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A Struggling Science Experiment

States Closely Watch California's Stem Cell Research Initiative

By Ariana Eunjung Cha
Washington Post Staff Writer
Sunday, February 13, 2005; Page A01

SAN FRANCISCO -- Last fall, a group of pioneering scientists, venture capitalists and entrepreneurs sold Californians on the ultimate startup, one with shoot-for-the-moon ambitions. The men and women pitched the state's residents on a new science that they said might one day lead to cures for humankind's worst diseases. "Save Lives with Stem Cells!" campaign posters urged.

Today, however, a little more than three months after state voters approved a measure allocating $3 billion in public funds for stem cell and related research, organizers are struggling with more down-to-earth concerns.

Members of the citizens' oversight committee, including Gayle Wilson, center, are sworn in at a December meeting in San Francisco. (Noah Berger -- AP)

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The initiative has been tainted by accusations that those who pushed hardest for the money stand to benefit from it the most. Advocates question the pell-mell pace organizers have set to get the program up and running; they worry that in their haste, program leaders are taking too many shortcuts, leaving the initiative vulnerable to being taken advantage of by private profiteers and unscrupulous scientists.

"I appreciate that people feel a sense of urgency. But it has to be done right rather than be done fast," said Susan Berke Fogel, co-founder of the Pro-Choice Alliance for Responsible Stem Cell Research, a coalition of scientific and legal groups that have raised concerns about the initiative.

The stakes surrounding California's initiative have only grown higher in recent weeks with the discovery that much of the most promising research probably cannot be conducted with federal funds because President Bush has restricted the money to certain lines of stem cells which now appear contaminated.

California's experiment is being watched closely by other states. Maryland this month became the most recent state, joining Connecticut, Florida, New Jersey, New York, and Wisconsin, to allocate or consider allocating their own money to stem cell research.

Proposition 71's creators thought the best way to tackle stem cell research was to create a government agency in a very non-government-like way. The California Institute of Regenerative Medicine would be run like a corporate startup, with the state's populace effectively serving as shareholders. Elected state officials, including Gov. Arnold Schwarzenegger (R), appointed a panel of 29 scientists, businessmen and university administrators to oversee the effort, in hopes of issuing the first grants in May.

To streamline and speed things along, the state decided to exempt parts of the organization from many of the traditional rules that government entities must follow, including some regulations governing how agencies spend money.

It didn't take long for controversy to ensue, starting with the man selected to lead the effort: Robert Klein II, 59, a Silicon Valley real estate developer and lawyer who wrote much of Proposition 71 and created a nonprofit group to campaign for it. One of his sons has juvenile diabetes and his mother has late-stage Alzheimer's.

Public-interest groups worried about his investments in the biotech industry and his ties to various interest groups. Some even called on him to resign.

Critics also expressed concern that other members of the oversight group might have conflicts of interest: More than few own stakes in biotech firms or other businesses that could stand to benefit from the research bonanza. They noted that the first batch of jobs for the institute were not advertised and went to friends or allies of the members and came with lucrative annual salaries, many in the $100,000s.

So loud is the opposition that Democratic state Sen. Deborah Ortiz, one of the strongest supporters of the proposition, expressed concern with how things are proceeding and suggested that new legislation might be needed to guarantee there's no abuse of the funds and that the neediest benefit.

A spokeswoman for the institute, Fiona Hutton, vehemently disagreed with the notion that there is anything fundamentally wrong with the program or that new legislation is needed. She said the committee has been working "cautiously and carefully" and that some issues have been resolved.

Klein, for example, has taken a number of steps to minimize any appearance of improper relationships, leaving his post at the nonprofit organization that led the campaign and divesting himself of millions of dollars in biomedical stocks he once held. He has said those actions should be sufficient to resolve concerns over possible conflicts.

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