Missing: Arnold's Promised $150 Million Stem Cell Loan

Last July, in the heat of the national debate about stem cell research, Gov. Arnold Schwarzenegger made headlines by promising $150 million to bail out the fiscally strapped California stem cell agency.

Today, more than three months later, the agency has not seen one dime of the promised loan despite the governor's July 21 statement that CIRM "need(s) the money now." Schwarzenegger said that it was "critical we take action" and that money should begin flowing "as soon possible."

The California Stem Cell Report queried both the governor's office and CIRM concerning Schwarzenegger's failure to provide the money. The governor's office has not responded to our request on Friday about what has blocked the cash. CIRM also has been less than informative.

Dale Carlson, spokesman for the agency, said that the State Department of Finance "needs to review the loan documents which are still being written," but declined to elaborate.

Unexplained was whether there is some problem with making the loan to CIRM, which one would think would be a fairly routine procedure that could be executed in less than three months. Unexplained also was the exact nature of the loan mechanism, which was not discussed in news reports at the time of the governor's announcement.

Anne Sheehan, an aide to the governor, told the CIRM Oversight Committee at the beginning of August that the loan amounted to "uncharted waters" for the state but that she expected action on it by the middle of August.

Since Schwarzenegger's politically exquisite timing of the loan announcement, which received worldwide attention, he has been involved in a re-election campaign in which he has built a commanding lead over his Democratic opponent, state Treasurer Phil Angelides. Perhaps the campaign has distracted Schwarzenegger's office from fulfilling the loan promise.

California stem cell Chairman Robert Klein alluded to the pressures of the campaign at a meeting of the CIRM Oversight Committee earlier this month. He indicated that the elections had made it difficult to hold a meeting of the CIRM Finance Committee, a special body created by Prop. 71, to approve issuance of CIRM bonds.

However, neither CIRM nor the governor's office explained if or why the Finance Committee would be involved in a loan between two state entities. Klein indicated that the Finance Committee, at its next meeting, would review more requests for bond anticipation notes, which are expected to be issued to private contributors to CIRM.

A July 20 press release by CIRM cited a section of Prop. 71 that appears to allow the state director of finance to provide funding to CIRM from the state's general fund if it is within the amount of unsold bonds authorized by the Finance Committee. That group has already approved $200 million in bonds, which have not been sold, so it would appear giving CIRM the $150 million is a simple ministerial act, but maybe not.

Klein said he hoped the Finance Committee could meet very soon after the fall elections, which will come a week from Tuesday.

The stem cell agency has been strapped for funds because of lawsuits that have blocked the issuance of state bonds that would fund it. It has operated, for the most part, on the basis of private contributions and loans since it began operations in late 2004. CIRM did not respond to a question from the California Stem Cell Report about whether the failure to provide the loan has created any financial difficulties at the agency.

Welcome to The Biopolitical Times

The Center for Genetics and Society has entered the blogosphere with a site called The Biopolitical Times. Initial topics are heavily tilted to the current relationship between vote-crazed politicians and their attempts to exploit embryonic stem cell research.

An excerpt from an item by Marcy Darnovsky:

"We’ve moved on from Fox and counter-Fox, wherein Rush Limbaugh demonstrates that “big idiot” is far too kind. Now we have top-level Democrats demonstrating their skill in cheap emotional blackmail. The take-home sentiment of a new ad by Majority Action, a Democratic 527, is that the Stem Cell Saviors will cure us all. And anyone who doubts that may as well have the blood of that sweet little six-year-old on their hands. This ad should be as embarrassing to those of us who support embryonic stem cell research as Limbaugh’s antics should be to its opponents."

The center, which has actively tracked the California stem cell agency, is inviting comments, private or public, on the site.

