Fresh Comments

Larry Ebert has posted a comment on the "corrections" item from March 17. We have posted a response to that item. "Anonymous" raises some interesting questions regarding the "back story" on why CIRM failed to issue a press release on the letters of intent on round two of the faculty awards(see the "$41 million" item on March 18). We have responded to that as well. You can read all of this by clicking on the word "comments" at the end of each item in question. You can also post comments yourself by clicking on that word.

Pricewaterhouse Report on Biotech Loans Available Online

The Foundation for Taxpayer and Consumers Rights has posted the $50,000 PricewaterhouseCoopers report made to the CIRM Biotech Loan Task Force last week(see item below). The numbering of the pages seems to indicate that there is more to come from Pricewaterhouse. The report is not yet available on the CIRM website.

Biotech Loan Program Eyes Matching Funds

The California stem cell agency last Wednesday considered a proposal to create a biotech loan program of up to $750 million and is expected to possibly enact it by June. Here is a report from John M. Simpson, stem cell project director for the Foundation for Taxpayer and Consumers Rights, who attended the meeting of the CIRM Biotech Loan Task Force in Sacramento.

"CIRM Biotech Loan Task Force members didn't learn much last week from a $50,000 consultant's report about other states' loan programs, except that nobody really seems to be doing what the stem cell agency envisions.

"Loan programs in other states aren't really comparable to California's plan members of CIRM's Biotech Loan Task force were told by Christopher Wasden of PricewaterhouseCoopers.

"The consulting firm checked out about 30 loan programs and then narrowed the list to consider 12 of them in detail. The criteria for the short-list were that the program be state funded, focused on life sciences or technology companies, primarily offered loans and had a meaningful size. The final criterion was that the program was responsive, Wasden said.

"Noting that most of the loans offered by the other states were in the $200,000 to $400,000 range, Wasden described the proposed California program as 'more ambitious by a factor of at least two.'

"In fact, ICOC Chairman Robert Klein raised the possibility of making loans as large as $50 million. Task Force Chairman Duane Roth mentioned loans aimed at pre-clinical trials of $3 million to $5 million.

"Wasden reported that the 'amount of experience with the programs is low. There have been no liquidity events and no write-offs -- yet.'

"After Wasden's report task force members discussed more details of how California's program may emerge. Roth suggested that a four-part business evaluation would be the first step. That would include:

"-- A background evaluation of the company's principals.
"-- A credit evaluation, a Dun and Bradstreet or similar report.
"-- A litigation assessment. This would not include an assessment of the company's intellectual property (IP) portfolio, but rather a check for any suits pending against the firm or its principals.
"-- An assessment of the business plan and financial feasibility.

"Klein suggested, as he has at all task force meetings, that this check could be performed by 'delegated underwriters.'

"Task force member Michael Goldberg suggested that 'higher standards of verification would be required for larger loans.'

"If the applicant met the business criteria in the first step, then the plans would be peer-reviewed by the scientific panel for scientific merit as the second step.

"During his report Wasden said that a number of the state loan programs required matching funds as a way to 'have a third party validate the management team.'

"Klein emphasized the need for matching funds if CIRM makes large loans. 'There would be a lot of other people's money at stake in the big ones,' he said.

"Goldberg asked if the length of the loans should be tied to the life span of the stem cell agency. Klein responded that at some point he expects the Legislature will 'look at CIRM and see if it performed and whether more money should be put in.'

"David J. Earp, Geron Corp.'s chief patent counsel and senior vice president, told the task force that a requirement for co-funding would serve as 'a sanity check.' Asked what he thought a Phase 2 clinical trial would cost for a stem cell therapy, he said, 'Many tens of millions, certainly larger than $5 to $10 million' that had been cited earlier in the meeting.

"Roth told the task force that he and Klein had been meeting with state legislators in an attempt to keep them apprised of the plan. He said he hoped to have a loan program policy ready to discuss at the stem cell Oversight Committee's June meeting."

Our comment: Keeping California lawmakers well-informed on this program is well-advised, particularly if Klein plans to ask them for continued funding for CIRM in a few years.

Strong Interest in $41 Million CIRM Faculty Award Program

The California stem cell agency's effort to boost "young" researchers with grants of up to $2 million has attracted 55 letters of intent, nearly as many as the first round of program last year.

