May 5 item "Looking for a $100 Million Helping Hand.")

Reporter Laura Mecoy of The Sacramento Bee did the most complete job of reporting on the subject in reports in the major California newspapers. But look for more in the next day or two in other newspapers.

Mecoy said that the most influential California legislator on stem cell matters, Sen. Deborah Ortiz, D-Sacramento, took a dim view of the $100 million plan.

"It would just make a murky issue even murkier," said Ortiz. "It is not the kind of openness you expect in government."

Mecoy said Klein characterized the $100 million as a bridge loan to, in his words, "make certain this momentum to develop new research and medical therapies is not slowed down."

“He refused to name the potential contributors,” Mecoy wrote, “but said they would only be repaid if the bonds sell. If the bonds aren't sold, he said the loans would become contributions.

“Klein said he plans to pursue this proposal on Monday when the stem cell agency's finance committee meets for the first time.

“(Jesse) Reynolds, program director at the Center for Genetics and the Society, called the contribution proposal 'risky,' and said it creates a 'strange relationship between a public agency and private lenders.' He also said Klein opens himself to possible conflict of interests by seeking contributions from foundations that also fund research and could be seeking state stem cell money as part of their future studies.

"'I don't think the head of a state agency responsible for giving out grants should be involved in fundraising,'" Reynolds said.

“Klein said the stem cell board's process for reviewing grants protects against conflicts of interest.

“He also said Proposition 71, the initiative that created the stem cell program, provided for contributions to be used to help fund grants and loans.

“During the election, though, such contributions were presented as matching funds that would be solicited by researchers seeking grants and loans from the state.

"'The problem here is we can't afford to lose eight or 10 months while this process (of litigation) moves forward,' Klein said.”

HQ: The Final Dissection(Maybe)

The post-mortems this morning on the stem cell HQ affair did not offer any extraordinary insights beyond what has already been reported. They did note that the San Francisco area, site of the new HQ, is an expensive place to live. Just how expensive? A 2003 study showed that family of four with two working parents needs to earn more than $70,000 a year to sustain its basic needs in that area.

You can find the study here.

Here are links to news stories on the HQ decision: Carl Hall, San Francisco Chronicle; Laura Mecoy, The Sacramento Bee; Terri Somers, San Diego Union Tribune; Steve Johnson, San Jose Mercury News; Paul Elias, The AP ; Louis Sahagun, Los Angeles Times; Marni Leff Kottle, Bloomberg.com

Flash!!! San Francisco Wins

San Francisco wins the stem cell HQ. Sacramento runs distant third. The vote was 16 for Baghdad-by-the-Bay and 11 for San Diego. Read Reporter Daniel Levine's story here in the San Francisco Business Times, filed at 4:01 PDT.

Looking for a $100 Million Helping Hand

The California stem cell agency may borrow $100 million from philanthropic organizations to start its research program.

The plan was announced after litigation raised financial clouds over the issuance of bonds by the California Institute for Regenerative Medicine.

Reporter Daniel Levine of the San Francisco Business Times quoted stem cell chairman Robert Klein as saying today, "We are looking at the potential to put together $100 million from various financial donors, to move forward and hire staff and make certain this movement to develop new research and advance medical therapies is not slowed down. As Nancy Reagan said, we cannot afford to lose any more time."

Levine also reported that “Klein said if for some reason the institute is unable to issue the bonds, the loans would be converted to grants. As such, he said the bridge financing would create no liability for the state.”

The (Almost) Final HQ Media Morsels

"It's cachet, it's reputation, and at this point it's become a sport,'' said stem cell institute vice chairman Ed Penhoet.

Today the last dog will be hung in the Affaire HQ. Here are links to morsels at the final pre-hanging media meal. Of course, we will dine again, journalistically speaking, at a post-mortem tomorrow.

Reporters Rachael Gordon, Carl T. Hall, Ilene Leichuk, San Francisco Chronicle; Paul Elias, The AP; Terri Somers, San Diego Union Tribune; Bradley Fikes, North County Times, Judy Silber, Contra Costa Times.

Looking at the Stem Cell Players

The stem cell HQ beauty contest has attracted all the attention in recent days, but other doings of the agency are more important in producing the cures that Prop. 71 promised.

Reporter Carl Hall of the San Francisco Chronicle this morning put together a good look at the selection of some key players and their significance.

