Former FDA boss 'lied' in filings

By Gary Duncan

THE former head of America’s Food and Drug Administration was charged yesterday with lying about his ownership of shares in companies regulated by the powerful US agency.

Lester Crawford, who resigned abruptly as FDA Commissioner in September last year, giving no reason, is accused by the US Justice Department of making false statements and violating conflict of interest laws.

Prosecutors said that Mr Crawford had falsely reported to authorities that he had sold shareholdings in companies governed by FDA rules while continuing to retain the stock.

The criminal charges, filed by the Justice Department’s fraud and public corruption section, were detailed in court papers known as an "information" — legal documents that normally precede a guilty plea.

Mr Crawford was scheduled to appear before Deborah Robinson, a US federal magistrate, this afternoon.

Details of the charges accused the former FDA chief of failing to disclose income from exercising stock options in Embrex, an agricultural biotechnology group regulated by the FDA, where he had previously served on the board.

While financial reporting rules for federal officials say that all income should be disclosed, Mr Crawford allegedly failed to reveal $8,000 of income from the Embrex options in 2003, and $20,000 in 2004. The court papers also accused him of having chaired the FDA’s Obesity Working Group when he and his wife owned more than $25,000 of shares in PepsiCo, the giant US drinks and snack food maker, as well as more than $25,000 worth of stock Sysco, another food manufacturer.

Both companies could potentially have been affected by the obesity panel’s decisions and "had a financial interest" in its activities, prosecutors claim. In 2003, the panel issued recommendations encouraging makers of fizzy drinks to relabel their products.

The Justice Department also accused Mr Crawford of making false statements over his ownership of stock. It said that in 2004 a US Government ethics official had inquired about the FDA Commissioner’s holdings in several companies regulated by the FDA.

The court papers claimed that Mr Crawford had replied in an e-mail on December 28 2004 stating that shares in "Sysco and Kimberly-Clark have in fact been sold". The charges state that, in reality, Mr Crawford knew that he and his wife retained shares in both companies. Prosecutors alleged that Mr Crawford’s wife also held shares in Wal-Mart, the retailer, also regulated by the FDA.

When Mr Crawford, a veterinary surgeon, stepped down from the FDA, he had held the top post at the regulator formally for only two months, although he had been its acting head for more than a year.