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Read Making a Killing

home / healthcare / in the media

The New York Times
Dec 17, 2004

by CAROLYN MARSHALL

Financier to Lead Institute on Stem Cells

SAN FRANCISCO, CA -- The real estate developer who helped write and finance a ballot initiative to create a California stem cell institute was elected on Friday to a six-year term as chairman of the committee that oversees it.

The financier, Robert N. Klein, a Palo Alto housing developer with strong ties to the Democratic Party, was unanimously approved here at the first meeting of the state-appointed committee that will dictate policy and oversee the California Institute for Regenerative Medicine, the $3 billion research agency created on Nov. 2 when the state's voters approved the initiative, Proposition 71.

Mr. Klein, 59, of Portola Valley, will take the helm of the new 29-member board, known as the Independent Citizens Oversight Committee, and guide the agency in distributing $300 million a year over a decade to finance embryonic stem cell research projects that are currently ineligible for federal grants.

The vote was briefly delayed by critics, who raised a series of concerns, asking why there was only one nominee for the job and whether Mr. Klein, a Stanford University Law School graduate with no background in science, tailored the job description to match his credentials.

The critics also complained of the relationship between Mr. Klein and the officials who nominated him, and urged the board to at least conduct a search for a chairman.

"There is obviously a lot of inside dealing going on," said Marcy Darnovsky, associate director of the Center for Genetics and Society in Oakland. "He donated campaign contributions to three of the four people who nominated him."

Mr. Klein was nominated by Gov. Arnold Schwarzenegger, Lt. Gov. Cruz Bustamante, the state controller, Steve Westly, and the state treasurer, Phil Angelides. Records show he contributed to all but the governor's campaign.

Ms. Darnovsky said she supported stem cell research but was a vocal critic of Proposition 71, calling it a "seriously flawed measure" that might exclude public oversight of how taxpayer money will be spent.

Another critic, Charles Halpern, a public interest lawyer in Berkeley, urged a more thorough candidate search by the board, which includes the Nobel Prize winner David Baltimore; the chancellor of the University of California, Berkeley, Robert J. Birgeneau; and Dr. David Kessler, former head of the Food and Drug Administration.

In a letter to the state attorney general, Mr. Halpern complained that the meeting organizers failed to give ample notice and background material, in violation of the state's open meeting law. That prompted the board to table all items on the agenda, except for the election of chairman and vice chairman.

Mr. Klein agreed to speak to the panel and the public before the vote. He said the state would get its fair share from royalties on any breakthroughs that emerge from the institute's research and that all meetings would be open to public scrutiny. He has stated that he would not hold biomedical stock or invest in companies that do research for the institute, to avoid any conflict of interest.

Some board members have been criticized for their ties to large biotechnological and pharmaceutical companies, including Pfizer and Amgen. Jerry Flanagan, an advocate for the Foundation for Taxpayer and Consumer Rights, warned of a "web of conflicts."

The board's vice chairman, Edward Penhoet, was a founder of the Chiron Corporation and has also served on the boards of several other companies. Another member, Dr. Tina S. Nova, is the chief executive of the biotechnology firm Genoptix.

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