Stem Cell Snippets: Warehouses, Fox Ad and Pombo

Here links to some stories related to California stem cell issues:

UC Davis – A warehouse in Sacramento is being converted into a $75 million stem cell research center by UC Davis. Reporter Jim Downing of The Sacramento Bee wrote:

"The new director of the Davis program, Jan Nolta, starts work Nov. 1. Nolta, who grew up in Willows, was recruited from Washington University in St. Louis along with longtime collaborator Gerhard Bauer, an Austrian native who is an an expert in the design and management of ultra-clean laboratories. Nolta and Bauer were at the UC Davis Medical Center on Wednesday as U.S. Rep. Doris Matsui, D-Sacramento, toured the laboratories of Mark Zern, an organ transplant expert whose research team is studying ways to use embryonic stem cells to regenerate the liver."

Michael Fox – His stem cell TV ad rivals the nuclear destruction commercial in the 1964 presidential race in terms of free air time, according to one longtime observer at the Poynter Institute, a newspaper think tank.

Pombo – Stem cell research rose to a higher level of visibility in a Central Valley congressional race in California. Reporter Lisa Vorderbrueggen of the Contra Costa Times wrote the story concerning incumbent Republican Richard Pombo and Democrat Jerry McNerney.

Arlington Speaks on CIRM's Orphan Software

The head of the Arlington Group, the defunct grant review software firm used by the California stem cell agency, says that CIRM has not acquired the copyright or intellectual property rights to the program used by the agency and other major grant providers.

Earlier, we reported that the San Diego Union-Tribune quoted CIRM President Zach Hall as saying that the agency owned the computer codes involving the grant review program. (See item below.)

In response to an inquiry from the California Stem Cell Report, Mary Taylor, CEO and founder of Arlington, provided the following statement that we are carrying verbatim:

"CIRM acquired the rights to the Easygrants software source code to use, modify, or have modified for them for their business purposes.

"They did not acquire the intellectual property, distribution rights, copyright, etc. Second, Arlington Group delivered to CIRM all of the work that had been done to date on their system, including significant documentation of requirements for the system configuration, as well as the initial development work. With this in hand, when they begin working with the new development group, they can hit the ground running.

"Finally, with this transaction, CIRM is saving the state money on license fees for 2007 and forward. So while it was an unexpected challenge, worst of all for AG, CIRM has taken the steps needed to ensure their success and be good stewards of the state's money."

Why is all this important? Orphaned software can be a disaster. Often it is poorly documented internally, without explanations of how the code was constructed and works. When glitches occur, that makes it extremely difficult to maintain by the purchasers. That can mean that information is lost and cannot be compiled properly. Hopefully that is not the case here.

Death of CIRM Software Firm Only a 'Hiccup'

The California stem cell agency, which faces an enormous task in reviewing a flood of grant applications, is minimizing the impact of the demise of the company that produced the software for evaluating and coordinating the applications.

Reporter Terri Somers of the San Diego Union-Tribune wrote that the Arlington Group of McLean, Va., suddenly went "belly up," leaving CIRM in a digital lurch.

But, she also wrote, CIRM President Zach Hall said that CIRM now owns the computer codes behind the Arlington program. Somers continued:

"There was no warning that Arlington was about to go out of business, Hall said. Apparently an investor withdrew his money unexpectedly, causing the company to fold, he said.

"Before that happened, the institute had paid $108,000 to Arlington, Hall said.

"The institute has since contracted with a new company, composed of former Arlington employees, to build the system at a cost equal to what it was to have paid the defunct company, Hall said."

The original eight-year contract called for payment of $233,474 in the first year.

Somers reported:

"'This has been a hiccup for us in terms of time schedule,' Hall said. 'But it's not a major issue.'"

Dale Carlson, spokesman for CIRM, today told the California Stem Cell Report,

"We got the source code, which will be helpful to us going forward. We've got their senior developers ready to work with us. It isn't delaying the review of the grants. It isn't costing us any more money. And we're talking with Arlington's major customers about an ongoing network to support the platform."

Those customers include the Bill & Melinda Gates Foundation, David and Lucile Packard Foundation and the Howard Hughes Medical Institute.