Hall quoted Harold Varmus, a Nobel laureate and former head of the National Institutes of Health, who now serves as president of the Memorial Sloan-Kettering Cancer Center in New York.

"'A lot of money is involved, and people are concerned about the outcome,' Varmus said. 'If the money goes to the wrong people, that would be terrible. It would undermine confidence in the public process. But there is, in principle, no reason this can't work as well as the federal system' of dispersing money for scientific research."

While Hall focused on selection and names of members of the working groups(the scientists who will make grant recommendations to the Oversight Committee), he also wrote about the selection of a president.

"Some of the more-often-mentioned possibilities include James Battey, who has directed a stem cell task force for the National Institutes of Health and directed the NIH's National Institute on Deafness and Other Communication Disorders; Per Pedersen, who was identified as a senior staff scientist for Johnson & Johnson in Sweden; and George Daley, a top-rated stem cell researcher at Harvard University who already has agreed to be an ad hoc science adviser for the stem cell program.”

Just Say No to $200 Million

The California stem cell agency should be prevented from issuing $200 million in bonds because it is not “necessary or desirable” under state law, according to Berkeley attorney, Charles Halpern.

In a letter to the California Stem Cell Research and Cures Finance Committee, Halpern said, “The ICOC does not have a plan for spending such money and has no criteria for making grants or monitoring the uses of the bond proceeds. As of today the ICOC has not even adopted an operating budget....”

Halpern requested the committee to reject the bond request by the agency and not approve more than $25 million in bond sales.

The former dean of the law school at the City University of New York also said, “It should be noted that tantalizing press reports in recent weeks have suggested that (stem cell chairman Robert) Klein has a secret plan to finance Prop. 71 without selling bonds. This morning (May 5) the CIRM has posted on its website a notice that it is working with state officials 'on an interim financing program that does not use state funds. This will be discussed at the May 9 Finance Committee.' This alternative financing program has never been discussed by the ICOC in an open meeting, and it does not appear on the Agenda for tomorrow’s ICOC meeting.”

Halpern said discussion of such a plan would be in violation of state law because the public did not have enough notice.

We are seeking comment from the stem cell agency on Halpern's letter, which follows below.

Text of the Halpern Letter

Here is the text of Charles Halpern's letter:


