Associated Press

SAN FRANCISCO — The committee tasked with doling out California’s $3 billion in stem cell research grants has selected two of its leaders, despite conflict of interests complaints and accusations that its inaugural gathering violated the state’s open meeting laws.

Housing developer Robert Klein II was unanimously chosen chairman Friday while biotechnology company Chiron Corp. co-founder Edward Penhoet received 21 of a possible 25 votes for vice chairman. Each will serve six year terms.

Even Klein’s unanimous appointment was criticized by some as preordained because Klein was the only candidate nominated for chairman and had successfully lobbied Gov. Arnold Schwarzenegger to nominate him for the position. Klein also backed Penhoet, who was also nominated by Schwarzenegger.

The two appointments to lead the California Institute for Regenerative Medicine were the only formal actions the committee took Friday during a nearly three-hour meeting.

Bowing to complaints that the meeting’s original agenda violated the state’s open meeting laws because it didn’t give the public enough time or information for review, Treasurer Phil Angelides and Controller Steve Westly rescheduled all items except for the two votes until an unspecified date. Counting the chairman and vice chairman, a total of 29 people sit on the committee.

Westly, who was required with Angelides to convene the first meeting of the Independent Citizens’ Oversight Committee, said the items were removed to avoid unnecessary distractions.

“It’s important that everything be done openly and transparently,” Westly said preceding the meeting.

Still, one of the committee’s loudest critics said even the stripped-down meeting violated open secret laws because it didn’t give the public enough information in enough time about the three candidates vying for vice chairman.

One paragraph biographies of each candidate were provided Friday at the meeting. Several of the 26 committee members also said they knew little about the candidates they were considering.

Charles Halpern, who was once a public interest lawyer and is now a writer and consultant, said Friday that he is contemplating a lawsuit to overturn the committee’s action.

“We got no information about any of the candidates until (Friday) morning,” he said.

Deputy Attorney General Ann Marie Marciarille, who counseled the committee, declined to comment after the meeting. A spokesman for the attorney general in Sacramento could not be reached late Friday.

Halpern, who had applied to become vice chair, also complained that it appears none of the candidates went through background checks. He and others complained that the head of the new institute should also be a scientist while another group complained that several committee members have biotechnology and pharmaceutical connections, which could lead to conflict of interests when it comes to doling out research grants.

“The public health value of stem cell research could be significantly compromised by the web of conflicts between committee members and the companies that stand to profit from research grants,” said Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights. “The concern is that research grants will be given on the basis of personal relationship and financial interest and not in the best interest of California patients.”

Klein wrote the proposition that created the research fund, contributed $3 million to the campaign he led and was instrumental in raising a warchest of more than $20 million in support of a measure that garnered 59 percent of the vote in November. Klein – whose son Jordan suffers from juvenile diabetes – has also been an active patient advocate and served on the board of directors of the Juvenile Diabetes Research Foundation.

Klein was nominated chairman by Gov. Arnold Schwarzenegger, Lt. Gov. Cruz Bustamante, Westly and Angelides. Westly, Angelides and several newly sworn in committee members praised Klein as the perfect candidate for chairman because of his patient advocacy work and detailed knowledge of state government and bond markets gleaned from his years as an affordable housing developer. Klein also wrote the state’s low-income housing law when he was a legislative assistant in the 1970s.

“He brings the full repertoire of skills needed for this job,” said committee member John Reed, chief executive of the nonprofit research center Burnham Institute in San Diego. “It is entirely appropriate that a patient advocate rather than a scientist lead this committee.”

For his part, Klein vowed to keep the committee’s business open and had promised earlier in the week not to hold any investments in biomedical interests if elected chairman.

“California is the leader today in crossing the frontier of regenerative medicine,” Klein said in accepting his appointment. “It is a bold and brave experiment.”