WSJ: Rich Guys With Causes Lack Accountability

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The Wall Street Journal

CAPITAL
By DAVID WESSEL

Rich Guys With Causes Lack Accountability
January 20, 2005; Page A2

The story of the rich man who goes into politics and spends his money to get elected is old and familiar. Once he gets into office, though, he can't do much without enlisting Congress or a state legislature. And then there is California, that font of innovation. In the latest twist in direct democracy, a rich man with a cause proposes a ballot initiative to spend taxpayer money on something the gridlocked state legislature won't back. He puts a lot of his own money into a successful campaign. When it passes, he takes charge of spending the money.

Robert N. Klein II is a Palo Alto real-estate developer whose son has juvenile diabetes. He chipped in about $3 million (of the $25 million total) for the campaign he led to get voters to OK borrowing $3 billion to finance stem-cell research. The constitutional amendment and accompanying statute won with 59% of the vote. This is the latest manifestation of a California tradition of voters deciding for themselves how to spend tax money. In 2002, then-actor Arnold Schwarzenegger led a drive to spend more on after-school care. In November, voters backed a 1% tax surcharge on incomes over $1 million to expand state mental-health programs. Both directed money through the usual state channels.

The stem-cell initiative, in contrast, creates a free-standing, grant-making California Institute for Regenerative Medicine governed by a 29-member oversight committee, appointed by elected officials and state university chancellors. The committee got the power to pick its chairman, but the ballot initiative specifies that he must have "documented history in successful stem-cell research advocacy" and should have "direct knowledge and experience in bond financing." It reads like Mr. Klein's résumé. He got the (unpaid) job and says he expects to keep it for three years or so.

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Mr. Klein -- who helped create California's affordable-housing-finance authority in the 1970s and then joined its board in the 1990s when it wasn't doing what he thought it should -- says he designed all this to insulate cutting-edge science from fickle, short-sighted politicians. "If you want predictability in funding in a new area of research where there are political issues, you have to have the ability to control the presidency, the House and Senate for a decade, and that isn't going to happen," he says.

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All this is understandable, even admirable, for a man who could easily be shopping for sports cars. But is it wise? "We should be concerned about the influence that people who write, qualify, and work to pass these initiatives have," says Elizabeth Garrett, a University of Southern California law professor. "They are not elected officials. They are not accountable. These are people who got involved because they have a lot of money."

Governance of the stem-cell institute is stirring controversy in California, mostly from groups that opposed it. But a prominent legislative supporter, Deborah Ortiz, a Sacramento Democrat, is seeking changes to assure public accountability. "A lot of the stem-cell vote was a symbolic vote against Bush's policy" on stem-cell research, says Bruce Cain, a political scientist at the University of California, Berkeley. "I don't think a lot of people read the fine print. A lot of people like the idea and don't like the implementation. I don't think this is going to go away."

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Write to David Wessel at [e-mail]

URL for this article:
http://online.wsj.com/article/0,,SB110617736807230718,00.html

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1. Code speak

"Rich guys with causes" = Wealthy who back liberal stuff. Rich guys who back conservatives are 'noble people giving back to thier country' or some such crap.