- California voters just approved sending over $4 billion to one immunology institute under criteria that currently match only one place.
- The billionaire who chairs that one potential institute also wrote the measure and funded nearly the entire campaign.
- Meanwhile, the institute has no named director and is located in a building that won’t be complete until at least 2028.
California voters just approved an $8.4 billion bond that sets half the money aside for one immunology institute under criteria that currently match only one place. The billionaire who chairs that one potential institute also wrote the measure and funded nearly the entire campaign, all while the institute still has no named director and sits in an unfinished building.
California voters approved Proposition 38 by about 54% to 46% on Nov. 3, authorizing the state to borrow $8.4 billion for immunology and immunotherapy research, with half reserved for a single nonprofit. Taxpayers will repay the bonds from the General Fund at roughly $500 million to $600 million a year for about two decades.
While no institute has been confirmed, the criteria point to one option: the California Institute for Immunology and Immunotherapy (CIII). (RELATED: No ID to Vote, but ID for Creatine? California’s New Law Sparks Backlash)
The CIII is chaired by Gary Michelson, the same billionaire who wrote the ballot measure and funded most of the campaign. In September, UCLA Health CEO John Mazziotta, who also sits on CIII’s board, told UC regents the institute had hired three employees: a chief operating officer, a general counsel, and a scientific adviser.
An alumni page of the Sullivan & Cromwell law firm identifies Rosemary Bradley as holding both the chief operating officer and general counsel roles. The scientific adviser’s identity has not been publicly disclosed, and no director has been named.
The institute’s own milestones page lists the chief operating officer and general counsel hires as happening in March but does not name them either. Its most recent Form 990 filings, covering the year ending June 2025, list zero employees.
When asked about the limited number of CIII employees, Robin Swanson, a spokesperson on the Yes on Prop 38 campaign, told the Daily Signal that the “California Department of Public Health (CDPH) is responsible for evaluating applicants based on the measure’s eligibility criteria.”
Its own five-year business plan had called for dozens of hires by this point. The building that is supposed to house it sits at the former Westside Pavilion near UCLA and is not expected to be finished until at least mid-to-late 2028.
The state already put roughly $200 million toward buying that site. But the institute still needs roughly another $100 million in construction money, according to comments Mazziotta made to UC regents in September.
Notably, the measure never names the institute that gets the first half of the money; it just sets the rules.
Per the rules, the institute has to be a nonprofit that already existed by the start of 2025 and focuses specifically on immunology and immunotherapy research. It has to be affiliated with a University of California campus whose health system sees more than 3.5 million outpatient visits and 35,000 inpatient admissions a year.
It also needs at least 200,000 square feet of research space, at least $250 million in philanthropic commitments, and separate $50 million commitments for a rapid vaccine program and a microbiome research program.
Those rules currently point to the CIII.
A UCLA spokesperson told CalMatters that, among the nonprofits affiliated with the university, only the CIII meets them. A Yes on 38 spokesperson later said it is “very likely” that the same institute will qualify under the current criteria.
Swanson told the Daily Signal that the measure was “written to ensure a highly qualified nonprofit could receive funding.”
“We can’t speak to the specific institutes that may or may not qualify across California,” Swanson stated. “The initiative does not specifically identify an institute, and several of the statutory eligibility criteria rely on information that is not publicly available for all potentially eligible nonprofit research institutions.”
“In the event that no institution initially qualifies or submits an application, Prop 38 authorizes the California Department of Public Health (CDPH) to adjust the eligibility criteria so the program can still move forward,” Swanson added.
The measure allows the Legislature to amend it later by a two-thirds vote plus the governor’s signature, except for “the allocation and disbursement of bond proceeds.” That carve-out will essentially mean lawmakers cannot later reopen or redistribute the $4.2 billion reserved for the single institute.
The governing document for that relationship, which is a roughly 80-page affiliation agreement between CIII and UCLA, was still not fully public before voters went to the polls. In late September the No on 38 campaign sent a formal open letter to the UC Regents asking them to release it.
But UC officials responded that the estimated date for a response was Oct. 16. Since that date, portions have surfaced through public-records requests, including a 7.5% share of net revenue from commercialized intellectual property going to UCLA and details of the five-year hiring plan that has not been met.
The measure states that the institute “shall not be deemed a public agency for any purpose under state law.” That language exempts it from the California Public Records Act, the Bagley-Keene Open Meeting Act, and the Political Reform Act. Thus, the public will not have the same right to request documents, sit in on meetings, or see the same conflict-of-interest disclosures that normally apply to groups spending public money.
Swanson noted that the “selected institute is not a government entity but instead a private nonprofit research institute.” The spokesperson pointed the Daily Signal to the “rigorous and enforceable accountability requirements” that the measure establishes specifically for “a private nonprofit research institution.”
Some of the requirements highlighted by Swanson include: a “binding funding agreement” with CDPH “requiring open scientific standards, peer review and public oversight,” oversight by the Citizens’ Financial Accountability Oversight Committee, “comprehensive CDPH reviews” every five years, and public financial disclosure including annual IRS Form 990 filings.
Notably, though, it’s a sharper break from the last time California borrowed for medical research. The California Institute for Regenerative Medicine, created by Prop 71 and expanded by Prop 14, is a state agency and has been subject to all three of those laws since 2004. But Prop 38 exempts the institute from them by name.
The measure also requires the institute to issue an annual public report and to hire its own accounting firm for an independent audit each year, with the state controller reviewing the results.
Funds raised by the Yes campaign hit roughly $71 million to 72 million. Notably, Michelson and his Michelson Center for Public Policy accounted for the large majority of it. Meanwhile, the No side raised about $12,000.
The Legislative Analyst’s Office (LAO) estimates the General Fund cost at $500 million to $600 million a year for about 20 years. Total repayment is expected to run closer to $12 billion once interest is included, with any royalty return to the state, which is 10% of licensing revenue, described by the LAO as uncertain and potentially decades away.
The measure also requires that any treatments developed with the money be sold in California at 20% below the national average price. The other half of the bond money is set aside for competitive grants to California public and nonprofit institutions.
A council that includes University of California representatives and other California research institutions would award those grants. That half is not fully open either, as only institutions that hold seats on the council can effectively compete for the grants, and the council must confer with the institute before making awards. The reserved half is the part written around a single entity that currently meets the criteria.
The CIII did not respond to the Daily Signal’s request for comment.