Proposition 14: Pros and Cons of Stem Cell Research in California 2020

Editor's note: The author of this piece is Ben Kaplan of Palo Alto, who appeared in a TV ad for the 2004 ballot measure that created the California stem cell agency. I talked with him recently by phone and invited him to submit his thoughts on the latest stem cell ballot measure, Proposition 14. Here is his article. 

 

By Ben Kaplan

Ben Kaplan

My story begins when my twin brother Ollie and I were born ten weeks prematurely. Despite his early birth and low birth weight, Ollie never had any lasting health problems, but I did. Just five days after my birth, I had a brain hemorrhage, or stroke, which caused cerebral palsy, specifically “left hemiplegia,” or weakness and paralysis on the left side of my body. I have been a supporter of stem cell research and regenerative medicine for over 20 years, with the hope it may lead to new treatment for my condition. During this time, I have seen research make great strides, from initially being conducted mostly in laboratory studies, to its application in human clinical trials.

California has been a trailblazer in state ballot initiatives for over 40 years. These have set national trends for issues and are often copied or emulated by other states: Prop 13 (property taxation), Prop 187 (Immigration), 209 (Affirmative Action) 215 (medical cannabis), 227 (bilingual education), etc. Proposition 71 in 2004 did this for stem cell research by establishing the California Institute for Regenerative Medicine (CIRM). Since then, several other states have passed their own ballot initiatives or legislation to fund stem cell research. This has created new momentum for increased federal funding.

Another benefit of CIRM funding is the development of private and philanthropic partnerships. The demonstration of a commitment by California to fund and support research and laboratory construction has led private foundations and other donors to contribute funds, dramatically accelerating the pace of stem cell research. The investment in research following the passage of Prop 71 also attracted researchers, scientists and private companies to California, providing financial incentives to open offices and laboratories in the state. In addition, CIRM created a research infrastructure for California by developing a system to award grants and share research data and results, giving it a major advantage over other states, and some countries. These partnerships are important because embryonic stem cell research cannot always be conducted in facilities built using federal funds due to pro-life and taxpayer groups, who have raised ethical and fiscal concerns about using public funding for research on embryonic tissue. CIRM research centers are a way around this roadblock by increasing scientific freedom, promoting research collaboration and hastening the development of new therapies and treatments.

In addition, CIRM has created economic expansion, providing a major boost to the burgeoning field of regenerative medicine. Progress in research funded by CIRM has led to a growing body of scientific evidence that treatments from stem cells may be available to people with debilitating and life-threatening conditions in the near future.

Stem cell research funding is on the ballot in California in 2020 as Proposition 14. This proposition has both potential benefits and drawbacks. One argument in favor is that it will continue and enhance California’s leadership position in support of stem cell research. It can also boost the state’s economy. Treatments may lower healthcare costs and improve health, which may lead to increased employment, worker productivity and economic growth. While the long-term outcome of stem cell research remains uncertain, new discoveries are producing evidence that is leading to clinical trials, allowing treatments to move closer to realization.

However, the COVID19 outbreak has also made Proposition 14’s fate uncertain. While stem cell research may lead to new treatments, it has placed unanticipated stress on California’s budget. However, new research is demonstrating the potential application of stem cells as a possible treatment for the virus. Given this pandemic, how will Proposition 14 fare? While the ultimate outcome is yet to be determined, it may depend on a delicate balance between potential treatment outcomes in the future versus expenses for the COVID19 pandemic in the present.

Recently, physicians at Stanford University, in a clinical trial partially funded by CIRM, have found that neural stem cells injected in rats with a condition similar to CP will travel to the damaged part of the brain and repair it. A clinical trial is also currently in progress at the Mayo Clinic using neural stem cells derived from bone marrow to treat hemorrhagic stroke. Private companies are pursuing similar research, with an eye to developing new therapies and treatments.

As stem cell science progresses and it becomes possible to implant stem cells into the brain, it is possible that I could have improved mobility in my left hand and foot, balance and coordination. This would enable me to do so many things that are now challenging, if not impossible, and would greatly improve and enhance my quality of life and that of many others.

Today's Marching Orders from the California Campaign for $5.5 Billion for Stem Cell Research

 

A clip from an email pitch by the campaign for Proposition 14

Backers of the $5.5 billion ballot measure to save the California stem cell agency from its financial demise
are working hard to keep their troops on track to build support for Proposition 14.

Today the campaign sent out a pitch (see above) as part of its social media drive to win approval of Proposition 14 in the Nov. 3 election. And it couldn't be more timely. Twenty-million voters are already beginning to receive their mail-in ballots.

The directions are explicit and amount to a daily list of tasks for patient advocates and others who have signed up for information from the campaign. The sign-up request is on the home page of the campaign website and impossible to miss. 

"Join now. Be part of the movement," declares the website. 

Social media is a bit of a loose term, but it includes such things as Twitter, Facebook and blogging. Research shows that about two-thirds of U.S. adults get news from social media sites. "One-in-five get news there often," says the Pew Research Center. 

"Facebook is still far and away the site Americans most commonly use for news, with little change since 2017. About four-in-ten Americans (43%) get news on Facebook. The next most commonly used site for news is YouTube, with 21% getting news there, followed by Twitter at 12%. Smaller portions of Americans (8% or fewer) get news from other social networks like Instagram, LinkedIn or Snapchat," says Pew.

News consumption is only part of the picture for a campaign. What may be more important is the personal connection that supporters can bring via social media. It is a question of trust and who do you listen to. Someone that you are connected to via social media and know even slightly may appear more trustworthy than the professional purveyors of information. 

So far the mainstream media is covering Proposition 14 lightly, a trend that is likely to continue. The presidential campaign consumes most of the traditional news space. State issues are receiving only minor attention, and Proposition 14 even less. That could be good for its chances of passage, but it is hard to tell in this very unusual political year. Under any circumstance, it remains imperative for the campaign to turn out its supporters in large numbers, which is a key goal for the social media effort. 

