The director of the Centers for Disease Control and Prevention resigned on Wednesday, in the middle of the nation’s worst flu epidemic in nearly a decade, because of her troubling financial investments in tobacco and health care companies that posed potential conflicts of interest.
Alex Azar, the newly appointed secretary of Health and Human Services, announced the resignation of the director, Dr. Brenda Fitzgerald. An agency statement cited her “complex financial interests that have imposed a broad recusal limiting her ability to complete all her duties as the C.D.C. director.”
The statement continued: “Due to the nature of these financial interests, Dr. Fitzgerald could not divest from them in a definitive time period. After advising Secretary Azar of both the status of the financial interests and the scope of her recusal, Dr. Fitzgerald tendered, and the secretary accepted, her resignation. ”
Mr. Azar, a former executive with Eli Lilly, made the decision on his third day running the sprawling H.H.S. agency. Dr. Anne Schuchat, a veteran official with the C.D.C., was named acting director — the position she had filled before Dr. Fitzgerald took office. She has had prominent roles in many of the agency’s emergency responses to disease outbreaks and vaccine programs around the world.
The resignation was announced less than a day after Politico reported on Tuesday that Dr. Fitzgerald, 71, had traded in tobacco stocks even after taking the position at the public health agency. The tobacco trades were small: Dr. Fitzgerald bought between $1,001 and $15,000 worth of stock in Japan Tobacco in August, according to her financial disclosure forms, before she signed her ethics agreement. She sold the stock, as promised, in October.
Before assuming the post, she also had investments in major tobacco companies, including Reynolds American, British American Tobacco, Imperial Brands, Philip Morris International, and Altria Group. Those were also sold in October, along with many of her other holdings.
A former Georgia health commissioner, Dr. Fitzgerald was appointed to the federal agency last July by Tom Price, a fellow Georgian who served as Mr. Trump’s first H.H.S. secretary — until he too was forced to resign under fire, for traveling extensively on private jets and expensing more than $400,000 for those trips to the government. Mr. Price’s investments in health-related companies had also come under scrutiny while he was in government.
In a September ethics agreement, Dr. Fitzgerald said she would divest from many stocks that might pose a conflict of interest. The other investments included CVS Health, Quest Diagnostics, AbbVie, and Zimmer Biomet Holdings, among others. 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 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.
Dr. Fitzgerald pledged to avoid any C.D.C. work that would affect those holdings, drawing criticism from Democrats who said such recusals would limit her effectiveness. In December, Senator Patty Murray, the ranking Democrat on the Senate panel that oversees the agency, expressed concerns that Dr. Fitzgerald’s recusals on issues involving cancer and opioids prohibited her from dealing with two of the biggest health problems in the country.
And even as she divested from many holdings in health-related companies, some members of Congress continued to express concern that those investments could compromise her positions on a variety of agency matters.
“It is unacceptable that the person responsible for leading our nation’s public health efforts has, for months, been unable to fully engage in the critical work she was appointed to do,” Senator Murray said Wednesday. “Dr. Fitzgerald’s tenure was unfortunately the latest example of the Trump administration’s dysfunction and lax ethical standards.”
But Dr. Fitzgerald’s predecessor at the C.D.C., Dr. Tom Frieden, issued a statement that suggested the latest investments causing concern were made by a portfolio manager without Dr. Fitzgerald’s knowledge. In August, financial disclosures show she purchased stocks in several companies that might conflict with her activities at the agency, including Japan Tobacco, the drugmaker Merck, and Humana, the health insurer. The records show she then sold those and other health stocks in October.
“I have spoken with Dr. Fitzgerald and believe her when she says that she was unaware that a tobacco company investment had been made,” Dr. Frieden said. “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.”
But Craig Holman, the government affairs lobbyist for Public Citizen, the consumer advocacy group, said not knowing about the investments a manager is making on your behalf is not an excuse. “You cannot just say the manager can do whatever he or she wants to do as long as I don’t know about it,” he said. “That’s not the conflict of interest code.”
The tobacco-related investments alarmed others. “It’s astonishing that the director of the Centers for Disease Control, which plays a major role in reducing tobacco use, would purchase stock in a tobacco company,” said William B. Schultz, a former general counsel for H.H.S.
The agency has been tackling several tough issues this year, including potential budget cutbacks and a flu epidemic that claimed more lives this week and closed some schools across the country. About 80 percent of the cases this season are of the H3N2 strain, and officials said last week the rate of hospitalization among flu sufferers was particularly high this year. The agency plays a critical role in tracking the number of illnesses and deaths and helping coordinate the public health response.
Senator Lamar Alexander, Republican of Tennessee and chairman of the committee that oversees the C.D.C., said he looked forward to working with Dr. Fitzgerald’s successor to tackle a host of critical health issues. “How to turn the tide in the opioid crisis, how to prevent more flu deaths, how to be ready for the next outbreak of infectious disease or food-borne illness,” he said.
A two-time congressional candidate, Dr. Fitzgerald, an obstetrician-gynecologist, was active in Republican politics and had close ties to other prominent Georgians — among them, Newt Gingrich, the former speaker of the House, and an early adviser to President Trump.
As the state’s public health chief, Dr. Fitzgerald made fighting childhood obesity one of her highest priorities. But she drew criticism from public health officials for accepting $1 million from Coca-Cola to pay for the effort. Her program drew heavily from the soda giant’s playbook, emphasizing Coke’s contention that exercise — rather than calorie control — is key to weight loss.
By SHEILA KAPLANJAN. 31, 2018
Pam Belluck, Donald G. McNeil Jr. and Katie Thomas contributed to this article.