CDC Director’s Investment in Tobacco, Drug Companies Baffles Ethics Experts
It was a financial investment in a tobacco company that helped lead to the downfall of Brenda Fitzgerald, who until Wednesday was the director of the Centers for Disease Control and Prevention.
For many in the public health community, the notion that the head of the CDC held shares of a company in an industry that has been so anathema to the agency’s mission was shocking.
But Fitzgerald also purchased shares in pharma giants Merck and Bayer after taking over the CDC—an apparent conflict of interest that also confounded government ethics experts.
That Fitzgerald had holdings that presented possible conflicts in her stock portfolio before starting as director of the CDC was a fixable problem. That she added to them after starting at the CDC last July was something else.
“This is unusual, in the literal sense of that word. This is un-usual. This is not standard operating practice,” said Georgetown University bioethicist James Giordano.
Federal law forbids senior government officials from owning, trading, or purchasing properties that pose a direct conflict of interest with their official roles, explained Craig Holman, government affairs lobbyist for Public Citizen. Fitzgerald’s purchase of stocks of companies that are impacted by CDC policies was a violation of that law, he said.
Although the CDC does not regulate the pharmaceutical industry, the agency’s policies and recommendations often have implications for drug makers.
Nominees or prospective appointees for senior government posts—the CDC director is appointed, not nominated—undergo ethics vetting before being named. Among other steps, that process involves scrutiny of their financial holdings to see if any pose a conflict of interest. If conflicts are spotted, would-be appointees outline plans to divest themselves of those problematic holdings in a signed ethics agreement.
Fitzgerald’s ethics agreement wasn’t filed until Sept. 7, 2017—two months after she started at the CDC. In August, as Politico reported, she purchased tobacco stocks and stocks in pharma giants Merck and Bayer.
“The problem with Brenda Fitzgerald is like many in the Trump administration, she was very negligent at submitting her personal financial disclosure to the Office of Government Ethics and finally worked out an ethics agreement with OGE very late in her term,” Holman said.
“So without that sort of ethics guidance from the Office of Government Ethics, and no ethics agreement signed, Fitzgerald just operated as if she were a regular citizen, trading and buying in stocks that pose a direct conflict of interest for her role as CDC director,” he said.
Holman and Giordano seemed genuinely flummoxed that Fitzgerald would buy shares in companies that might present a conflict of interest while serving as CDC director.
“That really represents, I think, a failure of an ethical compass,” Giordano said. “It is a question of credibility. And it is a question of responsible leadership.”
Tom Frieden, who preceded Fitzgerald as CDC director, said in a tweet Wednesday that she had told him she was unaware she had made an investment in a tobacco company, leaving open the possibility that the purchase of shares in Japan Tobacco, at least, was undertaken by a financial expert. (In her Sept. 7 ethics filing, Fitzgerald revealed there were a number of tobacco companies in her stock portfolio, including Philip Morris International and British American Tobacco.)
Frieden said Fitzgerald “understands that any affiliation between the tobacco industry & public health is unacceptable, & that when she learned of it she directed that it be sold.”
Still, the purchase of the tobacco and other stocks raise questions about the laxity with which the Trump administration approaches conflict of interest rules, as well as about the vetting Fitzgerald was subjected to when she was up for consideration for the CDC top job, Giordano said.
Fitzgerald had been under pressure for months for the length of time it was taking her to divest holdings that presented financial conflicts, which required her to recuse herself from some CDC decision-making. Senior Democrats in Congress complained about the fact that she had yet to testify before committees, because her conflicts of interest had not been completely resolved.
“The resignation puts the final nail in the conflict-of-interest controversies that have plagued Brenda Fitzgerald’s appointment as CDC director from the beginning,” said David Fidler, an adjunct senior fellow for global health at the Council on Foreign Relations.
“While having a sitting CDC director buy tobacco shares is bad enough on it own, this episode is yet another setback to public health at a time when multiple threats—from the flu crisis to the opioid epidemic—remain in desperate need of public health leadership, which, so far, has not been forthcoming from President Trump or any of his key appointments in this realm.”