Los Angeles Times Opposes $5.5 Billion Stem Cell Ballot Measure, Says State Has Higher Priorities

California's largest circulation newspaper, the Los Angeles Times, this morning editorialized against Proposition 14, the $5.5 billion stem cell measure on this fall's ballot, declaring that the state has "other, more urgent spending priorities."

The Times said,

"Now is not the time for a huge new investment in specialized medical research. First, it makes sense to wait until after the election; if Democrats do well, there should be growing support for embryonic stem-cell research at the federal level, which is where such funding should take place. 

"The future of California’s pandemic-battered economy and budget remains to be seen. Waiting also would give voters a chance to find out how well the state’s stem-cell research projects continue without state dollars, and whether some of the promising advances lead to breakthrough therapies and a return on California’s investment."

The Times claims a daily readership of 1.3 million and a combined print and online local weekly audience of 4.6 million.

The Times is the fifth daily newspaper to oppose Proposition 14. The initiative would save the California Institute of Regenerative Medicine (CIRM), as the agency is formally known, from financial extinction. It is running out of the $3 billion it was provided with in 2004 and will begin closing its doors this winter without a major infusion of cash.  

The Times editorial discussed Proposition 14 and the history of the agency in some detail and the role of its sponsor, Robert Klein, a Palo Alto real estate developer. 

Klein sponsored and was responsible for the drafting of Proposition 14 and the ballot initiative that created the stem cell agency in 2004, He ran the campaign then and is doing so again this year. He was the first chairman of the CIRM governing board and served for 6 1/2 years. He also contributed millions of dollars to both ballot measure campaigns. 

The Times wrote, 

"Klein’s role and the bloated structure of CIRM’s super-sized governing board have given rise to some serious ethical mishaps, including a board member who improperly intervened to try to get funding for his organization. (He is no longer on the board.) After this and several other examples of impropriety, rules were tightened. Board members must recuse themselves from votes when there is a conflict of interest, but with 29 members who all want certain projects to receive funding, there is too much potential for mutual back-scratching. Instead of repairing this problem, the new proposition would expand CIRM’s board to 35 members and retain its troubling independence from oversight by the governor and Legislature, leaving it open to further conflicts of interest.

"Proposition 71 hasn’t yet yielded a significant financial return on investment for the state — or the cures that were ballyhooed at the time. Though no one ever promised quick medical miracles, campaign ads strongly implied they were around the corner if only the funding came through. Proponents oversold the initiatives and voters can’t be blamed if they view this new proposal with skepticism."

The Times noted a number of lingering issues involving the agency, including the size of its 29-member board and the fact that members "generally have ties to the advocacy organizations and research institutions that have received most of the money." (For more on that subject, see here.)

The Times credited CIRM with giving "rise to a burst of scientific discovery." It said that CIRM has supported "promising advances in the treatment of diabetes,  'bubble boy' immune deficiency and vision-robbing retinitis pigmentosa, but other efforts have fallen short in clinical trials." The editorial also said CIRM made "the state the 'it' place for stem-cell research."

Unlike other newspaper editorials, the Times suggested that backers of the agency could come back in a couple of years with a revised, scaled-down proposal that would address issues with the agency.  The agency will still be operating during that period on a minimal level, administering multi-year grants with a skeleton staff.

The Times wrote, 

"There would be an opportunity to rethink and rewrite any future proposals, which should include a far more modest ask of taxpayers as well as fixes to the structure and inflated size of the CIRM board. The institute should also be placed under the same state oversight as other agencies reporting to the governor.

"If CIRM needs money for a basic operating budget over the next couple of years, that could be covered by the state’s general fund. The agency still needs to administer already-funded projects and could use that time to discuss a more affordable path forward. Right now, the state has other, more urgent spending priorities." 

For more on the life and times of the stem cell agency, Klein and issues involving the agency, see David Jensen's new book, "California's Great Stem Cell Experiment: Inside a $3 Billion Search for Stem Cell Cures."  Jensen has covered the agency since 2005 and written more than 5,000 items on the subject plus a number of freelance articles for Capitol Weekly, The Sacramento Bee, and other publications.

(Editor's note: Our count of newspaper editorials pro and con shows six with five against and one in support. They include the Times, Chronicle, Bakersfield Californian, San Jose Mercury, Santa Rosa Press Democrat and the Bay Area Reporter. If you know of others, pro and con, please email djensen@californiastemcellreport.com.) 

California Stem Cell Backers Fire Up Major Social Media Effort for $5.5 Billion Proposition 14

Backers of the $5.5 billion measure to save California's stem cell research program launched a major social media effort this week, declaring that they could not afford to compete with "the big money campaigns for significant airtime."

The campaign organization behind Proposition 14, the stem cell ballot initiative, sent out an email pitch recruiting sympathizers to help out via Facebook, Twitter, email, and other Internet avenues. The campaign email went to those on the mailing list of the campaign organization, which likely contains thousands of names.  The numbers could be much, much larger if the campaign is purchasing email lists. 

The campaign email (see below) said, 

"There are only 35 days left before election day, and mail-in ballots are already out in many California counties. We need your help to get the word out about Prop 14 and the fight to save stem cell research, treatments and cures in California! With a crowded election we will need to work hard break through the noise and urge Californians to vote “YES” on Prop 14.

"Leading up to the election, we’ll be sending you sample social media posts, newsletter articles and email blasts – and all we need you to do is share what we send with your channels! We are a patient advocate driven movement, so we don’t have the resources to compete with the big money campaigns for significant airtime, and our path to victory relies on the help of other passionate patient advocates like you. Your efforts will make all the difference, and with mail-in ballots already out it is absolutely critical that this work starts today."

The pitch included canned texts for use in emails to general audiences and non-profit organizations. Canned messages to be used on Facebook and Twitter were provided along with appropriate hashtags for Twitter. A "sample email blast" emphasized that "the federal government  WILL NOT save most of the promising research and therapies in development that would be abandoned if Prop. 14 fails."

