Developer Elected to Head Stem Cell Agency

California officials, comparing the state’s $3-billion investment in embryonic stem cell research to the push to send a man to the moon, on Friday convened the new state agency’s board for the first time, even as charges of a lack of openness caused them to significantly scale back their agenda.

Some viewed the first meeting as an opportunity to witness history. It was a moment, state Controller Steve Westly said, that will live on, even if the people who attended are forgotten.

“I genuinely believe we will look back on this day 40 or 50 years from now and say: ‘This is one of the smarter things California ever did,’ ” he said.

Many of the agency’s strongest backers view the decision of Californians to fund the biggest state investment ever in basic science as a “substitute national program,” taking the place of funds for embryonic stem cell research now strictly limited by the White House.

To that end, the 29-member Independent Citizens Oversight Committee, which is made up of some of the most prominent scientists, educators and patient advocates in the state, will decide who gets $300 million a year in research and facilities funds over the next decade.

As their first order of business, board members in attendance unanimously elected real estate developer Bob Klein to head the agency, effectively dismissing concerns raised by some people about his lack of scientific background and the fact that he was the sole nominee.

Klein, a lawyer whose 14-year-old son has insulin-dependent diabetes, ran the successful, multimillion-dollar ballot campaign to authorize the California Institute of Regenerative Medicine. He is pushing an aggressive pace for funding research, saying he wants the first grants to scientists by May.

Klein said afterward that he would reconvene the board as early as the first week of January to take up a wider agenda -- including conflict-of-interest guidelines, hiring procedures and ethics -- that was scrapped after objections were raised by public-interest lawyers. They wrote Atty. Gen. Bill Lockyer this week to say they thought too little public notice had been given.

Some at the meeting said they thought the agency had gotten off to a rocky start as a result. There was more criticism Friday from a few members of the public, who used their allotted time to urge board members to delay the election of a chairperson and vice chairperson, each of whom will serve a six-year term.

“There is a huge sum of money and a huge reservoir of hope,” said Marcy Darnovsky, associate executive director of the Center for Genetics and Society, who was part of a group that opposed the ballot measure because they thought the legislation, as written by Klein, provided too little oversight.

The agency will be largely immune from legislative controls, though Sen. Deborah Ortiz (D-Sacramento) has introduced a bill to allow some role for the Legislature despite the restrictions.

Darnovsky said her concerns have only deepened since the initiative passed, in particular about the decision by all four officials elected statewide -- Gov. Arnold Schwarzenegger, Lt. Gov. Cruz Bustamante, Treasurer Phil Angelides and Westly -- to nominate Klein, thus giving the board no choice.

Westly and Angelides, however, cast the agreement in a different light, saying the significance lay in how unusual it was.

Klein was strongly supported by numerous members of the board, who addressed their colleagues and the audience before voting.

Caltech President David Baltimore, a Nobel laureate for his work in virology, said he was not troubled that Klein had no scientific training.

“I’d like to put people’s minds a little at ease in that way,” Baltimore said. “I’ve had the opportunity to work with Mr. Klein in making the proposition responsive to the needs of institutions and the scientific community. I find him to be a man who can integrate specialized knowledge well.”

In his comments, Klein noted that the agency plans to hire a president, who will serve as the chief executive officer and main scientific advisor. He said the job would be filled after a national search.

When his election was official, many in the audience stood to applaud. His sons, Jordan, 14, and Robert, 18, were among the first to rise.

Klein first thanked the two families who were with him at the beginning: Doug Wick and Lucy Fisher, and Jerry and Janet Zucker, all of whom are movie producers who have children with juvenile diabetes.

Supporters of stem cell research here and elsewhere in the nation have repeatedly said mistakes by the new agency -- in ethics, oversight or research -- could seriously damage efforts to expand funding.

Although embryonic stem cells are widely believed to hold great promise in the understanding and treatment of such diseases as Parkinson’s, Alzheimer’s and diabetes, the work is controversial because embryos must be destroyed to create new lines of the cells.

For that reason, President Bush in August 2001 decided to limit federal funding to stem cell lines already in existence that had been taken from embryos donated by couples who used in vitro fertilization.

The work remains debated; several states ban some or all related research, and Congress is likely to again take up a ban that would include criminal and financial fines for scientists and patients who undertook or benefited from a procedure sometimes called therapeutic cloning. That is funded under the new California law.

For many there, the meeting Friday in a nearly packed auditorium at UC San Francisco marked a day of celebration and emotion -- punctuated by standing ovations for numerous decisions and statements.

The tremendous hope surrounding this effort -- something that worries some observers who note that the science is still in its early stages and cures are unlikely for years -- was underscored by some speakers.

One father, Don Reed, asked to be heard before the board got to its business.

Reed, whose son Roman was paralyzed from the neck down in a college football accident, said he had been told by doctors that nothing could help. Recently, he said, he held a rat in his hand that had been paralyzed and then was able to walk again after treatment with embryonic stem cells, a reference to work being done at UC Irvine.

“You are champions,” Reed said to board members. “You are doing the impossible with the invisible.”

In addition to Klein, the board elected Edward Penhoet to be his second in command. Penhoet co-founded biotech giant Chiron Corp., has served as dean of UC Berkeley’s School of Public Health and currently is head of the Gordon and Betty Moore Foundation.

Penhoet, who was nominated by Schwarzenegger and Angelides and supported by Klein, got 21 votes.

Several board members noted that his background in grant making, administration, science and private industry complemented Klein’s political, legal and patient advocacy experience.

Penhoet, who sits on the boards of numerous biotech companies and holds significant amounts of biotech stock, said Friday that none of those firms are engaged in stem cell research.

He said if that situation changed, he would resign from the board or place those holdings in a blind trust.

Penhoet also said he would continue his work at the Moore Foundation, and had permission to carve out large chunks of his time to dedicate to the stem cell institute’s business.

Several board members also have connections to the biotech world. Conflict-of-interest and public disclosure requirements still must be set for agency officials -- something critics say is troublesome.

Also nominated for vice chairperson were Dr. Frank Staggers, a former head of the California Medical Assn., and Joan Samuelson, a lawyer who founded the Parkinson’s Action Network and already had been appointed to the board.