Sometimes The Man From FCPA wonders if public figures lose all common sense when they step into public service. Exhibit A (this week) is that of Dr. Brenda Fitzgerald, the now former head of the Center for Disease Control (CDC). The CDC is the United States’ leading public health institute. The conflict of interest to her resignation was her investment in tobacco stocks after she became director of the CDC.
Fitzgerald claimed the purchases were made by a third-party investment advisor. Note this was not a blind trust that you might think a senior political official but her family’s regular investment advisor. For some reason after Dr. Fitzgerald found out about the investment, she was unable to extricate herself from it. Perhaps the family investment advisor was not aware Dr. Fitzgerald had been appointed as the Director of the CDC but even if the advisor was not aware, they were certainly after Dr. Fitzgerald was a medical physician. One might have assumed a Doctor of Medicine would be opposed to investment in a tobacco stock as an investment on general health principals. Or perhaps not. Reports indicate that Congress had grown tired of Dr. Fitzgerald’s inability to address a wide range of issues due to these conflicts of interest.
Dr. Fitzgerald’s imbroglio presents several lessons to be garnered for the compliance professional. The first is that you must work with your third party partners to understand your operating parameters. In the FCPA world, this means to hire representatives who will not engage in bribery and corruption, but you must also communicate any new circumstances which would impact their work for your organization. But more than even hiring and ongoing communications, you must monitor their work.
If your corporate mission is healthcare, it is always a conflict of interest to invest in tobacco stocks. One might think a Doctor of Medicine would be aware of this basic premise. But apparently not.