FDA's Office Of Criminal Investigations May Undergo Overhaul With The Resignation of Its Director

Terry Vermillion, who has headed up the office for 18 years, resigned two months after a whistleblower complaint about him was made public.

The resignation of Terry Vermillion, the long-time head of FDA's Office of Criminal Investigations, will give the agency a chance to thoroughly overhaul the office.

FDA Commissioner Margaret Hamburg put a plan in place to revise OCI's policies and procedures following a General Accounting Office report that criticized FDA's lack of oversight of the office. But the departure of Vermillion, who became director in 1992, a year after the office was created, may enable her to make deeper changes.

"This would give the Commissioner the opportunity to recruit someone from outside the agency to heal the problems," said an attorney with knowledge about the agency. "A lot of people feel the investigatory methods used by [FDA] criminal investigators are more suited to going after the mafia than dirty warehouses."

Vermillion announced on Nov. 23 that he would be retiring next month. The move comes two months after Sen. Chuck Grassley, R-Iowa, made a whistleblower's complaint against Vermillion public. The whistleblower sent a letter to Grassley saying GAO's report had failed to detect problems at OCI and citing allegations against Vermillion.

FDA declined to answer any questions about Vermillion's departure and whether it had someone in line to take over on an acting basis.

"The agency appreciates Terry's years of public service and wishes him well in retirement," an FDA spokesperson said.

Prior to joining FDA, Vermillion served as a special agent with the U.S. Secret Service for 23 years. As head of OCI he reports to the associate commissioner for regulatory affairs. The agency appointed Dara Corrigan the new associate commissioner in September (Also see "FDA's New ORA Head, Dara Corrigan, Has Broad Enforcement Experience" - Pink Sheet, 10 Sep, 2010.).

OCI Acts Independently From Field Force

Former FDA Commissioner David Kessler established the Office of Criminal Investigations in 1991following the generic drug scandal, in which generic manufacturers were found to have falsified data and paid gratuities to FDA staff while agency reviewers gave preferential treatment to some companies.

The attorney knowledgeable about the agency said that this took the field force out of criminal investigations, which was not a good thing. There is a disconnect between the two, he said, as OCI reports independently from the field force.

GAO's report noted that in 2007 OCI had 509 arrests and 369 convictions while in 2008 it had 408 arrests and 396 convictions. These include arrests and convictions resulting form both OCI's independent investigations and those conducted with other federal law enforcement agencies.

In 2008 OCI had a staff of 223, of which 180 were criminal investigators. FDA funding for the office was $41.3 million in 2008.

In response to the GAO report, Hamburg outlined plans to reform OCI, including the creation of new criteria for selecting misdemeanor prosecution cases against responsible corporate officers (Also see "Hamburg Outlines Planned Reforms Of FDA Criminal Investigations Office" - Medtech Insight, 15 Mar, 2010.).

Grassley had requested the GAO report, which was released in March, because of his concerns that OCI and the Office of Internal Affairs were operating without adequate oversight and accountability. In a Sept. 16 letter to GAO Grassley said his staff's interview of Vermillion on June 5, 2008 had also prompted the request for GAO's review of the office.

Grassley criticized GAO's findings as "less than stellar." He said he had received a whistleblower complaint that GAO investigators had missed many things taking place "under their noses."

The whistleblower specifically claimed that Vermillion directed the work of OCI primarily over the phone from his house in Hampton, Va.; had an OCI employee, referred to as his "office mistress," receive government contract training and a promotion; directed reports prepared by OCI's Office of Internal Affairs be changed to sanitize them of derogatory information about his fellow U.S. Secret Service retirees working at FDA; and used OCI technical support to do personal work for him.

-Brenda Sandburg ([email protected])