To Members of the California Stem Cell Research and Cures Finance Committee
Dear Chairman Angelides and Committee members:
The California Stem Cell Research and Cures Finance Committee
(“the Committee”) plays a critical role in the structure of Proposition 71. It is charged by Section 125291(a) to “determine whether or not it is necessary or desirable to issue bonds authorized pursuant to this article…and, if so, the amount of bonds to be issued and sold.” In other words, the Committee has gatekeeper responsibility -- deciding when and if bonds will be issued, and in what amounts, based on its determination regarding necessity and desirability.
The “necessary or desirable” determination is particularly important in this instance because the Treasurer, the Controller, and the Finance Director are the only officials answerable to the electorate who have a role in overseeing the expenditure of public funds by the California Institute for Regenerative Medicine (CIRM). The voters who supported Proposition 71 expect that no bonds will be issued until the Committee has concluded that it is necessary and desirable to do so, after giving careful consideration to the justifications offered by the Independent Citizens Oversight Committee (ICOC).
Remand to ICOC to make the case that issuing $200,000,000 in state bonds is necessary and desirable
In this case the ICOC has given the Committee no factual basis to support the conclusion that it is “necessary or desirable” to issue $200,000,000 of bonds at this time. The ICOC does not have a plan for spending such money and has no criteria for making grants or monitoring the uses of the bond proceeds. As of today the ICOC has not even adopted an operating budget, though it has been hiring and incurring expenses for four months. The CIRM has sufficient funds to continue operations until November.
This is not a typical bond issue, where a highway has been planned and designed in detail, and the bond proceeds are necessary to buy concrete and begin construction. In this case, no one knows where the bond proceeds will go. For example, ten percent is earmarked for capital construction. Where will the buildings be? Will the state’s participation be debt or equity? How will the state be assured that the buildings will only be used only for Prop. 71 purposes, and for how long? Moreover, since Prop. 71 grants are not limited to stem cell research, bond proceeds could be channeled into any as yet unspecified medical research that seems promising to the members of the ICOC.
The statutory context indicates that the terms necessary and desirable should be read in the conjunctive, but matters of close interpretation are unnecessary in this case. The ICOC has not submitted any information to the Committee to support a conclusion that the issuance of $200,000,000 is either necessary or desirable. Oral assurances made by Mr. Klein or the other Committee members who also serve on the ICOC cannot substitute for ICOC policy and factual presentation, and do not constitute a basis for an informed Committee judgment.
This Committee does not meet its statutory obligation by presenting the ICOC with a blank check for $200,000,000, to be repaid over thirty years by the state’s taxpayers . The Committee’s decision is not a technical matter, of interest only to experts in public finance and bond traders. It goes to the core of government accountability.
The oversight responsibility of this Committee is especially important in light of the recent unanimous vote of the state Senate Health Committee putting forward a Constitutional amendment to strengthen the accountability of the ICOC process. (See SCA 13.) Ten Senators across both parties voted their belief that the present governance system provides inadequate oversight and needs strengthening, In light of this legislative concern and commitment to crafting a stronger governance structure (a time-consuming referendum process), the Committee must be particularly attentive to its statutory oversight responsibility under the present Prop. 71 governance scheme.
I request the Committee to remand the matter to the ICOC to give it an opportunity to deliberate on its resolution requesting the issuance of bonds in the amount of $200,000,000, and to present a justification for that number along with a plan for its grant-making program over the next year. If no such plan is forthcoming, the Committee should authorize no more than $25,000,000 in bond sales, to permit the CIRM to continue to develop a grant-making program.
Revising the Agenda-- Pending litigation on the Constitutionality of Proposition 71
The Attorney General has represented to the Supreme Court of the state, in the name of the ICOC, that these bonds will be unsalable, or salable only at higher interest rates, so long as litigation is pending. Litigation is still pending. The Committee must review this issue in open session prior to voting whether to issue bonds at this time, not at the end of the meeting in connection with the possible filing of bond validation lawsuit. It is hard to imagine that it is “desirable” to issue a large amount of bonds under such circumstances. There must be a public explanation and an opportunity for public comment. According to the San Francisco Chronicle, the Attorney General has not changed his opinion.
The circulated Agenda, which indicates that the Committee will vote to issue the bonds at the outset, before considering the pending litigation, should be revised.
The alternative financing program
It should be noted that tantalizing press reports in recent weeks have suggested that Mr. Klein has a secret plan to finance Prop. 71 without selling bonds. This morning the CIRM has posted on its website a notice that it is working with state officials “on an interim financing program that does not use state funds. This will be discussed at the May 9 Finance Committee.” This alternative financing program has never been discussed by the ICOC in an open meeting, and it does not appear on the Agenda for tomorrow’s ICOC meeting.
In light of the California commitment to open process, raised to constitutional status by the voters last November in Prop. 59, this is a startling announcement. Needless to say, the discussion that the CIRM promises at this Committee’s meeting on May 9 would be in clear violation of the Bagley-Keene Open Meeting Act .
Conflict of Interest
The Prop. 71 process has received much critical scrutiny around the issue of conflict of interest, from the Senate, the press, and from nonprofit groups. Therefore, in order to reassure the public on this critical matter, it is especially important that this Committee be as free of conflict of interest as is possible. In that respect, the substantial campaign contributions made by Mr. Klein to Mr. Angelides ($19,000) and Mr. Westly ($27,000) for their 2006 campaigns present a problem. The public must have confidence that the members of the Committee are each acting with full autonomy, without gratitude for past gifts or expectations of future ones.
In order to bolster public confidence I urge that the two campaign contribution recipients—Angelides and Westly-- return past contributions to Mr. Klein and commit to accept no more contributions from him or any other member of the ICOC so long as the Committee continues to function. These steps would help to avoid even the appearance of conflict of interest and reassure the public that the Committee members are single-mindedly committed to protecting the interests of the public and that each member is wholly independent in his judgments.
Conclusion
For the reasons set forth herein, I respectfully request the Committee to:
Remand this matter to the ICOC for reconsideration with the request that the ICOC submit a record to the Committee which it considers sufficient to support the conclusion that the issuance of bonds in a particular amount is “necessary or desirable.”
Review in an open meeting, prior to authorizing the issuance of any bonds or other debt securities, the impact of the pending litigation on the sale of bonds, in light of the representations made to the Supreme Court by the Attorney General on behalf of the ICOC.
Address the problem of conflict of interest on the Committee, allowing an opportunity for public comment.
Revise the Agenda appropriately.
Set a time for discussion of the alternative non-bond financing plan with appropriate advance notice and preparation.
Respectfully submitted,
Charles Halpern
Charles Halpern was elected to membership in the Institute of Medicine of the National Academy of Sciences in recognition of his work as a public interest lawyer practicing at the intersection of medicine, biomedical ethics, and public policy. He was a Professor at Stanford and Georgetown Law Schools and Dean of the City University of New York Law School. As Founding President of the Nathan Cummings Foundation, he administered a substantial grants program in the health field.an He has been an active public participant in the administration of Proposition 71 since its passage. With Dr. Philip Lee, he filed a petition with the ICOC requesting attention to conflict of interest problems, public access issues, and other governance matters.

