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Politics: Goldfinch will plead in FDA stem cell inquiry

By Charles Swenson
Coastal Observer

State Rep. Stephen Goldfinch said this week he will plead guilty to a misdemeanor charge in connection with the illegal sale of stem cells by a researcher at a biotechnology firm he once owned. The plea follows an investigation by the U.S. Food and Drug Administration.

“I have been assured by the investigators that my minimal role will result in a simple misdemeanor charge and probation,” he said in a statement Tuesday. He said he has not seen the charges which will come from the U.S. Attorney’s Office.

The investigation was first reported last month by the online site FITS News.

Goldfinch, a Republican, was elected in 2012 without opposition in the primary or general election to the vacant seat in House District 108. He is running for a second term and said House rules won’t require a suspension. “Probation and a misdemeanor don’t mean a lot politically,” he said.

He doesn’t plan to resign.

Goldfinch, who turned 31 last week, was a biochemistry major at The Citadel when he started a company to harvest umbilical stem cells for research. That led to a second start-up, Caledonia Consulting, that partnered with the Medical University of South Carolina.

“One of my lab techs went rogue and started selling material behind our back,” Goldfinch said.

Vincent Dammai was an assistant professor of pathology and laboratory medicine at MUSC. He used the university facilities to harvest and process stem cells for Caledonia Consulting from 2006 until it was sold in 2008. In July, Dammai pleaded guilty in Houston, Texas, to selling stem cells without FDA approval, according to the U.S. Attorney’s Office for the Southern District of Texas.

One of Dammai’s clients was the original subject of the FDA investigation, but the search for the source of stem cell material led to Caledonia Consulting.

Dammai was not permitted to harvest or process stem cells, according to the U.S. Attorney’s Office. He was authorized to conduct research of kidney cancer.

Goldfinch said Dammai was an independent contractor for Caledonia. “The FDA regulations differ from state laws and provide that partners, like myself, are responsible for their employees or independent contractors, regardless of intent,” he said.

FDA investigators told Goldfinch he would be charged with “misbranding.”

“It’s an unfortunate thing,” said Randy Hollister, the county GOP chairman. “It does appear to me that it’s somewhat of a technical violation of the law. He’s stepping up and taking responsibility for it.”

Hollister was a candidate for District 108, but withdrew in favor of Goldfinch.

Goldfinch said he spoke with the U.S. Attorney’s Office about the Dammai investigation in early 2012. Hollister said if the issue had arisen at the time it wouldn’t have affected his decision about running for the House.

The use of embryonic stem cells in research has been controversial because of ethical questions of whether the fertilized eggs constitute human life, even though fertilized in the lab. “Umbilical stem cells are different,” Goldfinch said. “I thought it was a very viable alternative. It’s blood from a baby that’s already born.”

Goldfinch and his partner sold Caledonia for $1.2 million to an Arizona company that was one of its customers. That was the same company the investigators found had bought stem cells harvested by Dammai.

Goldfinch was a second-year law student at the time. He said he went to law school with the idea of serving as corporate counsel of Caledonia. But his partner got an offer from GE to work in Tel Aviv, so they sold the company.

The misdemeanor and probation shouldn’t “create any substantial problems” for his legal career, Goldfinch said.

Hollister doesn’t believe Goldfinch will face a primary challenge next year. “There’s always a possibility of a Democrat challenge,” he said. “He’s doing a spectacular job for a freshman. It would still be very difficult for the Democrats.”

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