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Last updated on April 16, 2014 at 17:34 EDT

Battle Threatens California Stem Cell Agency

June 5, 2005

SAN FRANCISCO — California’s effort to become a world leader in human embryonic stem cell research has long been supported by a coterie of well-heeled patient advocates who found their champion in an obscure state senator from Sacramento.

Now, however, a battle for control of the $3 billion in research money voters approved last year has unraveled the alliance and threatens to hinder the California Institute for Regenerative Medicine even before it awards its first grant, agency officials say.

The state Senate is expected to vote this week on a proposed constitutional amendment that would tighten perceived loopholes in how the agency is governed.

Among other provisions, the amendment would require institute officials to sell off, or place into a blind trust, any investments related to stem cell research. It also would require that any drugs developed with agency money be made available, at cost, to California’s poor and that any drug profits be shared with the state.

Supporters of the institute say the changes would cripple their effort, driving away top talent and corporate involvement just when other states and nations are competing for stem cell research projects.

If the amendment is approved by at least 27 of the 40 senators, the Assembly will have until June 30 to find its own two-thirds majority to place it on an expected state ballot in November.

The proposed amendment was written by state Sen. Deborah Ortiz, a Sacramento Democrat who was an early backer of California’s Proposition 71, which created the stem cell agency when 59 percent of state voters passed it in November.

The initiative was prompted by the federal funding restrictions President Bush placed on stem cell work, which is opposed by many social conservatives because days-old embryos are destroyed during research. Other states have quickly moved to pass similar funding efforts, fearing the loss of gifted scientists and biotechnology businesses.

Ortiz said she remains a supporter of the agency and of human embryonic stem cell research. But she’s become concerned that the language of Proposition 71 doesn’t ensure California will share in potential profits or that poor residents will benefit from the taxpayer-supported research. She’s also concerned that it allows key agency committees to conduct much of their work behind closed doors.

She says the dramatic step of going back to the voters is necessary because Proposition 71 prohibits the Legislature from amending the initiative for three years. The proposition vested all decision-making power with a 29-member board, appointed by Gov. Arnold Schwarzenegger and other elected officials.

The new agency’s first chairman, Bob Klein, said Ortiz’s legislation is unnecessary and obstructionist. The agency already faces a legal challenge that prevents it from borrowing money to fund the research grants, and Klein worries that going back to the voters could open the institute to even more legal challenges.

“Sen. Ortiz may have many of the same goals that we do, but it is the language itself that is crippling or potentially crippling to the institute,” Klein said during a May 23 meeting of the agency’s oversight committee, which voted unanimously to oppose Ortiz’s legislation.

It’s not clear whether Ortiz has enough support from her fellow lawmakers, who are getting lobbied by patient advocacy groups. The University of California, Stanford University, the California Institute of Technology and the University of Southern California also have formally expressed concern.

“I have a very tough time ahead of me,” Ortiz said. “I’m not convinced I can get two-thirds vote and the timelines are incredible.”

Hollywood producers and directors Janet and Jerry Zucker are among the former allies disappointed with Ortiz. Proposition 71 was born at a dinner attended by Ortiz at the Zuckers’ Brentwood home three years ago, and Ortiz campaigned heavily for Proposition 71′s passage. The Zuckers helped raise the more than $30 million spent in support of the campaign.

“Jerry and I feel a great debt of gratitude for the support she has shown stem cell research in California,” said Janet Zucker, who produced the 2001 comedy “Rat Race” and whose teenage daughter suffers from diabetes. “But we are perplexed and feel there is a better forum to work out these issues.”

Dr. Francisco Prieto, who made small campaign contributions to Ortiz before his appointment to the 29-member committee that oversees the stem cell agency, said the fight has been needlessly antagonistic. He hopes a compromise can be reached between his committee and Ortiz before the proposed amendment goes any further.

“I think the approach we have taken as a board has been more confrontational than it needs to be,” Prieto said. “Sen. Ortiz, in my opinion, has been and continues to be a strong supporter of stem cell research.”

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On the Net:

Proposed legislation, SCA13: http://www.senate.ca.gov/

Sen. Ortiz: http://www.senate.ca.gov/ortiz

Stem cell institute: http://www.cirm.ca.gov/