By Don C. Reed

Action Requested: share this information with friends. Consider sending polite letter of support for the California stem cell program to:, attention Stuart Drown. Watch this space for a potential new law attacking the California Institute for Regenerative Medicine.

Dear Stem Cell Research Supporter:

On May 27th, an open meeting of the Little Hoover Commission was held to discuss ways to drastically overhaul the California stem cell program.

It was a disaster.

First, a little background. The Little Hoover Commission* (LHC) is a California “efficiency organization” with the power to suggest new laws to “improve” the function of California programs. That sounds okay, doesn’t it?

But the California stem cell program has already been “improved” half to death; much more such “improvement” and the patient may not survive!

As you know, the CIRM (California Institute of Regenerative Medicine) has endured three lawsuits, (which nearly shut it down for two years); been audited five times (came up squeaky clean, thank you very much), and has had seven (7) laws thrown at it; can anyone name a government program which has been more systematically investigated, almost to the point of harassment?

And yet it has prevailed. All seven laws were defeated, the audits found the CIRM open and honest, the lawsuits were defeated on every point.

But now comes the Little Hoover Commission anyway, to take its turn.

Friends of this column might remember I have been worried about this group.

As you know, stem cell research’s greatest enemy in California is probably Senator George Runner. Mr. Runner, described by one newspaper (the Los Angeles City Beat, 3/24/05) as “virulently anti-embryonic stem cell Republican George Runner” is against our research in general and Proposition 71 in particular. He is, I believe, co-author to every anti-CIRM law that has been proposed. One of his bills was the source of the original request for the Little Hoover Commission to study the California program, and his wife, Assemblywoman Sharon Runner, was until very recently a member of the Little Hoover Commission.

However, at the first meeting of the LHC discussing the stem cell program, several board members complimented it. One said Bob Klein deserved “an A plus” for leveraging $272 million in California dollars into $1.15 billion in purchasing power; another said the program should be studied as an example of government at its best: successful public/private partnership.

So was I worried for nothing?

Unfortunately, no. My worst fears were just realized.

Here are three of the LHC’s proposed changes. (They said a lot more, but they were talking very fast, and I am only a two-finger typist—not to mention they provided zero written documents as to their recommendations, which made things rough on people trying to provide accurate coverage of the public meeting.)

1. The Little Hoover Committee would gut the leadership board of the California stem cell program, the Independent Citizens Oversight Committee (ICOC): weakening it, and putting it under political control. They would reduce the ICOC by half, from 29 to 15 members. And, in place of the non-political structure of the board, the LHC would impose a new way to select the membership, politicizing it.

The ICOC is a non-political governing board, designed to be above ideology and partisan politics. It is deliberately large, 29 members, so as to provide a diverse cross-section of opinion: science, education, business, patient advocates.

The LHC was quite open about their intention: they wanted to impose a “more traditional board where the Governor and Legislation have control”. This not only opens up the possibility of removing our funding, but flouts the voters’ will; California voted for a program where science would be judged on its own merits, not subject to the changing winds of political ideology.

2. The Little Hoover Commission would take away the ICOC board Chairman’s salary, as well as the vice-Chair’s. They would deliberately weaken the Chair’s authority by transferring most of his responsibilities to the President. Also, they would shorten his term in office from 6 years to two; there was even talk of eliminating his position altogether, or passing it around the ICOC membership, taking turns, making the position a “non-executive executive”!

This is ludicrous.

To understand what a mistake this would be, consider what skills the chairperson must provide, both by need, and by California law.

First, how is our program funded? Our only source of money is the sale of California bonds. No bond sales, no funding. Fortunately, our current Chairperson, Robert N. Klein II is an acknowledged expert on these bonds, having worked with them since 1975. (Klein set up and helped run the highly successful California Housing Finance Agency, also financed by bonds.)

Second, the success of our program depends on deep knowledge of and experience in interaction with state and federal law.

The chair is Bob Klein, the man who designed the California stem cell program, and who has steered it through innumerable crises. He served unpaid for the first five years, before financial conditions forced him to take a salary, $150,000 a year, small compared to most executives.

Could he be replaced by a board member or even the President of CIRM?

Under the law, “Mandatory Chairperson Criteria” Proposition 71 requires:

“…(ii) Experience with state and federal legislative processes that must include some experience with medical legislative approvals of standards and/or funding.”

It also suggests: “(B) Additional criteria for Consideration:…

(iv) Direct knowledge of and experience in bond financing.”

Do we know anybody like that? Hmm, let’s see. The President, esteemed scientist Dr. Alan Trounson, (being Australian) would not be eligible under the law, because he has no such experience; also according to his testimony, he has no understanding of bond sales, which are the lifeblood of our program.

Who does know about bond sales, and whose idea was it to use them to fund the stem cell program? Bob Klein.

Whose idea was it to develop and sell “bridge anticipation notes”—BANs, another form of bond—which got us through the first two years when law suits blocked our funding? Bob Klein.

And who is trying right now to negotiate federal guarantees for our loans to biomed companies—as much as a billion dollars backup funding? Bob Klein.

One false step, and we could lose millions of dollars of new money for California.

We must have a chair who understands not only the twists and turns of stem cell politics, but also the complications of bond finance.

To the best of my knowledge, there is exactly one person in the world with a skill set like that—the man the Little Hoover Commission would “term out” of office.

3. The LHC proposes hiring more staff to help with the work at CIRM. That sounds pretty good, at first—except they would not authorize any more money for this. Prop 71, by law, can only spend 6% of total funding on employees. The LHC noted that, but suggests no provision to change it. Apparently they expect current employees to take a pay cut to hire the new workers.

