Agenda for Public Meeting on Interstate Stem Cell Issues

Here is the agenda for next week's public interstate stem cell meeting.

Interstate Alliance for Stem Cell Research

British Consulate
Cambridge, MA
October 24-25, 2007
Agenda


October 24

12:00 pm Lunch (at Consulate)

1 pm Welcome and Introductions
Warren Wollschlager, Chair, Office of Research and Development, State of Connecticut and Fran Sharples, National Academies’ Secretariat for IASCR

Introduction of other participants

The purpose of this meeting is to review progress on the working group assignments made at the May 23-24 Irvine, CA meeting and to identify additional issues the IASCR needs to address.

1:15 pm Governance Issues - preliminary discussion: Warren Wollschlager

1:30 pm Report of Working Group on the development of a Glossary of Stem Cell Terms: William Lensch (Tab 1)

2:15 pm Report of Working Group on an IASCR Website: Fran Sharples, Susan Stayn, Eli Zupnick (Tab 2)

3:00 pm Break

3:15 pm Report of Working Groups on Developing Model Language for “Acceptably Derived;” Payment Issues and Health Care for Donors; and Certification of Stem Cell Lines from Other States and Countries (formation of standing committee): Marianne Horn, Geoff Lomax, Melissa Lopes, Susan Stayn, Ann Willey, Eileen Naughton, and Alta Charo (by phone) (Tab 3)

5:15 pm Adjourn meeting for the day

6:00 pm Reception (on site)



October 25

8:30 am Breakfast (at Consulate)

9:00 am Report of Working Group on Grant Reviews: Marianne Horn, Warren Wollschlager (Tab 4)

9:45 pm Report of Working Group of Legal Counsels on Role of Regulations vs. Guidelines and Policy Documents: Marianne Horn (Tab 5)

10:30 am Break

10:45 am Summary discussion of Working Group next steps

12:00 pm Working Lunch: Roles of International Society for Stem Cell Research: Jonathan Auerbach and Heather Rooke (Tab 6)

1:15 pm Governance Issues
Officers
Membership in IASCR
Budget
Roles of IASCR: information resource vs. policy development
Product branding

2:00 pm Recruitment of additional states and other members: discussion

2:30 pm Break

2:45 pm Working Group breakouts

3:30 pm Other agenda items TBD

4:00 pm Adjourn

Public Barred from Any Comment at $85 Million CIRM Meeting

Two days of closed-door meetings will be held in the San Francisco Bay area next week to consider the 59 applications for $85 million in faculty award grants to be handed out in December by the California stem cell agency.

The agency's Grants Working Group will meet next Tuesday and Wednesday at the Sheraton Gateway Hotel in Burlingame to make decisions on which grants to recommend to the Oversight Committee.

The agenda explicitly states there will be no open sessions at which the public can comment. That bars the public from even appearing to protest or comment on the lack of public access, which seems to be the first such ban by CIRM, an agency that has vowed to uphold the highest standards of openness and transparency. Previously, such meetings, including the very sensitive meetings involving the search for a new president, have included at least a brief session during which the public could comment.

Here is a list of the members of the Working Group, whose economic and professional links to applicants are secret. Also being withheld by CIRM decree are the names of the applicants for the state funding and even the institutions (including state-funded universities) where they are employed along with a general summary of the research they are proposing.

The Oversight Committee is scheduled to give out as many as 25 awards, making the odds pretty good for the 59 applicants. The awards could total as much as $3 million a year. Twenty-eight unnamed organizations are represented among employers of the individual applicants.

Aussie Stem Cell Probe Highlights Need for Maximum Openness at CIRM

John M. Simpson, stem cell project director for the Foundation for Taxpayer and Consumers Rights of Santa Monica, Ca., is one of the more diligent watchdogs of the California stem cell agency, which is funded by taxpayers to the tune of roughly $6 billion (including interest).

