California’s Billion-Dollar Stem Cell Initiatives End in Failure

Twenty years of false promises and white coat waste

By K. Lloyd Billingsley. He is a Policy Fellow at the Independent Institute.

"Twenty years ago, in the run-up to the 2004 election, Californians faced a vote on Proposition 71, the Stem Cell Research Initiative. The ballot measure promised life-saving cures and therapies for Alzheimer’s, Parkinson’s, and other diseases through embryonic stem cell research.

“Seventy-one will support research to find cures for diseases that affect millions of people,” said actor Michael J. Fox in an ad, “including cancer, diabetes, Alzheimer’s and Parkinson’s. Please support the effort to find cures.... It could save the life of someone you love.” Christopher Reeve also got in the act.

“My foundation supports cutting-edge research. And we are proud supporters of Prop 71,” Reeve said in the ad. “Stem cells have already cured paralysis in animals. Stem cells are the future of medicine. Please support Prop 71. And, stand up for those that can’t. Thank you.” Also on board was Republican Gov. Arnold Schwarzenegger, whose father-in-law, Sargent Shriver, was afflicted with Alzheimer’s. With this all-star lineup, the measure passed 59.5to 40.95, but there was more to it than grandiose promises.

Proposition 71 ponied up $3 billion for California researchers—nearly $300 million annually for 10 years—with $6 billion to pay back. On the institutional side, the proposition created the California Institute for Regenerative Medicine (CIRM). The prime mover was Democrat insider and real estate tycoon Robert Klein, who wrote the measure to install himself as chairman, and required a 70 percent supermajority of both houses to make any structural or policy changes.

In 2012, it emerged that CIRM was handing out more than 90 percent of its grants to institutions with representatives on its governing board. State Attorney General Kamala Harris ignored this blatant conflict of interest.

Klein also claimed that a steady stream of fees and royalties would make CIRM self-supporting. Trouble was, the state stem-cell agency reported no royalties until 2018, and only in the amount of $190,345.87. That is less than the salary of former state senator Art Torres, a non-scientist CIRM hired when a biotech professional was willing to work for no salary at all.

That same year, according to the San Francisco Chronicle, “not a single federally approved therapy has resulted from CIRM-funded science. The predicted financial windfall has not materialized.” With royalties only chump change and none of the promised cures in the offing, the institute that was supposed to be self-supporting went back to the voters. By this time celebrity support had disappeared, but CIRM bosses made a plan.

Americans for Cures, a nonprofit headed by Robert Klein floated Proposition 14, the Stem Cell Research Institute Bond Initiative, this time for $5.5 billion in general obligation bonds. As this writer twice verified, signature gatherers falsely claimed the measure sought only $1.5 billion.

As the deadline approached, Americans for Cures Vice President Don Reed began pushing for people to print out 16 pages and mail in the signatures. Secretary of State Alex Padilla ignored any fraud in the process and approved the measure for the November ballot. Proposition 14 passed by 51.09 to 48.91, a far cry from 2004.

Last year, according to MIT Technology Review, “after 25 years of hype, embryonic stem cells have yet to reach their moment.” CIRM now claims, “We have supported research that has led to a cure for severe combined immunodeficiency (SCID), a deadly immune disorder.” CIRM-funded scientists are working on a “wide variety of diseases,” including “heart disease, stroke, cancer, diabetes, Alzheimer’s and Parkinson’s disease, among others.”

In 2024, a ballpark figure for CIRM’s promised life-saving cures and therapies is zero. False promises are nothing new, but seldom have they been institutionalized in such a form, with such massive waste. If California is to conduct meaningful reform, it will have to be all about memory against forgetting."