Examiner Editorial: Time for fiscal oversight on stem-cell center

When state voters passed a $3 billion bond to create the California Institute for Regenerative Medicine in 2004, they were caught up in a peak period of hope for miracle cures of killer diseases just waiting to be unlocked by stem cell research. But now, some six years later, it is time to look at our stem-cell institute more realistically.

Are enough meaningful safeguards in place to ensure that the public’s generous start-up contribution is being spent wisely? Ever since the agency began, critics have charged that Proposition 71 contains provisions discouraging independent fiscal oversight — and that Californians should have been cut in for profits from any successful discoveries.

Stem-cell institute supporters say that some of the 364 research grants already issued have delivered promising steps toward breakthrough treatments of serious diseases such as macular degeneration, cancer and diabetes. However — with nearly half of the $3 billion seed money now committed — it seems likely that if the institute has any hopes of staying alive with continued transfusions of taxpayer money, it will need to come up with a big research triumph.

The board of directors clearly realizes it is time to roll the dice. This month they doubled a staff grant proposal, increasing the funding to nearly a quarter-billion dollars so that twice as many top-level scientists could be contracted. One $6 million disbursement is being used to lure a renowned researcher into transferring his entire stem cell lab from Duke University to San Diego.

In order to keep abreast of managing this dramatically beefed-up spending spree, the institute is pushing legislation allowing it to exceed its Prop. 71 limit of 50 staff employees. To date, no bills to change provisions of the institute’s mandate have ever passed. Prop. 71 set a super-supermajority of 70 percent of lawmaker votes for approving any amendments, and this is the first bill the board of directors ever supported.

The Examiner can understand the institute’s argument that it must pay top dollar in order to bring the best scientists to California. And to the board’s credit, it just voted 27-2 to authorize a $615,000 audit by the Institute of Medicine, an authoritative nonprofit specializing in independent health care analysis. The study will be paid for with privately raised funds.

However, at the speed that the institute is now handing out money from its guaranteed funding source, it seems especially justified for the public to expect the transparency of ongoing fiscal oversight from independent auditors such as the nonpartisan and highly respected Legislative Analyst’s Office. That’s what it will take for Californians to continue subsidizing costly stem-cell research during this long-running budget crisis.

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