Simpson (see photo) and his organization support human embryonic stem cell research, but they also have concerns about CIRM, an organization unlike any other in California history. It is virtually untouchable by the governor or the legislature, a distinction enjoyed by no other state agency.

CIRM is also an organization with built-in conflicts of interest, all legal because they were approved by California voters in Prop. 71, which created the stem cell agency.

We believe that means that CIRM should operate with more disclosure and openness than any other state agency. Such openness is in CIRM's own best interest, given the impact that even a minor scandal might have.

All that is a preface to Simpson's comments below, carried verbatim, on the Australian-Trounson stem cell research inquiry(see the several items below). Here is what Simpson sent exclusively to the California Stem Cell Report.

"As word makes its way from Australia to the United States about an investigation of a researcher in Alan Trounson's Monash Immunology and Stem Cell Laboratories, one point is already clear.

"There must be complete transparency and accountability in publicly funded research.

"Trounson, who is to assume the presidency of the California Institute for Regenerative Medicine, is by all accounts not under investigation. A report from a panel of academics who examined the evidence of wrongdoing is 'imminent.'

"Everyone interested in California's stem cell program is waiting for that report to see what degree of culpability -- if any -- Trounson had for things apparently done by others in his laboratory.

"Even before the report's release, the situation once again demonstrates the need for oversight, transparency and accountability in scientific research. Time and time again around the world, too many scientists have bent the rules for their own personal gain. Research simply must not be funded without the highest degree of public scrutiny.

"CIRM staff demonstrated the necessary high standards when after its vetting process, two ICOC-approved research awards were not granted.

"I suspect Trounson will emerge from the Monash probe unscathed, and I hope it will be with an even stronger commitment to the standards of accountability and transparency required by CIRM.

"Nonetheless, the ICOC should review closely the Monash University report when it is available and not allow itself to be blinded by the glitter of a world-class researcher. Even before the report's details emerge, however, the need for transparency and openness in all aspects of publicly funded research is demonstrated yet again."

Does the Trounson Story Have Legs?

The Australian stem cell research flap involving Alan Trounson made its North American debut today in a story in the San Francisco Chronicle. It also surfaced in one of the more serious scientific magazines, the Scientist.

Stephen Pincock of the Scientist added some details on the research. He also indicated a conclusion to the investigation is imminent. Sabin Russell's story in the Chronicle pretty much recapped previous material.

A reader on the Scientist web site, only identified as Leah, commented, "Why are there so many scandals around stem cell research? What a waste of money."

A quick resolution of the investigation is in the best interest of the California stem cell agency and Trounson, the incoming president of the $3 billion enterprise. As the saying goes, justice delayed is justice denied. The other important point is whether this story has legs. Trounson is not the subject of the investigation, but his name is really what makes it newsworthy. And it is mentioned in every story. The longer the story lingers, the more often Trounson's name will be associated with allegations of dubious activity. Not good for either the agency or Trounson.

Trounson Reports Not Appearing in American Mainstream Media

For the California stem cell agency, the good news is that the Australian stories about an investigation linked peripherally to its incoming president, Alan Trounson, have not really surfaced in the United States.

The usual online searches today failed to turn up any significant stories on the matter in the mainstream American media.

The not-so-good news is that the stories have handed another cudgel to those who would batter embryonic stem cell research. The case in point is an item by J. Wesley Smith(see photo), whose piece was headlined, "New CIRM Director's Research Under a Potential Cloud."

However, after some initial fumbling, the Australian stories have made it clear that Alan Trounson is not under investigation. Rather, another senior scientist involved in the $1.2 million project is the target, according to Australian officials.

The Australian, in a story by Leigh Dayton quoted California stem cell Chairman Robert Klein on the matter.

"I am fully aware of this and it is not Alan's work that is being questioned. My understanding is that this is a data issue that relates to the science carried out by a specific researcher."

Dayton wrote that Klein "solidly backed" Trounson. Dayton reported that Klein said that Trounson discussed the matter with the presidential search committee prior to his appointment.