(Editor's note: A slightly earlier version of this item did not include the last two paragraphs.)

The $25 Million Bioethicists' Dog

The blog at the American Journal of Bioethics has addressed the issue of big money and "the butcher's avarice" in the stem cell wars being fought across the country in this fall's election.

Specifically Jim Fossett, director of health and Medicaid studies at the Rockefeller Institute, wrote on Oct. 21 about the Missouri tussle and noted how California led the way. He also had this to say:

"There are huge amounts of money at stake in the embryonic stem cell research debate, and much of the political and financial support for such initiatives is coming from parties that expect to get something out of them—large research grants, potentially lucrative patents and commercial opportunities, scientific prestige, political credit and campaign contributions, tax revenue and jobs. Bioethicists also have a dog in this fight — CIRM’s draft strategic plan earmarks $25 million to examine the social, ethical, etc. implications of stem cell research, and there have been complaints from some quarters that this isn’t enough. By the rules that govern politics and the markets, this is absolutely ok. The right to petition the government for a redress of grievances is enshrined in the Constitution, and capitalism relies on rewards to those who provide society with useful things. The desire for money and status is perfectly compatible with, and is frequently accompanied by, a deeply felt desire to do good and heal the sick. Those who find the scramble for money distasteful might usefully contemplate Adam Smith—'It is not by the butcher’s altruism, but by his avarice, that we may expect to receive our dinner.'"

Klein Helps Aussies in Stem Cell Fray

California stem cell Chairman Robert Klein recently sang a stem cell tune that was "music" to some Australian ears. So says reporter Leigh Dayton in a story in The Australian.

Australia is caught up in a bit of controversy over stem cell research, and Klein visited there to support the forces of embryonic stem cell research.

Dayton wrote:

"'Mr Klein generously offered to visit Australia to help us in the current legislative climate," (Stephen) Livesey (CEO of the Australian Stem Cell Center) says. 'He provided the Australian stem cell science community with advice on how to engage the public, patients and politicians on the complex topic of stem cell research.'"

Klein's stem cell drum beating had a familiar sound to those who have heard him speak in California, but wa swelcomed down under.

Dayton reported:

"Clearly, Klein's words are music to the ears of Australian scientists and patient advocacy groups pushing to change the nation's embryo research and anti-cloning legislation."

The Australian account said Klein was "a guest" of the Australian Stem Cell Center last week, but did not specifically make clear who funded his trip. CIRM says it did not pay for his trip.

Stem Cell Snippets: Conflicts, WARF and Politics

Here are links to items of interest related to California stem cell matters.

Conflicts of Interest – Maryland is wrestling with the same conflict-of-interest questions that dog the California stem cell agency. Erin Bryant of Capital News Service wrote that legislation creating the Maryland stem commission built in the conflicts and does not spell out whether commission members are allowed to vote on applications from their own institutions. One member of the group thinks they should.


WARF – Longtime WARF stalwart Beth Donley is leaving that organization. Donley, the foundation's general counsel, had worked for the organization for eight years. Only six weeks ago she too control of its WiCell affiliate. Donley said she wants to move on to the "next level" – the private sector. That could be translated as higher compensation. It does seem odd that she is leaving so soon after her appointment to the WiCell position. Here is a link to Joe Vanden Plas' story on the Wisconsin Technology Network.


NEJM – The New England Journal of Medicine has a couple of pieces on the politics of stem cells and the flap over the ACT stem cell extraction announcement. Nothing new in the ACT item, but it is a straight-forward delineation of what occurred as compared to the somewhat muddled accounts elsewhere. Likewise with the politics piece.

Who is John Reed?

The 29 men and women who direct the California stem cell agency labor largely in public anonymity. While they oversee the expenditure of $6 billion in public funds, what makes them tick is really not known by the folks whose interests they represent.

Now comes a piece by Terri Somers of the San Diego Union-Tribune concerning John Reed, one of the members of CIRM's Oversight Committee and chief executive of the Burnham Institute in La Jolla, Ca.

