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Ex-FDA chief pleads guilty over stock holdings
october 16
Reuters
WASHINGTON - Former Food and Drug Administration Commissioner Lester Crawford pleaded guilty on Tuesday to two charges stemming from his ownership of stock in companies the agency regulated.


Crawford, who resigned from the FDA last year, admitted to making false statements on financial disclosure forms and violating conflict-of-interest laws. His sentencing was set for January 22.


Each count carries a maximum fine of $100,000 and up to one year in prison, Magistrate Judge Deborah Robinson said.


Appearing in U.S. District Court for the District of Columbia, Crawford said he agreed to a plea deal with prosecutors who charged he knowingly gave inaccurate information about his or his wife's stock holdings worth tens of thousands of dollars.


"I accept full responsibility for errors and omissions that occurred on my financial reports. This was my fault, no one else's," Crawford told reporters after his court appearance.


The holdings included stock in beverage maker PepsiCo Inc. , food distributor Sysco Corp. and Kimberly-Clark Corp., which makes medical devices.


The FDA regulates much of the food supply, medical devices, drugs, vaccines, cosmetics and animal feed and medicines.


Crawford held several senior posts at the agency from February 2002 to September 2005. He was confirmed as President George W. Bush's nominee to run the agency in July 2005 but abruptly left two months later.


Breaking into tears while talking to reporters, Crawford said he valued his years at the FDA and looked forward to returning to work in the private sector.


"Nothing I have done, I hope, can be construed to affect the integrity of the Food and Drug Administration," he said.


Crawford headed an FDA Obesity Working Group, which urged soda makers early in 2004 to relabel serving sizes of sugary carbonated drinks. Prosecutors said PepsiCo and Sysco had a financial interest in the group's advice.


Assistant U.S. Attorney Howard Sklamberg said in court "there is no evidence the Obesity Working Group conclusions were altered because of the Crawfords' ownership of PepsiCo or Sysco stock."


But he added that the Crawfords continued to hold the PepsiCo, Sysco and Kimberly-Clark shares despite being told by ethics officials at the Department of Health and Human Services (HHS) that they had to be sold.


From August 2003 through June 2004, Crawford and his wife owned 1,400 shares of PepsiCo stock worth at least $62,000 and 2,500 shares of Sysco worth at least $78,000, according to court documents.


In 2004, an HHS ethics official inquired about Crawford's ownership of Sysco and Kimberly-Clark stock. In an e-mail, Crawford stated the shares were sold when they had not been, prosecutors said.


Crawford's wife also retained shares in Wal-Mart Stores Inc., also regulated by the FDA, prosecutors said.


They also said Crawford, in a 2005 statement submitted to a Senate committee, failed to disclose income from the exercise of stock options in agriculture biotechnology company Embrex Inc. in 2003 and 2004. Crawford earned $8,150 and $20,627 from the sales, prosecutors said.



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