The faculty awards are designed to develop relatively young and promising researchers and particularly physician-scientists at a critical stage in their careers – providing them with salary and research funding for three to five years.

The $41 million grant program comes on top of a similar program last year that drew 59 letters of intent. Ultimately, the agency gave away only $54 million to 22 researchers out of the $85 million allotted in 2007. The grants were curtailed because five CIRM directors violated the agency's conflict-of-interest policies by writing letters on behalf of applicants from their institutions.

CIRM said the letters resulted from an "innocent misunderstanding." CIRM disqualified the 10 applications involved. The directors involved suffered no CIRM penalty, although some reportedly took steps to ease the economic or professional pain of applicants who were affected.

In December, CIRM directors ordered up a second round of faculty awards in order to give another chance to applicants disqualified last year because of their deans' conflict violations.

The names of the institutions and researchers submitting letters of intent this month were not disclosed by CIRM, which keeps them secret. Only the winning applicants names are released and then only after they are approved for funding.

In response to a query, Don Gibbons, chief communications officer for CIRM, released the number of intent letters and said 31 institutions were represented. He did not provide a breakdown for numbers from academic institutions and nonprofit research organizations.

CIRM has directed applicants in the second round not to disclose whether they competed in the first. Disclosing such information in this round could mean disqualification of the applicant.

Grant reviewers, however, are not likely to have too much trouble identifying applicants who are making their second run – unless their latest applications are totally different than the first or the reviewers' memories are faulty.

Fourteen grants are expected to be approved this summer following a closed-door review of the applications by the same CIRM panel that reviewed the first round of the grants. Scientists on that panel do not have to publicly disclose their financial or professional interests. Instead their disclosures are made privately to CIRM.

The application deadline is April 3, although no one can apply unless a letter of intent has already been sent.

California's Huge Lab Construction Program Set for Public Airing

The schedule for the next step in California's $758 million(including matching funds) stem cell lab grant construction program went up today on the CIRM web site and offers a rare opportunity for the public to comment on grant applications prior to final action.

Applying for the state cash are virtually all the major players in stem cell research in California. The names of the 12 were disclosed in December in an unusual move by the agency that was aimed at helping them to raise the matching funds needed to win the CIRM cash. Over the past three years, nearly all applicants for California stem cell research funds have been shrouded in secrecy until after the grants are approved, preventing the public from making any sort of meaningful comment.

The construction grant programs are exceptions, offering public sessions during review by the facilities group.

However, CIRM meetings are in fact rarely attended by more than a handful of persons, especially those from the general public. Applicants will be out in force, however, if only to be available to answer questions and possibly plan strategy in case questions arise that might hobble final action.

The agenda for the Facilities Working Group covers two days – April 4 and 5 – at the Westin San Francisco Airport Hotel in Millbrae. The Friday session is scheduled to begin at 2:30 p.m. and run to 9 p.m. The Saturday session runs 9 a.m. to 3 p.m.

Final approval by CIRM directors is slated for early May.

Corrections

Based on incorrect information from the Chico Enterprise Record, we reported incorrectly on March 4 that Janet Wright was leaving California last month to take a new job and would no longer be serving on the Oversight Committee of the California stem cell agency. CIRM reports that Wright is leaving to take a new job, but cannot say when. Wright did not respond to emails requesting the correct information.

We also reported incorrectly on Feb. 29 that the bond anticipation notes purchased by the Gordon Moore Foundation and Taylor Crandall were not repaid by CIRM. That information, provided by the state treasurer's office, is incorrect. The notes have been repaid.

Our policy is to correct mistakes as promptly as possible, both separately in a correction and in the original item, including a note that the item was corrected. If you see information that you believe is factually incorrect, please send an email to djensen@californiastemcellreport.com.

The ICOC Plays The Crest

The board of directors of the California stem cell agency met earlier this week in a restored movie house (see photo) in downtown Sacramento. The location was a bit unusual for a CIRM meeting, but the affair triggered the imaginations of some board members. Here is a report from John M. Simpson of the Foundation for Taxpaper and Consumer Rights, who attended the meeting.

ICOC members took note of their unusual surroundings as they took to the stage of the Crest Theater in Sacramento this week, a venue that has seen performances ranging from Cab Calloway to Kurt Cobain.