Social media campaigns are increasingly important in political and ballot measure campaigns, regardless of whether a campaign can afford traditional TV advertising. Such advertising is less useful in generating support for a number of reasons, including segmentation of media consumption. 

So far, no significant, major opposition has surfaced against Proposition 14.

The campaign for the measure is led by Robert Klein, who sponsored Proposition 14 and is responsible for the writing of the 17,000-word measure. Klein also wrote the 10,000-word, 2004 ballot measure that created the California Institute for Regenerative Medicine (CIRM), as the agency is officially known. Klein is a Palo Alto, Ca., real estate developer.

Klein hired FionaHutton &Associates of Studio City, Ca., to handle the bulk of the campaign work.  

2020-09-29 Proposition 14 California Social Media Email by California Stem Cell Report on Scribd

How Does $5.5 Billion Become Only Five Bucks? A Question Yet to be Answered

Call it California's five-buck, stem cell mystery. It could be a case of Proposition 14  campaign voodoo or just simply a boring calculation, but no one knows -- at least anyone who is willing to talk. 

As readers may recall, Proposition 14 is a $5.5 billion bond measure (plus a lot of other things) aiming at saving the state stem cell agency from financial extinction. The folks behind the ballot initiative, including Robert Klein, the sponsor of the proposal, are telling California voters to never mind that billion-dollar stuff. 

"Proposition 14 will cost the state an average of less than $5 per person, per year – about the cost of a bottle of aspirin," Klein said way back in July.

He may be right. 

However, Klein, who has already put up millions for the measure and heads the campaign, has not explained how he or his team devised the bottle-of-aspirin figure. The California Stem Cell Report has asked the campaign more than once to explain the figure, most recently just last Wednesday. But so far no explanation has been forthcoming. 

Arriving at such a per capita cost involves a number of assumptions, including population projections over the next 20 to 30 years and interest rates over the same period. Of course, it also should be noted that the five-buck figure is per capita not per taxpayer. That means that taxpayers -- because they now number only about 18 million compared to the total population of about 33 million -- will be paying perhaps twice what the campaign claims. 

Some might say this is no big deal, and they may be right. But a substantial number of persons could believe that this black-box, five-buck number is real because it has been repeated so often, even though it is unsubstantiated. Certainly, the campaign hopes that it will be effective and move a fair amount of voters into the "yes" column.

At this point, the five bucks is no more than campaign voodoo. But, as the California Stem Cell Report wrote in July, such is to be expected in any ballot campaign. The object is to win. Campaigns can be expected to embellish, push the envelope and release information that may not stand up to real scrutiny. 

As mentioned earlier, the California Stem Cell Report has not received a breakdown from the campaign about how it devised its five-buck figure.  If an explanation comes in, we will carry it verbatim. Meantime, the five-buck countdown stands at 27 days since the first inquiry was made. Readers should stay tuned. 

*********

​Read all about California's stem cell agency, including Proposition 14,  in David Jensen's new book. Buy it on Amazon:  California's Great Stem Cell Experiment: Inside a $3 Billion Search for Stem Cell Cures. Click here for more information on the author.

San Francisco Chronicle Says No to $5.5 Billion Stem Cell Measure, Proposition 14.

The San Francisco Chronicle today urged its readers to reject the state ballot measure, Proposition 14, that would stave off the demise of California's stem cell agency with a $5.5 billion infusion of cash. 

The Chronicle's headline on its editorial said, 

"No on Prop. 14; no need to replicate California’s disappointing stem cell experiment"

The editorial cited the Chronicle series in 2018 assessing the work of the agency. Written by Erin Allday,  the news story said,

 “Promised breakthroughs used to sell Proposition 71 in 2004 aren’t panning out, a Chronicle investigation found."

The Chronicle is the largest circulation newspaper to editorialize on the Proposition 14. The Chronicle says it has 173,514 daily circulation, mostly in the San Francisco Bay Area, and 306,525 digital circulation. Readership figures for its editorials are not available. 

The impact of newspaper editorials in state ballot measure campaigns is debatable. In the heyday of the newspaper business, editorial page readership was in the neighborhood of 25 percent or less of total readers.  

Here are some excerpts from this week's editorial. (The editorial department operates separately from the news department, which produced the 2018 investigation.)

"Especially in a field as nascent as stem cells, science is slow, incremental and unpredictable, largely incompatible with the leaps forward touted in 2004. While the unique state of the science and politics drew broad support for Prop. 71 — including The Chronicle’s — we shouldn’t make a habit of setting science policy and budgets by state plebiscite."

"While state funds helped support the research that led to two approved cancer drugs and a host of prospective therapies in various stages of development, far-reaching breakthroughs attributed to the stem cell agency have been scarce so far, as a Chronicle investigation found. More than half the original funding went to buildings and other infrastructure, education and training, and the sort of basic research that, while scientifically valuable, is a long way from medical application. There’s nothing inherently wrong with that, but it is at odds with the vision of dramatic advancements put to voters."

"While both initiatives provide for recovering income from approved therapies, the fiscal benefits are a matter of speculation. And with the pandemic, wildfires and more stretching the state’s resources, stem cell research looks like an even more unlikely gamble for a government with more pressing priorities."

*********

​Read all about California's stem cell agency, including Proposition 14,  in David Jensen's new book. Buy it on Amazon:  California's Great Stem Cell Experiment: Inside a $3 Billion Search for Stem Cell Cures. Click here for more information on the author. 

$2.1 Billion in California Stem Cell Awards Goes to Institutions Linked to Directors of State Stem Cell Agency

Editor's note: The following article by yours truly was published as a freelance piece this week on Capitol Weekly, an online state government and politics news service. 

By David Jensen

Over the last 15 years, California’s stem cell agency has spent $2.7 billion on research ranging from arthritis and blindness to cancer and incontinence. The vast majority of the money has gone to enterprises that have ties to members of the agency’s governing board.

All of which is legal. All of which is not likely to change.

