Criticism of new $3 billion California stem cell agency mounts

By: PAUL ELIAS - AP Biotechnology Writer | Thursday, January 6, 2005 1:28 PM PST ∞

SAN FRANCISCO (AP) -- Complaints are mounting that a newly created California stem cell agency has failed to keep the public informed of its actions as it begins doling out $3 billion in taxpayer-provided grants.

Still others complain the agency hasn't developed rules to prevent its managers from unjustly enriching themselves and their employers.

Many of the 29 board members appointed by the governor and other elected officials to run the agency represent research universities and the biotechnology industry, both of which are expected to win millions of dollars worth of grants.

The criticism picked up this week as the California Institute for Regenerative Medicine committee prepared for a key meeting in Los Angeles on Thursday. The committee is expected to begin creating powerful "working groups," which will control the agency's grant-making process and other financial functions such as choosing where to locate its headquarters.

Proposition 71, which passed in November and created the agency to fund stem cell research, explicitly exempts the working groups 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.

Those special privacy rights trouble a leading First Amendment lawyer and other critics who complain the agency's design makes it likely that taxpayer funds will be mismanaged, especially when it comes to awarding laboratory construction projects.

"The built-in secrecy provisions are a central flaw that may contribute to others," said Terry Francke, general counsel for 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 a committee pledge to ignore the privacy provisions of Proposition 71 and vow to conduct most of its work in public. He and other critics also complained that little advance information about Thursday's meeting is publicly available.

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 available in advance. As a result, Lockyer advised the agency to postpone decisions on many of those matters. Now some of those same topics are scheduled to be discussed Thursday at the University of Southern California.

The meeting of the Independent Citizen's Oversight Committee (ICOC) is expected to last more than six hours and address a host of issues vital to the creation of the new agency, including hiring a president and full-time staff. The critics charge the agenda is too long on ambition and too short on information.

Halpern, who was once a public interest lawyer and is now a writer and consultant in Berkeley, alleged the new meeting still violates 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 continues to "advise his client," but he hasn't decided whether any changes to the agenda should be made.

A spokeswoman for committee chairman Robert Klein was unavailable for comment Wednesday. Committee vice chairman Edward Penhoet didn't return a telephone call.

Other critics, meanwhile, have called on the agency to install strict conflict-of-interest rules to prevent committee members and their employers from deciding funding issues that could directly benefit them.

The Oakland-based Center for Genetics and Society, a pro stem cell research organization that opposed Proposition 71, called on committee members to "fully disclose the financial interests and board memberships of ICOC members and require that they own no stock in biomedical companies."

Klein, a Palo Alto housing developer who led the campaign to pass the proposition, has pledged to do that. But at least 10 of the 29 committee members represent California universities and nonprofit research foundations, both of which are expected to win many grants and contracts to construct laboratories and conduct research over the agency's 10-year life span. Several other members, including former California first lady Gayle Wilson have connections to biotechnology, an industry expected to receive grants from the new agency.

"We're seeing growing concern about the stem cell institute from advocates of open government, consumer rights, women's health, responsible business and responsible business," said Center for Genetics program director Jesse Reynolds.