By Jesse Reynolds
Stem-cell cronyism

THE BIOTECHNOLOGY AND pharmaceutical industries are no strangers to the revolving door between government and the industries it supposedly regulates. Just this year two prominent Congress members who had authored legislation governing the sectors announced they're stepping down to become the heads of the Biotechnology Industry Organization and the Pharmaceutical Research and Manufacturers of America.

But the selection – or more accurately, coronation – of Robert Klein as the chair of the committee governing California's new Institute for Regenerative Medicine may be the most overt case of cronyism and insider dealing in biomedicine yet.

The IRM was created by November's Proposition 71, which directs the state to issue $3 billion in bonds to fund stem-cell research. Although many liberals supported it as an understandable reaction to the Bush administration's theocratic leanings, many progressives who support embryonic stem-cell research – including the Bay Guardian and the Center for Genetics and Society – came out against it, citing lack of accountability, inadequate protection of egg providers, and inherent conflicts of interest.

Klein, a real estate millionaire, was the chief force behind Prop. 71. He was a key author, the chair of the Yes on 71 committee, and its top donor, providing $5 million. The Yes on 71 group has now morphed into an IRM booster operation, with Klein at its helm. What's more, he donated almost $150,000 to the politicians who appoint the members and nominate the chair of the IRM's governing committee, and the qualifications for chair detailed in the initiative closely resemble his own résumé.

No one even tried to hide this inside job. The four designated officials – Gov. Arnold Schwarzenegger, Lt. Gov. Cruz Bustamante, Treasurer Phil Angelides, and Controller Steve Westley – all nominated Klein. That left negligible voting options for the members of the governing committee. All the better for them: despite the Orwellian name "Independent Citizens Oversight Committee," it's composed entirely of representatives of groups who want a spot at the $3 billion trough. Its members certainly don't want to upset the powerful chair.

When the Treasurer's Office released the agenda for the first meeting of the ICOC Dec. 17, the selection of chair and vice chair was just one item among many for a three-hour meeting. And the public advance notification and documentation were both inadequate. It took a letter from public interest lawyer Charles Halpern to the attorney general citing the Bagley-Keene Open Meeting Act to postpone the other important decisions.

At the meeting in San Francisco, the "voting" on the only nominee for chair was commenced by Westley even before any discussion of the nominee. It wasn't until ICOC member Jeff Sheehy, an AIDS patient advocate, spoke up that voting was paused. The ensuing "debate" consisted of a campaign speech by Klein and odes by many of the committee members. The committee proceeded to unanimously approve Klein for chair, and overwhelmingly select the vice chair nominee who had received Klein's endorsement, Chiron cofounder Edward Penhoet.

Such an obvious charade only reinforces the criticisms of Prop. 71 voiced by its pro-choice opponents. Fortunately, some prominent supporters of the initiative are rapidly becoming critics. Chief among these is state senator Deborah Ortiz, who has introduced a bill to increase oversight, protect egg providers, and ensure financial returns to the state. No one was shocked when Klein – at the time not yet coronated as chair – told her to back off.

Ortiz insists that her bill will withstand legal challenges. Let's hope so. In any case, there's an urgent need for public scrutiny and pressure if there's any hope of reasonable standards of transparency, accountability, prevention of conflicts of interests, state financial returns, and protection of egg providers and human subjects.

Jesse Reynolds is program director at the Center for Genetics and Society in Oakland. For more information go to www.genetics-and-society.org.