A U.S. Food and Drug Administration (FDA) official opted to retire after bad advice from an ethics committee left him staring down a significant tax expense, The Wall Street Journal reported.
Malcolm Bertoni, who joined the FDA in 2004 and served for more than 10 years as director of the Office of Planning, alerted the FDA in 2018 that he owned stock in approximately 70 companies the agency regulated, through accounts that were managed by professional traders with the authority to act without Bertoni’s knowledge, the WSJ reported. The FDA’s ethics department erroneously told Bertoni “years ago” that these holdings were permitted under exceptions carved out for mutual funds, Bertoni’s lawyer, Charles Borden, told the WSJ. (RELATED: Nancy Pelosi’s Husband Unloads Massive Stake In Chips Stock For Huge Loss After Buying Shares Before Subsidy Vote)
When the error was discovered through a standard review of the agency’s books, Bertoni was recused from his duties surrounding those companies, the WSJ reported. While the agency acknowledged that they had made an error in permitting him to own the stocks, Bertoni would need to sell the stock, valued between $120,000 and $1.1 million, in order to continue working.
JUST IN: Thousands of officials across the government’s executive branch reported owning or trading stocks that stood to rise or fall with decisions their agencies made, a Wall Street Journal investigation has found.
— unusual_whales (@unusual_whales) October 11, 2022
After considering the tax and retirement-planning consequences of such a sale, in addition to personal reasons, Bertoni instead opted to retire, Borden told the WSJ. An FDA spokesperson declined to comment on what might have motivated Bertoni to retire.
“The FDA takes seriously its obligation to help ensure that decisions made, and actions taken, by the agency and its employees, are not, nor appear to be, tainted by any question of conflict of interest,” an FDA spokesperson told the WSJ.
Activist groups have recently lobbied to halt the ability of members of Congress to trade stock, but a vote to implement that ban was delayed in late September until after midterm elections in November. Executive branch employees are already forbidden from working on “government matters” that financially impact themselves, their spouse, children or business associates, according to the U.S. Office of Government Ethics.
Borden did not immediately respond to the Daily Caller News Foundation’s request for comment.
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