Trump CDC Chief Quit After Investing in Tobacco While in Job

(Bloomberg) -- One of the Trump administration’s top public health-officials resigned on Wednesday amid an uproar over her investments in tobacco, the nation’s leading cause of preventable death.

The exit of Brenda Fitzgerald as the head of the Centers for Disease Control and Prevention is another black eye for the U.S. Health Department, which last year saw the departure of then-health secretary Tom Price after it was revealed that he had traveled extensively on private jets at taxpayer expense.

“Dr. Fitzgerald’s tenure was unfortunately the latest example of the Trump administration’s dysfunction and lax ethical standards,” Senator Patty Murray, the top Democrat on the Senate Health, Education, Labor and Pensions Committee, said in a statement.

Alex Azar, a former Eli Lilly & Co. executive who was sworn in as the new Health and Human Services Secretary on Monday, accepted Fitzgerald’s resignation, according to an emailed statement from Matt Lloyd, a spokesman for HHS. Fitzgerald, who took the helm of the CDC in July, was also under scrutiny for other financial conflicts that have kept her from testifying on key issues on Capitol Hill.

“Dr. Fitzgerald owns certain complex financial interests that have imposed a broad recusal limiting her ability to complete all of her duties as the CDC director,” Lloyd said. “Due to the nature of these financial interests, Dr. Fitzgerald could not divest from them in a definitive time period.”

Anne Schuchat, the principal deputy director who served as acting director before Fitzgerald was appointed, will lead the CDC on an interim basis, Lloyd said.

Schuchat will help steer the agency’s response to a particularly virulent flu season, with infections running high across much of the country. The season is shaping up to be similar to the epidemic of late 2014 and early 2015, which led to 710,000 hospitalizations and 56,000 deaths, according to the CDC.

Stock Conflicts

One of the stated goals of the CDC is to reduce tobacco use. Politico reported on Tuesday that Fitzgerald bought between $1,001 and $15,000 in Japan Tobacco shares one month into her leadership of the agency. Politico previously reported frustration among senators that Fitzgerald hadn’t been able to testify at hearings, including one on public-health threats.

According to the U.S. Office of Government Ethics, federal employees are permitted to trade stocks as long as they don’t use nonpublic information, but aren’t allowed to participate in any functions where their holdings could present a conflict.

Tom Frieden, former CDC director under President Barack Obama, defended Fitzgerald on Twitter, saying that he talked to her and believes her when she says she was unaware her financial manager had made a tobacco-company investment.

“She understands that any affiliation between the tobacco industry & public health is unacceptable, & that when she learned of it she directed that it be sold,” Frieden tweeted.

Aside from his travel, Price, the former health secretary and Georgia congressman, had been under scrutiny for trades in health-care stocks he had made while involved in crafting legislation that could affect the shares.

Price invested in privately offered shares of Innate Immunotherapeutics Ltd., an Australian drug company he learned about from Representative Chris Collins, a New York Republican who sits on the board of the company. Price invested in Innate Immuno as negotiations were under way for a bill called the 21st Century Cures Act that would help speed drug approvals. Price voted in favor of the bill when it was passed in 2016.

Fitzgerald, a board-certified obstetrician-gynecologist, previously served as commissioner of the Georgia Department of Health.

©2018 Bloomberg L.P.