These days the Crest often shows classic movies like "Gone With The Wind." Calling the meeting to order, Chairman Robert Klein noted the entertainment industry backgrounds of board members Sherry Lansing and Leeza Gibbons and declared the Crest "an adequate stage for our tremendous talent."

Lansing objected that she was only a "bit player."

Introducing new President Alan Trounson, Klein suggested that the Crest's marquee should have billed the meeting as "Starring Dr. Alan Trounson, straight from Australia."

Trounson began his president's report by confessing to snapping a few photos of the Crest "because they won't believe me at home."

In fact, to the bemusement of several passersby who didn't seem to know what to make of it, the huge letters on the marquee spelled out:

Wed March 12
CA Institute For Regenerative Medicine
8:15 AM Spotlight on Deafness
9:00 AM ICOC Meeting
Open to The Public

For the most part the unusual message didn't draw a larger or different crowd than usual when the meeting is held in a hotel or academic setting.

Not usual for an ICOC meeting, however, Assemblyman Martin Garrick, R-Carlsbad, and Sen. Mark Weyland, R-Escondido, showed up to speak for adoption of a regulation that would define a "California supplier" that was presented by John Valencia, attorney for Invitrogen. You can be sure that had nothing to do with the marquee.

The ICOC ended up at the Crest this way: The date and general location of the meeting were set before a venue was booked. It turned out when Klein's aide Jena Pryne tried to nail down a site, virtually everything in Sacramento was booked for conventions and activities relating to the legislative session. She sought advice from Scott Tocher, interim associate legal counsel to the vice chair, who grew up in Sacramento.

Tocher, who remembered the Crest hosting graduations and citizenship ceremonies, thought it could work. Pryne booked it and the ICOC's name was, if not up in lights, on the marquee.

Appropriately during the board's closed executive session when members decided to hire Dr. Marie Csete as Chief Scientific Officer at a salary of $310,000, Melissa King, CIRM executive director, passed out free popcorn to those waiting for the board to return and make the action official in public.

The seats were the most comfortable I've been in at any ICOC meeting. Let's play the Crest again next year.

Fresh Comment

"Anonymous" has a fairly detailed comment on the "warf" item below about the "true overcome" of the latest action in the stem cell patent dispute.

WARF Scores in Patent Struggle

WARF has chalked up a victory in the latest round in the stem cell patent wars, but challengers are vowing to continue the legal battle.

Here is a link to the story on Science Now. John M. Simpson, stem cell project director for the Foundation for Taxpayer and Consumer Rights, also sent along this response to the anonymous comment on the role of his organization.

"Anonymous is wrong. So far the challenge has narrowed the patent claims,
but more importantly prompted a substantial change in WARF's behavior. In January 2007 facing the patent re-examinations and surrounding publicity WARF substantially eased licensing requirements and became much more cooperative with the stem research community. They also 'clarified' that they would not seek a license from CIRM although the then general counsel, Elizabeth Donnelly, told The Stem Cell meeting sponsored by Steve Burrill & Co the previous spring that was the intention."

Legal Action in Multimillion Dollar CIRM HQ Promises

The California stem cell agency is embroiled in a $425,000 flap with its landlord as part of the City of San Francisco's deal to pick up millions of dollars in agency's expenses as part of the city's successful bid to land the CIRM headquarters.

Reporter Sabin Russell of the San Francisco Chronicle today wrote that the agency's directors have authorized legal action against Stockbridge Capital Partners, owner of the building housing CIRM.

Russell wrote:

"At issue is approximately $425,000 in annual operating costs for items as diverse as electricity, janitors, parking privileges and fees similar to those paid by condominium owners.

"Part of the deal, according to stem cell board Chairman Robert Klein, was that the state-funded institute would not have to pay those costs. 'A couple of months ago, we had a meeting with Stockbridge, and at that time they assured us they would pay all expenses. They have not lived up to the representations made to the mayor or ourselves,' he said.

"Adam Alberti, spokesman for Stockbridge, said Wednesday that the company remains committed to keeping the institute headquarters in San Francisco. 'We are in year two of a 10-year rent-free deal,' he said. 'We will continue to meet that obligation.'

"Alberti said that so far the firm also has covered about $1 million of operating expenses - costs that were to be covered by 'private fundraisers and other parties' who have yet to come through with the money. 'We are working with the city and other folks involved to find ways to cover this,' he said. 'Ultimately, the guarantor of the deal is Stockbridge.'"