So, if we cut everyone’s salary in half, we could hire twice as many people! An interesting concept. I wonder which of the LHC members would like to go first, and reduce his or her income, by way of example?

Throughout the hearing, LHC board members displayed a staggering lack of knowledge about the program they would so radically change.

Example: as a reason to change the ICOC governing board, one LHC member stated that biotech was “locked out of representation on the (ICOC) board”…apparently not realizing four biotech representatives are in fact installed on that board.

Example: Objections were raised to the alleged “throwing out” of the CIRM’s strategic plan. CIRM spokesperson Don Gibbons pointed out that this was incorrect: the “new” strategic plan was an addition to and extension of the previous one, not a replacement: and this fact was plainly labeled as such, from the front page onward. These additions included the new loan program, and also reflected some major changes in science.

Example: One member came close to slandering the men and women of the ICOC, accusing them of “giving themselves grants… anyone would want to play cards, if they could be guaranteed a stacked deck.” This is not only insulting, but factually inaccurate; board members are not even allowed to speak about grants affecting their institutions, let alone vote on “giving themselves grants”.

The public was not allowed to view the LHC draft document.

True. The board members and staff were allowed to have copies of the proposed changes, but not the public. This would seem contradictory to the LHC’s mission of increasing transparency of government. Apparently, the only time the public will see the actual document– will be after it is too late to offer comments on it!

Important: LHC members stated several times that they were against any legislative changes which would require “going to the people”, i.e. needing a public vote. They much preferred a legislature-only approach. The people, one individual noted, are “not interested in change”. Others agreed, calling it (popular vote on change) “arduous” and “futile”. At an earlier meeting of the LHC, a member stated his opinion that at least some of the changes sought by critics could not be achieved without a Constitutional amendment, which means a public vote.

Prop 71 was passed by initiative, and approved by the voters of California; much of the law was placed in the Constitution, meaning a vote of the public would almost certainly be required to amend it.

So would the LHC changes be Constitutionally legal?

“That’s for the courts to decide,” one member said, shrugging off the possibility of a few more years in court.

As the father of a paralyzed young man, I cannot be so casual about anything which may delay cure research. This struggle is personal to me, not some sort of intellectual exercise. The scientific challenges are difficult enough, without needless political delay.

When the meeting was over, a member of the LHC came up to me and said, “We want the CIRM to thrive and flourish!”

To which I responded, “Then why gut it? Why remove the heart and soul of a highly successful program?”

By any objective measure, the California stem cell program is an enormous success. Just one example: remember the $272 million budgeted for construction—which was leveraged into $1.15 billion in buying power. How did the ICOC and its Chairman accomplish this? They insisted that matching funds be required from institutions seeking facilities grants. In this manner the purchasing power of California dollars was multiplied three times over. How many programs, public or private, can bring in more funds than they put out? I know of none. And this is the Committee the LHC would weaken; this is the chairman whose salary the LHC would take away.

The ICOC board is a convergence of expertise, not a conflict of interest. Their diversity is a strength, and their chair makes sure every viewpoint is heard, which is probably why most decisions are close, often unanimous; they wrestle out their decisions, arguing, struggling, working it out, finding what is right—in the full light of public view– and California benefits.

The old expression applies: “if it ain’t broke, don’t fix it.”

Does that mean the program is perfect? Of course not. No institution on earth should be beyond correction. If a speed-reader was to wade through the endless pages of the public record of the ICOC meetings, he or she would find countless arguments about policy and performance, as problems are identified, dealt with, and policies set up to prevent their recurrence. That is healthy.

Positive interaction with our governmental leadership in Sacramento and Washington is actively sought; witness our new Vice-President, cancer-survivor Art Torres, whose sole job that is. Mr. Torres is a veteran of many years public service, including working with Cesar Chavez and the farm workers union, and he came out of retirement just to work with the California Institute for Regenerative Medicine.

Well, there it is.

The final draft of the Little Hoover Commission report will be released soon.

If you want to offer your thoughts and recommendations, or just voice your support for the California program, send an email to, attention Stuart Drown. (On a personal note, I have met Mr. Drown several times, and corresponded with him, and he has always been polite and professional.)

So what do we do now? Consider writing the letter.

Above all, get ready.

Update your email lists. If you live in California, consider the idea of visiting Sacramento in the near future. If Senator Runner or someone else puts up a law based on LHC, which he almost certainly will, there will be hearings to attend.

If you don’t live in California, we will still need your help. This will be an interactive effort. If an attack law develops, we who support the CIRM will be going through our phonebooks and e-lists, organizing our defense.

Across America, wherever you live, the success or failure of the California stem cell program affects you and your loved ones: all who hope and work for cure.

Let there be no doubt in anybody’s mind. We in the patient advocacy community appreciate, support, and will defend the CIRM and the ICOC. It is the concrete realization of our hopes for cure, an institution dedicated solely to finding cures for illness and injury which afflict our families– we will not sit idly by when it is attacked.

Any law calling for a weakening or political “do-over” of California’s stem cell program must and will be vigorously opposed.

Don C. Reed, co-chair, Californians for Cures
Californians for Cures sponsored the Roman Reed Spinal Cord Injury Research Act, source of the first state-funded embryonic stem cell research in America.

*Important: Not all the LHC board members were present that day, (this is budget crisis time at the California capitol) and I know of at least one member who strongly opposes the direction the committee is taking. It may be that the committee will reconsider their current position– a good reason to send them your thoughts:

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