Associated Press
SACRAMENTO, CA — Six philanthropic organizations have agreed to loan California’s stem cell agency $14 million until it can raise money on its own, state Treasurer Phil Angelides said Tuesday.
The California Institute for Regenerative Medicine, which was created by Proposition 71 in 2004, has been unable to borrow money from more traditional channels because two lawsuits challenging the agency’s constitutionality have not been resolved.
Superior Court Judge Bonnie Lewman Sabraw is expected to rule on the lawsuits
soon. But even if the agency prevails, anticipated appeals will continue to block its access to the Wall Street bond market until at least 2007.
Voters authorized the agency to borrow $3 billion so it can grant about $300 million annually in stem cell research grants to California scientists. No grants have been funded because of the agency’s inability to borrow money.
The $14 million will fund fellowships to help train stem cell researchers.
The loans are expected to cost the state about $600,000 in interest in the first year and will be repaid as soon as the agency can sell bonds, Angelides said.
John Simpson of the Foundation for Taxpayer and Consumer Rights said that even though it appears that “there are safeguards in place to ensure that purchasers of the notes don’t hold undue sway over the stem cell institute,” he criticized the agency for the “secretive” way it went about the process.
“A completely open, transparent process would better serve everyone,” Simpson said. “I truly wish they’d see that.”
If the stem cell agency loses the court challenge and is declared unconstitutional, the loans will not be paid back.
The Jacobs Family Trust has agreed to loan the agency $5 million. The Beneficus Foundation, William K. Bowes Foundation, The Eli and Edythe L. Broad Foundation and The Moores Foundation have agreed to loan the agency $2 million each. The Blum Family Partners, LP agreed to loan the agency $1 million.
