CA: Stem cell royalty promise just election ruse? (Prop 71)

Sac Bee ^ | 11/07/05 | Stuart Leavenworth

[NormsRevenge]

Mark Twain said it best when he commented: "There are lies, damn lies and ballot initiatives."

--snip--

One of these deceptions involves Proposition 71, the measure that created California's $3 billion stem cell research agency in 2004. In marketing this initiative, proponents said the state would receive not only miracle cures and reduced medical costs, but also up to $1.1 billion in royalties from new stem cell innovations.

Now we are learning that this promise, at best, was misleading. At worst, it was a cynical ruse.

As was entirely predictable, biotech leaders and many university leaders - key supporters of Proposition 71 - are now opposing any return of royalties to California. They want to retain such payments at their own institutions, even though taxpayers are the ones who will provide $3 billion in venture capital ($6 billion if you include the interest costs on the bonds).

Moreover, state officials have now disclosed another obstacle to any return of royalties - the Internal Revenue Service. Federal tax law prevents government entities from selling tax-exempt bonds to finance a private enterprise that feeds royalties back to its coffers. If California expects to get direct royalties, most experts agree it has to sell taxable bonds to finance research. Depending on whose estimates you believe, such bonds will add $423 million to $700 million to the interest costs of the bonds.

Amazingly, leaders of Proposition 71 - including Robert Klein II, a bond expert and developer who wrote the initiative - knew about this complication during the campaign but didn't make it public. Nor did Klein mention it to consultants he commissioned to prepare an economic analysis of Proposition 71 - one that was widely touted during the campaign.

[Brilliant]

Amazingly, leaders of Proposition 71 - including Robert Klein II, a bond expert and developer who wrote the initiative - knew about this complication during the campaign but didn't make it public.

Sounds like the media isn't doing its job in CA. The voters should not be dependent on the Proposition 71 leaders to disclose all the warts of this boondoggle. The article implies that the media did NOT know, and that shows they weren't doing their job.

[NormsRevenge]

But But ,, The media never lies..

however their omissions in reporting could be seen technically as complicity in any event and not just sloppy work...

also one may wish to blame the educational institutions that turn these dunderheads out and on the loose in a society that can only thrive and prosper on open and honest discourse on any number of vital topics we are confronted with every day.

Unfortunately in either case, in the end we all pay , or in this case, pay and pay..

[Snapping Turtle]

Our words coming to fruition.

[nickcarraway]

This article doesn't even mention the incredible legal liabilities the state is incurring, that could send this way over $6 billion. One reasons VCs don't want to back this is because of the legal liabilities.