Last week was a busy one for stem cell research. But amid the coverage of major technical advances, an all-too-predictable scandal erupted in California's stem cell program. The details reveal improper and potentially illegal influence on the allocation of public funds by a board member of the California Institute for Regenerative Medicine, the state body created to expend the $3 billion voters agreed to borrow and invest in research under Proposition 71.

The action was, in part, a symptom of the board's structure. Proposition 71, which created CIRM in 2004, requires that a majority of board members be representatives of the very institutions waiting in line to receive grants.

This latest revelation occurs on the heels of the announcement of a new technique for isolating fully potent stem cells, without the need for embryos, eggs or cloning. To some, this calls into question the relevance of California's enormous set-aside for embryonic stem cell research - particularly at a time of exploding deficits and tough budget cuts for state services.

The scandal began when CIRM gave initial approval for a $638,000...