California Stem Cell Research Agency Will Get $14M From Bonds Sales
by Steven Ertelt
April 6, 2006
Sacramento, CA (LifeNews.com) — With its financial resources drying up and two lawsuits filed against it keeping other funds tied up in court, the California committee set up to distribute taxpayer funds for human cloning and embryonic stem cell research approved selling short-term bonds to raise some quick cash.
A finance subcommittee, chaired by state Treasurer Phil Angelides, has approved the sale of $14 million in bond anticipation notes.
The money will help the California Institute for Regenerative Medicine, set up by Proposition 71, stay solvent while the lawsuits continue.
"This is an important step forward," Robert Klein, chairman of the board, told the San Francisco Business Times.
Klein said the committee may sell as much as $50 million in short term bonds "incrementally in the near future."
According to The Argus newspaper, six organizations say they will invest in the notes, which are issued in anticipation if offering hundreds of millions in long-term bonds should the committee prevail in the lawsuits.
The newspaper reported the bonds should bring in $600,000 in interest in the first year and the two-year bonds have a maximum interest rate of five percent.
The Jacobs Family Trust, a San Diego foundation that focuses on community development, will be the largest investor at $5 million while four other foundations will spend $2 million apiece to purchase bonds. Those include the Beneficus Foundation, the William K. Bowes Foundation, the Moores Foundation and the Eli and Broad Foundation.
Blum Capital Partners, a San Francisco real estate firm, will spend $1 million, according to the newspaper.
Once the litigation has been completed, the investors will be repaid.
The state treasurer’s office said they will not make repayments, making the funding a donation, if the bonds are never sold.
Taxpayer and pro-life groups have filed lawsuits against the committee saying that it has violated state laws regarding conflicts of interest and state oversight on spending taxpayer funds.
An Alameda County Superior Court judge is expected to issue a ruling on the case soon, but both sides are expected to appeal the decision. As a result, a resolution in the case likely won’t occur until 2007 at the earliest.