So who is Reed? An accomplished scientist and triathlete who rises at 3 a.m. and who "exudes the wholesome earnestness of a patriarch in a 1950s black and white sitcom." He also sings rock at company soirees.

Somers, however, devotes most of her piece to Reed's professional accomplishments. An excerpt:

"Since delving into apoptosis, Reed has written more than 550 peer-reviewed scientific articles and 50 book chapters. He has the distinction of having published more papers on programmed cell death during the past decade than any other scientist worldwide, according to the Institute for Scientific Information. He was also recognized by the Institute for Scientific Information as the world's most cited scientist in all areas of research from 1997 to 1999."

We confess to a fondness for profiles about people such as Reed -- people who actually do the job, provide the leadership and set the tone of enterprises. But good profiles are rare in the media. It is difficult to create a three-dimensional portrait of an individual in the amount of time provided by most newspapers or media outlets. Not all reporters have the skills to crawl inside, so to speak, another person's personality. Perhaps the most difficult part of reporting a profile is to find persons who know the subject of the profile well and who are willing to comment critically and publicly about him or her. After all, none of us are perfect, and to be complete a profile should reflect at least some of that imperfection.

That said, we would like to see more profiles, regardless of their limitations.

Stem Cell Snippets: Rentals to DNA

Here are links to some interesting items related to stem cell issues.

Sharing – One of the goals of the upcoming rounds of lab grants by the California stem cell agency is to increase the sharing of CIRM-funded facilities with other nearby scientists not so fortunate as to have access to the costly gear needed for research. The topic has not received much media attention but its importance was highlighted in an article by Bernadette Tansey of the San Francisco Chronicle. "Microscope for hire" was the headline. In this case, the article discusses UC San Francisco's plans to rent out their tools, six new microscope worth $2 million.

Diver Don – Ubiquitous stem cell advocate Don Reed popped up in the lead of a story by Jason Gertzen in the Kansas City Star looking at the Missouri stem cell measure, which is on the November ballot. The piece used Reed, a former professional scuba diver, as an example of the folks who hope for cures. Reed, meanwhile, is exhorting -- via his website, stemcellbattles.com – the millions of folks with disabilities throughout the country to vote for their best interests in the November election.

Tell-All –-J. Craig Venter is baring all, according to reporter Antonio Regalado of the Wall Street Journal. Venter is just about ready to release his DNA to the world. Venter, you may recall, was the gent best known for his efforts to be the first to decipher the full sequence of the human genome. An interesting piece about a controversial scientist. Here is a link to a free version of the story.

Setting Sail Again – Sort Of

The California Stem Cell Report is leaving the Old Country Tuesday and returning to its home port in Romantic Old Mexico. We have concluded an excellent visit to California, playing with grandchildren and family and now are flying back to ready Hopalong, our sailboat and only home, for a winter's cruising along the west coast of Mexico. Hopalong has been resting at a berth near Guaymas, but we will haul her onto dry land to pull one of her masts to make repairs. The work schedule means that we may not be filing items as often as we have over the past weeks.

Meantime, keep reading the report, send along your comments and tips and whatever else you think may be of interest. We can be reached at djensen@californiastemcellreport.com or you can post a comment by clicking on the word "comments" that appears after each item.

SEED Grant Hopefuls Total 232; Names Remain Secret

A whopping 232 applications competing for $24 million in grants has deluged the California stem cell agency – a figure that CIRM today said demonstrated "the keen interest in the field and the pent up demand for funding for human embryonic stem cell research."

Names of not only the scientists but also their institutions, many of them likely state-funded schools, are secret by the decision of CIRM. However, nothing prevents the applicants themselves from disclosing the fact that they have applied for state funding, and some are expected to do so.

Failure to disclose the names of persons and institutions seeking state funds is poor governmental policy and hardly complies with CIRM's oft repeated pledge for the highest standards of transparency and openness.

