Is this proposition a $4 billion giveaway to a billionaire-backed LA research center?

This story was originally published by CalMatters. Sign up for their newsletters.

It will appear on the November ballot as Proposition 38, which would provide $8.4 billion for cutting edge immunology research and cures for heart disease, cancer and Alzheimer’s, as well as other diseases that may be vanquished with immunotherapies.

Included in that is more than $4 billion for one, unnamed institute. The legal language behind the proposition gives no outward indication where that $4 billion would go other than pages of oddly specific language that outlines the parameters the lucky recipient must meet to qualify for the windfall.

That might not mean much to the average voter who is trying to parse 14 propositions as they fill out their ballots.

But a CalMatters analysis shows that the ballot language criteria were tailored in a way that very likely excludes all but one institute in the entire state: the California Institute for Immunology and Immunotherapy, whose prominent donor and co-founder is the chief backer of the proposition.

The analysis raises the question of why the framers took such care to construct a highly specific set of criteria that seemingly points to a single eligible institute without naming it in the bond.

“It is very clearly designed to support a specific nonprofit,” said Sarah Hill, a professor of political science at Cal State Fullerton who studies California’s ballot process. She said Prop. 38’s language is “oddly specific with numbers,” which on its own should raise the suspicion of voters.

“Why is it just this one institute that you have designated that’s going to get half the money?” she asked, posing a question she believes voters too will wonder.

The split design of the bond measure might also trouble voters, Hill added. As written, the bond measure would mete out more than $4 billion to one unnamed institute and over $4 billion to select nonprofit and public university researchers who apply for grants on a competitive basis. 

It’s as if the bond backers are saying, “it’s OK that some of it is going to a specific nonprofit because the rest is much broader, much more general,” Hill said. “They’re trying to get people to focus there, but would half of the money still be designated for one nonprofit? Essentially, yes.”

Hill doesn’t know why the bond measure’s backers are hopeful it’ll pass. One possible reason she gave: Enough voters won’t scrutinize this thoroughly and they’ll support it because it promotes medical research into recognizable diseases. 

“They’re hoping the way this goes, the voters will just think it sounds nice, which sometimes works,” she added.

There’s recent history that a confusing ballot measure targeting just one entity passes, albeit barely. In 2024 voters approved Proposition 34 by 50.9%. It placed limits on how health care providers spend money. Never explicitly mentioned in the measure’s text was that it appeared to apply to only one organization: the AIDS Healthcare Foundation.

Backer of bond is also co-founder of immunology institute

The billionaire co-founder of the California Institute for Immunology and Immunotherapy, Gary K. Michelson, is one of the two ultrawealthy chief backers of Proposition 38. The institute first became a nonprofit in 2022. Michelson has given it at least $120 million since then. Michelson is the board chair of the institute, which is housed at a research center owned by UCLA. 

Prop. 38’s language allocates half the bond money to one unnamed nonprofit that must meet very specific criteria: 

• It’s a nonprofit founded before 2025;
• It focuses on immunology and immunotherapy research rather than research broadly;
• It’s affiliated with a University of California campus with a medical center that serves a minimum number of patients. Currently only UCLA meets that threshold; 
• It must meet a minimum square footage requirement for the size of the research institute;
• It received a minimum dollar amount in donations from funders, including for specific research endeavors. 

A UCLA spokesperson, Phil Hampton, confirmed that among all nonprofit entities affiliated with UCLA, only the California Institute for Immunology and Immunotherapy could satisfy the stipulations of Prop. 38. 

The website supporting the proposition touts it as an effort to award grant dollars to scientists working on drug therapies for incurable diseases, but makes no mention of the California Institute for Immunology and Immunotherapy as a likely recipient of half the bond revenue. Michelson and a nonprofit that he founded, the Michelson Center For Public Policy, donated at least $8.2 million to the Yes on Proposition 38 campaign. Another campaign donor and institute co-founder, Meyer Luskin, has given at least $5 million.

A former science research administrator publicly opposes the proposition. Robert Kaplan was an associate director at the federally funded National Institutes of Health — the world’s largest public funder of biomedical research. He said concentrating half the funding to one unnamed institute is unfair. “There is a lot of talent in immunology, immunotherapy research in California,” he said in an interview. “All the institutions are scrambling, and so tracking a huge portion of it to one institution, I think, is a bad idea.” 

Kaplan also worries the bond measure is too focused on one discipline —immunotherapy — at the expense of a wider array of biomedical research. He’s currently a senior scholar at the Stanford University School of Medicine’s Clinical Excellence Research Center.

The Michelson Center for Public Policy, where Michelson is the director, has given between $1,000 and $9,900 to CalMatters.

The potential for cures through immunotherapies is huge because most diseases involve the immune system, the bond measure backers say. California science research has been rocked by funding cuts ordered by the White House that led to hundreds of cancelled federal grants. While many of those grants were restored, the Yes on Proposition 38 campaign says ongoing federal funding instability necessitates state investment in immunology and immunotherapies.

Should Prop. 38 pass, bond payments will cost taxpayers $500 million annually for 25 years, bringing the cost of the $8.4 billion bond to more than $12 billion, according to the Legislative Analyst’s Office. The office said costs to the state may be less if the drug therapies developed through the bond’s research funding generate profits that are then routed back to California’s coffers.