The dispute raises questions about whether other promises made in San Francisco's multimilllion dollar bid are being fulfilled. As far as we know, no public accounting has ever been made.

CIRM Salary Ranges Top Those at NIH

The Sacramento Bee today reported that the salary pay ranges approved by directors of the California stem cell agency amount to a 23 percent hike for top executive positions and easily surpass those at the much larger National Institutes of Health.

Reporter Jim Downing wrote that the new pay ranges provide for a possible $508,750 top salary for the positions of chairman and president, up from $412,500. A top range of $332,000 was approved for executives at the next level, up from $270,000, with CIRM's top two attorneys at $277,500, up from $225,000.

The action, taken with little debate by the Oversight Committee does not immediately increase the salary of any employee, however, just the ranges of possible pay.

Downing also reported,

"Directors of federal medical research agencies such as the National Institutes of Health make considerably lower base salaries, according to NIH spokesman Don Ralbovsky, who said he could not immediately provide exact salary information."

Fresh Comment

"Anonymous" has posted a comment on "salaries" item below concerning Wednesday's WARF patent decision. We will have an item on the patent matter later today.

CIRM Salaries Approved Along with Action on 'California Suppliers'

Here some of the highlights from today's meeting of the directors of the California stem cell agency, in addition to the appointment of Marie Csete as chief scientific officer.

They were provided by John M. Simpson, stem cell project director for the Foundation for Taxpayer and Consumer Rights, at our request. Simpson attended the session. Here is what he wrote.

"Despite (CIRM General Counsel) Tamar Pachter's recommendation, the board approved the proposed definition of a California supplier after John Valencia, an attorney for Invitrogen, made it clear that this would merely start a 45-day public comment process and the proposed regulation would be subject to change after that period taking comment into account. I was among those speaking in favor of passage.

"After lengthy discussion they adopted the Proposed Tools and Technical RFA with one substantial modification: Companies will be allowed to submit four applications like universities and research institutes. The staff recommendation would have limited companies to two applications.

"The Board also approved revised salary ranges as submitted. Top ranges were trimmed from what had been proposed at governance meeting.

"During public comment I noted that neither (CIRM Chairman Robert) Klein nor (Vice Chairman Ed) Penhoet take a salary and asked if approval of ranges for those positions indicates they intend to take a salary. He responded that after five years not doing so he may have to assess the situation and that it would be up to the board but that he 'knows of no such plans at this time.'"

We are querying Don Gibbons, chief communications officer for CIRM, specifically what salary ranges were approved.

Simpson also reported that there was little discussion of the biotech loan program and that a policy may be presented in June.

Emory Scientist Named to Key Post at California Stem Cell Agency

Emory University scientist Marie Csete today was named as the new chief scientific officer at California's $3 billion stem cell agency.

Csete (see photo) is only the second person to fill the key position, which has been vacant since last fall. Arlene Chiu resigned at that time after filling the position since 2005.

Alan O. Trounson, president of CIRM, said in a news release:

"Her training and experience as both a basic researcher and clinician is critical to our strategy of advancing discoveries into the translational pipeline. In addition, her expertise in the field of transplantation and understanding of immunology issues will be highly relevant to advancing new discoveries in the stem cell field toward therapies and cures."

CIRM also quoted Harvard's Stuart H. Orkin, who is also chair of the group at CIRM that performs scientific reviews of grants, as saying,

"I am very pleased that Dr. Marie Csete will assume the Chief Scientific Officer position at CIRM. She was an active and insightful member of the Scientific Working Group. Her leadership will ensure that CIRM meets its potential for the state of California."

CIRM's news release, which is not yet available on its website, also said,

"Prior to joining the CIRM, Dr. Csete was John E. Steinhaus Professor of Anesthesiology at Emory University, with adjunct appointment in Cell Biology, and program faculty appointments in Biochemistry, Cell and Developmental Biology, Neurosciences, and the Emory/Georgia Tech Biomedical Engineering Program. She was also the director of Liver Transplant Anesthesiology at the Emory University Hospital in Atlanta and director of the Emory/Georgia Tech Human Embryonic Stem Cell Core, and co-Director of the Emory MD/PhD Program.

