California is Greece without the Acropolis. And yet, the California Institute for Regenerative Medicine–perhaps its profligate administers fearing that the people of California will pull the plug when its ten year borrow and spend license expires–is spending desperately on research in the hope that it will have something to show for its borrowed $6 billion (including interest). From the story:
The state-funded stem cell institute decided to double the rate at which it spends taxpayer dollars as part of a strategy to produce definitive research results that can persuade voters to give it more cash. When staff members from the California Institute for Regenerative Medicine approached the Board of Directors last week with a proposal to spend $120 million on grants for six researchers, the directors poo-pooed the idea. They said it would be a much better idea to double the funding to $240 million for 12 researchers, one of whom, they hope, will find a miracle cure for a debilitating disease. The move was part of a tactic by agency leaders to foster voter enthusiasm to hand the agency billions of dollars more.
The story quotes the head profligate, Robert Klein as suggesting that we should borrow another $4 billion–that the CIRM will then spend on huge salaries, PR staffs, expensive buildings, and grants to for profit private corporations and universities with huge endowments.
Klein needs to get a clue. California is impecunious. We are broke. Our services are being slashed past the bone. Yet, for the spendthrift CIRM, it is borrow, borrow, borrow and spend, spend, spend. The time has long since come to shut this white elephant down–and I say that even though a lot of its money now goes to adult stem cell research.
August 30th, 2010 | 5:51 pm
[...] This post was mentioned on Twitter by Vince Humphreys, Stand In The Gap. Stand In The Gap said: BIOETHICS WATCH => CIRM Freely Spending Broke California’s Money http://dlvr.it/4SzSK #912 #ocra #ucot #rs #tcot #tlot #sgp [...]
August 30th, 2010 | 11:03 pm
Ah, the delicious irony of Da Governator’s deficit spending. CA was bankrupt and voted in this funding specifically for embryonic stem cell work to get around the federal restrictions on funding. I’m sure Arnold thought he’d be recognized as one of the pioneers of ESC research and money would be flowing once CA broke out of bankruptcy, but – HAHA! – now the bills will be due before too long and there’s simply no way with the economy as it is that things can be remedied. This will likely go down as one of the worst science funding projects and examples of wasteful tax spending ever. Wesley, I think I remember you posting a while back about how the majority of the money has been spent merely to establish a robust administration center for this regenerative research? Ah, well, the links are out there for people who want to read up on the epic failure… it’s almost comical.
Wesley J. Smith Reply:
August 30th, 2010 at 11:34 pm
Chris: I was involved to some degree in trying to persuade Arnold to go neutral on 71. I knew he wasn’t caring a whit about the ethics, but he had run as a fiscal conservative, and going into debt for this was bonkers. I had some very good assurances from very high places that would be the case. But Arnold wants to be liked by the right people–who hated Bush and saw this as a way to repudiate him–and so two weeks before the vote, which was then with 71 beneath 50%–he endorsed. He was popular then, and that was that. I have never forgiven him, not that that matters.
August 30th, 2010 | 11:08 pm
By the way, I should add that I’m a research scientist funded by the NIH. I understand that funding is tight and initiatives are hard to get going and be productive, so from a functional point of view, it’s sad that nothing will come from this waste, and it strikes me again (as always when I think about this debacle) that the money could have funded some really great science.
August 31st, 2010 | 9:09 am
Obviously the spending by the stem cell agency stands in marked contrast to the state’s financial condition. But your readers should remember that this was a measure that was passed by the voters of California — not the legislature and the governor. It was approved at the same time the far more dubious high speed rail bond measure was adopted. So we can lay this profligacy at the feet of the people of California, who continue to want to spend and spend as indicated by their repeated approval of mammoth bond measures. Another fact to keep in mind is that the agency does not have a giant bureaucracy, Its staff consists of less than 50 persons to oversee more than $1 billion in state spending. The number of employees will grow next year but a 6 percent limit is imposed by law on the agency’s operational budget.
Wesley J. Smith Reply:
August 31st, 2010 at 9:53 am
Yes, but there is nothing REQUIRING the money to be borrowed and spent. Moreover, the salaries, PR money, etc., is a disgrace.
August 31st, 2010 | 10:03 am
You are absolutely right. The money does not have to be spent, but the voters, in their infinite wisdom, created an agency that is free of normal budgetary oversight and can do pretty much what it pleases with the borrowed money. We really do need to pay attention to the disconnect between voters’ actions and rhetoric. They whine about excessive spending, but then approve things like the stem cell agency and the high speed rail project.