Eight out of every ten dollars that agency has handed out have been collected by 25 institutions such as Stanford University, multiple campuses of the University of California and scientific research organizations. Their combined total exceeds $2.1 billion.

All 25 have links — directly or indirectly — to past or present members of the board of the agency, according to an analysis by the California Stem Cell Report, which has covered the agency since 2005.

“They (the agency’s directors) make proposals to themselves, essentially, regarding what should be funded. They cannot exert independent oversight,” says Harold Shapiro, who led a 2012 study of the agency by the prestigious Institute of Medicine (IOM), which is now called the National Academy of Medicine. The study recommended a major restructuring of the agency’s board to help deal with the problem.

The longstanding, conflict-of-interest issues are not addressed in Proposition 14 on the Nov. 3 ballot. The measure would give the agency, officially known as the California Institute for Regenerative Medicine (CIRM), $5.5 billion more and expand its scope of activities and research. The ballot measure is likely to increase the problems by increasing the size of the agency’s governing board from 29 to 35.

Another ballot initiative, Proposition 71, created California’s stem cell program in 2004. Ever since, conflict of interest questions have dogged CIRM. Indeed, critics of the agency can today point to the top five recipients of CIRM largess as examples of conflict problems. Stanford University ranks as the No. 1 recipient with $388 million. UCLA is No. 2 with $307 million. It is followed by UC San Diego, $232 million; UC San Francisco, $199 million, and UC Davis, $143 million.

All have had a representative on the CIRM board since the inception of the program.

(Editor’s note CIRM’s totals may change slightly as the result of the agency’s internal accounting procedures.)

IOM and public confidence in CIRM
The IOM study, with its criticism of conflicts, was commissioned by CIRM at a cost of $700,000. Directors expected that it would provide a “gold standard” evaluation of the agency that would support a ballot measure for additional funding. The study’s scope went well beyond conflicts of interest. In fact, it said it did not search for evidence of specific conflicts because the task was not part of the agreement with CIRM. The IOM did say that “studies from psychology and behavioral economics show that conflict of interest leads to unconscious and unintentional ‘self-serving bias’ and to a ‘bias blind spot’ that prevents recognition of one’s own bias.” While all of the study’s findings were consequential, the matter of conflicts attracted the most public attention.

“Ties to stem cell board lucrative,” said a headline in the Orange County Register shortly after the IOM report was released.

“The agency has used more than half of its funding and one day will almost certainly want to ask taxpayers for more. It should remember that voters will look for evidence of public accountability as well as respected research,” said the Los Angeles Times in an editorial in December 2012.

The IOM report itself said, “Far too many board members represent organizations that receive CIRM funding or benefit from that funding. These competing personal and professional interests compromise the perceived independence of the ICOC (the CIRM governing board), introduce potential bias into the board’s decision making, and threaten to undermine confidence in the board.”

The IOM said the composition of the board makes it neither “independent” nor capable of “oversight,” although the board is legally dubbed the Citizens Independent Oversight Committee (ICOC).

Placing deans of medical schools and patient advocates on the board who are linked to specific diseases “raises questions about whether decisions delegated to the board—particularly decisions about the allocation of funds—will be made in the best interests of the public or will be unduly influenced by the special interests of board members and the institutions they represent. Such conflicts, real or perceived, are inevitable….”

The situation involves more than legalisms. “Properly understood,” the IOM said, “conflict of interest is not misconduct, but bias that skews the judgment of a board member in favor of interests that may be different from or narrower than the broader interests of the institution.”

The IOM study additionally surveyed board members about conflicts of interest and reported, “While a majority of respondents stated that personal interests did not play a role in their work on the ICOC, some responses were more equivocal. One respondent replied that it was ‘hard to tell’ given that so many decisions take place off camera in secret meetings,’ while another acknowledged that ICOC members are human, and, of course, their decisions are influenced by personal beliefs and interests.”

The ‘inherent’ conflicts
The conflicts were built in by Proposition 71, which dictated the composition of CIRM’s 29-member board. CIRM’s general counsel, James Harrison, once described the situation as “inherent conflicts of interest.”

Under Proposition 71, representatives from virtually all the California institutions that stood to benefit were given seats at the table where spending plans are approved and awards handed out. Directors are not allowed to vote on specific awards to their institution. But they control the direction of the agency and what CIRM calls “concept” plans, including specific elements and budgets for the award rounds. Some of those rounds run into hundreds of millions of dollars.

One of the “concept” plans created a $47 million program to help California institutions recruit star scientists to the Golden State. Another plan created the $50 million Alpha Clinic Network at five academic centers all connected to board members.

Following the IOM report, the CIRM board did remove most institutional directors from meetings where awards are ratified. Jonathan Thomas, chair of the board, declared then that financial conflict issues were “put to bed once and for all,” a position that the agency holds today. In May 2019, Thomas told directors that several “authoritative entities” have studied CIRM and produced written reports that dealt with conflict matters.

Thomas said, “Each had in it sort of quite vehement language about the conflict of interest issue, which has always been just perceived…..With respect to any given funding award, there’s never been an actual conflict.”

During the 2019 meeting, the board did not discuss issues involving board action on “concept” plans. They continue today to modify and approve “concept” plans.

Beyond the CIRM board
Conflicts of interest at CIRM go beyond the 29-member board. In 2014, the agency was shocked by a case involving a former president of the agency, Alan Trounson, and StemCells, Inc., a company that was awarded $40 million while he was serving as the top executive at CIRM. (The company later declined one of the awards.) Only seven days after his final day at CIRM, Trounson was named to the board of directors of StemCells, Inc.

He served on the company’s board for about two years and received $443,500 in total compensation, including stock options, according to StemCells, Inc., documents filed with the Securities and Exchange Commission.

