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Star Scientific CEO steps down; company considers changing its name

Jonnie Williams, chief executive officer of Star Scientific Inc., talks on the floor of Star Scientific Inc.'s tobacco processing facility in Chase City, Va. in 2000. (MASAAKI OKADA/ASSOCIATED PRESS)

The businessman at the heart of a federal investigation into Virginia Gov. Robert F. McDonnell (R) stepped down Friday as chief executive of Star Scientific Inc., the dietary supplement maker.

The company has also been given permission by stockholders to look at changing its name, indicating that it might ditch Star Scientific Inc. in favor of Rock Creek Pharmaceuticals Inc.

Last month, company officials announced that Jonnie R. Williams Sr. would step down as chief executive of the one-time tobacco company he helped found in 1990. The move became official with the company’s annual shareholders’ meeting, held Friday in Washington.

Williams will stay with the company for at least a year in a different role, as will Paul Perito, who stepped down Friday as chairman of Star Scientific’s board of directors.

Williams was replaced by Michael Mullan, a doctor and chief executive of the Roskamp Institute in Florida, a research facility that has conducted studies of Star’s supplement, Anatabloc, under a royalty agreement with the company.

The company has said that the change in leadership — and potentially the name — is intended to reflect a new emphasis on pharmaceuticals for an organization that exited the tobacco field in 2012 and has since been focused on Anatabloc, which it says has anti-inflammatory properties, as well as a skin cream that also contains the chemical anatabine.

The corporate makeover could also help the company distance itself after revelations that Williams provided more than $160,000 in gifts and loans to McDonnell and his family. He has told federal authorities that he provided the assistance believing that McDonnell would help the company. A criminal probe is continuing.

This month, federal prosecutors in Virginia told McDonnell that they intended to criminally charge him and his wife in connection with their relationship with Williams. But a final decision about whether to indict the first couple was put on hold after their attorneys made a last-minute face-to-face appeal to senior Department of Justice officials in Washington.

Virginia officials are also investigating whether McDonnell complied with state laws requiring financial disclosures by elected officials.

Williams is cooperating with the probe, and company officials have turned over corporate records and the results of an internal investigation.

McDonnell has apologized for the relationship but insisted that he did nothing to help Star Scientific that he would not have done for any other business in Virginia. He has also said he did not break a state law that requires elected officials to disclose gifts to them worth more than $50. The law does not impose the same requirement on family members.

Many of Williams’s gifts went to first lady Maureen McDonnell and the governor’s adult children.

Star Scientific, meanwhile, is facing lawsuits from shareholders, who allege that the company overstated Anatabloc’s promise. The company also had been the subject of a federal securities investigation but has informed investors that it does not expect that it will face any charges as a result of the probe.

Rosalind Helderman is a political enterprise and investigations reporter for the Washington Post.



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