CDC Director Resigns After Tobacco Stock Trades

By Alicia Ault
WebMD Health News

Jan. 31, 2018 -- CDC Director Brenda Fitzgerald, MD, has resigned after it was revealed that she invested in several food, drug, and tobacco companies after she began her tenure at the health agency.

The investments were not illegal, but government ethics rules require federal employees to find ways to minimize conflicts of interest, either through seeking a waiver, putting the holdings in a blind trust, selling off the holdings, or recusing themselves from matters that could affect the holdings.

Generally, federal agency nominees choose to divest, but the specifics are usually worked out between the appointee and the ethics office at the specific agency. Fitzgerald, 71, had begun -- but had not finished -- divesting when she was named to head the CDC in July 2017. The months-long process attracted scrutiny from some members of Congress in late 2017. But a new report by the news organization Politico shows that she also made new stock purchases after she took office.

"It takes a certain kind of cluelessness for a director of the Centers for Disease Control and Prevention to purchase stock in a tobacco company a month after assuming the job as the nation's top public health official," Peter G. Lurie, MD, president of the Center for Science in the Public Interest, says in a statement.

Fitzgerald was slow to sell off her holdings in the lead-up to her appointment and after, Lurie says. "Inexplicably, she decided to make matters even worse -- at a time when her existing holdings were already drawing scrutiny," he says.

"There is an untenable conflict between seeking to personally profit from tobacco use and being a credible voice on tobacco and other public health issues," Vince Willmore, vice president of communications for the Campaign for Tobacco-Free Kids, says in a statement to Medscape Medical News. "We are pleased that HHS [Health and Human Services] Secretary Azar has accepted Dr. Fitzgerald's resignation and urge him to appoint a strong leader who is committed to reducing tobacco use," he said.

According to Politico, Fitzgerald owned stock in five tobacco companies at the time she was appointed: Reynolds American, British American Tobacco, Imperial Brands, Philip Morris International, and Altria Group Inc.

Then, according to documents obtained by Politico, Fitzgerald made at least a dozen new investments in tobacco, drug, and food companies -- including Merck & Co, Bayer, Humana, and US Food Holding Co. -- after she began her leadership at the agency. She also purchased shares in Japan Tobacco a day after touring the CDC's Tobacco Laboratory, which is charged with researching potential health harms of tobacco. Politico obtained Fitzgerald's calendar and stock purchase information through a Freedom of Information Act request.

Fitzgerald sold all of her potentially troublesome investments by November 2017, Politico reported. But during the fall, she had to recuse herself from testifying at several congressional hearings because she had not fully divested. In December, Sen. Patty Murray (D-WA) wrote to Fitzgerald asking her to resolve all of her conflict of interest problems.

In a tweet after Fitzgerald's resignation, Murray said, "I repeatedly raised concerns about Fitzgerald's conflicts of interest and broad recusals from work impacting public health issues like cancer and opioids -- this is yet another example of this administration's dysfunction and questionable ethics."

The CDC chief stepped down within 10 hours of the Politico report, via an announcement from a spokesman for Alex Azar, who was just recently sworn in as the new head of the Department of Health and Human Services.

"Dr. Fitzgerald owns certain complex financial interests that have imposed a broad recusal limiting her ability to complete all of her duties as the CDC director," the statement said. "Due to the nature of these financial interests, Dr. Fitzgerald could not divest from them in a definitive time period," it continued, adding that she had resigned after discussing the conflicts with Azar.

Had Support of Medical Community

At the time of her appointment, Fitzgerald was viewed as someone who could work closely with then-HHS Secretary Tom Price, MD. Both had Georgia political ties. Price, an orthopedic surgeon and former Republican member of the House of Representatives from Georgia, was scrutinized about his stock holdings and potential conflicts of interest from the moment of his nomination.

The Senate narrowly confirmed Price. He resigned in September 2017 after it was revealed -- again, by Politico -- that he had made a number of trips on private and charter flights at taxpayer expense.

Unlike Price, who had tepid support from the medical community, Fitzgerald was seen as a good fit at the CDC.

She was Georgia's public health commissioner from 2011 until her appointment. She was known for an initiative to encourage language development in babies and for efforts to improve childhood immunization rates, to cut childhood obesity, and, ironically, to encourage people to stop smoking.

Politico reported that Anne Schuchat, MD, will act as CDC director until a new appointee is named. She is the CDC's principal deputy director and was acting director before Fitzgerald's appointment.

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