 |
 |
Schwarzenegger loans $150 million to stem cell agency Governor tells finance director that the state cannot wait since President Bush vetoed federal bill By Rebecca Vesely, Staff Writer One day after President Bush vetoed expansion of federal funding for embryonic stem cell research, Gov. Arnold Schwarzenegger today ordered a $150 million loan to the state's stem cell agency, which has been hamstrung by litigation. Schwarzenegger wrote in a letter to his finance director that the state cannot wait to fund the promising branch of science that patients hope will cure our most devastating diseases and injuries. "California is poised to take the lead not only in this country, but all countries, on stem cell research," the governor wrote in the letter. "We cannot fall behind the nations who are making this life-saving science a priority," Schwarzenegger, a Republican who is seeking re-election this fall, has been trying to distance himself from the president on the issue. He wrote a letter to President Bush earlier this week urging him to not veto HR 810, passed by Congress on Tuesday, which would have reversed the president's 2001 order to limit federal financing of embryonic stem cell research to a small number of lines, or colonies of cells. In his first-ever veto since taking office five and a half years ago, President Bush rejected the bill Wednesday, equating the research to murder because it involves the destruction of human embryos. The California Institute for Regenerative Medicine, or CIRM, was created in 2004 by Proposition 71 as a way to thwart the federal restrictions on stem cell research. The voters approved $3 billion in bonds over 10 years towards financing stem cell research in the state. Gov. Schwarzenegger supported the measure, which had the support of 59 percent of voters. But the state has not been able to issue any bonds because of lawsuits challenging the constitutionality of CIRM, brought by taxpayer and consumer groups with ties to anti-abortion activists. Instead, CIRM has been surviving on foundation gifts and bond anticipation notes, which are essentially loans from philanthropy groups. The state has issued $14 million in the notes so far and is expected to close on another $30 million within the next month. Robert Klein, the chairman of the board overseeing CIRM, called the $150 million loan "remarkable." "California is now leading the nation with the burden of the hopes of patients on our shoulders," Klein told reporters in a conference call. "It's a leadership we take extraordinarily seriously." The general fund loan to CIRM will carry an interest rate of about 4.8 percent. It will be repayed when and if the state prevails in the lawsuits challenging the stem cell institute, said Molly Arnold, chief counsel for the state Department of Finance. The state is expected to deliver a check to CIRM within few months, Arnold said. Meanwhile, CIRM plans to issue a call for grant applications to researchers across the state. Money will go out to chosen researchers by early 2007, said Zach Hall, president of CIRM. CIRM has been holding scientific meetings over the past several months to determine how best to spend taxpayer dollars, and officials have suggested that they will fund so-called "innovation grants," or promising stem cell research not likely to get financing from other institutions, such as the federal government. CIRM has already issued $12 million in scientific training grants to leading institutions such as Stanford University and the University of California San Francisco. The $150 million loan is three times as much as the federal government spends today on embryonic stem cell research, Hall noted. "Because federal coffers have been dry, it is a general drought among researchers," Hall said. With the state stem cell agency limping along for nearly two years, some are questioning why Schwarzenegger chose to approve the loan now, citing election-year politics. "This was done in response to the veto," said Adam Mendelsohn, spokesman for the governor. "The governor felt it was critical to take action, despite anything happening in Washington." Klein defended the governor's timing, saying the state needed a clear victory in the courts, which it got in late April when an Alameda County Superior Court judge sided with the state on every count in the lawsuits. "That created a platform for action," Klein said. The state Court of Appeals is expected to take up the lawsuits by December. ---------------------------------------------------------------------- To sign-off Parkinsn send a message to: mailto:[log in to unmask] In the body of the message put: signoff parkinsn