Nonprofit claims ‘pattern of leadership failures’ by stem cell agency chief.
Sacramento Bee
LOS ANGELES, CA — Robert Klein II, the campaign chairman who became the head of the state’s stem cell board, should resign his post, the Center for Genetics and Society said Wednesday.
The organization, which supports stem cell research but has frequently criticized the stem cell program, issued a report card giving a grade of C-for a “very disappointing” first year for the agency created by voter approval of Proposition 71 in November 2004.
The Oakland-based nonprofit center singled Klein out, saying he’d been an ineffective leader, misled voters and created a board rife with conflicts of interest.
“The pattern of leadership failures, notably including Mr. Klein’s misleading of voters regarding financial returns during the campaign, lead us to conclude that in order for (the California Institute for Regenerative Medicine) to move forward, the institute needs a fresh start,” said Jesse Reynolds, the center’s project director on biotechnology accountability. “It is time for him to step down as chair of the CIRM‘s board.”
Nicole Pagano, Klein’s spokeswoman, said the chairman was busy with “personal matters” and couldn’t comment. She said the agency has had a “great first year” by holding 56 meetings, creating three working groups to advise the board and hosting an international scientific gathering.
“The Center for Genetics and Society has never stopped running against Proposition 71 (in) spite (of) its overwhelming victory,” she said in an e-mail. “This report rehashes old issues that they have already expressed to our board; which (the board has) duly considered and addressed. It is the kind of criticism-based activism that seems designed more for publicity than any practicable purpose.”
The center’s report revisits many of the issues it and other critics raised during the 2004 campaign and the past year. But it is the first to call for Klein’s resignation. The multimillionaire developer became interested in stem cell research in hopes of finding a cure for his diabetic son and has become a source of controversy.
He was one of Proposition 71‘s top contributors and donated more than $175,000 to three of the four elected officials who nominated him stem cell chairman: Treasurer Phil Angelides, Controller Steve Westly and Lt. Gov. Cruz Bustamante.
He was Proposition 71‘s primary author, writing a chairman’s job description that fit him and establishing an oversight board of scientists, university officials, biotech interests and patients’ advocates with interests in stem cell research.
Reynolds, the lead author of the center’s report, said the board’s conflicts of interest were apparent when it decided to give 14 of its 16 first grants to institutions with representatives on the board. He also said Klein misled the public about the tax-exempt status of the bonds to be used for financing stem cell research.
Proposition 71‘s economic study and its proponents’ claims that the initiative would pay for itself were based, in part, on the bonds’ being tax exempt.
Since then, Klein has admitted he knew the bonds would have to be taxable – which costs the state more in interest payments – if California expects to recoup revenues from the research it funds.
The Center for Genetics and Society’s report also criticized Klein for hiring stem cell agency staff from the Proposition 71 campaign and a nonprofit organization affiliated with the campaign.
The center said the stem cell agency, under Klein’s leadership, has failed to operate as “an accountable, responsible and transparent state agency.” The board has opened more meetings to the public, but it’s kept private some meetings and working group financial disclosures.
The center also faulted the stem cell board for failing to fully protect egg donors and ensure state-funded stem cell therapies would be affordable.
The stem cell board is set to consider these policies Feb. 10 and is planning a scientific conference to address egg donors.
A month before its next meeting, a council that advises the state on science matters issued its final report on state-funded stem cell research revenues and availability Tuesday. The California Council on Science and Technology called for the state to follow federal Bayh-Dole Act rules for determining ownership of state-funded stem cell research.
It said grantees should retain ownership of their discoveries and return of revenues shouldn’t be part of state grant requirements. Instead, the council said, any revenue stream should go to research and education.
John M. Simpson, Foundation for Taxpayer and Consumer Rights stem cell project director, said this policy could deny affordable access to cures. He called for revamping the agency’s structure rather than getting rid of Klein because the agency’s problems “go beyond personalities.”
Klein is struggling to raise donations to keep the stem cell program alive. It is set to run out of money June 30 because lawsuits challenging its constitutionality have blocked the sale of bonds to finance it. Litigation and appeals are expected to take 15 months.
Zach Hall, the stem cell agency’s president, recently told The Bee that he’s trying to “keep the momentum going” by raising $2 million to advance scientific programs. He said he’s also optimistic the state will soon be able to sell about $50 million in bond anticipation notes to finance the agency and its stem cell grants.
The agency’s attorneys contend these notes would avoid the legal pitfalls because the purchasers would agree to turn their investments into contributions, if the state loses in court.
