Wednesday, October 18, 2006

FDA Chief Charged with Conflict

October 17, 2006
Former F.D.A. Chief Is Charged With Conflict

Lester M. Crawford, former chief of the Food and Drug Administration,
was charged yesterday with conflict of interest and lying about stock he
and his wife owned in companies the agency regulates.

Dr. Crawford, who resigned abruptly in September 2005, just two months
after his nomination had been approved by the Senate, is expected to
plead guilty in federal court in Washington today, said his lawyer,
Barbara Van Gelder.

Each of the two charges filed against Dr. Crawford, 68, is a misdemeanor
punishable by up to a year in jail, but Ms. Van Gelder said she expected
him to be fined and placed on probation.
It's his responsibility," she said, "and he accepts it."

Senior employees of the food and drug agency are prohibited from owning
shares in companies the agency regulates, and when Dr. Crawford became a
deputy commissioner in 2002, the government's charging document says,
ethics officials at the Department of Health and Human Services told him
that he and his wife would have to sell stock in a dozen regulated
companies. Those companies included several large pharmaceutical and
medical device concerns, among them Johnson & Johnson, Merck, Pfizer,
Medtronic and Boston Scientific.

Dr. Crawford and his wife, Catherine, sold their holdings in nine
companies, the government says, but retained shares in three others: the
food companies Sysco and Pepsico, and Kimberly-Clark, a maker of
consumer health care and other products.

In addition, it says, Mrs. Crawford held shares in another regulated
company, Wal-Mart, but her husband did not list those holdings in his
2002 financial disclosure.

Prosecutors also say that Dr. Crawford, a veterinarian and
pharmacologist, owned options to buy 41,500 shares in Embrex, an
F.D.A.-regulated poultry biotechnology company where he formerly served
as director. He exercised some of those options in 2003 and 2004,
earning $8,150 in one transaction and $20,627 in another. He correctly
reported those transaction on his federal tax returns but did not list
them in disclosure filings at the time or disclose the remaining,
unexecuted options he held in the company, the charges say.

The government noted that during a period when the Crawfords held shares
in Pepsico, a soft drink and snack food company, he was chairman of an
F.D.A. Obesity Working Group that among other tasks was reviewing
calorie content labeling for soft drinks. At the time, prosecutors said,
the couple held 1,400 shares of Pepsico worth at least $62,000, as well
as 2,500 shares of Sysco, which specializes in supplying food to
restaurants and institutions, worth at least $78,000.

When Dr. Crawford became acting commissioner of the agency in 2004,
reviewers at the Department of Health and Human Services, the F.D.A.'s
parent, again raised questions about his ownership of Sysco and
Kimberly-Clark shares. Responding to that query, he wrote in an e-mail
message to an ethics official at the department that "Sysco and
Kimberly-Clark have in fact been sold."

"In truth and in fact, as Crawford then knew, Crawford and/or his wife
held shares" in both Sysco and Kimberly-Clark "throughout 2003 and
2004," according to the charging document.

Dr. Crawford, now a senior staff member at the Washington lobbying and
communications firm Policy Directions, could not be reached for comment.
But his lawyer, Ms. Van Gelder, said the fact that the charges were
misdemeanors reflected Dr. Crawford's having amended his financial forms
after his departure, making a full disclosure.

"One of the things I hope comes out is that he sold the Mercks and the
pharmaceuticals," Ms. Van Gelder said. "The Syscos and Kimberly-Clark,
one wouldn't ordinarily think, 'I've got to divest myself.' You wouldn't
think Wal-Mart is in the same boat as Merck."

Dr. Crawford's rocky 18-month tenure as acting commissioner and then
commissioner was marked by a series of controversies, including the
withdrawal of the painkiller Vioxx from the market and an internal
battle over whether the agency would approve the emergency contraceptive
Plan B for over-the-counter sale.

Though his sudden resignation last fall so soon after his confirmation
appeared unusual, he offered no detailed explanation. The office of
Daniel Levinson, inspector general of Health and Human Services, told
Congress, however, that it was investigating the circumstances of the
commissioner's departure.

Records obtained through the Freedom of Information Act several weeks
later revealed that the department's ethics office had questioned Dr.
Crawford's broker in August 2005, the month before he quit.

A spokesman for Sysco said yesterday that the company had not been aware
that Dr. Crawford was a shareholder.

"We were totally unaware of it, and we really didn't have any real
regulatory matters before the agency beyond routine matters," said the
spokesman, John M. Palizza.

A spokesman for Pepsico said compliance with government regulations
concerning conflict of interest was clearly an individual
responsibility. He referred additional questions to Dr. Crawford.

Copyright 2006 The New York Times Company

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For Immediate Release:
Contact: Jeff Lieberson
October 16, 2006
202-225-6335 (office)

202-225-0817 (cell)

Hinchey Statement On Court Filing Against Former FDA Chief Crawford

Washington, DC -- Congressman Maurice Hinchey (D-NY) today released the
following statement in response to the court filing against former FDA
Commissioner Lester Crawford on charges of making a false writing and
serving with conflicts of interest. Hinchey led the call last year for U.S.
Department of Health and Human Services (HHS) Inspector General Daniel
Levinson to conduct an investigation into Crawford's sudden resignation with
a particular focus on any potential financial conflicts of interest.
Levinson initiated the investigation, which is still ongoing according to a
letter he recently sent to Hinchey.


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