The $10,000-a-Month Stem Cell Lobbyist

In an unusual move, the California stem cell agency has hired a private and influential lobbyist at a rate of nearly $10,000 a month to represent it in the state Capitol.

Few if any state agencies hire private lobbyists. Instead they rely on civil servants to appear before legislative committees and handle the myriad of details of the legislative process. California cities and counties, however, do hire Sacramento lobbyists.

The stem cell agency has contracted with Nielsen, Merksamer, Parrinello, Mueller and Nayor of Sacramento to carry its legislative water. The five-month contract is capped at $49,900 with a monthly retainer of $9,600, billed in advance. The firm bills at rates of up to $645 an hour for attorney time.

Gene Erbin, one of two attorneys in the firm focusing on the stem cell agency, said the firm helped draft Prop. 71 and represented the campaign organization during last fall's election. Erbin indicated that some state agencies use private lobbyists, but did not give any specific examples. A spokeswoman for the California Secretary of State's office, which regulates lobbyists, said she did not know offhand of any state agency with private lobbyists.

Robert M. Stern, president of the Center for Governmental Studies in Los Angeles, said, “Obviously, the stem cell agency is unique because it was done by initiative and because the legislature (or some legislators) want to amend its law substantially (and also because it has its own budget.)

“I don’t have a problem with state agencies having lobbyists but I believe that they should be state employees, rather than private contractors. It is more efficient (they are full time and less expensive), and the employees don’t have other clients.”

The Nielsen firm has a blue chip list of clients, including some in the health industry. They include Genentech, Merck and Pfizer. The Wall Street Journal on April 12, in a story by Antonio Regalado, reported that Merck had been involved in stem cell research.

In a contract letter to the stem cell agency, Steven Merksamer, a member of the firm's management committee and one of its founders, said that it is “virtually inevitable” that the firm will work on projects for other clients that have “different governmental or political objectives or views.”

He added that because of the diversity of the firm's practice, “it is certainly possible, even likely” that the firm will represent other clients with interests that are “adverse” to those of the stem cell agency “but which are not directly related to the matters for which you are retaining us.”

Merksamer, once chief of staff to then Gov. Deukmejian, also said that the firm is not legally a “consultant” that makes a governmental decision and thus is not subject to economic disclosure.

Erbin was once a legislative consultant to Democratic legislative committee chairmen and is a specialist on initiatives. Jim Gross is the other member of the firm focusing on the agency. He is an expert on health issues.

"Nothing If Not Political"

Picture the contestants in the Miss Stem Cell beauty pageant: Sluttish San Francisco, surf-and-turf San Diego and Sacramento, the demure farm girl.

That's how The Sacramento Bee editorialized today on the process of selecting a location for the stem cell headquarters.

While the newspaper had a little fun with the subject, it said the process illuminated the political nature of the Oversight Committee.

“It has revealed how parochial interests will likely dominate the dispersal of $3 billion of public funds over the next decade.

“At Monday's meeting of the institute's site-selection subcommittee, (stem cell chairman Robert) Klein ranked San Francisco - a quick drive from his Portola Valley home - as his top choice. Richard Murphy and Dr. John Reed gave even more lavish scores to their home team, San Diego. When it was clear that the fix was in, Dr. Phyllis Preciado of Fresno asked to change her score. Her extra five points for Sacramento kept it in the competition.