Following the announcement of the Trounson appointment, CIRM looked into some of Trounson’s work at CIRM. In July of 2014, the agency said that its “severely” limited investigation found no evidence that its former president attempted to influence action on behalf of StemCells, Inc., during the previous month. The state’s political ethics agency, the Fair Political Practices Commission, said in a Feb. 6, 2015, letter to Trounson that there was “insufficient evidence to demonstrate” a legal violation.

Even before the agency was created, critics warned of conflict-of-interest problems. Writing in an opinion piece in October 2004 in the San Francisco Chronicle, David Winickoff, then a professor at UC Berkeley, said, “Contrary to what its name suggests, the ICOC is neither ‘independent’ of interest-group politics nor does it include any ‘citizen’ members. Hard- driving university scientists, disease group advocates and private industry executives who will make up the ICOC all have vested interests in how the money is to be used.”

A sampling of conflicts
The California Stem Cell Report, which calculated the percentage of awards linked to institutional directors, has chronicled the conflicts issues at CIRM over the past 15 years. In 2012, its analysis showed that 92 percent of awards had been collected by institutions tied to past and present directors. The figure dropped to 79 percent by this summer as the types of grantees have widened. Here is a sampling of conflict issues that have surfaced publicly over the years.

In 2007, violations involving five board members resulted in voiding applications from 10 researchers seeking $31 million. The applications included letters of support signed by deans of medical schools who also sat on the CIRM board of directors. Directors are barred from attempting to influence a decision regarding a grant. The agency blamed its employees for the problem.

In 2008, public complaints by one applicant from industry about conflicts of interest on the part of a reviewer were briefly aired at a public board meeting. The then chair of the CIRM board, Robert Klein, told the applicant the board needed instead to discuss naming CIRM-funded labs and then go to lunch. CIRM later refused to release the letter from the applicant detailing the problem.

In 2009, board member John Reed, then CEO of the Sanford-Burnham Institute, was warned by the state’s Fair Political Practices Commission about his violation of conflict of interest rules. Reed intervened with CIRM staff on behalf of a $638,000 grant to his organization. Reed took his action at the suggestion of then CIRM Chair Klein, an attorney who led the drafting of Proposition 71.

Also in 2009, then board member Ted Love, who had deep connections in the biomedical industry, served double duty for the agency. He was the interim chief scientific officer and helped to develop the agency’s first, signature $225 million disease team round while he was still serving on the board. As chief scientific officer, Love would have had access to proprietary information and trade secrets in grant applications.

When questioned, CIRM said that Love would serve only as a part-time advisor to the agency president, not as chief scientific officer. Nonetheless, in 2012, the board adopted a resolution with high praise for Love and his performance specifically as the chief scientific officer.

Beginning in 2010, a stem cell firm, iPierian,Inc., whose major investors contributed nearly $6 million to the ballot measure that created the stem cell agency, received $3.9 million in awards from the agency. The contributions were 25 percent of the total in the campaign, which was headed by Bob Klein. (See here and see here.)

In 2011, the chairman of the CIRM grant review group resigned from his position as the result of another violation, which the agency felt necessary to report to the California legislature. John Sladek, former president of Cal Lutheran University in Los Angeles, co-authored scientific publications with a researcher who was listed as a consultant on a CIRM grant application.

In 2012, StemCells, Inc., was awarded $40 million by the CIRM board despite having one of its $20 million applications rejected twice by grant reviewers. The action came after the board was vigorously lobbied by Klein, who had left his post as chair the previous year. Klein, who ran the Proposition 71 campaign, had campaign connections to researcher Irv Weissman of Stanford, who founded StemCells, Inc., and was on its board. Weissman was featured in a TV campaign ad for Proposition 71 and helped to raise millions for the 2004 ballot campaign.

The StemCells, Inc., awards were the first time that CIRM had approved that much money for one company, and the first time Klein lobbied his former board.

In 2012, an incident surfaced that illustrated how non-profit, disease-oriented organizations sometimes expect increased funding as the result of the appointment of sympathetic individuals to the board. That occurred when Diane Winokur was appointed to the board as a patient advocate. The chief scientist for The ALS Association, said Winokur will be “a tremendous asset in moving the ALS research field forward through CIRM funding.”

The IOM study identified as a problem the personal conflicts of interest involving the 10 patient advocates on the board. It said, “(P)ersonal conflicts of interest arising from one’s own or a family member’s affliction with a particular disease or advocacy on behalf of a particular disease also can create bias for board members.”

In 2013, internationally renowned scientist Lee Hood, winner of a National Medal of Science, violated the conflict of interest rules of the California stem cell agency when he was involved in reviewing applications in a $40 million round to create genomics centers in California. The conflict involved connections between Hood, Weissman and Trounson. It was not discovered by the agency during the closed-door review and was raised by another reviewer at the end of the review. The review had to be redone later in the year.

Hood never commented publicly, but CIRM said he acknowledged the conflict.

In January 2014, the genomics round surfaced again. The applications were by then before the CIRM board for public ratification of reviewers’ decisions. The reviewers’ actions are taken behind closed doors with no public disclosure of reviewers’ personal, professional or economic conflicts.

The genomics round riled some researchers who complained publicly in letters to the agency’s board about unfairness, apparent preferential treatment and manipulation of scores.

Only seven of the 29 members of the 29-member board could vote on the applications. Conflicts of interest and CIRM rules barred the rest from voting. The final vote on the award was 6-1 for a group led by Stanford. Two years earlier, however, when the “concept” plan was approved by the CIRM board, no directors were disqualified, even though some of their institutions were likely to benefit. The plan was approved on a show of hands. The transcript of the meeting does not indicate any negative votes or absentions.

The hidden review process
Under CIRM’s rules, the scientists who review the applications must come from out-of-state. They do not have to disclose publicly their economic, personal or professional conflicts despite the fact that they make the de facto decisions on the applications. The board rubber stamps nearly all of the reviewers’ actions to approve funding. A CIRM examination of the practice in 2013 showed that 98 percent of reviewers’ decisions were ratified by the board. Since then, the agency has not produced a similar report. Occasionally, however, the board will approve an application that was not recommended for funding.

