Alex Philippidis Senior News Editor Genetic Engineering & Biotechnology News
Conflict of Interest Concerns Raised by Purchases of Shares after Taking Agency Helm
Brenda Fitzgerald, M.D., resigned today as director of the U.S. Centers for Disease Control and Prevention (CDC).
The resignation follows months of disclosures about stock holdings by Dr. Fitzgerald in companies within industries that fall under the purview of the CDC, which terms its mission to: “Protect America from health, safety, and security threats, both foreign and in the U.S.”
Dr. Fitzgerald’s resignation was accepted by Alex M. Azar II, who took office Monday as Secretary of the CDC’s parent agency, the U.S. Department of Health and Human Services (HHS), that agency said today in a statement issued in the name of spokesman Matt Lloyd.
“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 HHS said.
“Due to the nature of these financial interests, Dr. Fitzgerald could not divest from them in a definitive time period. After advising Secretary Azar of both the status of the financial interests and the scope of her recusal, Dr. Fitzgerald tendered, and the Secretary accepted, her resignation,” the HHS statement continued. “The Secretary thanks Dr. Brenda Fitzgerald for her service and wishes her the best in all her endeavors.”
Scott H. Amey, J.D., general counsel for the Project on Government Oversight, a nonpartisan, independent nonprofit that advocates for government reforms, told GEN that Washington needs to avoid situations where agency heads have so many financial conflicts that they are prevented from running an agency.
“It makes no sense to bring people into public service who have to step out of the room every five minutes to avoid a conflict involving their stock account or a former employer,” Amey said. ” Dr. Fitzgerald's case is troubling because it shows a lack of judgment in her investments. I think the administration needs to do a better job of vetting appointees, and agency ethics officials must ensure that even the smallest conflicts of interest are reported and mitigated.
“Ethics laws and regulations are on the books, but unfortunately the process and enforcement are sometimes inadequate, and ethics work is often thankless work,” Amey added.
Matters of Perception
Conflict of interest concerns go beyond actions that are explicitly legally proscribed, into matters of perception, Graham Parker, Ph.D., assistant professor of research in the Carman and Ann Adams Department of Pediatrics at Wayne State University’s School of Medicine, told GEN.
“That’s such a broad remit that she [Dr. Fitzgerald] would have in that position. It really should put her on a footing that she’d know she should be above any kind of suspicion,” said Dr. Parker, who is editor-in-chief of Stem Cells and Development, a journal published by GEN publisher Mary Ann Liebert, Inc. “As soon as there’s a perception that somebody might be in conflict, that’s really what conflict of interest is about. It’s funny how many definitions of conflict of interest don’t talk about that.”
Dr. Parker noted that the website of his journal includes language requesting that authors disclose conflicts that might impede the evaluation of their work in a manner consistent with the integrity of the endeavor.
“I always say, you should over-disclose,” Dr. Parker said. “If it’s something that isn’t relevant, then the editor can make the decision, and everybody can walk away knowing that they’ve known everything they could possibly need to know about a situation. But under-disclosing, if then found out by the editor or someone else, always everything sounds worse, even if there was no intent. If somebody has to find it out first, then it’s always worse.”
Dr. Fitzgerald, a board-certified obstetrician-gynecologist, was appointed by Azar’s predecessor Tom Price, M.D., who resigned in September following criticism of his use of private charter flights. She took office July 7 as CDC’s 17th director, as well as administrator for the Agency for Toxic Substances and Disease Registry, succeeding Thomas Frieden, M.D., (appointed by former president Barack Obama) who resigned last year.
Dr. Fitzgerald previously served as the commissioner of the Georgia Department of Public Health (DPH) and state health officer from 2011 to 2017.
Tobacco and Pharma Shares
Dr. Fitzgerald resigned a day after Politico published a report that Dr. Fitzgerald purchased between $1,001 and $15,000 worth of shares in a tobacco company, Japan Tobacco, as well as between the same amounts each in Merck & Co., Bayer, and Humana.
In addition to the tobacco, pharma, and insurer investments, Dr. Fitzgerald also invested between $15,001 and $50,000 in US Food Holding, the parent company of a food distributor serving restaurants, healthcare, hospitality, government, and educational institutions.
The purchases occurred between July and September, all occurring after she took office as the CDC’s director. On October 26, Dr. Fitzgerald sold the Japan Tobacco shares, as well as all stock holdings higher than $1,000, Politico added.
In December, Dr. Fitzgerald told The Washington Post that she and her husband were required to retain holdings in two limited liability companies from which they could not divest themselves due to legal and contractual obligations. The LLCs are investors in Greenway Health, a health information technology company, and Isommune, a San Diego, CA, startup founded on a proprietary platform technology for the discovery of tumor-specific molecules intended for use in multiple immunotherapeutic and diagnostic programs.
Those investments—disclosed in her ethics agreement dated September 7, according to the The Washington Post—drew criticism last year from Sen. Patty Murray (D-WA), top Democrat on the U.S. Senate Committee on Health, Education, Labor, and Pensions (HELP). Sen. Murray contended that Dr. Fitzgerald’s stock holdings constituted ongoing conflicts of interest limiting her ability to perform her role and engage in key public health challenges.
“Your continued investments will prevent you from leading on critical issues that fall under [CDC’s] mission,” Sen. Murray wrote in a letter to Dr. Fitzgerald. “In order to ensure that the CDC is led by an individual who can engage on all issues under its purview, it is imperative that you resolve the issues that are currently limiting your ability to divest from these holdings.”