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Rep. Goldfinch Believes He’ll Remain a Lawmaker Despite Federal Charge

S.C. Rep. Stephen Goldfinch says he doesn’t believe he’ll face any disciplinary action from his House colleagues over his pending federal criminal case in connection with the harvesting of stem cells that later were sold to a Texas man posing as a U.S. doctor.

In an interview Tuesday with The Nerve, the 31-year-old freshman Republican lawmaker from Georgetown County confirmed he has been charged by federal prosecutors in Houston with one count of what court documents describe as the interstate transfer of “misbranded drugs.”

The charge carries a maximum sentence of one year in federal prison, a $100,000 fine and a year of supervised release, according to an attachment with the charging document, called an “information.” The charge was filed Nov. 26 in U.S. District Court in Houston.

Goldfinch, an attorney, told The Nerve that he “self-reported” his criminal case to S.C. House Clerk Charles Reid and Brad Wright, an attorney who works for House Speaker Bobby Harrell, R-Charleston. Goldfinch said he was informed that for him to be suspended from the House, he would have to be charged with a felony, a crime that carries a prison sentence of at least two years, or a crime of “moral turpitude.”

“It is ultimately up to the speaker, but after talking to them, it doesn’t look like it falls into any of those categories,” said Goldfinch, who was elected for the first time to the House last year.

Reid and Wright didn’t respond to written questions Tuesday from The Nerve. Contacted Tuesday by The Nerve, Rep. Kenny Bingham, R-Lexington and the House Ethics Committee chairman, said he didn’t think Goldfinch’s case could be considered by his committee because it appears to fall outside the committee’s authority under state law to investigate ethical violations involving House members.

“That has not been a role of the Ethics Committee,” Bingham said. “It’s a determination of the speaker of the House.”

Bingham said he agreed with Goldfinch’s explanation to The Nerve about the circumstances under which a lawmaker facing criminal charges can be suspended from office, citing the January 2012 suspension of Rep. Harold Mitchell, D-Spartanburg, on felony state tax evasion charges.

Mitchell, who later pleaded guilty to misdemeanor charges and was reinstated to the House, was the subject of a House Ethics Committee hearing last week into allegations of possible misuse of campaign money. The committee made no immediate findings.

Federal prosecutors in Texas allege in their “information” that from April 26, 2006, through Dec. 30, 2008, a Mt. Pleasant-based company then owned and operated by Goldfinch, called Caledonia Consulting Inc., was involved with the “distribution and sale of stem cells” that had not been approved by the U.S. Food and Drug Administration to “treat human diseases.”

The document alleges that the company during the time period “routinely” sold stem cells to co-defendant Francisco Morales of Brownsville, Texas, who “performed unapproved procedures involving stem cells.” Morales, who falsely represented he was a licensed U.S. physician, performed an unsuccessful stem-cell procedure in Mexico in 2009 on a woman suffering from multiple sclerosis after being paid $10,000 by the woman and her husband, according to his plea agreement.

Morales has pleaded guilty to his role in the case and is scheduled to be sentenced next month, court records show.

“I’ve fully cooperated (with federal authorities), and I told them I fully intend to plead guilty,” Goldfinch said Tuesday, adding he was informed his case would be transferred to a federal court in South Carolina.

‘He Hoodwinked Me’

Goldfinch stressed, though, that while he knew Morales when he owned Caledonia Consulting, he wasn’t aware of the alleged illegal activities of Morales or of co-defendant Vincent Dammai, a former assistant professor at the Medical University of South Carolina who pleaded guilty in July to a federal charge in connection with the case and is awaiting sentencing next month.

Dammai admitted that from early 2006 through December 2008 while with the university, he harvested stem cells for Caledonia Consulting and was paid $161,625, according to court papers and an FBI press release. Dammai also admitted he was not permitted under federal law to harvest or process stem cells, but rather was authorized only to conduct kidney cancer research, according to the release.

Caledonia was sold in December 2008 to co-defendant Fredda Branyon, owner of a Scottsdale, Arizona-based company called Global Laboratories, according to court papers. Caledonia Consulting was dissolved then, though Dammai later entered into a consulting agreement with Branyon, who sold stem cells harvested by Dammai to Morales, records show.

“As a result of this agreement, Dammai routinely received umbilical cord blood in South Carolina from Global Laboratories and processed stem cells from the cord blood at the Medical University (of South Carolina),” the FBI release said.

MUSC had no knowledge of Dammai’s alleged illegal activities, according to federal authorities. Goldfinch told The Nerve he also was unaware of those activities while Dammai was working under contract with his former company.

“I was the business guy,” Goldfinch said. “I was never the guy in the lab. Vincent was in the lab.”

“I trusted him,” Goldfinch added. “The guy went to church with us, and he hoodwinked me.”

Goldfinch said under federal law, “you can sell umbilical cord blood … as long as it’s for research,” adding that Dammai never provided forms required by the FDA to Morales explaining that restriction.

“Because I trusted him (Dammai), I didn’t have direct oversight over him as I should have,” Goldfinch said, though pointing out that federal prosecutors “already admitted they didn’t see any intent” on his (Goldfinch’s) part to commit a crime.

Angela Dodge, a spokeswoman in the U.S. Attorney’s Office in Houston, declined to comment on specifics of Goldfinch’s case when contacted Tuesday by The Nerve, though she confirmed in an email response that his case will be transferred to South Carolina. Goldfinch said he is expected to have an initial court appearance next week.

Reluctant Disclosure

Goldfinch, who, according to his online LinkedIn profile, earned a bachelor’s degree in biology and a master's degree in business administration from The Citadel, and received his law degree from the Charleston School of Law in 2010, said he no longer in the stem-cell business.

Asked if he had any other current businesses outside his law practice at the four-attorney firm of Boyd Goldfinch, Goldfinch said he is a minority owner of a three-partner company called Lowcountry Marine Salvage, which he described is involved with the “excavation of historic shipwrecks.” The company was registered with the S.C. Secretary of State's Office on Feb. 19, records show.

That business, however, isn’t included in his official biography on the S.C. General Assembly’s website, which lists his occupation only as “attorney.” Goldfinch said although he supports voluntary disclosure of lawmakers’ private sources of income, he thinks a law requiring it for all legislators would be a “terrible” idea, citing his part ownership of the marine company as an example.

“It puts my family at risk, and it puts my partners’ families at risk,” he said. “You could have people following you and pirating your shipwrecks.”

The larger problem with a law requiring disclosure of private income sources, Goldfinch said, is that it discourages “young, free-thinking entrepreneurs from getting into public service,” contending that those considering running for office would be less likely to do so if they believed it would risk violating confidentiality agreements involving their businesses, which he noted are common in the private sector.

“I’m breaching my confidentiality agreement by even discussing my relationship (to Lowcountry Marine Salvage),” he said, adding though, “Thankfully, I’ve gotten waivers from my partners because of all of this publicity (stemming from his criminal case).”

“It’s not that we have anything to hide,” he said. “It’s just that we’re out there trying to make a living.”

Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve on Facebook and Twitter @thenervesc.

 

Accountability Ethics General Assembly Legislation Transparency

Rep. Kenny Bingham Rep. Stephen Goldfinch House Speaker Bobby Harrell House Ethics Committee