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Mon, Oct-16-06, 19:01
Ex-F.D.A. Chief to Plead Guilty to Lying About Stocks
By THE ASSOCIATED PRESS
Published: October 16, 2006
Filed at 7:48 p.m. ET
Text: Criminal Information (U.S. v. Crawford)
WASHINGTON (AP) -- Former FDA chief Lester Crawford has agreed to plead guilty to charges of failing to disclose a financial interest in PepsiCo Inc. and other firms regulated by his agency, his lawyer said Monday.
The Justice Department accused the former head of the Food and Drug Administration in court papers of falsely reporting that he had sold stock in companies when he continued holding shares in the firms governed by FDA rules.
Court papers say Crawford chaired the Food and Drug Administration's Obesity Working Group while he and his wife owned shares worth at least $62,000 in soft drink and snack food manufacturer Pepsico Inc., based in Purchase, N.Y. In addition, the documents say, he held stock worth at least $78,000 in food product manufacturer Sysco Corp., based in Houston.
While he and his wife owned the stock, the panel Crawford chaired met with representatives from the packaged food industry and gave congressional testimony encouraging manufacturers to relabel serving sizes to give calorie counts greater prominence.
Crawford ''is going to plead guilty to two misdemeanors tomorrow afternoon and he is going to admit his financial disclosures had errors and omissions, mostly with his wife's continued ownership of stocks,'' said Crawford's lawyer, Barbara Van Gelder.
''At the end of the day, he owned these stocks and he will admit he owned them while he was at the FDA and he will take responsibility for that,'' said Van Gelder. She said Crawford was not disputing the government's claims in what she called a plea agreement.
Accused of making a false writing and conflict of interest, Crawford was scheduled to appear before a federal magistrate Tuesday afternoon. Each charge carries a maximum penalty of one year in prison.
The papers say Crawford failed to disclose his income from exercising stock options in Embrex Inc. of Research Triangle Park, N.C., an agriculture biotechnology company that has been regulated by FDA. Crawford had been a member of Embrex's board of directors, according to federal filings.
Crawford, a veterinarian, abruptly resigned from the FDA in September 2005 but gave no reason for his departure. He had held the top position for just two months but had been acting head of the 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 still 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 failed to report $20,000 from the sale of Embrex stock options in 2004.
Crawford's ownership of shares in Pepsico, Sysco, Embrex and the other companies was prohibited under federal regulations, since the companies are considered to be ''significantly regulated'' by the FDA.
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AP reporter Andrew Bridges contributed to this story.
By THE ASSOCIATED PRESS
Published: October 16, 2006
Filed at 7:48 p.m. ET
Text: Criminal Information (U.S. v. Crawford)
WASHINGTON (AP) -- Former FDA chief Lester Crawford has agreed to plead guilty to charges of failing to disclose a financial interest in PepsiCo Inc. and other firms regulated by his agency, his lawyer said Monday.
The Justice Department accused the former head of the Food and Drug Administration in court papers of falsely reporting that he had sold stock in companies when he continued holding shares in the firms governed by FDA rules.
Court papers say Crawford chaired the Food and Drug Administration's Obesity Working Group while he and his wife owned shares worth at least $62,000 in soft drink and snack food manufacturer Pepsico Inc., based in Purchase, N.Y. In addition, the documents say, he held stock worth at least $78,000 in food product manufacturer Sysco Corp., based in Houston.
While he and his wife owned the stock, the panel Crawford chaired met with representatives from the packaged food industry and gave congressional testimony encouraging manufacturers to relabel serving sizes to give calorie counts greater prominence.
Crawford ''is going to plead guilty to two misdemeanors tomorrow afternoon and he is going to admit his financial disclosures had errors and omissions, mostly with his wife's continued ownership of stocks,'' said Crawford's lawyer, Barbara Van Gelder.
''At the end of the day, he owned these stocks and he will admit he owned them while he was at the FDA and he will take responsibility for that,'' said Van Gelder. She said Crawford was not disputing the government's claims in what she called a plea agreement.
Accused of making a false writing and conflict of interest, Crawford was scheduled to appear before a federal magistrate Tuesday afternoon. Each charge carries a maximum penalty of one year in prison.
The papers say Crawford failed to disclose his income from exercising stock options in Embrex Inc. of Research Triangle Park, N.C., an agriculture biotechnology company that has been regulated by FDA. Crawford had been a member of Embrex's board of directors, according to federal filings.
Crawford, a veterinarian, abruptly resigned from the FDA in September 2005 but gave no reason for his departure. He had held the top position for just two months but had been acting head of the 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 still 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 failed to report $20,000 from the sale of Embrex stock options in 2004.
Crawford's ownership of shares in Pepsico, Sysco, Embrex and the other companies was prohibited under federal regulations, since the companies are considered to be ''significantly regulated'' by the FDA.
------
AP reporter Andrew Bridges contributed to this story.