The CIRM governing board has resisted requiring public disclosure of the interests of reviewers. The subject has come up several times, but board members have been concerned about losing reviewers who would not be pleased about disclosing their financial and other interests.

Nonetheless, public disclosure of economic interests among researchers is routine in scientific research articles. Many universities, including Stanford, also require public disclosure of financial interests of their researchers.

At the time of Hood-Weissman-Trounson flap, Stanford’s policy said, “No matter what the circumstances — if an independent observer might reasonably question whether the individual’s professional actions or decisions are determined by considerations of personal financial gain, the relationship should be disclosed to the public during presentations, in publications, teaching or other public venues.”

Proposition 71 placed the legal authority for grant approvals in the hands of the CIRM board. Traditionally in the world of science, other scientists (“ peer reviewers”), however, are deemed to be the most capable of making the scientific decisions about grant applications. The traditional practice calls for the reviewers to be anonymous and meet in private, which is also CIRM’s practice.

If the CIRM board concedes the decisions to the grant reviewers, state law is likely to require public disclosure of their financial interests, a move that the board has opposed for years. Former CIRM Chairman Klein repeatedly advised the board during its public grant approval processes that reviewers’ actions were only ”recommendations,” and that the board was actually making the decisions.

Proposition 14 implicitly recognizes, however, that a problem exists with directors approving “concept” plans for awards that could benefit their institutions.

To ease that problem legally, Klein inserted language in the new proposition that excludes adoption of “strategic plans, concept plans and research budgets” from being considered as matters involving conflicts of interest.

The measure does nothing to deal with matters involving the de facto, closed-door approval of awards by researchers who are unknown to the public and who do not have to publicly disclose their interests.

At the time the IOM report was released nearly eight years ago, some board members complained that its recommendations were unrealistic because of the likely, lengthy difficulties of altering a state law that had been created by the initiative. But since then, directors have not asked state lawmakers to change the structure of the board or to comply with the other $700,000 worth of IOM recommendations.

CIRM directors, however, missed an opportunity last year to seek conflict-easing changes through the $5.5 billion stem cell measure now on the ballot, Proposition 14.

Some board members have said they discussed the initiative privately with Bob Klein, who crafted the proposal last year.

Revision of CIRM’s conflict rules was discussed at a board meeting in May 2019. Several board members expressed concerns about the loss of valuable insights from board members who cannot vote on applications. Some also expressed concerns about whether loosening the rules would damage the possibility of voter approval of a ballot measure to refinance the agency. Several, including CIRM Chair Thomas, also said “there’s never been a conflict” involving a funding award and a board member. No action involving conflicts was taken at the meeting.
—
Editor’s Note: David Jensen is a retired newsman who has followed the affairs of the $3 billion California stem cell agency since 2005 via his blog, the California Stem Cell Report. He has published thousands of items on California stem cell matters in the past 15 years. This story is an excerpt from his book, California’s Great Stem Cell Experiment: Inside a $3 Billion Search for Stem Cell Cures, which is available for pre-order on Amazon.

CIRM Board Member Calls Proposition 14 'Fatally Flawed' and 'Unaffordable"

The San Diego Union-Tribune this morning carried an op-ed piece by a long-time director of the California stem cell agency that said this fall's $5.5 billion ballot stem cell ballot measure is "unaffordable, unnecessary and fatally flawed." 

The article was written by Jeff Sheehy, an HIV/AIDS patient advocate member of the agency's board and who was also chair of the board's Science Subcommittee. He has served on the board since the agency was created in 2004 and funded with $3 billion that is now nearly gone. 

The ballot measure, Proposition 14, would save the agency from financial extinction. 

Sheehy's column began:

"It must seem odd that someone who has spent countless hours over the last 15 years as a member of the governing board of the California Institute for Regenerative Medicine (CIRM) would oppose Proposition 14, which seeks to provide $5.5 billion in new funding for the stem-cell agency. While I value CIRM and its work to date, Proposition 14 commits California to spending money it does not have — $7.8 billion including interest for research that is already well-funded. Plus, CIRM’s pre-existing flaws are actually exacerbated by new provisions in the measure."

(The stem cell agency is officially known as the California Institute for Regenerative Medicine.) 

Sheehy's views are not entirely unknown, but the newspaper piece reaches a significantly different and larger audience. Plus San Diego is a hotbed of biotech. Its institutions and businesses have benefited mightily from funding by the agency.

UC San Diego has received $232 million, Salk Institute $53 million, Scripps Research Institute $51 million, the Sanford Consortium $43 million and Viacyte, Inc., $72 million. Among businesses supported by CIRM, Viacyte is No. 1. 

Sheehy said,

"And after spending all of that money, not a single U.S. Federal and Drug Administration-approved product has materialized on which CIRM’s funding played an important role." 

 Sheehy cited the financial costs of the agency as one major reason for his opposition to Proposition 14.  Combined with the $3 billion in state bonds provided in 2004, Sheehy said, 

"Proposition 14 will add at least another $260 million a year in annual repayments. That means California taxpayers will be on the hook for $587 million a year for stem-cell research. Remember state imperatives such as education, health care and housing are not only chronically under-resourced, but with a looming deficit, will be starved for funding because bonds must be repaid first. Cuts have already happened and more are likely on the way. Critical needs will go unfunded."

Sheehy also said that Proposition 14 fails to fix "severe flaws" in the measure that created CIRM. including the "absurd requirement" for a super, super-majority of the legislature to make even tiniest corrections in the existing law. 

He said the state is not receiving an adequate financial return on CIRM-funded inventions. He said "in practice" the provisions of Proposition 14 would undermine existing CIRM rules about "access and fair pricing." He said,

"It would require that any returns from the state’s investment in new therapies are given back to pharmaceutical and biotech companies, thus freeing them from any price restraints since CIRM will be making up the difference. This change is a blatant giveaway to those companies."