"Dr. Csete graduated from Princeton University with a degree in Music and received her M.D. from Columbia University’s College of Physicians & Surgeons. After residency and fellowship training at the Massachusetts General Hospital and St. Elizabeth’s Hospital in Boston, Massachusetts, she was Assistant Professor in Residence at the University of California, San Francisco where she directed the liver transplant anesthesiology team."

Brief comments from Csete appeared on this website last October in defense of secrecy of the names of applicants for stem cell lab construction grants. The agency refused to release the names at that time, but in December decided that they should be public so that they could raise matching funds for their grant applications.

She will earn $310,000 a year at CIRM and will receive $20,000 in moving expenses.

Biopolitical Times: CIRM Eyeing Ways to Pay Women for Eggs

The Biopolitical Times is reporting that CIRM President Alan Trounson dropped a "bombshell" recently, declaring that "he wanted to open the door to paying women for their eggs for CIRM-funded research, a clear end-run around California law."


On Monday, Susan Fogel of Pro-Choice Alliance for Responsible Research, who is of the few who follow California stem cell matters closely, reported on the Feb. 28 meeting of the CIRM Standards Working Group. She said,

"Alan Trounson stepped up to the podium, and certainly surprised nearly everyone in the room with a proposal that the SWG support paying women for their eggs by offering them compensation in the way of discounts on their fertility treatments - 'egg-sharing' - if they agree to give up some of their eggs before they have achieved their own reproductive success. Never mind that Proposition 71 itself prohibits compensation for egg providers in CIRM funded research; the CIRM regulations, adopted after a deliberative and public process, prohibit compensation; California statute passed and signed into law in 2006 (SB 1260) prohibits compensation in non-CIRM funded research, and the National Academies guidelines prohibit compensation. The only permissible payment is for reimbursement of incurred expenses. Trounson made several assertions: (1) researchers cannot use spare embryos (this is incorrect - there is no California law that prevents people from donating embryos to research), (2) it is highly unlikely that women would give extra eggs when they go through fertility treatments (no evidence here), and (3) it is extremely difficult in California to get human eggs (others pointed out that there is no such evidence; however, SWG member Kevin Eggan stated that he hasn't been able to recruit egg donors in Massachusetts)."

We asked CIRM for comment on Fogel's article. Don Gibbons, chief communications officer, said, "her piece is largely accurate, just make clear this is about DISCUSSING the topic, NOT PLANS TO CHANGE POLICY.(his capitals)" Following that response, we asked him specifically about whether CIRM believed the statement that Trounson "wanted to open the door" to compensation was "largely accurate." Gibbons responded,

"No, he wanted to open a discussion on the options."

Fogel's item also said,

"It soon became clear that at least one person in the room knew this was coming. (CIRM Chairman Robert) Klein and Trounson had clearly been conspiring on turning California law on its head. Klein jumped in to make the argument that since it is permissible to reimburse women for medical care they might need for health consequences of providing eggs, he had a legal opinion from James Harrison(outside counsel to CIRM), of the Remcho firm, with a twisted definition of 'medical' to include IVF treatment, and arguing that paying women for a portion of their IVF would be 'reimbursement' not 'compensation.'"

The Biopolitical Times article is likely to raise a something of a stir, perhaps as early as Wednesday when the Oversight Committee meets in Sacramento and makes the rounds in the Capitol to see legislators. The piece prompted an email to us from one knowledgeable and longtime CIRM observer, who said,

"Once again, the advice of Klein leads another soul over the precipice."

The reference was apparently to advice that Klein, who is an attorney and claims credit for writing Prop. 71, gave to a CIRM director last year. He told the man to lobby CIRM staff on behalf of a grant to his own institution, a move that currently is under investigation by state officials as a violation of state conflict-of-interest rules.

As for the current CIRM rules on donor expenses, they were carefully crafted following months of hearings and approved in 2006 with virtually no dissent by CIRM directors.

Obviously we have two different perceptions of what occurred at the Feb. 28 meeting, which was not covered by any media. Perhaps it will become clearer when the transcript is posted, which should happen in the next week or so.

,

The Bee Calls for Tougher Legislation on CIRM

On the eve of the Sacramento meeting of directors of the California stem cell agency, The Sacramento Bee today editorialized for major changes in the way the agency operates.

The Bee said "questions about its internal conflicts and finances remain as urgent as ever."

