How stupid...

Why the CDC director had to resign

Brenda Fitzgerald's departure quickly followed the arrival of HHS Secretary Alex Azar.

By ADAM CANCRYN and JENNIFER HABERKORN

Health and Human Services Secretary Alex Azar had planned to send a clear message to Congress and his new boss in the White House that he would not tolerate ethically questionable behavior.

That opportunity came faster than expected after POLITICO reported Tuesday that the director of the Centers for Disease Control and Prevention had traded in tobacco stocks while she led the agency.

Less than 48 hours after being sworn in, Azar accepted the resignation of CDC Director Brenda Fitzgerald amid questions about her judgment and conflicts of interest.

Fitzgerald’s purchase of shares in tobacco, drug and food companies while serving as the nation’s top public health official and her inability to divest other holdings kept her from working on key health issues and were exactly the kind of distractions Azar vowed to eliminate.

“Alex has a really low tolerance for drama,” a person familiar with Azar’s thinking said. “He wants the president to look at HHS and say, ‘This is my workhorse. This is the place where I’m getting stuff done.’”

After a meeting with the CDC’s senior leadership early Wednesday, Fitzgerald submitted her resignation, according to a source familiar with the matter. An HHS spokesman said Azar accepted it, but it is unclear whether he demanded it. Rank-and-file staffers didn’t know about the decision until after HHS issued a news release later in the morning.

Sources inside HHS and the CDC say there were several reasons to believe Azar couldn’t stand for any more public relations problems in his agency. Fitzgerald’s lingering problem with an ethics recusal — she wouldn’t do work on cancer detection or some aspects of the opioid crisis — posed enough of a problem for the CDC.

“We have like the worst flu epidemic ever, and she’s not out there,” a source close to the department said of her inability to testify. “That’s mind-boggling at a very basic level.”

But the report that she had bought tobacco stock after she started at the CDC appeared to be the last straw.

In recent weeks, Azar specifically told associates that he'd take a hard line on any ethical problems in the department, and pledged to lawmakers and the White House that his agency would be far more businesslike in advancing the GOP’s health priorities than it was during Price’s era.

Azar’s background as a former HHS general counsel meant he was intimately familiar with the agency’s ethics rules. He was HHS' top lawyer for four years during the George W. Bush administration, and cultivated a reputation for a strict adherence to the rules.

HHS — which makes decisions that could routinely drive the financial interests of drugmakers, among others — has some of the toughest stock-ownership prohibitions in government, according to accountability experts.

Fitzgerald told The Wall Street Journal later Wednesday that she felt her investment issues detracted from the agency’s work. She said she didn’t know about the tobacco stock purchase, which she said had been handled by a financial counselor.

The public health world has a particularly strong ethic against the use of tobacco. The CDC Foundation, an independent nonprofit created by Congress to support the CDC’s public health work, has a policy against accepting any dollars from the industry.

Fitzgerald had faced earlier controversy over a state partnership with Coca-Cola while she was a senior public health official in Georgia, a move that critics didn’t like but were willing to overlook given the company’s Atlanta headquarters.

“But no one in public health argues you should be engaged with the tobacco industry,” one public health expert said.

Sources familiar with Azar's plans say he had long anticipated spending his first days at HHS ridding the department of the ethical and organization problems that tarred the tenure of his predecessor, Tom Price. Price resigned in September after scrutiny of his charter jet flights, and before that had faced criticism over his own stock trades.

Lawmakers voiced their frustration to POLITICO about Fitzgerald's inability to testify to Congress as Azar met one-on-one with them ahead of his confirmation.

“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," said Sen. Patty Murray (D-Wash.), ranking member of the Senate Health, Education, Labor and Pensions Committee.

Senior Republicans on the HELP Committee said after a hearing earlier this month that they wanted Fitzgerald to eliminate her conflicts of interest so that she could testify after she canceled an appearance for the second time. Murray criticized her conflicts during the hearing in which another CDC official testified in Fitzgerald’s place.

Inside the CDC, there was speculation that Fitzgerald’s existing financial conflicts — if she was unable to resolve them — would frustrate the no-nonsense Azar. A former Georgia public health official who was close with Price, Fitzgerald had already lost influence within the department after his ouster. The purchase of Japan Tobacco stocks proved to be too much.

“It was intolerable," said a Republican staffer.

HHS’ legislative affairs shop, meanwhile, is already under fire from Capitol Hill on multiple fronts. Within hours of Azar’s swearing in, House Oversight Chairman Trey Gowdy, a fellow Republican, sent a scathing letter to the new secretary, outlining all the ways in which HHS has not complied with document and oversight inquiries.

Gowdy said the legislative affairs operation has fallen “into a state of permanent disrepair” and warned that he may move to “compulsory” measures if the department doesn’t adequately respond.

The CDC needs to maintain a strong relationship with Capitol Hill. The agency, which gets a portion of its funding from Obamacare’s Prevention and Public Health Fund, is constantly threatened with funding cuts.

Because of its link to the divisive health law, the agency is more vulnerable than other health agencies, like the National Institutes of Health or the FDA.

The agency is already at a disadvantage because it is run out of Atlanta — one of the few federal agencies not based in Washington, where leaders can make a quick run to the White House or Capitol Hill.

“There was already strong concern due to her recusal issues, and then when news broke about her tobacco purchases, the dam of frustration broke,” a senior GOP aide on Capitol Hill said.

Azar has prioritized mending relations with lawmakers and had planned to roll out changes within the department over the next several weeks. The early efforts are expected to focus on shoring up HHS’ legislative and public affairs operations.

Among Azar’s first moves at HHS was to task his chief of staff, Peter Urbanowicz, and deputy chief of staff Brian Harrison with a top-to-bottom evaluation to identify problem areas, people familiar with the situation said.

Multiple people familiar with Azar’s thinking have characterized his view of the department as a turnaround job, pointing to Urbanowicz’s private-sector experience directing the restructurings of troubled health care organizations.

“Peter is the kind of person that can really help make the trains run on time,” Federation of American Hospitals President Chip Kahn said.