October 27

Former FDA Commissioner or Wife Held Stock in FDA Regulated Area – NYT

Former FDA Commissioner or Wife Held Stock in FDA Regulated Area – NYT

Thu, 27 Oct 2005

The mystery behind the resignation of Dr. Lester Crawford seems to be about failure to divest from financail holdings in companies regualted by the FDA.

The New York Times cites Dr. Crawford’s statement to Forbes last month, “saying that he had sold all of his interest in Embrex before he went to work for the F.D.A.”

See: Forbes, Faces In The News Former FDA Chief Denies Financial Conflicts
Matthew Herper, 09.28.05

Similar conflicts of interest violations have been documented by The Los Angeles Times in a series of investigative reports focusing on the National Institutes of Health.

The culture among high government officals at the NIH and the FDA seem not wiwho just don’t seem to accept that rules prohibiting government employees from having financial ties to companies regulated by the agencies they work for, apply to them.

Contact: Vera Hassner Sharav


October 27, 2005
Ex-Head of F.D.A. or Wife Sold Stock in Regulated Area

Dr. Lester M. Crawford, the former commissioner of the Food and Drug Administration, or his wife sold shares in companies regulated by the agency in 2004, according to financial disclosure forms.

The sales may have played a role in Dr. Crawford’s sudden resignation from the agency last month after only two months as its leader.

The latest disclosure form, signed by Dr. Crawford on June 28, shows that he or his wife sold shares in 2004 in companies including the Sysco Corporation, a large food supplier; Kimberly-Clark and Teleflex Inc., which have medical-products divisions; PepsiCo Inc. and Wendy’s International, which sell food products; Wal-Mart Stores Inc., which includes pharmacies; and Embrex, an agriculture biotechnology company where Dr. Crawford was once a board member.

The value of the sales varied from $1,001 to $100,000, according to the form.

Embrex, Kimberly-Clark, Pepsico and Wendy’s are not on a form listing the Crawfords’ 2003 holdings, although that form states that the Crawfords sold shares that year in Wendy’s and Sysco valued at $1,001 to $15,000.

Dr. Crawford was quoted by Forbes.com last month as saying that he had sold all of his interest in Embrex before he went to work for the F.D.A.

Another form listing Dr. Crawford’s financial transactions in 2002 shows that he or his wife sold shares in Pepsico, Kimberly-Clark and Sysco that year. Each of those sales had values of $15,001 to $50,000.

The forms, which were recently released by the Department of Health and Human Services under a Freedom of Information Act request and were disclosed Tuesday by The Wall Street Journal, are the first documents to confirm that financial disclosure issues may have been a factor in Dr. Crawford’s abrupt exit.

A hand-written note on the Crawfords’ 2003 disclosure form, from an ethics reviewer who is unnamed and dated July 25, 2004, says additional information is needed. “Recommend selling Teleflex shares also,” it says.

A note dated Jan. 12, 2005, on the same form says that shares in Wal-Mart and Teleflex were sold.

The Senate Health Education Labor and Pensions Committee asked the inspector general of the Department of Health and Human Services to examine the circumstances surrounding Dr. Crawford’s resignation. It specifically asked that his financial reporting be examined.

Dr. Crawford’s wife, Catherine W. Crawford, has disputed reports that his resignation was related to his not fully disclosing information about his finances to the Senate. But her brother, William W. Walker III, said she had told relatives that an unintentional failure to disclose financial holdings led to the resignation.

Dr. Crawford served for three-and-a-half years as deputy commissioner, acting commissioner and commissioner of the F.D.A.

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