John M. Simpson, stem cell project director for the Foundation of Taxpayer and Consumers Rights of Santa Monica, Ca., said:

"The stem cell institute missed another opportunity to operate transparently and build the public’s trust when it announced today that it received 232 applications for 30 SEED research grants from researchers affiliated with 36 nonprofit institutions.

"Californians have a tremendous interest in knowing how this pool is cut to 30 grantees. All would be better served if the names of the applicants and their institutions were released. If you want our money, tell us who you are.

“There’s no need to worry about embarrassing somebody because they don’t get a grant. CIRM is planning to fund only 12.9 percent of the applicants. Missing this cut is no big deal. Scientists need to develop thicker skins if they want to use public money for their work and CIRM needs to let the sun shine in."

(You can read more on this subject at "sunshine needed," "bad policy," "secrecy broken" and "CIRM defends.")

In a CIRM press release, Arlene Chiu, CIRM director of scientific programs, said, "We’re delighted that there is such strong competition for our inaugural research initiative, and that the applicants are considering such a broad range of approaches. It bodes well for the future of our program."

The grants are expected to be awarded in January – the first research funded by the agency since it was created in 2004. Review of the applications, a prodiguous task, is scheduled for late November. (See item below.)

SEED Grant Applications Pour Into CIRM

The California stem cell agency was flooded last Friday with applications for the $24 million SEED grant program but the exact number is not expected to be released until Monday.

Initially, 301 letters of intent were filed for about 30 SEED grants with 78 letters for the $80 million comprehensive grant program. Roughly 40 California institutions were represented. The names of those filing letters of intent and applications for public funding are secret. Only those winning grants will be identified by CIRM.

Nearly overwhelmed by the numbers, CIRM earlier asked institutions to certify that letters of intent were filed by "principal investigators." Dale Carlson, a spokesman for CIRM, said "only five or six" letters were eliminated as a result of the certification process.

On Oct. 1, we reported concerns that the certification effort was unfair and penalized younger scientists. (See "whittling down the researchers.") That issue came up indirectly during last week's meetings of the Oversight Committee.

Chairman Robert Klein noted that one of the goals of the agency is to expand the number of stem cell researchers. He asked CIRM President Zach Hall whether a future round of grants would be proposed to advance that effort.

John Reed, a member of the Oversight Committee and president of the Burnham Institute, also indicated that younger researchers ought to be encouraged.

Hall responded that the SEED grant program was not meant for staff scientists or post-doctoral applicants. He indicated that a grant program aimed at younger scientists could be worthwhile sometime in the future.

To help deal with the imposing number of grants, the Oversight Committee last week added 18 alternate members to the grants working group in addition to the existing 16 alternates. Fifteen scientists sit as regular members of the group.

Just how the review process will work is not entirely clear. The California Stem Cell Report plans to post an item in the near future dealing with the mechanics of how the reviewers will go through the grants.

The agency has scheduled Nov. 28-30 for review of the SEED grant applications by the Grants Working Group. Applications for comprehensive grants are due Nov. 13 and scheduled to be reviewed Jan. 8-10.

Doggie Bag Tidbits from the CIRM Meeting

Here are some leftovers from last week's meeting of the Oversight Committee of the California stem cell agency.

Need for Speed – Each year's delay in issuing bonds costs the agency about $84 million because inflation diminishes the value of the $3 billion authorized two years ago, said Chairman Robert Klein. President Zach Hall also said the agency is moving fast to hire a scientific review officer, a senior facilities officer and a grants technical assistant.

Intellectual Property – Discussion was deferred on the policy on intellectual property for businesses, including open access on scholarly publications involving CIRM-funded research. Time ran short at the Wednesday session so IP was taken off the agenda.

Eggs – About 300 persons viewed the egg risk conference online compared to the 90 who attended the actual session, according to Hall. The agency will issue a report on the conference near the end of the year.