One report from Australia quoted a CIRM spokesman as saying, "We're aware of the situation and have it under careful review." Interim CIRM President Richard Murphy confirmed, for the California Stem Cell Report, that was the agency's position.

Reporter Dan Box of the Australian wrote that Monash University is tossing out all the data from the experiment. He also quoted Monash officials as saying it is not known when the nine-month-old investigation will be finished.

Dayton wrote this about the details of the project.

Specifically, "benchmarking" reports claimed the group had developed a designer mouse that mimicked lung damage from smoking.

The reports also claimed the team had experimental results showing that treatment with adult stem cells reversed respiratory damage in the mouse.

According to the ASCC investigation, neither claim was supported by documentation in the lab's notebooks.

Fresh Comment

David Hamilton has posted a comment on the "Buried News" item below. You can read it by clicking on the word "comments" at the end of the item.

Buried News: William Bowes, UCSB and Jamie Thomson

In the increasingly rarefied atmosphere of stem cell philanthropy, a $3 million gift does not necessarily make big headlines. Especially when it goes to a school outside of the small circle of stem cell stars.

So last week when one of the founders of Amgen, William Bowes(see photo), gave that amount to the University of California campus at Santa Barbara(UCSB), it hardly caused a ripple in the media.

Something similar occurred earlier this year when renown University of Wisconsin stem cell researcher Jamie Thomson became affiliated as an unpaid, adjunct professor with UCSB. It was nearly a non-announcement and received little initial attention. But the school put together a $1 million package for him and is building a lab.

All of which reflects very much on the way the California media works. If it doesn't happen in Los Angeles or San Francisco, it is not likely to receive much notice.

But more particularly none of the news reports on the donation put it together with Thomson's presence at UCSB, which is very much a part-time thing. But it is hard to resist speculating that Thomson and UCSB could draw ever closer.

The press release from school, which stands on the cliffs overlooking the Pacific just north of Santa Barbara, quoted Michael Witherell, UCSB vice chancellor for research, as saying:

"UCSB is bringing to stem cell research its characteristic approach of integrating science and engineering in a single center. The Ruth Garland Chair is central to this approach, because it allows us to attract a researcher of national stature to lead the new center."

The $3 million donation was given by Bowes in memory of his mother, Ruth Garland. She was born in Santa Barbara and raised in nearby Ojai. Her grandparents settled in Santa Barbara in 1855. Educated as a physican at Stanford , she participated in a major diabetics study with William Sansum in Santa Barbara. A nonprofit research facility in Santa Barbara bears his name. It was one of the first places in the United States to do studies on insulin after it was discovered.

We asked Dennis Clegg, chairman of the Department of Molecular, Cellular and Developmental Biology Department and director of the Training Program in Stem Cell Biology at UCSB, about the donation. He replied,

"The gift will allow us to bring in senior talent in the stem cell field to be director of a new center, which will allow us to build on our rapidly growing program in stem cell research, and we are really excited about it. We have had interest in the position from the US and abroad. We have already formed a search committee and will be inviting candidates for interviews in the near future."

Incidentally, UCSB has received nearly $3.5 million in funding from the California stem cell agency during the past two years. You can see Thomson's talk that he gave at UCSB last spring by going to this web page.

Australian News Story Erring on Details

An Australian news report about an investigation involving Alan Trounson and a stem cell research project is apparently not entirely correct on some of the details.

Here is what we have been told concerning Trounson's role on the project (see item below). Trounson was the leader of the respiratory research program, which had three principal investigators (PI) and 16 scientists. The person being investigated was a PI (senior research fellow).

The story in the Daily Telegraph did not make it clear that there were three PIs and as many 16 scientists.

Trounson Stem Cell Project Under Investigation in Australia

An Australian newspaper is reporting that Monash University is investigating "inconsistencies" in a $1 million research project involving Alan Trounson, the incoming president of the California stem cell agency.

