CDC director resigns over financial conflicts including stock in tobacco, beer and soda companies

Jan. 31, 2018 7:02 AM PT

Reporting from Washington — The head of the Centers for Disease Control and Prevention resigned Wednesday following reports that she traded in tobacco stocks despite being the nation’s top public health official and heading an agency that has led U.S. anti-smoking initiatives for decades

Dr. Brenda Fitzgerald, whom President Trump tapped in the summer to head the CDC, purchased shares in Japan Tobacco International as well as stocks in a number of healthcare companies after taking office, according to a report this week by Politico.

The stock trading echoes the behavior of Trump’s first Health and Human Services secretary, Tom Price, who was forced to resign last year amid questions about his frequent use of charter aircraft at taxpayer expense.

While a congressman, Price also traded extensively in healthcare companies even as he pushed legislation and took other actions that affected many of those same companies.

It is not clear whether Fitzgerald, a former OB-GYN doctor and Georgia health commissioner, took any official actions that may have affected the value of her stocks.

But she had recused herself from various duties as CDC director, citing potential conflicts.

A spokesman for the Health and Human Services Department said Wednesday that Fitzgerald offered her resignation after raising the recusal issues with the incoming HHS secretary, Alex Azar.

“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,” said Matt Lloyd in a statement. “Due to the nature of these financial interests, Dr. Fitzgerald could not divest from them in a definitive time period.”

Among the companies whose stock Fitzgerald purchased last year after taking office were pharmaceutical giants Merck & Co. and Bayer, and health insurer Humana, according to financial disclosures first reported by Politico.

The stock in Japan Tobacco, a multinational that sells Winston and Camel cigarettes around the world, was valued at between $1,001 and $15,000.

Fitzgerald, though praised by some in public health after she was appointed, has maintained a relatively low profile as CDC director, particularly compared to many of her predecessors who have been outspoken champions for issues such as smoking cessation.

Dr. Tom Frieden, for example, who headed the CDC under President Obama, already was a leading national champion for cutting tobacco use and tackling obesity, both of which he had done as commissioner of the New York City Department of Health and Mental Hygiene.

Fitzgerald, in contrast, canceled her first scheduled appearance before Congress last fall to discuss the opioid epidemic, citing potential conflicts of interest because she continued to hold investments in companies involved in the public health crisis.

Those conflicts began to attract criticism last year, and the revelations about Fitzgerald’s trading in tobacco companies drew strong condemnation from consumer advocates, public health experts and others.

“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,” said Vince Willmore, a spokesman for Campaign for Tobacco-Free Kids. “The nation’s top public health official simply shouldn’t be investing in products that are the number one cause of preventable death.”

Fitzgerald’s resignation also fueled new criticism about lax ethics in the Trump administration.

“It is unacceptable that the person responsible for leading our nation’s public health efforts has, for months, been unable to fully engage in the critical work she was appointed to do,” said Washington Sen. Patty Murray, the senior Democrat on the Senate health committee. “Dr. Fitzgerald’s tenure was unfortunately the latest example of the Trump administration’s dysfunction and lax ethical standards.”

UPDATES:

9:35 a.m.: This article was updated with additional information about Fitzgerald and reaction from Murray and Willmore.

8:52 a.m.: This article was updated with staff reporting.

7:40 a.m. This article was updated with a statement from the Department of Health and Human Services.

This article was originally published at 6:55 a.m.