Ex-FDA chief to plead guilty

Crawford made profit, lied about owning stock in companies regulated by agency

October 17, 2006|By Jonathan D. Rockoff | Jonathan D. Rockoff,Sun reporter

WASHINGTON -- Former FDA Commissioner Lester M. Crawford, who was charged by federal prosecutors yesterday with lying about owning stock and options in companies regulated by the agency, will plead guilty to two misdemeanors today, his lawyer said.

Public corruption prosecutors with the U.S. attorney's office said Crawford failed to disclose tens of thousands of dollars in income from exercising options, selling stock and earning dividends in Pepsico and other companies while holding top jobs at the Food and Drug Administration.

The charges were outlined in an 11-page filing in U.S. District Court yesterday. The filing, called an information, often precedes a guilty plea.

Crawford's lawyer, Barbara Van Gelder, said he will take responsibility for "errors and omissions" in his financial disclosure reports. She attributed the mistakes to Crawford and his wife not realizing that the FDA oversaw companies in which they held stock.

"I don't think at the time they thought Kimberly-Clark, Pepsico, Sysco and Wal-Mart were regulated by the FDA, but they were," Van Gelder said. "And that's why he's pleading guilty."

The charges seemed to justify the widespread doubt over Crawford's stated reason for his sudden resignation in October 2005, just two months into his tenure as FDA commissioner.

At the time, Crawford said, "It is time, at the age of 67, to step aside." His was the shortest term as the nation's top food and drug regulator.

But Van Gelder said Crawford did not learn about an investigation until "well after" he had resigned.

A spokeswoman for prosecutors said yesterday that she did not know whether the investigation started before or after Crawford's resignation.

Each of the two misdemeanor charges carries a penalty of up to a year in prison, but Van Gelder said that under sentencing guidelines Crawford would face a total of no more than a year.

Government regulations barred Crawford, like other senior agency officials, from holding stakes in companies regulated by the FDA while he served as deputy commissioner, then acting chief and finally the nation's top food and drug regulator from February 2002 until his departure.

The regulations required Crawford to file financial disclosure forms certifying that he had no conflict of interest.

While serving as acting FDA commissioner in December 2004, Crawford lied to a government ethics official inquiring about his assets, saying that he and his wife had sold shares in Kimberly-Clark, which makes health products, and Sysco, a food manufacturer, prosecutors said.

"Sysco and Kimberly-Clark have in fact been sold," Crawford e-mailed the ethics official, according to the court filing.

Crawford also allegedly failed to disclose nearly $29,000 in income from stock and options in Embrex, an agricultural biotechnology company, in 2003 and 2004.

During those years, prosecutors said, Crawford led an FDA working group that studied the problem of obesity while owning Sysco shares worth at least $78,000 and $62,000 in stock in Pepsico, the maker of soft drinks and snack foods.

Crawford and his wife held Kimberly-Clark shares worth as much as $90,000 and Wal-Mart stock worth up to $71,000, prosecutors said. The Crawfords sold their shares in Kimberly-Clark on Aug. 18, 2005, and their Wal-Mart stock on Jan. 4, 2005, prosecutors said.

Crawford sold his Sysco stock on Oct. 25, 2004, and his wife sold hers on Aug. 31, 2005.

Neither the FDA nor the Department of Health and Human Services would comment on the charges.

Crawford's leadership of the FDA was marked by controversy. After three stints at the agency beginning in 1975, he rejoined the FDA in 2002 amid protests from liberal groups about his previous work at the National Food Processors Association and Georgetown University's Center for Food and Nutrition Policy, which the groups complained had received industry money.

During his tenure as acting commissioner, the FDA was attacked for failing to re-inspect a major flu vaccine supplier after finding contamination problems. The British government eventually shut down the plant, causing shortages of the vaccine in the United States.

The agency also endured attacks over the safety of drugs and medical devices, triggered by publicity over deaths blamed on the painkiller Vioxx. Later, as commissioner, his decision to delay approval of the morning-after birth control pill prompted criticism that politics was trumping the agency's traditional emphasis on science-based decision-making.

"He tilted toward what was good for the industry as opposed to what was good for the public," said Dr. Sidney Wolfe, director of the health research group at the organization Public Citizen.

Since January, Crawford, a veterinarian by training, has been working as a senior counsel at a lobbying firm, Policy Directions Inc., that specializes in health, food and drug issues.

Peter J. Pitts, who was associate FDA commissioner for external affairs under Crawford, described his former boss as "devoted to public service" and "unswayed by industry." Pitts said he believed that Crawford must simply have made a mistake while filling out complex financial disclosure forms.

"They are very complicated, and I could see how he made mistakes," Pitts said. "And I am sure that any mistakes he made were in the oversight category."

jonathan.rockoff@baltsun.com

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