Reporter Carly Crawford of the Daily Telegraph said the stem cell research project "is under investigation after it was scrapped for delivering highly doubtful results." Crawford quoted a university spokesman as saying the investigation involved "possible inconsistencies."

Trounson was quoted as saying through a spokesman,

"I will not comment on this matter while it is being investigated by the university."

The newspaper said Trounson was not being investigated by Monash University but that he had been interviewed.

The matter involves interim findings from lung regeneration research conducted at Monash with public funds, according to Crawford, apparently from the Australian Stem Cell Center, which Trounson co-founded and which is scheduled to receive $115 million in government funding over a 10 year period.

According to the newspaper, Trounson was the principal investigator on the project, which involved 13 scientists. Investigators were required to submit 90-day progress reports to keep the grant funding flowing. The story said that "inconsistencies" were found by the Australian Stem Cell Center in multiple progress reports that were signed by Trounson and an unnamed senior researcher.

(Editor's note: Later information (see item above) indicated that Trounson was the leader of the respiratory research program, which had three principal investigators (PI) and 16 scientists. The person being investigated was a PI (senior research fellow).

The story did not make it clear when the inquiry began. It said that the Stem Cell Center referred findings to Monash last December. The story also said the project was abandoned in February after inconsistencies were found.

The newspaper said it "understands lab records contradicted assertions contained in the reports that said agreed research benchmarks had been met."

Fresh Comments

Larry Ebert has posted a new comment on the "Nobel" item below. David Jensen, the author of this blog, has posted a comment on the "CIRM Says No" item in response to the one by CIRM Oversight Committee member Jeff Sheehy. Sheehy's position is that the public disclosure of statements of economic interests by grant reviewers is not necessary. Our position is that we should not give the enemies of stem cell research any new cudgels. You can read the comments by clicking on the word "comments" at the end of the items.

Nobel Prize, Stem Cells and WARF

Some of the reports earlier this week on the Nobel prize in medicine did not highlight its key link to human embryonic stem cell research or, indeed, how it plays into the WARF stem cell patent challenge.

The connection was something that initially eluded this sometimes science-challenged writer. But we asked Jeanne Loring of the Burnham Institute (soon to be of the neighboring Scripps Institute) to elucidate.

She said it was "a spectacular day" for embryonic stem cell researchers.

"The Nobel Prize for Physiology or Medicine was awarded to three pioneers in embryonic stem cell research. Dr. Martin Evans and his colleagues accomplished a scientific coup in 1981, creating the first embryonic stem (ES) cell lines. Dr. Mario Capecchi and Dr. Oliver Smithies developed a way to alter genes in the ES cells, and for the last 20 years, scientists have used these scientific procedures to create hundreds of valuable new strains of laboratory mice. Some of these mice contain human disease-causing mutations, and are used all over the world for research on cancers, obesity, diabetes, Alzheimer's disease, Huntington's disease, and dozens of other diseases. These mouse 'models' of human disease are invaluable for pharmaceutical development and have had a dramatic effect on accelerating the pace of new drug development."

Loring is one those challenging WARF's patents on stem cells, a matter that has troubled some in the research community, including the incoming president of the California stem cell agency, Alan Trounson.

In April, Loring wrote an op-ed piece in the Wisconsin State Journal, commenting on the justification for the challenge and the early negative findings by the federal government.

She said,

"WARF's executives are understandably unhappy about the patent office's decision because they think they will lose money.

"But they could save an enormous amount of money, and gain a great deal of good will, by quietly dropping their claims to human embryonic stem cells and allowing the judgment of the patent office to stand. If they did this, they could be seen as a supporter, not an exploiter, of scientific research.

"If Sir Martin Evans of Scotland, who was one of those who first made embryonic stem cells in 1981, were to be awarded the Nobel Prize for his discovery, as is expected, WARF could gracefully take credit for helping scientists build on his landmark research."