Wesley J. Smith Reply:
August 31st, 2010 at 11:12 am
Proving that you can fool some of the people some of the time. I don’t think it would pass today, and unless things change dramatically, I doubt whether it will be renewed.
August 31st, 2010 | 11:31 am
What a bunch of misinformation and distortions. An overhead rate of less than five percent is modest my any measure. We have two products that CIRM funding helped launch in clinical trials and expect several more in the next four years. We did not cost the state’s general fund one dime until January 2010 because we were paying our own interest for the first five years. We can verify that the tax revenue from our building projects alone, not counting the research projects, brings in more tax revenue than the interest payment the state is now making. We are growing the pot of money for schools, not taking money away from schools.
Our PR contracts are around $200,000 and mostly cover public education efforts, not traditional PR or hype.
Wesley J. Smith Reply:
August 31st, 2010 at 12:31 pm
Oh really? Let’s see: You are paying a part time executive $250,000 a month. http://www.firstthings.com/blogs/secondhandsmoke/2010/07/03/cirm-part-time-fat-cats-strike-it-rich-on-californians-borrowed-money/ You are paying executives in the $300,000- $500,000 range, more, in some cases, than the President of the United States. http://www.firstthings.com/blogs/secondhandsmoke/2010/03/22/california-institute-of-regenerative-medicine-pays-big-salaries-on-broke-californias-borrowed-money/ Klein works part time for $150,000 a year. CIRM has been credibly accused of covering up the money it wants to spend on crisis management. http://www.firstthings.com/blogs/secondhandsmoke/2008/02/10/borrowed-taxpayers-money-paying-for-pr-firm-in-another-proposition-71-snafu/ Then there has been the conflicts of interest and mismanagement problems, e.g., http://www.firstthings.com/blogs/secondhandsmoke/2007/12/08/more-trouble-in-proposition-71-land-cirm-conflict-of-interest-cover-up/ It has given hundreds of millions for the most expensive buildings money can buy. http://www.firstthings.com/blogs/secondhandsmoke/2008/05/07/proposition-71-the-new-gilded-age/ The arrogance, hubris, sense of entitlement, etc. of the CIRM should mean it is shut down at the expiration of its 10 year mandate. May it be so.
August 31st, 2010 | 1:03 pm
Are they spending more on research now because: 1) they have finally attracted research teams and 2) they have finally built the new buildings needed to house the new research teams – in addition to being gung-ho on results?
What about the privately funded, 3rd party audit? Doesn’t that seem like a responsible thing to do (whether the audit’s cost is appropriate is another issue)?
Can you provide evidence and data that CIRM will not be a good investment for CA?
When I was in CA, I recall reading that some economic consulting firm (Analysis Group or something like that) argued that there are long term economic benefits for CA through intellectual property (assuming the religious right, the bulk of the anti-ESC research crowd, does not shut down the science). I recall the economic models I looked at predicted returns on this front wouldn’t begin until about 15 years later. Is that too long to wait for an investment, why or why not? We’ve been waiting for Jesus to return for 100s of years – is 15 years to long?
For example, one can envision, in 15 years, a cure for XXXXX, just as children may have been cured of Batten’s disease by fetal stem cells. Such treatments could save CA $ in treatment costs, public health costs, etc. Is this worth it?
Further, I recall that Drs. Thompson and Yamanaka are now in CA. Was this due to CIRM? Will this yield dividends to CA in 15 years? Is $180K/yr too much to pay them for CA cost of living? Look at how much physicians, some of whom are quacks, get at typical public university medical schools.
The operating costs, as I recall reading, for CIRM were projected at about $250 million (for you math challenged, that’s approximately $1 out of every $25) with top levels placed at $325 million (remember, start-up funds often go towards actual resarch), including the new buildings necessary to hold the research for all the new scientists that immigrated to CA. Is the amount spent on buildings and admin operating costs significantly more than what CIRM had committed to? In other words, if CIRM said up front they will spend XXXX on buildings, why is everyone upset if they actually do what they say they will? Buyer’s remorse?
What about the matching funds obtained by private donors – once private donors saw that CA got the ball rolling and the infrastructure in place, donors were ready to start paying for actual research – is this considered in the investment value – companies have a stake in it. If I recall, the private sector was anticipating about $3 billion in tax obligations during this time – that covers half the initial investment of $6 billion.