The Bee continued:

"Given that the state faces a multibillion-dollar budget deficit – and that $3 billion in bonds could be put to better use than lavish executive pay salaries – one might think that lawmakers would be ready for a full revamp of the stem cell agency."

The Bee said recently introduced legislation by Sen. Sheila Kuehl, D-Santa Monica and chair of the Senate Health Committee, "doesn't go far enough in ensuring an equitable outcome."

The Bee said,

"What's needed is clear legal authority for future attorneys general to regulate the pricing of stem cell therapies when companies are making excessive profits after benefitting from the state's investment.

"Kuehl's bill doesn't do this. Neither would it eliminate the potential conflicts, and excessive number of board members, that have long kept the institute's oversight committee from operating effectively and credibly. All her bill would require is a study of the institute's governance by the Little Hoover Commission by 2009. Too little, too late.

"Although SB 1565 is better than nothing, it is a far cry from what California taxpayers and patients deserve for the $3 billion – $6 billion, including interest – they have agreed to invest in this field of science."

Biotech Loan Plan Now Available to Public

The California stem cell agency today posted its draft policy for its biotech loan program, which could total as much as $750 million, a little more than 24 hours before it is scheduled to receive its first public hearing.

The document, which we are still reviewing, can be found here. The proposal will be discussed Tuesday at a 4 p.m. meeting of the Biotech Loan Task Force in Sacramento with remote locations in San Carlos in the San Francisco Bay Area and Pleasanton.

The policy will go to the full CIRM board of directors on Wednesday morning.

We have written repeatedly about CIRM's failure to keep the public informed in a timely fashion about its proposed policies and initiatives. This latest example is one of the most egregious, given the far-reaching nature of the plan. One would think that someone on the board of directors would point out this level of performance is not acceptable in either the public or private sector.

It is a management failure, one that rests with Robert Klein, chairman of CIRM, and Alan Trounson, president of CIRM.

That said, we have to give the agency some credit for posting many of the documents for the Wednesday meeting with something close to sufficient notice. But posting and preparing these documents should be routine tasks. When an organization struggles with routine tasks, it means it does not have time or capability to respond well to exception events or crises.

Part Two of Lab Grant Applications Now Available

The latest versions (part two) of the applications in CIRM's lab grant construction program have now been posted. They can be found here.

The Primrose Path of Stem Cell Research in California

Campaign rhetoric and reality: No, this isn't about this year's presidential election campaign, but about the California stem cell agency, its seductive origins and the sweet promises to voters in 2004.

Those matters have surfaced as part of this week's meeting of the directors of the $3 billion institute, which was born nearly four years ago in what is one of the ultimate political acts – an initiative campaign in which voters thrust aside lawmakers, seize control of the reins of government, write legal code themselves and raise and allocate billions of dollars.

All fueled by campaign promises – in the case of Prop. 71 – that not only will sick people will be cured but California residents, businesses and researchers will receive special treatment.

Well, not exactly, CIRM now says, particularly in the case of California businesses.

The stem cell agency delivered the bad news as the result of a request by Sacramento attorney, John R. Valencia of the firm of Wilke, Fleury, Hoffelt, Gould & Birney, on behalf of an unnamed California-headquartered life sciences corporation. Valencia also represents, among others, the California Healthcare Institute, which, in turn, represents California's biomedical industry. That organization has members on its board of directors who also serve as directors of CIRM.

Valencia made a seemingly simple request of CIRM: define "California supplier." The term is found in Prop. 71, which states:

"The ICOC (CIRM's board of directors) shall establish standards to ensure that grantees purchase goods and services from California suppliers to the extent reasonably possible, in a good faith effort to achieve a goal of more than 50 percent of such purchases from California suppliers."

Unfortunately, the two words in question are not otherwise spelled out in the initiative. And it is clear now that CIRM wants few restrictions on where it goes for outside, private contracting. Valencia, however, argues that CIRM can find virtually everything it needs in California, which is not called the Golden State for nothing.

It is not a trivial matter. In his letter to CIRM, which comes before its directors on Wednesday, Valencia points out that it could ultimately run to $300 million.

Valencia says it is "vitally necessary" to define California supplier. He says the definition is virtually required by Prop. 71 whose overall objective is to advance California economic interests. He wrote:

"Why send hundreds of millions of California taxpayer dollars outside the state, where it does nothing to create California jobs, economic growth or tax revenue?"

