Ex-FDA chief pleads guilty to conflict of interest

Lester Crawford held onto shares in companies governed by agency

Stephen J. Boitano / AP file

Lester M. Crawford

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updated 4:38 p.m. ET Oct. 17, 2006

WASHINGTON - Former FDA commissioner Lester Crawford pleaded guilty Tuesday to conflict of interest and falsely reporting information about stocks he owned in food, beverage and medical device companies that he was in charge of regulating.

Crawford appeared before U.S. Magistrate Deborah Robinson and admitted falsely reporting that he had sold the stock when he continued holding shares in the firms governed by FDA rules.

The charges — conflict of interest and false reporting — are misdemeanors and each carries a maximum penalty of one year in prison.

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As head of the Food and Drug Administration, Crawford oversaw regulation of products that account for an estimated 25 cents of every dollar spent each year by U.S. consumers.

At the same time, Crawford, through his broker, oversaw an investment portfolio that included tens of thousands of dollars in shares in Pepsico Inc., Sysco Corp., Kimberly-Clark Corp. and other companies that posed a conflict between his personal finances and his responsibilities as head of the federal agency.

Federal regulations prohibited Crawford from owning shares in companies that are considered to be “significantly regulated” by the FDA.

Crawford, a veterinarian and food-safety expert, abruptly resigned from the FDA post in September 2005 but gave no reason for leaving. He had held the job for two months, following his confirmation by the Senate. He had been acting head of the agency for more than a year. He currently works for Policy Directions Inc., a Washington lobbying firm.

Former FDA chief Lester Crawford will plead guilty for failing to disclose a financial interest in companies his agency regulated, his lawyer said Monday.

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The Justice Department accused the former head of the Food and Drug Administration with falsely reporting that he had sold stock in companies when he continued holding shares in the firms governed by FDA rules.

Crawford “is going to plead guilty to two misdemeanors tomorrow afternoon and he is going to admit his financial disclosures had errors and omissions, mostly with his wife’s continued ownership of stocks,” said Crawford’s lawyer, Barbara Van Gelder.

“At the end of the day, he owned these stocks and he will admit he owned them while he was at the FDA and he will take responsibility for that,” said Van Gelder.

Accused of making a false writing and conflict of interest, Crawford was scheduled to appear before a federal magistrate Tuesday afternoon. Each carries a maximum penalty of one year in prison.

The papers say Crawford failed to disclose his income from exercising stock options in Embrex Inc. of Research Triangle Park, N.C., an agriculture biotechnology company. Crawford had been a member of Embrex’s board of directors, according to federal filings.