California Stem Cell Funding Faces Legal Challenge

John Myers of member station KQED reports that the funding for California's new Stem Cell Research Agency may be in jeopardy. Proponents and opponents of the controversial voter initiative say the measure is poorly written and may violate the state's constitution.

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And here's another issue for the House to sort through: Should Congress revise President Bush's current restrictions on stem-cell research? This research is opposed by pro-lifers who are against the medical use of fetal tissue. In California, those opponents are now trying to block the sale of stem-cell bonds. Last November, voters in California approved these bonds to fund a new stem-cell research institute. Even stem-cell supporters think there should be changes. From member station KQED, John Myers has more.

JOHN MYERS reporting:

Almost two weeks ago, California's new Institute for Regenerative Medicine chose to make its permanent home in San Francisco. It was a day the chairman of the institution's oversight board, Robert Klein, praised as one of new beginnings.

Mr. ROBERT KLEIN (Oversight Board Chair, Institute for Regenerative Medicine): This is the renaissance for medicine, for science, in California. It starts today. Thank you.

MYERS: But while the institute may have a new home, it still doesn't have money because of a legal challenge to the $3 billion of stem-cell bonds approved by voters last fall.

Mr. TED COSTA (Executive Director, People's Advocate): We're going to find out once and for all if the California Constitution really means what it says.

MYERS: Ted Costa is executive director of People's Advocate, an anti-tax group that has filed one of two lawsuits to block the sale of the stem-cell bonds. Costa's lawsuit argues that because the new Institute for Regenerative Medicine is controlled by an oversight board of private citizens and not by public officials, then using taxpayer money for the bonds will violate California's state constitution. But Costa's critics point to his attorneys as a sign of what's really behind the lawsuit, attorneys who are all involved with a vocal pro-life organization. It's a charge Ted Costa denies.

Mr. COSTA: You will not find the word `pro-life' or will you find the word `abortion' in this lawsuit. It is simply not there.

MYERS: Costa maintains his lawsuit is focused on the wording of last November's stem-cell ballot initiative, one that he says hands over large sums of public money with no strings attached. This legal challenge to the stem-cell bonds might mean the new research institute, which is operating on a limited start-up loan from the state, would run out of money by the end of the year. Several short-term options are now being considered. The institute's president has suggested borrowing money from philanthropic organizations. And California's state treasurer, Phil Angelides, is considering going to Wall Street investors for some $200 million in short-term help.

Mr. PHIL ANGELIDES (California State Treasurer): We're going to try every reasonable avenue to see if we can't provide reasonably priced, cost-efficient, interim financing even with the litigation. It'll be a tough job, though.

MYERS: Angelides maintains that such short-term financing would not run into the same legal challenges as the bonds. But money isn't the only hurdle for California's new stem-cell research effort. One of its original champions is now pushing to modify the voter-approved initiative, only six months after it was on the ballot. That supporter is state Senator Deborah Ortiz.

State Senator DEBORAH ORTIZ (Democrat, California): You know, we have an obligation to the best that we can do to deliver on the confidence that the voters, you know, placed in us in passing this initiative.

MYERS: For example, Ortiz says the stem-cell initiative does not force the new institute's leaders to reveal any personal financial investments, investments that could pose a conflict of interest. She has introduced legislation to require that information. The legislation would also create new standards, she says, to provide taxpayers with some return on their investment.

State Sen. ORTIZ: It creates an opportunity to define what the state's interest is; in fact, to recoup either the pharmaceuticals or the therapies that are developed in a stronger and more express way.

MYERS: Ortiz's suggested changes would have to be approved by voters, just like the original initiative, and that probably would not happen until next summer at the earliest. All of this has led some advocates of stem-cell research to say they worry that the legal hurdles and legislative changes to California's new efforts could make finding real cures take that much longer. For NPR News, I'm John Myers in Sacramento.

CHADWICK: Stay with us on DAY TO DAY from NPR News.

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