UK/California stem cell summit -– Sixteen California scientists and 16 UK scientists will meet in Great Britain on Nov. 13-14 to discuss stem cell matters. Hall will be attending and will check out the stem cell bank in Merrie Olde England.

Stem Cell Snippets: UC Irvine, Loring and Windows of Opportunity

Here are some links to stories of interest related to California stem cell matters

UCI – Thomas Yuen, chairman and CEO of Prime Cell Therapeutics of Irvine, Ca., has donated $1 million for embryonic stem cell research at UC Irvine, according to a piece by reporter Gary Robbins of the Orange Country Register. Prime Cell is a privately held stem cell engineering firm currently involved with adult stem cells, according to its web site. Robbins said Yuen, 54, has kidney disease and quoted him as saying, "My illness exposes me to a lot of people who are sick and suffering. And I believe stem-cell work holds the promise of treating a multitude of age-related and chronic diseases."


WARF – Reporter David Wahlberg of the Wisconsin State Journal takes a crack at the WARF patent dispute. An excerpt from his balanced article: "WARF's stance, that Thomson's work is worthy of patents, 'is like saying that just because heating in water works for cooking a chicken egg, it's novel to consider using heating in water to cook a duck egg,' said Jeanne Loring, a stem-cell researcher at the Burnham Institute for Medical Research in California."


Out Front – Hartford Courant columnist Dan Haar writes: "The federal ban (on ESC research)has created a window of opportunity for Connecticut, California, Illinois, New Jersey, and perhaps a few other states that have had the foresight to front their own cash. 'When the ban goes away, there are only going to be a few places in the country that already have this,' said Marc Lalande, a UConn geneticist and associate dean who heads the university's stem cell working group. 'We are going to have a leg up. We will be able to compete successfully for federal funding.'"

Strategic Plan – The Red Herring web site posted a piece on CIRM's strategic plan, saying "for the most part" it received an "informal endorsement."

Stem Cell Snippets: From WARF to Researcher Conflicts

Here are some tidbits and links to some interesting news items, press releases or other material concerning California stem call issues.

WARF -- "The recent out-of-state challenges, including one from California, to stem cell patents held by the Wisconsin Alumni Research Foundation (WARF) lack merit and underscore the need for serious patent reform in the United States," says patent attorney Grady Frenchick. In a piece on the Wisconsin Technology Network, he says the challenges are politically motivated. .

Bonds -- CIRM has no plans to sell $1 billion in general obligation debt next year even if it overcomes court challenges, Reuters reports.

Attorney General's Race -– Patient activist Karen Miner pens piece endorsing Jerry Brown for California attorney general, saying his opponent is anti-stem cell research.

Salaries – In response to a request from the California Stem Cell Report, CIRM released the following salaries for the latest hires at CIRM: Lorraine Hoffman, chief finance and administrative officer, $190,000, and Marcia Davey, interim financial officer, $142,000.

Disclosure -– Ivan Oransky, deputy editor of The Scientist, writes in the Boston Globe on the need for more disclosure from scientists. "A survey published in the Journal of Law, Medicine, and Ethics of clinical researchers' attitudes on conflicts of interest included this mind-boggling response: 'Let's say . . . we do a dozen studies for [Company X] . . . and it is a $2 billion company. . . Let's say that I owned a lot of stock in [Company X]. I mean, the application of a new drug to the company, let alone our ability to participate in that drug, would not affect that one iota. So, as far as I am concerned, conflict of interest is overblown.' Message received: Researchers know best. Please stop bothering us with these silly rules and your sensationalist investigations."

Stem Cell News Coverage: Spending, Geography and Planning

News coverge of the meetings of the California stem cell agency was a bit light this week with only the San Francisco Chronicle, the San Diego Union-Tribune and Bloomberg carrying stories.

However, we may see something later from the Los Angeles Times and New York Times, both of which had reporters at the Tuesday meeting.

Terri Somers of the San Diego paper focused on the question of geography as a criteria for selection of research facilities (see item below). She wrote:

"The (Oversight Committee) has shown geographic biases before.