Sheehy concluded, 

"Unaffordable, unnecessary and fatally flawed, Proposition 14 is unsupportable. If California is going to continue to spend billions to fund stem-cell research, the Legislature should draft a new measure that does it the right way."

Sheehy said the San Diego newspaper solicited the article. Sheehy was the lone dissenting vote in June when the CIRM board voted to endorse Proposition 14.  His views on the proposition have been aired at some length on the California Stem Cell Report.  The text of his comments last October can be found here. The remarks in June can be found here.

*********

​Read all about California's stem cell agency, including Proposition 14,  in David Jensen's new book. Buy it on Amazon:  California's Great Stem Cell Experiment: Inside a $3 Billion Search for Stem Cell Cures. Click here for more information on the author.

California Stem Cell Report Now Optimized for Mobile App/Phone Use

For those of you who have been frustrated trying to read on your cell phone the information on this web site, the California Stem Cell Report is now optimized for viewing on cell phones.  Please let me know if you have any difficulties in that regard or have other suggestions for the California Stem Cell Report at djensen@californiastemcellreport.com. Thank you. 

Proposition 14: Newsom Endorses California's $5.5 Billion Stem Cell Measure

Newsom pushed a $17 million bid for the CIRM HQ

California Gov. Gavin Newsom, long a supporter of the California stem cell agency, today endorsed Proposition 14, the November ballot measure to give the agency $5.5 billion more and save it from financial extinction. 

Known officially as the California Institute for Regenerative Medicine (CIRM), the agency is running out of the $3 billion voters provided in 2004. It will begin shutting its doors this winter without a major infusion of cash. 

Newsom's endorsement was buried in a news release announcing his stand on a number of ballot measures. It also came on one of the worst days of the week in terms of securing news coverage, not to mention that California news is dominated today by wildfire coverage, among other things. 

The news release could not be found on the Internet at the time of this writing. It was forwarded to the California Stem Cell Report by the campaign. The full text of the Newsom announcement concerning the stem cell measure said, 

"YES on Proposition 14 to continue funding stem cell research, as well as research and therapy development for Alzheimer’s, Parkinson’s and other neurodegenerative conditions.  As Mayor of San Francisco, Newsom was an outspoken champion of Proposition 71 (2004), which created the California Institute for Regenerative Medicine (CIRM) and made California a global leader in the field." 

In 2004, Newsom played a major role in raising a $17 million, successful bid to lure the headquarters of the agency to San Francisco. After its free rent expired a few years ago, CIRM moved to Oakland because of the high cost of space in San Francisco. 

Below is the release thanks to the folks at the campaign. 

*********

​Read all about California's stem cell agency, including Proposition 14,  in David Jensen's new book. Buy it on Amazon:  California's Great Stem Cell Experiment: Inside a $3 Billion Search for Stem Cell Cures. Click here for more information on the author.

***********

 

FOR IMMEDIATE RELEASE: September 11, 2020

 

NEWSOM TAKES ADDITIONAL POSITIONS ON NOVEMBER BALLOT MEASURES 

Governor supports Props 14, 15, 18 & 19, opposes Prop 21

 

SACRAMENTO – Governor Gavin Newsom today announced his positions on remaining measures appearing on California’s statewide ballot in November.

 

Newsom SUPPORTS Proposition 15, which would reclaim billions of dollars for California’s public schools, community colleges and essential local services by changing the tax assessment of the most expensive commercial and industrial (non-residential) real property to current market value.

 

Newsom has long endorsed the concept of this balanced “split roll” property tax reform as a matter of fairness, as long as residential property owners and small businesses are protected.

 

“California, like every state in America, is currently experiencing the severe financial aftershocks of global pandemic,” Newsom said.  “As a result, we’ve seen numerous proposals floated to stabilize our state’s long-term fiscal outlook, to protect our most vulnerable and local communities, and to fund critical programs with new revenue.”

 

“In a global, mobile economy, now is not the time for the kind of state tax increases on income we saw proposed at the end of this legislative session and I will not sign such proposals into law,” he said.                                                                                                             

 

“I do however support Prop 15 because: it’s a fair, phased-in and long-overdue reform to state tax policy, it’s consistent with California’s progressive fiscal values, it will exempt small businesses and residential property owners, it will fund essential services such as public schools and public safety, and, most importantly, it will be decided by a vote of the people,” he said.  

 

Newsom OPPOSES Proposition 21, which, with some modifications, is similar to the failed Proposition 10 he also opposed in 2018.

 

“In the past year, California has passed a historic version of statewide rent control – the nation’s strongest rent caps and renter protections in the nation – as well as short-term eviction relief,” he said.  “But Proposition 21, like Proposition 10 before it, runs the all-too-real risk of discouraging availability of affordable housing in our state.”  

 

In addition, Newsom is taking positions on the following measures:

 

• YES on Proposition 14 to continue funding stem cell research, as well as research and therapy development for Alzheimer’s, Parkinson’s and other neurodegenerative conditions.  As Mayor of San Francisco, Newsom was an outspoken champion of Proposition 71 (2004), which created the California Institute for Regenerative Medicine (CIRM) and made California a global leader in the field.  
• YES on Proposition 18, which would allow Californians 17 years of age to participate, register and vote in primary elections if they turn 18 by the time of the general election that same year.
• YES on Proposition 19, extending financial protections to homeowners 55 or older who purchase a new home or lose their home to wildfire.  It also closes a property tax loophole and allocates those savings to local firefighting programs. 

 

Previously, Newsom had taken an early position on important criminal justice and civil rights measures appearing on the November ballot, including:  

 

• YES on Proposition 16 to restore affirmative action by repealing 1996’s Prop 209.
• YES on Proposition 17 to restore voting rights for Californians on parole after completing their prison term.
• NO on Proposition 20, which attempts to roll back criminal justice reforms enacted by California voters.
• YES on Proposition 25 to ban cash bail, by upholding the 2018 law signed by Governor Jerry Brown.

 

Election Day is Tuesday, November 3, 2020.  The deadline to register online to vote is Monday, October 19, 2020, although Californians can register in person to vote up until Election Day.