Tamar Pachter, general counsel to CIRM, has an answer, which boils down to this: CIRM is not legally required to give preference to California suppliers beyond what is stated in Prop. 71 as well as existing law. It's a "goal" not a "mandate," she writes in response to Valencia's request. Weasel words in Prop. 71 -- she explains, although that is not her terminology -- provide plenty of wiggle room. Those terms include "reasonably possible," "good faith effort" and "goal."

We can chalk up that verbiage to CIRM Chairman Robert Klein, who led the initiative campaign and claims responsibility for writing Prop. 71, although other attorneys were involved as well.

More than one issue underlies this matter. One is the question of campaign promises. Some say that CIRM should be measured against the promises of the campaign, however overstated they may have been. Others say that no one should be so naïve as to believe that the sweet talk of a campaign has any connection to the ultimate reality.

Another matter involves the practical realities of running an enterprise involving stem cell research, clearly a global endeavor. Parochial requirements concerning California preferences make CIRM's task more difficult – not easier.

Nonetheless, the stem cell institute must recognize its obligation to California voters in clear and unmistakable ways – perhaps not necessarily in this particular case. But it had its way with voters in 2004. Failing to be responsive could have unfortunate consequences. Hell hath no fury like a voter scorned.

Dissecting the Legislative Strategy Behind the Latest California Stem Cell Bill

Think motherhood when you think about new state legislation aimed at California's $3 billion stem cell agency.

That's the strategy on the latest bill that targets the world's largest source of funding for human embryonic stem cell research, all of which comes at the expense of California taxpayers.

Think of those millions of taxpayers as investors. Who can say they should not receive a tidy return on their $6 billion (including interest) commitment? Who can oppose a nonpartisan, thorough-going review of the agency, which has stumbled more than once and which is riddled with built-in conflicts of interest? Especially when that agency lives in a constitutionally protected, ivory-tower world, far from the bloody financial fray now underway beneath the Capitol dome.

While motherhood is not as popular as it once was, these are motherhood questions for lawmakers and hard to oppose.

The current political climate may now be as receptive for passage of the bill, SB1565, as at any time. Legislative demonstrations of fiscal prudence are the order of the day in the Capitol. Stifling government profligacy is the paramount virtue.

CIRM gave supporters of the legislation more leverage when the agency offered an ill-timed plan to boost the maximum pay ranges of CIRM's top executives by 50 percent, or $200,000 annually in some cases. The CIRM pay plan received a public and negative airing on the same day that a $16 billion state budget deficit was announced. A subcommittee of CIRM directors balked at the executive pay proposal, but it will surface again next Wednesday. Introduction of the CIRM legislation came only a few days after that subcommittee hearing, probably not coincidentally.

The lead author on the CIRM bill is Sen. Sheila Kuehl, D-Santa Monica, who is chair of Senate Health Committee. Republican Sen. George Runner of Antelope Valley, who is part of the GOP leadership, is co-author.

Their position is that CIRM has offered an inadequate return to California investors/taxpayers. Kuehl and Runner instead propose to guarantee in state law that California residents have affordable access to therapies developed with state cash, an issue which affects CIRM's intellectual property rules. The lawmakers also want to mandate a study of CIRM with recommendations for changes. Kuehl said that one reason for her latest legislation involves breaches of the agency's conflict-of-interest policy by a number of its directors.

The bill needs 70 percent approval of both houses of the Legislature –- a super, supermajority requirement created by Prop. 71. The unique and unprecedented requirement is intended to protect the agency, but lawmakers may now regard it as a challenge to their authority.

CIRM has opposed similar legislation in the past, but it has not taken an official position on SB1565, which is the embodiment of simplicity in some ways. It could be easily severed to put the requirement for a study on CIRM operations in a separate measure, which could help its chances.

CIRM is likely to oppose the study, however, because it could generate public hearings and open the door to greater changes in CIRM procedures. At the very least, the hearings could lead to critical news coverage and possibly threaten CIRM's credibility and clout.

Next Wednesday some CIRM directors and executives will be visiting with lawmakers following the agency's Oversight Committee meeting. Kuehl's legislation is likely to come up during those sessions along with the pay proposal. CIRM supporters should be prepared with some good answers.