"(Committee member Duane) Roth recalled that the vote on the location of the institute's headquarters – whether in San Diego or San Francisco – was ultimately decided by a vote in which the majority of board members selected what was geographically convenient for them.

"Roth suggested that if geography would be a big factor, applicants should compete for grants regionally."

Carl Hall of the Chronicle discussed the agency's spending plans for 2007 (a revised budget for the agency is expected to be formally presented in December.) Hall wrote:

"California stem cell policymakers revealed a rough outline of what could be a $500 million attempt in 2007 to push the state's stalled experiment in stem cell research into a new phase of productive grant making."

He reported that stem cell chairman Robert Klein says he expects facilities grant to "almost certainly by matched 2 to 1 by institutions and private donors." The committee, however, has not yet set a matching criteria that exceeds 20 percent.

Rob Waters of Bloomberg wrote about the draft of the agency's strategic plan.

"The agency's motto, 'turning stem cells into cures' was on the report's cover. The message inside was more nuanced: While the agency seeks to accelerate research, the report said 'it will take time, perhaps decades' to get proven treatments. The statement drew support from scientists, concern from those afflicted by diseases that may be helped by stem cell therapy.

"'I think some people will look at this plan and say the goals are too modest,' said Leon Thal, a University of California-San Diego neuroscientist and member of the agency's governing board. "'I disagree. I think they're realistic.'"

Conflicts of Interest: From Press Releases to Matching Funds

For those of you who may have forgotten -- at least 14 members of the 29-member Oversight Committee come from institutions that could benefit from the roughly $300 million in proposed grants from CIRM to build research facilities. The committee will decide which instititions receive the cash and under what terms. Members, however, are forbidden from voting on grant applications from their own institutions.

Those built-in conflicts of interests at the California Institute for Regenerative Medicine surfaced today during a discussion concerning the grants and the process of issuing press releases about CIRM-funded research.

Just what should CIRM require from medical schools and other institutions that receive grants for multimillion dollar laboratories? The law requires that applicants must secure matching funds from other sources that equal at least 20 percent of the award. But how that credit is calculated is yet to be determined. Applications will not be submitted for many months, and fundraising is already underway. So the issue of what expenditures made now or even earlier can be counted as matching funds is not an insignificant matter for the deans of the medical schools and others who are raising the cash.

Also up for debate was a provision that would favor grants to institutions that propose a higher matching percentage.

Given their responsibilities to the institutions they work for, some of the deans wanted to be sure their fundraising efforts and money for initial building plans would not be wasted. Some also noted that an early clarification of the issue would mean meaning speedier construction, a goal that CIRM advocates.

Brian Henderson, CIRM Oversight Committee member and dean of the USC School of Medicine, said favoring institutions offering higher matching funds could lead to a "ridiculous escalation" in which schools try to outbid each other. David Baltimore, CIRM Oversight Committee member and president of Caltech, noted that a bidding war disadvantages "poorer" institutions. He favored a straight percentage.

Also disturbing some directors of the agency were grant criteria that would consider the geographic location of applicants within California with an eye to assuring that facilities are available to researchers throughout the state.

Baltimore said the board is "too conflicted" to consider geography. But Henderson said, "Reasonable geographic distribution is a laudable goal." Gerald Levey, an Oversight Committee member and dean of the School of Medicine at UCLA, opposed the use of geography as did Oswald Steward, chair of the Reeve-Irvine Research Center at UC Irvine.

The press release issue can be crystalized in the following manner: Should recipients of $10 million grants, or for that matter any size, be required to "coordinate" with CIRM press releases on the results of the taxpayer-funded research.

Baltimore, who brought up the proposed requirement, said it "was an inappropriate transgression of the independence of (our) institutions." It was a sentiment heatedly defended by others at various institutions.

