|Alameda County Superior Court|
Superior Court Judge Bonnie Lewman Sabraw ruled
in April that lawsuits challenging the legitimacy of the California
Institute for Regenerative Medicine (CIRM) failed to show that the
voter-approved law that created it in 2004, "is clearly, positively
and unmistakably unconstitutional."
ruling came after a trial in which lawyers for the plaintiffs, anti-abortion
and taxpayer groups, argued that the state agency was not accountable
to state governance norms and that the institute was rife with conflicts
The groups who
filed the suit will appeal to the California Supreme Court. These
expected appeals will continue to block the release of state funds
to CIRM, leaving it to pursue other sources of money.
to adamantly oppose reasonable reforms, including those proposed
by state Senator Deborah Ortiz (D-Sacramento), a longtime champion
of stem cell research. CIRM's allies claim
that the bill Senator Ortiz has proposed, SB 401, is "premature
and unwarranted" and its consideration "stands to further
delay critical progress."
Money: Creative Financing, Gala Fundraiser, and Conflicts of Interest
With the CIRM's
ability to issue bonds still hampered by legal challenge, it has
turned to novel methods of funding. It has not requested support
from the state, a move that would likely open the door to legislative
oversight. Instead, CIRM has turned to private sources for donations
and below-market rate loans, an approach that increases the likelihood
of undue private influence on the agency, and reinforces the perception
that CIRM acts more like a private firm than a state body.
After months of hints and speculation, CIRM board chair Robert Klein
announced that five private foundations will loan $14 million to
the cash-strapped agency via risky loans at below-market interest
rates. Although it is not surprising that the lenders who agreed
to this arrangement are people who have shown past support for biomedical
research, the nature of their support reveals a likely interest
in how the CIRM will later allocate its $3 billion in grants.
example, the foundation established by the founder of the biotechnology
firm Amgen, William Bowes, loaned CIRM $2 million. A recent report
by a venture capital firm described Amgen as a "stem cell company."
Another $2 million came from the foundation created by John Doerr,
a prominent venture capitalist who has investments in numerous biotechnology
corporations. And Eli Broad, who previously donated $25 million
to the University of Southern California for a stem cell research
center, also loaned $2 million to the CIRM. It would not be surprising
if he was especially eager to see CIRM research funds going to USC.
Because Proposition 71 greatly limits the portion of these loans
that can go to administrative costs, CIRM is pursuing a second path
of novel fundraising. In a move that appears unprecedented for a
state agency, the CIRM will be the beneficiary of a gala
dinner and performance, tickets for which begin at $1500 and
go up to $100,000. Those who make larger donations will receive
briefings and tours of research facilities, possibly conducted by
CIRM scientific staff. Pressure from the Foundation
for Taxpayer and Consumer Rights has caused the CIRM to release
the names of donors, but not any of their affiliations, which are
likely to include potential grant recipients and other beneficiaries
of CIRM activities. The CIRM has explicitly stated that it will
accept donations from executives of biotechnology corporations.
Beeeditorial spelled out
the potential conflict of interest inherent in this arrangement
by pointing out that the situation is "analogous to what might
happen if Caltrans started seeking private donations to build a
new San Francisco Bay Bridge. Funding for the bridge is stymied,
so `Friends of Caltrans' hold a gala fundraiser. Out of self interest,
bridge contractors rush to buy tickets. Those contributing hope
they will get special status when bridge contracts are awarded,
and possibly they will."