Larry Smarr
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When Governor Gray Davis announced last month that he had awarded $100 million of the state surplus to UCSD and UC Irvine to create one of three new California "Institutes for Science and Innovation," a customary release was issued from the university. The new institute, to be called the California Institute for Telecommunications and Information, proclaims the university, will do nothing less than "revolutionize how we live, work, and communicate.

"This institute will leverage UCSD's and UCI's complementary strengths in telecommunications, information technology, and applications with the powerful industry base along the High Tech Coast from San Diego to Irvine," UCSD chancellor Robert C. Dynes, is quoted as saying.

Robert Dynes

"For example," the release goes on, "cardiac bio-sensors may be developed to allow health care providers to remotely monitor elderly patients; and sensing devices embedded in highways and bridges will provide electronic damage reports immediately after earthquakes and other natural disasters."

"Wouldn't it be nice if you got a call on your cell phone that said, 'Hello, we thought you'd like to know that your right front brake will fail in about 100 miles'?" Dr. Larry Smarr, the institute's newly named director, told the London Guardian.

At UC Irvine, the university said, "a 'smart house' will be constructed to demonstrate how computer-controlled appliances, entertainment suites, and security systems can be operated remotely via wireless Internet links." And both UCSD and UC Irvine will get giant new buildings to house the institute, each with futuristic, "World of Tomorrow" facades.

"Each of the buildings will have public viewing areas where visitors will be able to see the research underway and exhibit galleries to explain the impact of the integrated research program," said the release. "The key applications areas to be studied include the environment and civil infrastructure; intelligent transportation; telemedicine, bioinformatics, and digitally enabled genomic medicine; and new media arts."

Warren Hellman

The awarding of the three institutes (the others went to UCLA, which intends to pursue "nanotechnology," and UC San Francisco for bio-medicine) was supposedly the result of a competition held among five UC campuses. Proposals from two other UC campuses lost out: Riverside, which wanted to study plant genetics, and Berkeley, which also wanted to pursue the study of information technology.

But since the idea of the institutes was reportedly cooked up by none other than Padres owner John Moores and Richard Lerner, head of La Jolla's Scripps Research Institute, along with Davis chief-of-staff and ex-San Diego Democratic congresswoman Lynn Schenk, UCSD's bid had always been regarded by insiders as a sure bet. In addition to owning the Padres, Moores is a venture capitalist who, after giving Davis almost half a million dollars in campaign contributions, was named by the governor to serve as a UC regent.

The institute also had the blessing of Warren Hellman, a wealthy and influential San Francisco venture capitalist and UC Berkeley alum, who is the father-in-law of Chancellor Dynes. Hellman is partnered with Moores in at least one venture, Blackbaud Software, a South Carolina company that specializes in accounting systems for charities. Dynes, in turn, has endorsed the $350 million, taxpayer-financed downtown baseball stadium proposed by Moores.

Adding to the institute's sense of inevitability was the fact that UC president Richard Atkinson, a former UCSD chancellor, was an original board member of and investor in Qualcomm, the cellular-phone giant that was founded in 1985 as a virtual outgrowth of UCSD's engineering school.

Last year, Atkinson owned more than $200 million of Qualcomm stock, according to the financial disclosure statement he is required to file. Qualcomm, which already has various technology agreements with UCSD, lobbied hard for the institute and has donated $15 million to partially underwrite its creation. Lerner was the selection panel's chairman.

Lynn Schenk

Besides Qualcomm, a number of other electronic ventures announced they had anted up almost $200 million to sponsor the institute. Other contributions included $15 million from cell-phone maker Ericsson and an undisclosed amount from Leap Wireless, a Qualcomm spinoff. Moores and Dynes both sit on the Leap Wireless board and have been compensated with company stock options.

In addition to Leap, Qualcomm, and Ericsson, other participants include IBM, Sun Microsystems, Boeing, Broadcom, Microsoft, Intersil, ST Microelectronics, and Sony. Science Applications International Corporation, a billion-dollar-plus defense contractor and high-tech vendor based in Torrey Pines, is also on the list.

"In total, UCSD and UCI have raised more than $139 million in firm industrial commitments, from 28 industrial partners," according to an institute news release. "Private donors have contributed another $32 million. We also have strong letters of support from another 16 companies with whom we are still engaged in discussions. Therefore, we expect the industrial cost-sharing number to rise considerably over the next six months."

In return for their money, according to a university website, the so-called "industry partners" will "be asked to nominate a senior executive to serve on the Industry Council." The industry council, the website notes, "will help guide our broad strategic vision for the institute. Industry engineers and scientists will be in residence; they will participate in the day-to-day research activities of the institute and offer graduate and undergraduate students valuable insights by serving as mentors to summer interns."

John Moores

An investment firm called ideaEDGE Ventures, which is listed as an institute "partner," added that "a key reason for ideaEDGE Ventures locating in San Diego is the flow of ideas and students from UCSD, which has been instrumental in establishing San Diego as the leading wireless-technology center in the United States."

But in the world of venture capital, ideas mean money, and skeptics warn that without appropriate safeguards, state taxpayers may end up giving away valuable technology to the industrialists without getting much, if anything, in return. Critics also worry that, without proper policing, serious temptation and conflicts of interest might arise for professors who own stock or who act as consultants to companies that stand to gain financially from the professors' taxpayer-sponsored research.

"I think it would be foolish to think companies will be wide-eyed idealists that will let scientists pursue whatever interesting new finding they have," Bruce Jaffee, an outspoken UC Davis professor of nematology, told the Sacramento Bee last January when Davis first announced plans for the so-called "public-private" institutes.

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