No way to fund research

It’s going to take decades, perhaps, before Americans understand the results of the Obama and Bush administrations’ willingness to throw hundreds of billions of tax dollars at the nation’s economic problems with virtually no meaningful oversight. It doesn’t take an auditor to realize the real and potential level of waste, fraud, abuse and corruption going on here. That’s what happens with “free” money. In California, however, we already are learning the problems of the state’s 2004 “free money” scheme, known as Proposition 71, which provides $6 billion ($3 billion in bonds, $3 billion in interest) in tax funds to pay for stem-cell research.

It’s bad enough that such research is politically divisive, given the unresolved human-life issues at the core of the research using human embryos. From a fiscal standpoint, however, the state has thrown an enormous amount of money at a research proposition, and it did so for transparently political reasons – as a reaction to the Bush administration’s refusal to use federal funds for most stem-cell endeavors. 

Prop. 71, which passed with nearly 60 percent of the vote, established a California Institute for Regenerative Medicine, established a constitutional right to provide such research, authorized some general-fund start-up money, empowered the state government to issue general obligation bonds to pay for the project and authorized the state to pay for those bonds, according to the official summary of the initiative.

Advocates championed the potential life-saving health benefits of such research. Unfortunately, voters didn’t pay attention to critics, including fiscal watchdogs such as Tom McClintock, then a state senator and now a congressman, and John Moorlach, then Orange County’s treasurer and now a supervisor, who argued that the initiative’s fine print was rife with conflicts of interest and lacked accountability. This week, the nonpartisan and widely respected Little Hoover Commission released a report and found that the critics were warranted with many of their concerns.

The report points to widespread criticism of whether the current structure assures that money will get directed “to science that will best lead to medical treatments and cures.” We’d argue that the system is designed to assure that the money won’t go to the right places, given that it will be directed based on self-interest and politics. 

Certainly, the report’s proposals are worth considering. It details various changes in the board structure and proposes better oversight mechanisms. But we’d argue that the fundamental problem is the program itself, which is a poster child for the way interested parties can hijack the initiative process for financial gain.

The Orange County Registe