After being appointed by the Trump administration to lead the U.S. Centers for Disease Control and Prevention (CDC), director Brenda Fitzgerald reportedly bought shares in a tobacco company.
The investment came as Fitzgerald’s previous holdings were already under review.
The CDC is tasked with, among other things, reducing tobacco use in the United States. Which is why her acquisition of shares in a tobacco giant just one month into her new role as CDC director has caused some critics to question how the head of the CDC can buy tobacco stocks while simultaneously working to help Americans quit smoking.
George W. Bush’s chief ethics lawyer from 2005 to 2007, Richard Painter, was quoted by Politico, who broke the story of Fitzgerald’s questionable tobacco stock trading, as having said that buying tobacco stocks while leading the CDC is “ridiculous” and “gives a terrible appearance.”
“You don’t buy tobacco stocks when you are the head of the CDC. It’s ridiculous; it gives a terrible appearance.”
A spokesperson for the Health and Human Services Department confirmed that the tobacco stocks were purchased after Fitzgerald assumed the role of CDC director while claiming that the purchase of “potentially conflicting stock holdings” were handled by a financial manager working on behalf of Fitzgerald and that they were later sold.
“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.”
Fitzgerald, according to records disclosed as a result of the Stock Act requiring disclosures of transactions in excess of $1,000, bought between $1,001 and $15,000 worth of stock in Japan Tobacco, one of the world’s largest tobacco companies.
Potential Conflict Of Interest
Notably, while the CDC wages war on smoking, smoking cessation devices such as electronic cigarettes are on the rise. The most popular in the U.S., based on current market share, is Juul, which is owned by Japan Tobacco International (JTI). In other words, the CDC’s efforts to diminish smoking in the U.S. could result in increased interest in vaping, which in turn would benefit companies like JTI that maintain a stake in the vaping industry and those who owns their publicly traded shares.
Which is to say that if Fitzgerald had not divested herself and sold off her stake in JTI, which was acquired after she assumed the role of CDC director, then the CDC’s efforts to diminish cigarette use in the U.S., if it were to in any way result in the recommendation of vaping in place of smoking like we’ve seen in the United Kingdom with the U.K. government’s recommendation that smokers take up vaping, could result in financial benefit for JTI’s shareholders.
UPDATE: Fitzgerald has resigned from her role as director of the CDC. Her resignation comes on the heels of Politico’s widely publicized report about her acquisition of tobacco stocks a month into her tenure as CDC director.
What do you think of the CDC director buying big tobacco stock while heading the CDC and its anti-smoking efforts?