IF YOU WANT to see an example of everything that's wrong with the new stem cell-research program in California, look at the case of Edward Penhoet. He's the vice chair of the Independent Citizens Oversight Committee, the panel charged with overseeing the expenditure of $3 billion in research money, most of which will go to universities and private biotech firms – and he has direct financial interests in several outfits that might well be getting huge sums of taxpayer cash.

As Tali Woodward points out on page 13, Penhoet has investments in at least three biotech firms that do stem cell work.

And that's just one example. At least seven members of the ICOC have direct financial interests in – and thus could stand to personally benefit from – the research they're going to be funding. That's an unacceptable situation.

As we noted last year, before the election (see "Cell Divide," 10/29/04), the high-profile campaign to pass Proposition 71 hid the fact that the state would be effectively handing out a vast sum of money without adequate public oversight. And that appears to be exactly what's happening.

Critics of the stem cell board are asking the panel to abide by the National Institutes of Health guidelines, which forbid grant makers from holding any financial stake in an entity that receives grants. We'd go further: Penhoet and his colleagues should either divest themselves of all interests in, and resign from any jobs with, any company or institution that does stem cell work – or they should resign from the panel.