(For unknown reasons, Loring's piece does not appear in a routine search of the Wisconsin newspaper. If you would like a copy, please send an email to djensen@californiastemcellreport.com.)

Work to Begin on Stem Cell Training Grant Concepts

California stem cell agency officials seem ready to dissect a $31 million proposal to train thousands of persons to work in the stem cell industry and use it as the framework for competitive bidding on efforts to beef up the biotech workforce.

The proposal from the California State University and community college systems came up for a brief discussion at last week's Oversight Committee meeting.

Richard Murphy(see photo), interim CIRM president, told committee members that CIRM funds should be awarded on a competitive basis. However, he said more discussions will be held with officials at CSUS as the CIRM staff works out concepts for RFAs.

The CSUS and community college systems, assuming they remain focused on CIRM, are likely to win their share of the grants.

CSUS officials presented their plan to the Oversight Committee last August. No other options were laid out at the time, although Oversight Committee members raised a series of questions. CSUS responded with a lengthy report prior to last week's meeting.

Training is an important part of the CIRM's strategic plan. especially in the next year or two. The plan designated about $38 million for technical staff training and about $35 million for scientific personnel development.

The technical training component seems to be more aligned with the CSUS proposal. The plan stated:

"The growth of this industry will require an educated and well-trained workforce. CIRM will support training of technical staff with essential skills for stem cell research such as cell culture, microscopy, fluorescence-activated cell sorting and analysis, micromanipulation techniques, surgical techniques, and good laboratory practices (GLP). Training will be supported at the undergraduate and masters levels with certificate or degree programs. Successful biotechnology training programs have already been implemented at several California colleges and universities as a means of supporting the broader research community. CIRM will seek to support similar programs that focus efforts towards maintaining an adequate supply of technical staff for stem cell research.

Fresh Comment

Larry Ebert has posted a new comment on the "Pushed or Jumped" item below.

Sewell Praises Bee, Criticizes Hall

David Serrano Sewell, a member of the Oversight Committee of the California stem cell agency, is lauding an article by The Sacramento Bee on the selection of Alan Trounson as the agency's new president.

It is somewhat unusual to find praise coming from CIRM for The Bee, which has taken a critical view editorially of many of CIRM's action. But those editorials are written in a department that operates independently of the newsroom, which in turn operates independently of the editorial department. It was a news article that Sewell praised.

Sewell's comments came in a letter published in today's Bee in which he also took issue with the comments of former CIRM President Zach Hall, who was quoted in the Trounson piece

Sewell (photo above) said Hall

"...was dead wrong in his assessment that the (CIRM) management structure presents some 'challenges.' The challenges are not in the agency's governing structure; rather, they originated from Zach's inability to effectively work with the entire board. Happily, those 'challenges' are behind us. Dr. Trounson is a breath of fresh air!"

There is a bit of history involving Sewell and Hall. Last April Sewell confronted Hall during a public meeting of the agency's Facilities Working Group, in a manner which some members of the Oversight Committee found disturbing. One said later she could not believe "the tone of contention, sarcasam and aggression toward Hall."

Following the meeting, the chairman of the working group quit with no explanation. And Hall announced he was moving up his previously announced plans to retire.

Correction

The Biotech Bank Plan item on Oct. 4 incorrectly identified Michael Goldberg as chairman of the Biotech Loan Task Force and Duane Roth as chairman of the Finance Subcommittee. Roth actually heads the task force and Goldberg the finance panel.

Fresh Comment

Jeff Sheehy, a member of the Oversight Committee of the California stem cell agency, has posted a hefty rebuttal to the item "CIRM Says No" below. He disagrees with the California state auditor and the position of this author. Sheehy says public disclosure of the economic interests of the individuals who make critical recommendations on multimillion dollar grants of public money would amount to "draconian overkill for a hypothetical problem (that) could severely slow the grantmaking process and delay needed therapies and cures." Your attention is invited to his comments. You can find them by clicking on the word "comment" at the end of the "CIRM Says No" item. .

