In December, we argued that California's stem cell research agency should dramatically improve its transparency and clean up the blatant conflicts of interest in it operations or go the way of the dinosaurs. We are happy to report the agency finally appears poised to take steps in that direction.

The California Institute for Regenerative Medicine was created after voters passed Proposition 71 in 2004, which established $3 billion in funding for stem cell research. It is important to remember the context of that vote. The economy was in relatively decent shape -- at least compared to today -- and the federal government was actively attempting to discourage stem cell research for its own political purposes.

A Stanford student changes the media of retinal ganglion cells from a rat in the Monje Lab at Stanford University’s Lorry I. Lokey Stem Cell Research
A Stanford student changes the media of retinal ganglion cells from a rat in the Monje Lab at Stanford University's Lorry I. Lokey Stem Cell Research Building, in Palo Alto, Calif. on Friday, August 31, 2012. (LiPo Ching/Staff)

It was a great opportunity for California to get a jump into a field that was going to flourish regardless of politics. The idea behind Proposition 71 was to bring thousands of cutting-edge scientists to the state's various research centers.

To some extent that happened. But the agency's then-chairman, Robert Klein, built a protective shield around the board, and results of that were mixed. It prevented political influence from the Legislature on board appointments and funding decisions, which was wise, but it also prevented oversight to deal with conflicts of interest among board members that were obvious and identified by critics from the start.

Jonathan Thomas has now taken over, and he is a very different chairman. He recognizes the institute has to mature. He is improving transparency and public accountability. He obviously hopes the changes will enable the institute to look beyond Proposition 71 funding toward its next phase, which would mean asking the public for even more money.

Before any of that can happen, the agency must prove that it understands how to properly handle the public's money.

A critical evaluation by the prestigious Institute of Medicine, the health arm of the National Academy of Sciences, found the agency beset by conflicts of interest that compromised its integrity in awarding research grants. Of the 29-member governing board, 13 were from institutions that competed for grants.

Under Thomas' reforms, those members will not vote on the remaining $1.2 billion in grants to be distributed. While that is more blatant common sense than reform, it is a step in the right direction.

The critical report also said the agency should involve private industry to a greater extent. To advance stem cell research to the point of cures for diseases such as diabetes and Alzheimer's, private donors, partners and investors will need to be convinced of a financial return.

Researchers at Stanford, UC San Francisco and other California institutions are making breakthroughs. If the stem cell agency can establish a record as a good steward of public dollars to finance brilliant science, it can continue to play a useful role in stimulating and guiding research to bring the potential cures from stem cell research to fruition.

If it cannot do that, it will be just another expensive Tyrannosaurus rex.