However, Jeff Sheehy, Oversight Committee member and deputy director for communications at the UCSF AIDS Research Instititute, said coordination on press releases was not an onerous requirement and would help protect CIRM. Ultimately he dropped his opposition to removing the language, declaring that the board was wasting time on the matter in extended debate.

Our point – for now -- about these discussions is not which position prevailed. What is important is that the directors of the $6 billion California stem cell agency are setting the terms of contracts that could benefit their institutions.

The directors are not in a good place. When a director votes, one can imagine him or her thinking: Whose interests do I serve? My employer's? The person who appointed me? The groups I am supposed to represent? CIRM's interests? Or the people of California?

Some of these issues are found in other segments of state government but rarely to the degree they are found on the Oversight Committee of the California stem cell agency. And it is all legal, courtesy of California voters, who created this situation in 2004 when they approved Prop. 71. Nonetheless, for those affected by CIRM and who follow its activities, understanding the conflicts and how they can affect multimillion dollar decisions is an imperative.

By the way, the matching fund issue comes up again at the Oversight Committee meeting in December. The geographic criteria was retained on a 15-10 vote. And grant recipients can ignore any coordination efforts on press releases. The offending press release language, which has been around for months, was removed, triggering another delay in official adoption of the regulations.

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Coming Up Tonight

Sometime in the next few hours we will post an item on today's meeting of the Oversight Committee of the California stem cell agency. It will look at the institutional but legal conflicts of interests that many of the members of the committee have.

Few Complaints Voiced on CIRM Strategic Plan

The California stem cell agency's proposed plan for spending $3 billion on stem cell research received its first real screening tonight, and the audience seemed nearly enamored with the effort.

A few minor questions were raised along with some remarks that could be construed as slightly critical, but generally the comments were along the lines of "extraordinary work product" and "outstanding document."

The screening of the plan occurred at a meeting of the CIRM Oversight Committee, a few miles from Hollywood at the Luxe Hotel on Sunset Boulevard. The proposal comes up for consideration again at another meeting of the committee on Wednesday.

CIRM President Zach Hall walked the audience – the 29-member Oversight Committee – through the document that he and his staff have been working on for about a year. He noted that is a "living plan" and subject to change by the committee, which is not expected to give it a final nod until December. Even then, he proposed that it be reviewed regularly and altered to meet changing needs and opportunities.

While the document contains specific figures, Hall said those are not "immutable" and were intended to be approximate. Final approval of grants is also in the hands of the board – not the CIRM staff.

Hall did highlight one aspect of the plan's special programs – collaborative research and disease teams that would cross multiple institutions and disciplines. They would be tightly focused and managed and encouraged to have a professional manager to push the project along. The plan envisioned $122 million for the disease team program and $60 million for the research team effort. (See page 87 of the plan.)

Oversight Committee member Claire Pomeroy, dean of the UC Davis School of Medicine, and others asked for insertion of language specifically discussing the funding of embryonic stem cell vs. adult stem cell research and human vs. nonhuman research.

Ted Love, another Oversight Committee member and president of Nuvelo, said safety should be an "extraordinary priority" of the plan. "Nothing creates a crisis like safety," he said, referring to public alarm that occurs when human experiments go awry.

Other board members emphasized the need for a top notch public education and communications effort. Committee member Joan Samuelson, president of the Parkinson's Action Network, said that the agency can "succeed only if they (the public) are with us." The plan suggests spending $4.5 million for "public outreach." (See page 105.)

John M. Simpson, stem cell project director for the Foundation of Taxpayer and Consumers Rights and often a critic of the agency, praised the plan's realism and outreach. But he reminded the board,

"At the end of the day the best scientific plan is meaningless unless there are guarantees for affordable access to cures and treatments."

While plaudits were handed out liberally during the evening meeting, the biggest round of applause came following testimony from another member of the public, Roman Reed, who is paralyzed as the result of a football accident.

He said he had told his young son that one day they would walk side by side.

And then Reed told the CIRM board,

"I believe that one day you will make my promise to my son come true."