CIRM Says No to Auditor's Conflicts Concerns

Elaine Howle, the California state auditor, knows a great deal about the mischief that goes on in state government. And make no mistake about it, mischief does occur even when the multibillion dollar battle ground is in public and the economic interests are on full display.

She also knows that the mischief can grow even greater when the doors are closed and the financial interests of the major players are hidden from the public, such as in the case of grants awarded by California's $3 billion stem cell agency.

So Howle (photo above) recommended last spring that the California stem cell agency, with its $3 billion research effort, do more to ensure that its conflict of interest code is followed. Her suggestion was rather modest considering the stakes: CIRM should ask the state attorney general for an opinion about whether the men and women who make the basic decisions on hundreds of millions in dollars in grants should be required to publicly disclose their economic interests.

CIRM's answer to the state auditor came last month: No.

"It is not appropriate," said the agency in letter to Howle. The letter came only 10 days before one institution withdrew its request for $2.6 million, a pitch that was approved by grant reviewers in secret last March without turning up the fact that the applicant was tied to an international scientific flap.

Richard Murphy, interim president of CIRM, wrote to the state auditor,

"We have given careful consideration to your recommendation and have decided it is not appropriate to implement at this time. In almost three years of operation and approval of four rounds of grants, the recommendations of the CIRM working groups have never been routinely and/or regularly adopted by the ICOC. Until the time that such a pattern is detected, the question you suggest we raise with the attorney general is entirely hypothetical, and is therefore not appropriate for submission. We will, however, continue to monitor approvals for such a pattern and will reconsider our decision if one emerges."

Murphy has some interesting lines of reasoning here, ones that clearly had the influence of a skillful attorney.

One part of his response refers to "routine and regular" actions. Another says the whole matter is hypothetical, implying that hypothetical possibilities are not worthy of public action. Let's examine CIRM's contentions.

First, should hypothetical situations to be ignored by government agencies? The possibility of contracting small pox or polio is hypothetical. Does that mean that children should not receive vaccinations against those diseases? Or that the government should not require them to be vaccinated in certain situations? The possibility of a terrorist boarding a plane with a bomb is hypothetical. Does that mean inspections of passengers boarding aircraft should cease?

The point about PUBLIC disclosure of the economic interests of grant reviewers is to prevent serious problems. A scandal involving conflicts-of-interests among persons who make critical judgments on the requests for hundreds of millions of dollars in taxpayer funds could be crippling to the stem cell agency. It is in the agency's best interests to inoculate itself against that possibility. It is most certainly in the public's best interest.

As for the routine ratification of reviewer recommendations, the Oversight Committee, which has ultimate legal authority on grant approval, has modified the reviewers' recommendations from time to time. We are sure that CIRM's able legal staff has counted the occasions and is prepared to make the case that the Oversight Committee does not routinely give grants a rubber stamp.

However, from seeing the board in action and reviewing transcripts, we come to a different conclusion, although we have not yet counted and assessed each individual vote. Reviewers are making de facto decisions. Most grants are routinely approved with little discussion by the Oversight Committee. Only a relative handful have been changed by that group.

Asking for a formal opinion from the attorney general is a serious matter. Such opinions have the force of law, for most purposes. CIRM would not want to seek such an opinion if it were uncertain of a favorable result. It is also fair to say that unless something changes, CIRM is not likely to ever detect a pattern of "routine and regular" approval of reviewer recommendations. To do so would open the agency to other legal perils, such as lawsuits alleging that the Oversight Committee is failing to perform its duties as required by law.

(The CIRM response on this matter is part of a document filed as part of the six-month response to the entire state audit. The response is not available on the Internet. If you would like a copy, please send an email to djensen@californiastemcellreport.com.)

$122 Million Disease Team Effort, $25 Million for New Pluripotent Lines

Crank up those grant-writing machines. Another 147 million in California stem cell dollars are going to start moving into the pipeline this fall.

