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Tuesday, May 24, 2022

Insiders’ Edge Doling Out Stem Cell Funds

The race to fill seats on the 29-member commission that will dole out some $3 billion in stem-cell research grants over the next decade is turning into an insider’s game.

What at first looked like a daunting deadline 40 days following Nov. 2 and an equally daunting set of criteria for membership, has proved to be a relatively easy process.

Three days after Proposition 71 passed by an overwhelming 18 point margin, state Controller Steve Westly named Dr. Philip Pizzo, dean of the Stanford School of Medicine, to the Independent Citizen’s Oversight Committee. The committee serves as the board for the newly formed California Institute for Regenerative Medicine, which will oversee the allocation and monitoring of $3 billion for stem-cell research authorized by the vote.

Westly’s move was followed last week by Lt. Gov. Cruz Bustamante’s appointment of Dr. Richard Murphy, president and chief executive of the Salk Institute for Biological Studies in La Jolla. Both Pizzo and Murphy were listed on Proposition 71’s Web site as key supporters of the initiative.

“It is purposely being constructed as a fairly elite group of people who are both experienced and knowledgeable,” said Michael Friedman, president and chief executive of the City of Hope Comprehensive Cancer Center. “There are people who have been devoting substantial amounts of time and energy to the organization of what Prop. 71 would be, and the passage of Prop. 71, so you are starting off with a pool of knowledgeable, experienced and committed people.”

But opponents of the initiative, led by a group called Doctors, Patients and Taxpayers for Accountability, have long decried the process for creating the oversight committee, saying in campaign literature that it will be “composed of insiders many of whom will be on the receiving end of the money.”

Even the wording of the law authorizing the committee and the $3 billion in bond offerings to fund the research creates a situation in which those who were active proponents of Proposition 71 have an inside track.

The initiative requires that the board be established 40 days from the date of passage and that its first meeting occur five days later. It establishes a greater hurdle for those not already involved in the process by setting up an extensive list of requirements for membership, including naming individuals already in the narrow field of embryonic stem-cell research.

As a result, many selectors have turned to the advice of the initiative’s co-chairman, Robert Klein, according to Ben Dubin, a partner at Asset Management Co. and a friend of Klein’s for 15 years.

Klein, a real estate developer and lawyer in Palo Alto whose son is diabetic, got the initiative started with at least $2 million of his own funds. He had a hand in drafting the proposition and assembled a long list of Nobel laureates, scientists and leaders of several research institutions to back the measure.

“Bob put together a phenomenal group when he was working on Proposition 71,” said Dubin, whose company invests in early stage biotech firms. “I’m sure in this whole Proposition 71 process, the people like Bob Klein who worked on this interacted with most of the people who will be on the committee.”

Klein did not return calls.

Westly’s spokesman, Paul Hefner, said Klein is one of a small group with whom the controller consulted regularly to make his appointments. He stressed that the requirements outlined in the initiative for committee members are fairly strict.

“That’s our starting point: What are the qualifications?” he said. “Then, we start looking at identifying the possible candidates.”

The governor, lieutenant governor, treasurer and controller each name five members to the committee. The balance are appointed by the chancellors of the five University of California campuses with medical schools, who each name a representative; and one each by the speaker of the Assembly and the president pro tem of the state Senate. A chair and vice chair are then elected by the committee.

The chancellors must name an “executive officer” familiar with the needs of the campuses they represent. The state’s top elected officials must choose one person each from the following set of criteria:

-An “executive-level” officer of a nationally ranked research university, excluding the five UC schools, that has placed in the Top 10 of U.S. universities in life science patents and has a history of administering annual research grants and contracts of more than $100 million.

-An executive-level officer of a nationally ranked, non-profit academic research institution involved in stem cell research who has managed a $20 million budget in life sciences during the past five years.

-Representatives of life sciences companies with backgrounds in medical therapies but not in stem cell research, in order to avoid a potential conflict of interest.

The balance of the members must be advocates for those suffering from particular ailments.

The requirements, say the initiative’s supporters, are designed to appease a wide-ranging pool of beneficiaries vying for a slice of the $3 billion pie.

“You want a few professors but you want a lot of leadership,” Dubin said. “You want the nuts and bolts, but mostly you want non-technical people. It’s a political committee. In many places, it has to benefit all of California.”

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