Stem Cell Institute Must Abide by ‘Good Government’ Rules Before Issuing Grants

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Santa Monica, CA — The California taxpayer-funded stem cell research institute must abide by the same good government rules that apply to every other state board, according to the Foundation for Taxpayer and Consumer Rights (FTCR).

FTCR released an analyses today of how the stem cell institute’s conflict of interest, open meetings, and public records rules, including voluntary standards to be voted on today, fall far short of standards that apply to other state boards and public officials. Click here to view the analyses.

“The public health value of stem cell research is jeopardized by weak oversight rules that allow biotech companies to use their political and financial power to influence the decision making process,” said Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights. “The only solution is to require the stem cell institute to abide by the same good government rules that apply to every other state board and public official.”

FTCR called on the stem cell institute to abide by the same standards that apply to other state boards before issuing the $3 billion in research grants approved by voters under Prop 71. In addition to strengthening good government standards, FTCR said that the stem cell institute must also ensure that the State of California controls any patents created as a result of the research and that low-income residents are guaranteed access to the new medical technologies. At least 10 of the 29 members of the stem cell institute’s powerful oversight committee (ICOC) own stock in or have ties to biotech companies that could profit from research grants.

Key failures of the stem cell institute’s conflict-of-interest, public records, and open meetings rules include:

* Stem cell institute officials are not required to abide by state conflict-of-interest standards that require other state board members to divest their financial interest in companies that stand to gain from decisions made by those boards. Under current rules, some stem cell institute officials are exempt from the Political Reform Act which requires public officials to disclose their financial interests;

* Under new standards likely to be voted on today, grant reviewers that have significant authority over which grants are approved, do not have to disclose conflicts to the public like members of other state boards must do;

* The stem cell institute and working groups are largely exempt from the California Public Records Act and Open Meetings Act.

In May, the so-called Independent Citizens’ Oversight Committee (ICOC) which was created by Prop 71 to oversee the research institute, adopted interim ethical guidelines developed by the National Academy of Sciences which address protections for egg donors and rules for use of stem cells but do provide public records, open-meetings, or conflicts-of-interest standards.

A lawsuit that has held-up bond sales charges that Prop 71 violates the California constitution by providing state money to an agency that is not under the exclusive control of the state. The State Treasurer’s office has announced plans to issue “bond anticipation notes” in the amount of $200 million which would be paid off when bonds are issued. The chair of the ICOC, Robert Klein, has begun soliciting $100 million in grants from foundations. These foundation grants and bond anticipation notes will be needed to pay for 28 initial grants to train new stem-cell scientists scheduled for review in early August.

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The Foundation for Taxpayer and Consumer Rights (FTCR) is California’s leading nonpartisan consumer advocacy organization. For more information, visit us on the web at

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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