The Oversight Committee of the California stem cell agency last week approved concepts for two new research efforts – one to develop new pluripotent human stem cell lines and another for planning grants for disease team research.

The disease team research effort is the largest at $122 million and most complex. So this fall – probably November -- the agency plans to seek applications for up to 20 planning grants for a total of $1 million. Funding approval is expected next spring.

The idea behind the disease team approach is stimulate proposals that would use strongly managed, diverse teams to accelerate development of therapies into actual use. The teams would also have clear-cut milestones on which they would be measured.

All of you team-oriented folks -- and what scientist is not (a little humor there) – can find a short document here that was presented to the Oversight Committee last week about the effort. The approach is also discussed in the strategic plan. Available at last week's meeting, but not on the CIRM web site at this point, is another important, 59-page document called "Disease Team Workshop: Information Gathering Session (July 25-26, 2007)." If you want that one, send an email to info@cirm.ca.gov.

Receiving a planning grant is not a pre-condition to winning an actual disease team grant later, CIRM staff said. And at the insistence of some of the medical school deans who serve as CIRM directors, the Oversight Committee also added a 10 percent indirect cost allotment in the planning grant(that is the change from the short document you will find on the web).

As for the new stem cell lines, the RFA on that $25 million program will come up this fall with approval for funding also in the spring. The grants are aimed at supporting generation of new lines of pluripotent cells, said CIRM,

"new clinical grade lines of hESCs and other pluripotent human stem cells suitable for future clinical use or other biomedical applications

"new hESC lines generated using improved methods that may be optimal for differentiation along selective lineages or for studies of disease

"disease-specific, pluripotent stem cell lines to support the study of the effects of genetic variation on disease development and response to treatment

"the discovery and implementation of alternative methods for generating pluripotent human cells."

More specifically, the awards will be made to "support two areas of derivation: the generation of new human lines using excess embryos from in vitro fertilization, and derivations from other sources using new and novel methods."

In addition to the document from last week's meeting, you can find more on the subject in the CIRM strategic plan.

Both programs will have limits on the number of applications from each institution.

CGS on CHA: Pushed or Jumped?

That was the headline on a piece on Biopolitical Times concerning the $2.6 million grant from the California stem cell agency to a Los Angeles subsidiary of a Korean business, headed by a controversial scientist.

Jesse Reynolds of the Center for Genetics and Society wrote skeptically about the explanations involved in the withdrawal, declaring that they "seemed a bit disingenuous."

"Regardless," he said, "the outcome is the right one."

CIRM Bonds: 3.55 Percent vs. 5.168 Percent Interest

When Prop. 71 was passed, even well-informed voters believed that the new California stem cell agency would use $3 billion in NON-taxable bonds to finance its activities.

The issue is significant because it costs the state a great deal more to use taxable bonds, which were exactly what was used on Thursday.

The California Stem Cell Report asked the state treasurer's office for a comparable rate if the bonds had been tax-exempt. Spokesman Tom Dresslar replied that the rate would have been around 3.55 percent. That compares to the 5.168 percent rate that the bonds were sold at, a rather hefty boost.

The total interest cost for the $250 million in bonds is expected to be $31.941 million.

CIRM and the state treasurer's office are seeking an opinion from the IRS that they hope will allow CIRM to use non-taxable bonds, but it is not clear when that will be forthcoming.

If it can't use the cheaper financing, the state faces close to another $1 billion in interest costs, according to some estimates. That is beyond the $3 billion that non-taxable bonds were expected to cost. (Yes, the figure is nearly identical to the amount of bonds authorized under Prop. 71.)

The issues of the cost of CIRM bonds and what could be generously described as a lack of candor during the campaign on the part of California stem cell Chairman Robert Klein are currently backburner issues in the Capitol and California. But given the magnitude of the costs, they are likely to surface anew in the not-to-distant future.