Deborah Ortiz, California State Senator, Senate District #6

Before there was a Proposition 71, which was passed in November, 2004 by a 3-2 ratio by California voters and which will provide a $3 billion public investment in embryonic stem cell research, California State Senator Deborah Ortiz had introduced legislation in Sacramento that would have provided $1 billion in stem cell funding through the sale of revenue bonds approved by the State Legislature.

Following the failure of these plans to reach fruition, Stanford-trained lawyer and real estate developer Robert Klein (and his associates) drafted, qualified, and passed Proposition 71, spending almost $30 million dollars to do so.

While Proposition 71, the Stem Cell Initiative, was pending in the fall of 2004 as a proposed constitutional amendment and ballot initiative, with its supporters spending tens of millions of dollars to get it passed and its opponents lamenting their lack of funds with which to match the television-centered campaign of the proponents, various criticisms were leveled against many of the intricately-worded and often-convoluted provisions of the lengthy ballot proposal.

A leading critic of Proposition 71 was State Senator Tom McClintock, who, in an interview on September 16th with
California Politics Today, called it a "'self-serving sham' that will spend money California doesn’t have."

Additional criticism of Proposition 71 leveled against it during the fall, 2004, campaign season can be found at these links: Stem Cells #1, Stem Cells #2, Stem Cells #3, and Stem Cells #4.

On December 6, 2004, a little more than a month after Proposition 71 was passed by the voters of California, State Senator Deborah Ortiz (D-6th) introduced a bill, SB 18, intended to address some of the criticisms that had been leveled against Proposition 71 while it was being contested.

Senator Ortiz appeared on California Politics Today this afternoon and spoke about SB 18.

You can hear this interview with Senator Ortiz in its entirety by clicking here.

During that interview, Senator Ortiz addressed four major areas of concern that her proposed law would "supplement," this being the "legal term of art" (itself a legal term of art) referring to changes to Proposition 71 that she says the Legislature's Office of Legislative Counsel has told her are "acceptable" (not her term and not a term of art, either) modifications of the Proposition 71 initiative constitutional amendment that is renowned for the strength of the provisions written into it prohibiting changes to it.

These main areas are: the entitlement of the people of the State of California to a certain proportion of the royalties that may accrue as a consequence of bio-medical discoveries made with Proposition 71 funds and/or forms of assured access at reduced or no cost to the treatments derived from these discoveries; a further clarification of the obligations of members of the "working groups" (this IS a term of art) that will be examining and making recommendations about who will get the $3 billion in Proposition 71 money, in terms of their need to file financial disclosure documents, observe various anti-conflict of interest rules, and/or recuse themselves from certain deliberations from which they stand to benefit personality, directly or indirectly; the number of public meetings in excess of the two now required that ought to be required of the "Independent Citizens' Oversight Committee" ("ICOC") responsible for overseeing the dispersal of the $3 billion dollars, the method and amount of notice that needs to be given to the public of these meetings; and the need to assure the safety of the "patients" who will be involved in the experiments financed by Proposition 71 money.

On this last point, Senator Ortiz said that the drafters of Proposition 71 had "inadvertently" "left…open" the questions of "informed consent" (there's another one) and rules regarding the payment of (poor) women for undergoing "hyper-ovulation" treatments and egg extractions, including the issue of whether they would be required to waive their right to compensation for damages they might suffer as a result of these procedures.

Senator Ortiz did not accept the characterization of her efforts to modify Proposition 71 through legislative action that many say is strictly prohibited under the terms of Proposition 71 itself as "monumental hypocrisy," which is what her fellow California State Senator Tom McClintock called it in an interview on California Politics Today earlier in the afternoon.

Senator McClintock based his accusation on what he said were repeated instances of Senator Ortiz responding to his criticisms along just these lines in debates with assurances that Proposition 71 as written would not present any problems in these areas.

In his interview, Senator McClintock asserted his belief that SB 18 would be approved by the California Legislature handily, and that it would have no effect whatsoever on the conduct of the ICOC, which, he added, would be able to defend itself against SB 18 with some of the $3 billion dollars appropriated to it by Proposition 71.