Oh, then there are royalties – I recall these were on the order of $1 billion.
While CIRM is basically a top heavy grant distribution center, the numbers of those working at CIRM are small, yet their salaries are not.
This is a good way to get the peasants riled up, grabbing their pitchforks to go cut the large CIRM salaries, but is shutting down CIRM’s operations a good long term investment for CA? Why or why not?
http://www.nature.com/nbt/journal/v25/n5/full/nbt0507-513.html
http://www.the-scientist.com/article/home/53302/
Smith provides absolutely no data and evidence demonstrating that CIRM is a poor investment.
Is it wise to make such decisions based on emotions and rhetoric, rather than data and evidence?
Wesley J. Smith Reply:
August 31st, 2010 at 9:52 pm
David: Data and evidence? Of all the people who comment on this blog, you are one of the most ideological and emotional. That you may not recognize that says it all.
August 31st, 2010 | 1:23 pm
This might be news for some, but to rational, thinking people it isn’t.
Buildings for laboratories are expensive. Did everyone know that?
Can anyone think of several reasons why a CIRM* laboratory building is expensive?
hint… think of all the chemicals, fume hoods, electricity needed to run VERY expensive equipment, fire walls to protect projects years in the making, backup generator systems, space for large equipment, benchtop cabinetry, built in freezers and cold rooms, warm rooms, sterile rooms, etc, etc that go into labs.
It’s not like a Wall-Mart* building. Seriously. No lie.
*I have no affiliation whatsoever (that I’m aware of) with the Wall-Mart corporation or with CIRM
August 31st, 2010 | 9:11 pm
David:
Or, it could be that they’re building them on steep hillsides, hiring big-shot architects, and taking advantage of the money to refurbish academic buildings rather than go for cheaper real estate.
It’s all in the SFGate article Wesley linked, if you’d care to read it.
Wesley J. Smith Reply:
August 31st, 2010 at 9:25 pm
Indeed. When you are spending other people’s borrowed money, and when those people are bankrupt, you don’t shop Rodeo Drive. Unless you have an arrogance and sense of entitlement that knows no bounds.
August 31st, 2010 | 11:32 pm
CIRM was funded by a $3 billion bond authorized by the voters in 2004, of which reportedly it has spent about half. CIRM now wants to draw down its remaining bonding capacity for fast track research hopefully to yield medical breakthroughs that will get voters to reauthorize more funding when its bonding capacity is used up. Technically, this isn’t “waste” to spend funds CIRM is authorized to do so even though their research is predictably yielding no medical breakthroughs.
I’m not a lawyer but it seems that CIRM can not be stopped from spending without going back to the voters with a ballot initiative to suspend its funding (just as Prop 23 on the Nov. 2010 ballot proposes to suspend California’s Global Warming law).
First, it seems the voters were sold a California Dream in 2004 that funding stem cell research would result in breakthroughs for victims of paralysis or cancer.
If so, how are we now to trust any purported research breakthroughs from which the researchers future livelihoods are at stake? Quoting Juvenal, who will peer review the peer reviewers?
Stem cell research is an exercise in faith healing.
September 1st, 2010 | 5:13 pm
Wesley has such a disregard for facts that he can’t even quote himself accurately. When he states, “Oh really? Let’s see: You are paying a part time executive $250,000 a month,” the link to his own story states the salary is for six months not one month. But of course that is not accurate either. The contract for an interim VP for R&D, was to be paid on a daily rate based on actually time worked and no one expected the contract to come near the max. And yes that is a significant salary, but since he was to be helping us develop criteria for funding our first clinical trials safely, we needed that level of industry expertise and that is what it costs. It is a small investment to make sure clinical trials are conducted safely.
September 2nd, 2010 | 2:14 pm
Smith,
Were my questions too difficult for you? Or too numerous?
I’m just curious why they go unanswered.
Wesley J. Smith Reply:
September 2nd, 2010 at 3:35 pm
How do I not sound egotistical, David? Let’s chalk it up to time and interest. I am not able to spend the time to reply publicly and privately to the questions I am asked or comments that come in, as much as I appreciate the time people take to do so. I reply to some posts because I find them interesting. I don’t react well to attempts to pull my strings as if I am a puppet. And frankly, your attitude so often expressed here, does not lend itself to desire.
Links
Blogs
Find Us
Contact