Ex-FDA Chief Pleads Guilty

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.

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, abruptly resigned from the FDA job in September 2005 but gave no reason for his decision to step down. He had held the top position for just two months but had been acting head of the regulatory agency for more than a year.

According to the Justice Department's court papers, a government ethics official inquired about Crawford's ownership of stock in several companies FDA regulates and Crawford replied in a Dec. 28, 2004, e-mail that "Sysco and Kimberly-Clark have in fact been sold." Actually, the court papers state, Crawford knew that he or his wife held shares in both.

Even though financial reporting requirements for federal officials say all income must be disclosed, Crawford failed to reveal $8,000 in income from the exercise of Embrex stock options in 2003, and also failed to report $20,000 from the sale of Embrex stock options in 2004.

At the time he was making decisions chairing the government obesity panel, Crawford and his wife owned more than $25,000 in PepsiCo shares and more than $25,000 in Sysco shares.