Ex-FDA Chief Pleads Guilty in Stock Case

By Andrew Bridges - The Associated Press

October 17, 2006

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

Crawford admitted to falsely reporting that he had sold or did not own stock when he continued holding shares in the firms governed by rules of the Food and Drug Administration. Beginning in 2002, Crawford filed seven incorrect financial reports with a government ethics office and Congress, leading to the charges.

The two charges _ conflict of interest and false reporting _ are misdemeanors and each carries a maximum penalty of one year in prison and a $100,000 fine. U.S. Magistrate Deborah Robinson set Crawford's sentencing for Jan. 22.

After admitting guilt under the terms of a six-page plea agreement, Crawford choked up outside the courthouse when he spoke briefly to reporters.

"This was my fault and no one else's and I accept full responsibility," Crawford said.

He said he had cooperated with the Justice Department since learning of its investigation in December. He asked that his guilty pleas not impugn the FDA.

"Nothing that I have done, I hope, can be construed to affect the integrity of the FDA," said Crawford, adding that he had worked at the agency four times over 30 years.

"While I value that very much, and would do it all over again," Crawford said, pausing briefly to sob before concluding: "I look forward to returning to the private sector."

Earlier in court, Robinson asked Crawford 59 questions. He offered brief replies to each, including when asked if the statement of offenses, detailed in an 11-page charging document, was accurate.

"It is," Crawford told Robinson.

As deputy, then acting commissioner and later commissioner 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.

Crawford earned nearly $42,000 in dividends or exercising stock options from illegally held shares while at FDA. Nearly $29,000 of that came from exercising stock options in Embrex Inc., where he had served as a director. The company was FDA-regulated at the time.

He and his wife also owned between $188,000 and $336,000 in shares in Pepsico Inc., Sysco Corp., Kimberly-Clark Corp. and Wal-Mart Stores Inc. Ownership of those companies also was illegal, since all are considered "significantly regulated" by the FDA.

Crawford, a veterinarian and food-safety expert, abruptly resigned from the FDA 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.

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