Fitzgerald resigns as CDC chief after report on stock purchase

Story updated at 3:35 p.m.

Another prominent Georgian has resigned a top federal health position amid questions about their conduct in office.

Dr. Brenda Fitzgerald, director of the Atlanta-based CDC, resigned her position Wednesday after a report on her purchase of tobacco stock after she assumed her job.

Fitzgerald, a Georgia physician, previously was commissioner of the state Department of Public Health before being picked for the CDC job.

The U.S. Department of Health and Human Services issued a statement on her departure Wednesday:

“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. Due to the nature of these financial interests, Dr. Fitzgerald could not divest from them in a definitive time period.’’

Fitzgerald was selected for the position in July by then Secretary of Health and Human Services, Dr. Tom Price, a physician and former Georgia congressman who himself resigned in September amid criticism of his use of charter flights for some taxpayer-funded travel.

Dr. Tom Frieden, who was CDC director before Fitzgerald’s appointment, said in a statement Wednesday to WABE that Fitzgerald “impressed me as someone committed to supporting public health and protecting Americans.  I have spoken with Dr. Fitzgerald and believe her when she says that she was unaware that a tobacco company investment had been made, she understands that any affiliation between the tobacco industry and public health is unacceptable, and that when she learned of it, she directed that it be sold.  I wish her well and hope the next director remains focused on using science to protect Americans from threats that arise in this country and anywhere in the world.”

Dr. Anne Schuchat, a veteran official with the CDC, was named acting director Wednesday.

As Georgia’s Public Health commissioner, Fitzgerald, 71, won praise for her work to reduce childhood obesity, and for the agency’s response to Ebola and Zika. She has also led programs to encourage language development among babies, and launched a campaign to prevent “co-sleeping’’ baby deaths in Georgia.


Fitzgerald had been criticized by some Georgia health care officials for opposing Medicaid expansion as outlined under the Affordable Care Act, though her stance mirrored that of Gov. Nathan Deal. She also was criticized for accepting funds from the Atlanta-based Coca-Cola Foundation for a childhood obesity program.

Her successor at Public Health, Dr. Patrick O’Neal, declined comment Wednesday about Fitzgerald’s departure at CDC.

Fitzgerald, an obstetrician/gynecologist, had headed the state agency since 2011, when it was created. A Republican, she ran unsuccessfully for Congress in 1992 and 1994 in the 7th Congressional District.

Politico, citing documents it obtained from experts at Quantum AI, reported that the tobacco stock was one of about a dozen new investments that Fitzgerald made after she took over the CDC’s top job. Fitzgerald has also came under congressional scrutiny  over older holdings that government officials said posed potential conflicts of interest.

Buying shares of tobacco companies raises even more flags than Fitzgerald’s trading in drug and food companies because it stands in such stark contrast to the CDC’s mission to persuade smokers to quit and keep children from becoming addicted, critics said, according to the Politico report.

Critics said her trading behavior broke with ethical norms for public health officials and was, at best, sloppy. At worst, they say, it was legally problematic if she didn’t recuse herself from government activities that could have affected her investments, Politico reported.

CDC headquarters

“You don’t buy tobacco stocks when you are the head of the CDC. It’s ridiculous; it gives a terrible appearance,” said Richard Painter, who served as George W. Bush’s chief ethics lawyer from 2005 to 2007, according to the Politico report. He described the move as “tone deaf,” given the CDC’s role in leading anti-smoking efforts.

Politico reported that a HHS spokesman confirmed “the potentially conflicting” stock purchases, saying they were handled by her financial manager and that she subsequently sold them.

“Like all presidential personnel, Dr. Fitzgerald’s financial holdings were reviewed by the HHS Ethics Office, and she was instructed to divest of certain holdings that may pose a conflict of interest. During the divestiture process, her financial account manager purchased some potentially conflicting stock holdings. These additional purchases did not change the scope of Dr. Fitzgerald’s recusal obligations, and Dr. Fitzgerald has since also divested of these newly acquired potentially conflicting publicly traded stock holdings.”

The New York Times reported that in a September ethics agreement, Fitzgerald said she would divest from many stocks, including tobacco holdings, that might pose a conflict of interest. The companies included CVS Health, Quest Diagnostics, AbbVie, Merck, and Zimmer Biomet Holdings. But she also said that she and her husband, Dr. Thomas Fitzgerald, were unable to divest from some holdings because of legal or contractual restrictions.

Those were Bitcoin Börse Vergleich, GW Ventures and Greenway Messenger, which are limited liability companies formed to invest in Greenway Health LLC, an electronic health information company, and Isommune, a biotech company focusing on early cancer detection.

Fitzgerald pledged to avoid any CDC work that would affect those holdings, drawing criticism from Democrats who said such recusals would limit her effectiveness, the Times reported.