“Let's fast-forward to later this year, when the oversight committee is expected to start dispersing $300 million in annual research grants. Bay Area representatives will undoubtedly direct funds to Stanford and UC San Francisco. The Los Angeles contingent will push hard for UCLA, University of Southern California, Cedars-Sinai and the City of Hope. The San Diego appointees will make sure that UCSD, the Salk Institute and the Burnham Institute get their gravy. (UC) Irvine and (UC) Davis supporters will probably need to trade votes to avoid being shut out.

"Klein says he designed the 29-member oversight committee to shield it from politics, but make no mistake: This board is nothing if not political.”

Where's The Money?

Reporter Bob Egelko of the San Francisco Chronicle follows the bond money trail at the California stem cell agency in a story that looks at the strategies in dealing with lawsuits against the institute.

His article says, “Prop. 71 committee chairman Robert Klein and state lawyers have publicly discussed filing a bond validation suit in Sacramento County Superior Court. Such a suit might be resolved within months, because courts have generally confined their review to the state's ability to pay for the bonds.” That would mean much quicker sale of the bonds than would be the case in dealing directly with the litigation from fundamentalist and right wing groups.

The subject of the litigation is up for closed-door consideration at the Oversight Committee meeting on Friday.

Poor Policy, Poor Management

In less than 48 hours, the group that will be the largest single source of stem cell research funding in the world -- $3 billion -- will meet to discuss a wide range of complex issues, including its budget and appointment of key officials.

But the public has no real idea what the Oversight Committee is considering. At the time of this posting, they only can see perfunctory statements listed on the web site of the California stem cell agency. The agenda for this Friday's meeting does not even indicate whether items will be voted on or merely discussed. "Consideration" is the term used, which can cover a multitude of possibilities.

Presumably the 29 members of the committee that is supposed to make decisions on the issues are also limited to what they can see ahead of the meeting. Some of the committee members have already expressed their displeasure at not having sufficient time to prepare for the meetings and review the issues. Rushed agendas and lack of advance background material have been a problem with the Oversight Committee since its inception.

Normal governmental procedures in California, including those of the lowliest school boards, provide for far more disclosure on subjects to be considered at public sessions than that offered by the stem cell agency.

Chairman Robert Klein has promised the highest standards in openness and transparency. That promise has not been fulfilled in terms of giving the public and Oversight Committee members adequate advance notice and material on the complex issues the panel considers each month.

It is simply poor management and poor policy to continue in this fashion. And it will continue to alienate unnecessarily Oversight Committee members that Klein needs support from.

For a more on this issue see the item “Consider This” on this blog on April 1.

Flogging Not Yet Finished

San Franciso Mayor Gavin Newsom this morning is echoing the words of the soul singer James Brown.

“I feel good,” Newsom said after his city's bid for the permanent HQ of the California stem cell agency was ranked No. 1 by the agency's site selection committee. Sacramento and San Diego ran neck-and-neck for second.

But as someone once said, “It ain't over til it's over.” The three cities make presentations to the full Oversight Committee on Friday. The candidates for the presidency of the agency will also make their views known or reaffirm them. Then there are the wishes of Chairman Robert Klein.

Backers of each city made it clear they will pitch their proposals throughout the week. For example, the most powerful legislator in California on stem cell issues, Sen. Deborah Ortiz, D-Sacramento, stressed once again that she would like to see the agency in Sacramento.

Her office released a statement late Monday that said, “While all of the proposals were outstanding, I believe Sacramento, like the state-of-the-art research authorized by Proposition 71, represents the promise and hope of the future.

“While other regions have been stagnant, Sacramento has seen a 30 percent growth in medical, health and technology sectors. We are the shiny new home to a growing hub of cutting-edge research and treatment into cancer, autism, Alzheimer’s disease, organ transplants, cardiology and spinal cord injuries. We offer an affordable, quality-of-life, the seat of state government and an integrated, world-class health care system.”

Reporter Laura Mecoy of The Sacramento Bee noted some regional bias on the part of the San Diego site selection committee members, John Reed and Richard Murphy. Reporter Carl Hall of the San Francisco Chronicle wrote that Phyllis Preciado of Fresno leaned heavily towards Sacramento.

Here are links to other stories: Reporter Louis Sahagun, Los Angeles Times; Sandy Kleffman, Contra Costa Times; Rebecca Vesely, Oakland Tribune, Jim Hopkins, USA Today; San Diego Daily Transcript (no byline) Paul Elias, The Associated Press, Terri Somers, San Diego Union Tribune.