He also said he'd be voting for it.

In his interview on California Politics Today, Senator McClintock said that if Senator Ortiz were sincere about achieving the reforms included in SB 18, she would start organizing a petition drive to put them on the ballot as an initiative with the authority to override the offending provisions of law as implemented through Proposition 71.

As can be heard in her interview, Senator Ortiz, when confronted with this challenge from Senator McClintock, counter-suggests that he and his Republican colleagues join with her to put such an initiative on the ballot without going through the signature gathering process, but rather by referring it to the voters as a proposed constitutional amendment with a 70% vote by both houses of the California Legislature.

Senator Ortiz, who the Sacramento Bee three days ago said was "laying the groundwork to make a run for statewide office [specifically, State Insurance Commissioner]," also challenged Senator McClintock to join with her in raising the money necessary to qualify and pass such a "supplemental" referendum. You can hear Senator Ortiz' comments about Senator McClintock's criticisms and the rest of her interview in its entirety by clicking here.

Also on the afternoon of December 15, 2004, California State Treasurer Phil Angelides made it unanimous when he became of the fourth of the four state constitutional officers entitled under the provisions of Proposition 71 to nominate a candidate to chair the ICOC to name Robert Klein II for that office. As mentioned above, Mr. Klein was the principal author of Proposition 71 and led the fundraising and campaign efforts that qualified and passed the measure.

You can read more about Mr. Klein's background in this press release announcing his nomination by California Governor Arnold Schwarzenegger to the position of Chair of the ICOC.

Not mentioned in that press release, but a part of a report in yesterday's San Jose Mercury News, was the fact that Mr. Klein had been involved in some complex financial dealings in Fresno in the early 1980s. According to the Mercury News:

"In 1981, Fresno County officials asked Klein [whose father was former Fresno City Manager Robert N. Klein] for help putting together a bond measure to stimulate the building industry. He arranged for the county to issue $27.8 million in low-interest loans to two companies he was closely associated with, Duncan Financial Corp. and Griffin Homes, according to the Fresno Bee.

"In 1982, the Fresno County Board of Supervisors hired Klein's financial group, Tomar Klein Financial Group, to be a consultant on a 1982 bond issue. Unknown to the supervisors, Tomar Klein became a consultant to developers taking part in the bond program, according to the Bee."

Also according to the Mercury News:

"Klein says he has no financial interest in the position [as Chair of the ICOC] -- and, in fact, would probably lose income if he took time off from his business.

"'If elected chair of the institute, I would personally pledge to not hold any biomedical stock or investment interest during the term of office,' Klein said in a statement. 'I pledge to serve the interests of California citizens, its patients and its taxpayers.'"

But, according to remarks by Marcy Darnovsky, of the Center for Genetics and Society in Oakland, as quoted in the Mercury News, Klein's elevation into a six-year term as ICOC chair "raises all sorts of questions about cronyism and `echo chamber' relationships in a field that needs to have maximum public oversight and accountability."

Ms. Darnovsky was also quoted on this subject on the San Diego Union-Tribune's SignOnSanDiego.com web site, where she said:

"The citizens of California were expecting that the committee would vote and it would be given a choice of qualified candidates that were the result of a careful search of people who could be entrusted with $3 billion in public money.

"Instead they get a coronation," Darnovsky said. "Clearly there wasn't a search for candidates."

For now, the last word on Mr. Klein's unanimous appointment to the top leadership position at ICOC comes from Jeff Sheehy, of the San Francisco patient advocacy group Survive AIDS, who was appointed to the ICOC by out-going California Senate pro tem John Burton. According to the same article from which the Darnovsky quote above was taken, on the San Diego Union-Tribune's SignOnSanDiego.com web site in an article entitled "'Coronation' of committee head on stem cell funds disturbs some," Mr. Sheehy said that it would have been healthy to have a discussion before selecting a chairman.

"I have no doubt that Bob will be an extraordinary chairman," Sheehy said. "But we should have had a choice."