 

In June, Newsom signed a law requiring election officials to automatically send a mail-in ballot to every registered voter in the state.  The law also requires election officials to count all ballots received within 17 days of the election. 

 

# # # 

Fourth California Newspaper Opposes $5.5 Billion Stem Cell Proposal

The Santa Rosa Press Democrat yesterday editorialized against Proposition 14, the $5.5 billion measure to save the California stem cell agency from financial extinction. 

The headline on the editorial said:

"No on 14: It’s time for stem cell agency to stand on its own"

Including the Press Democrat, four California newspapers have now opposed the measure. One is for it. 

The newspaper said it does not oppose stem cell research per se.

"Our objection (in 2004 to the measure that created the agency) was to ballot-box budgeting. That’s an even more acute concern today, with millions of Californians out of work and the state struggling to fulfill its most basic obligations in the face of historic budget deficits caused by the coronavirus pandemic.

"Is stem-cell research more important than education? Transportation? Safety net programs?

"There isn’t an easy answer, and that’s the problem with budgeting by ballot initiative. Voters must say 'yes' or 'no' without an opportunity to weigh the relative value of competing priorities, with no ability to adjust to unexpected situations such as the pandemic and, in the case of the Institute for Regenerative Medicine, limited legislative oversight for a quasi-public agency that has been the subject of conflict-of-interest concerns."

The editorial continued,

"After 16 years, the California Institute for Regenerative Medicine is well established, and its successes should allow it to secure other sources of funding, including federal funding as the Bush-era restrictions have been lifted. The state, meanwhile, is struggling to balance its books, and it wouldn’t be wise to take on more debt at this time. The Press Democrat recommends a no vote on Proposition 14."

Read the California Stem Cell Report regularly for the latest and most in-depth coverage of the effort to save the California stem cell agency from financial extinction.  

How Does $5.5 Billion Turn Into $5.00 a Person? It's a Stem Cell Mystery So Far

Backers of this fall's $5.5 billion ballot measure to support the state stem cell research agency say that it will cost each resident of California only $5 a year. 

The calculation may be correct. It also could be campaign hype of the sort that arose in 2004 involving the initiative that created the California Institute for Regenerative Medicine (CIRM), as the state stem cell agency is officially known.  

But it is impossible to tell as the date of this writing. The campaign has not responded to requests from the California Stem Cell Report for information on how it came up with the $5.00 figure. 

Whether it is $5.5 billion or only $5.00 a person, it involves money borrowed by the state. Proposition 14, the ballot measure in question, directs the state to borrow the cash over a 10-year period. Paying interest to investors would cost an additional estimated $2.3 billion over several decades, bringing the total estimated cost to $7.8 billion, according to the state legislative analyst. 

Calculating the annual cost per person over decades involves a number of assumptions including population predictions, future interest rates, timing of bond sales and so forth.  

The only language that could be found on the campaign website concerning the figure says, 

"When you consider that chronic disease is the leading cause of death and the leading driver of annual health care spending, this initiative is a small price to pay to potentially save millions of lives and billions of dollars in health care costs in the coming decades – less than $5 per person per year." 

It should be noted that the campaign web site does not seem to include a search engine, although that is common practice on most web sites. 

As for CIRM's cost today, it began with $3 billion in 2004. Estimates then of the interest costs were about $3 billion, making a total estimated cost of $6 billion. The actual cost as of this summer was $4 billion, largely because of the low interest rates since the Recession of 2008. 

CIRM is now running out of money and will begin closing its doors this winter unless Proposition 14 passes. 

If the campaign supplies information on the $5.00 figure, the California Stem Cell Report will carry it when it comes in.

$5.5 Billion California Stem Cell Campaign Intensifies, Voting Begins in One Month

California's 21 million voters soon will be receiving mail that tells them a $5.5 billion stem cell ballot measure is "outrageous," unaffordable and will perpetuate long-standing problems with the state's stem cell research program. 

The assertions are contained in the official state voter guide. It also says the state stem cell agency, which is running out of money, has made "significant progress" in developing therapies during its 15-year life. 

Supporters say in the pamphlet that Proposition 14 will "dramatically expand access to clinical trials and new therapies, make treatments and cures more affordable for Californians, and provide patients, their families, and caregivers with financial assistance."

The ballot measure is intended to re-finance the agency, formally known as the California Institute for Regenerative Medicine (CIRM), which will begin closing its doors this winter unless the proposition is approved. CIRM's original $3 billion is nearly gone. The ballot measure that created it in 2004 provided no funding beyond the state bonds that were approved then. 

Because the money is borrowed, the actual cost to taxpayers rises. In the case of Proposition 14's $5.5 billion, the cost climbs to an estimated $7.3 billion, according to the state legislative analyst. The original $3 billion actually will cost about $4 billion, according to CIRM, and will not be paid off for many years.

The voters' guide is aimed at very briefly allowing supporters and opponents of ballot measures to make their cases. The guide has been issued by the state for many decades prior to actual voting, which begins in about a month -- not Nov. 3, which is the last day to vote either by mail or in person. 

Absentee voting has long been practiced in California. During the presidential primary election earlier this year, 72 percent of the ballots were cast by mail. The percentage is likely to be higher this fall because of Covid-19 and the intense interest in the presidential race. 

The mail-in voting pressures campaign organizations to make their cases very early and to assure that the turn-out of their supporters begins as soon as possible. Voters can expect to see more pitches for Proposition 14 in coming weeks. The opposition is not well organized and unlikely to mount a large media effort. 

In addition to the pro and con arguments, the guide includes the full text of the roughly 10,000-word measure, which is written in legalese and less than transparent. The legislative analyst's summary does a good job as far as it goes. 

However, important aspects of the measure are missing from the summary, including how CIRM's scope would be greatly expanded to include such things as funding research for "aging as a pathology" and "therapy delivery."  You can read about those here on the California Stem Cell Report.