Ex-HHS deputy Allen in fraud arrest

Claude Alexander Allen, the No. 2 Bush appointee at the Department of Health and Human Services (HHS), was arrested in March for allegedly swindling retail stores out of more than $5,000 in 25 fraudulent refunds since January. His lawyer told The Washington Post the incidents were “a series of misunderstandings.”

Allen left the HHS after three years as deputy secretary. In that post, he issued a directive that all FDA Warning Letters and untitled letters be vetted before issuance by the Office of Chief Counsel, then headed by newly appointed Dan Troy.

At the time, Allen, who slashed the FDA’s issuance of Warning Letters by as much as 70% in 2001, said it was not his intention that the directive should have “a chilling effect on enforcement” as critics were then complaining.

However, it did have such an effect and added more than a month to the FDA’s letter-issuance time and drastically curtailed the number of letters issued. Industry’s rate of product recalls, traditionally seen as an inverse barometer of FDA enforcement, soared 42% after Warning Letters were reduced. 

A police spokesperson told the Post that Allen had received 25 fraudulent refunds for products ranging from stereo equipment   and clothes to items worth as little as $2.50.