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New California Stem Cell Agency Under Fire

January 6, 2005

SAN FRANCISCO (AP) – California’s new stem cell agency is generating a lot of talk – and it’s not all about the ethics of human embryonic research.

First Amendment advocates are grousing about the veil of secrecy covering how the agency is coming together and where $3 billion in taxpayer money is going.

The criticism started last fall during the debate over Proposition 71, the bond measure ultimately passed by voters that funds the agency, and picked up this week ahead of a key organizational meeting.

Board members of the agency meet Thursday to discuss the hiring of a president and full-time staff and to begin setting up committees that will oversee financial functions, including the awarding of laboratory construction contracts and research grants.

The agency, named the California Institute for Regenerative Medicine, can dole out $300 million a year in grants for 10 years. That sum makes it the biggest state-run research project in U.S. history.

Many of the board’s 29 members, appointed by Gov. Arnold Schwarzenegger and other elected officials, represent research universities and biotechnology companies that undoubtedly will receive grants.

So far, the members haven’t made any rules preventing themselves and their employers from being unjustly enriched – something that the watchdogs see as footdragging, particularly since the biotechnology industry contributed $28 million to get the measure approved.

The activists argue that being able to follow the money is the only way to guarantee it isn’t being mishandled. Doing that, though, wouldn’t be easy even if the board had already put confict-of-interest safeguards in place, because of the explicit exemptions written into Proposition 71.

Under the measure, the agency’s financial oversight committees are exempt from the state’s open-meeting law when it comes to discussing patients, intellectual property concerns and sensitive scientific data it wants to keep confidential.

“The built-in secrecy provisions are a central flaw that may contribute to others,” said Terry Francke of Californians Aware, a nonprofit organization that promotes open government and the First Amendment. “Prop 71 makes the process of governance almost entirely secret.”

Francke called for board members to pledge to ignore the privacy provisions and vow to conduct most of its work in public. He and other critics also complained that the public knew very little about Thursday’s day-long meeting.

Another prominent critic, Charles Halpern, derailed most of the agency’s first meeting last month after he complained to California Attorney General Bill Lockyer that not enough public notice or information was made available in advance. As a result, Lockyer advised the agency to postpone decisions on many of those matters.

Halpern, who was once a public interest lawyer and is now a writer and consultant in Berkeley, alleged the new meeting still runs afoul of state open-meeting laws and charged the “committee is being invited to rush into the core of its work without having laid an appropriate foundation.”

Nathan Barankin, a spokesman for Lockyer, said the attorney general hasn’t decided whether any changes to the agenda should be made.

A spokeswoman for board Chairman Robert Klein was unavailable for comment Wednesday. Vice Chairman Edward Penhoet didn’t return a telephone call.

Other critics are calling on the board to get busy on the conflict-of-interest rules. At least 10 board members represent California universities and nonprofit research foundations and several others, including former California first lady Gayle Wilson, have connections to biotechnology.

The Oakland-based Center for Genetics and Society, a pro stem cell research organization that opposed Proposition 71, wants board members to disclose all their ties – both financial and managerial – to biotechnology and sell any stock they own in biomedical companies. Klein, the chairman, has pledged to do that.

The voters’ 59 percent approval of Proposition 71 represented a resounding rejection of Bush administration policy, which has sharply restricted federal funding for research that involves the destruction of human embryos.

Stem cells can potentially grow into any type of human tissue. Many scientists believe stem cells could someday be used to repair crippling spinal cord injuries and treat an array of diseases, including diabetes and Parkinson’s.




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