Who's on Second: Sacramento and San Diego

San Diego and Sacramento emerged as closely ranked for second choice for the headquarters. Now the leading candidates for the president's job at the agency will weigh in privately with their thoughts. The Oversight Committee votes on Friday, but Paul Elias, biotech writer for The Associated Press, writes that it looks like Baghdad-by-the-Bay will the headquarters for the biggest stem cell research effort in the world.

Here is a link to his story. The agency's web site is likely to post an official version of the subcommittee's action sometime today.

Surprise: San Francisco Gets the Nod

San Francisco is the first choice recommendation for the new headquarters of the California stem cell agency.

Happy supporters of the bid released the news about 15 minutes ago on the Internet even before it was posted by the agency. Here is the item from the Bay Area Council.

"Today, Jim Wunderman, President and CEO of the Bay Area Council, released the following statement regarding the California Institute for Regenerative Medicine (CIRM) Site Search Subcommittee's decision to make San Francisco their first choice recommendation for the Institute's new headquarters.

"Today's announcement is one of the final steps towards cementing the Bay Area's role as the center of biotechnology in the world. If approved by the 29-member Independent Citizens' Oversight Committee on May 6, this may be the psychological turnaround point for the Bay Area -- a historical marker of when the economic recovery began in earnest.

"We already have the most important companies in biotechnology. We were the birthplace of the industry. We have the world's largest concentration of life sciences companies, with more than 820. If we win the headquarters of the $3 billion stem cell institute, the Bay Area's leadership in this industry will grow further.

"The message this choice would send out is that if you want to either conduct cutting-edge research, or grow a company, or find a good job in biotechnology and stem cell research, you must come to the Bay Area.

"The contest to win the Institute's headquarters has been one of the hottest and most competitive in recent California history. The site search subcommittee has been under tremendous pressure from all involved. They are to be congratulated for running the process fairly and to the letter of the law. Since they held themselves up to such high standards, the entire state can know that the committee's recommendation is in the best interest of stem cell research and the people of California.

"Locating the stem cell institute headquarters in the Bay Area will help grow an already robust industry cluster in the region -- one that pays good dividends to our residents. The biotechnology industry contributes more than $12 billion to the Bay Area economy each year and employs more than 79,000 people. Bay Area biotech jobs pay an average of $80,000, which is 35 percent higher than normal for our region. Our research institutes draw in more than $900 million a year in grants for biotechnology research. Biotech is a true engine of our economy and will likely be key to our recovery."

Managing Stem Cell Expectations

The California stem cell agency is working hard to put money in the field to find cures for everything from cancer to dementia. But Stu Leavenworth, an associate editor of The Sacramento Bee, sounded a cautionary note in an opinion piece.

It said in part:

“Now that the initiative is law, Proposition 71 supporters face a daunting challenge - how to manage lofty public expectations.

“Partly because of the P.R. campaign, many patient advocates and California taxpayers believe that medical miracles are imminent. In reality, most scientists say it will take years, and possibly decades, before embryonic stem cell treatments are proven and made widely available.”

Penhoet, Selling and Management

Now a millionaire venture capitalist and philanthropist, Ed Penhoet grew up in Oakland, the son of a piano teacher, Helene, and a hardware store owner, Etienne.

Some of the tidbits from a profile of the vice chairman of the stem cell agency in the San Francisco Chronicle. Reporter Alex Barnum wrote the piece that also tells us Penhoet learned some of his management skills that he used at Chiron from a year selling cars.

"If you have highly productive, highly trained people working for you, you can't order them around every day. ... You have to sell them on the concepts that you're trying to put forward,” Penhoet told Barnum.

The story also reported:

“Penhoet's restless ambition has led him down other paths as well. After a stint as dean of the UC Berkeley School of Public Health, he is now president of the Gordon and Betty Moore Foundation, the country's sixth largest philanthropic organization, where his job is making sure that $5 billion is put to work in solving some of society's toughest problems.”

Barnum wrote, “What's unusual, friends and colleagues say, is that someone of such ambition is also a genuinely nice guy, modest and open-minded. The same characteristics that served him in academia and business -- an ability to attract talented people, a skill at solving problems and defusing difficult situations -- will be valuable in his latest, most public role as vice chair of the stem cell board, they say.”