What bond backer says

CalMatters presented its findings to the The Yes on 38 campaign. In a lengthy email response, Claudia Briggs, the campaign’s spokesperson, said Prop. 38’s language isn’t uniquely tailored to the California Institute for Immunology and Immunotherapy. She defended the detailed eligibility criteria written into the bond proposition.

“We wrote the measure to ensure a highly qualified nonprofit could receive funding,” she wrote. “We can’t speak to the specific institutes that may or may not qualify across California.”

Briggs wrote that the eligibility criteria were “intentionally designed to ensure that whichever institute is selected is prepared to accelerate lifesaving research immediately while maintaining the highest standards of scientific quality, accountability, and stewardship of public funds.”

She explained that the eligibility criteria were crafted to “ensure the selected institute is primarily focused on immunology and immunotherapy research, already has significant resources before receiving bond funds, has an adequate physical facility to accommodate multiple labs and research programs, and has an existing close working relationship with at least one UC campus in order to establish the foundation for the cross-collaboration that will be important to the success of the measure.”

Drugs created through research funded by the bond would have to be discounted at 20% for California residents and 10% of any revenue from the drugs developed through bond-funded research would go back to the state’s general fund. If the revenues repay what the state spent on the bond and there’s money left over, the spare cash would return to the special account supporting the goals of the bond. 

The bond measure language says that if no institute qualifies, the California Department of Public Health can adjust the criteria to select a winning institute. 

How the bond seemingly points to one institute

The bond proposition language says that the institute receiving the $4.2 billion must be affiliated with a University of California campus housing a medical center with more than 3.5 million outpatient visitors and at least 35,000 inpatient admissions.

According to the UC’s latest fiscal audit, only the UCLA medical center and its affiliated sites registered more than 3.5 million outpatient visits in 2025, with 4.1 million visits. UC San Francisco came in second with 3.4 million visits. UCLA’s website says its medical system admits at least 46,000 people for inpatient care.

Based on that criteria, only an institute affiliated with UCLA is presently eligible for the $4.2 billion fund. 

The bond measure also requires that the research entity measures at least 200,000 square feet and has a “primary” purpose of “conducting research in the fields of immunology and immunotherapy.” Press releases from 2024 indicate that the institute will occupy between 360,000 and 500,000 square feet of space on UCLA-owned property. 

The institute’s stated purpose is to be an “invention factory” for “life-saving drugs, vaccines, diagnostics” and to “end disease as we know it within our lifetime.” It initially received $200 million in support from the state budget that helped to secure the UCLA research space. 

One of the other requirements of Prop. 38 is that the nonprofit receiving the $4.2 billion be an entity that’s received at least $250 million in philanthropic support. The California Institute for Immunology and Immunotherapy has received a reported $250 million. 

Another bond measure requirement is that top officials from the affiliated UC campus sit on the unnamed institute’s board. Four top UCLA administrators are listed on the California Institute for Immunology and Immunotherapy’s board of directors, including the campus chancellor, Julio Frenk, and the school’s vice chancellor for research, Roger Wakimoto. The institute’s webpage, labeled “Board of Directors,” lists the senior UCLA personnel as “UCLA Board of Directors.” At least four UCLA officials must sit on the institute’s fiduciary board, according to a 2023 term sheet of the affiliation agreement between UCLA and the institute. The UCLA personnel are named as directors in the institute’s most recent Form 990 tax filing.

Prop. 38 is highly specific about two donations that must be at least $50 million each that seem to only apply to the California Institute for Immunology and Immunotherapy. The bond language says one donation is to support “a rapid vaccine development program” and the other supports “a microbiome research program.”

Michelson and his wife donated $50 million to two research programs with near-verbatim descriptions that match the bond language as part of their $120 million contribution to the institute, according to a press release. The microbiome research will be conducted in collaboration with the UCLA Goodman-Luskin Microbiome Center, which Luskin and his wife helped establish through a $20 million donation they made with another couple.

Other grants limited to select researchers

While an unnamed institute is to receive half the money from Prop. 38, the other half will be meted out to a narrow array of public and nonprofit-based researchers in California through a competitive grant application process. 

A council selected by the chancellors of seven of the 10 UC campuses, officials from other universities and nonprofit researchers will select the winning grant proposals. The three UCs excluded are UC Merced, UC Santa Barbara and UC Santa Cruz. The winning proposals must be specifically in the areas of immunology and immunotherapy and can only come from employers who are represented on the council. 

These grant winners must maintain a close relationship with the institute chosen to receive half the bond money. 

That institute will help decide which projects led by other nonprofits are funded. The bond language says the “council shall confer with the institute … in making final decisions regarding the funding of grant proposals.”

The winning applicants must also all offer the institute “the opportunity to substantially participate in and collaborate on any clinical trials conducted as part of the funded research.” 

The bond language extends that opportunity as well to the UCLA campus by name.

Asked why UCLA has a privileged role in conducting research funded by the bond money, Briggs, the spokesperson for Yes on 38, cited UCLA’s status as the largest health facility network in the UC system that “provides more than 3.5 million outpatient clinical visits each year.”

And by being in Los Angeles, “it has immediate access to the state’s largest and most diverse population center and potential medical patient base.”

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