Bruce I. Diamond; Denial of Hearing; Final Debarment Order, 68455-68459 [2013-27186]

Agencies

• Food and Drug Administration
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 78, Number 220 (Thursday, November 14, 2013)]
[Notices]
[Pages 68455-68459]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-27186]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2000-N-0110]


Bruce I. Diamond; Denial of Hearing; Final Debarment Order

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is denying Dr. Bruce I. 
Diamond's request for a hearing and is issuing an order under the 
Federal Food, Drug, and Cosmetic Act (the FD&C Act) debarring Dr. 
Diamond for 10 years from providing services in any capacity to a 
person who has an approved or pending drug product application. FDA 
bases this order on findings that Dr. Diamond was convicted of felonies 
under State law for conduct relating to the development or approval of 
a drug product or otherwise relating to the regulation of a drug 
product under the FD&C Act, was convicted of felonies involving fraud, 
and was a material participant in acts forming the basis of a 
conviction that subjects another person to debarment. In determining 
the appropriateness and length of Dr. Diamond's debarment period, FDA 
has evaluated the relevant considerations listed in the FD&C Act. Dr. 
Diamond has failed to file with the Agency information and analysis 
sufficient to create a basis for a hearing concerning this action.

DATES: This order is effective November 14, 2013.

ADDRESSES: Submit applications for termination of debarment to the 
Division of Dockets Management (HFA-305), Food and Drug Administration, 
5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT: G. Matthew Warren, Office of 
Scientific Integrity, Food and Drug Administration, 10903 New Hampshire 
Ave., Silver Spring, MD 20993, 301-796-4613.

SUPPLEMENTARY INFORMATION:

I. Background

    On December 16, 1997, Dr. Diamond pled guilty to 53 State criminal 
offenses, including felonies, in the Superior Court for the County of 
Richmond, Georgia, and the court subsequently entered judgment against 
him. The offenses in the Official Code of Georgia to which

[[Page 68456]]

Dr. Diamond pled guilty included 16 counts of theft by taking (section 
16-8-2), 10 counts of theft of services (section 16-8-5), 2 counts of 
written false statements (section 16-10-20), 8 counts of acquiring a 
controlled substance by misrepresentation (section 16-13-43), 8 counts 
of prescribing or ordering dangerous drugs (section 16-13-78.1), 7 
counts of prescription of controlled substances (section 16-13-41(f)), 
1 count of practicing medicine without a license (section 43-34-26), 
and 1 count of bribery (section 16-10-2). On February 10, 1999, in a 
separate proceeding, Dr. Diamond consented to disqualification from 
receiving investigational new drugs under Sec.  312.70(b) (21 CFR 
312.70(b)).
    Dr. Diamond, who holds a doctorate in pharmacology but not a 
medical degree, was a professor on the faculty of the Medical College 
of Georgia (MCG), a unit of the Board of Regents of the University 
System of Georgia. Dr. Diamond collaborated with a colleague there, 
Richard Borison, M.D., Ph.D., to manage clinical trials for various 
drug companies. Without the knowledge or consent of MCG, Drs. Diamond 
and Borison used MCG and other government-owned facilities and State 
employees to conduct the clinical trials but diverted the funds paid by 
the study sponsors for their own gain, without compensating the 
university system. Although Dr. Diamond is not a physician, he managed 
medical aspects of the clinical trials. In that capacity, he signed Dr. 
Borison's name on prescriptions for controlled substances and other 
drugs the State defined as dangerous. During the course of one clinical 
trial, Drs. Borison and Diamond bribed an employee not to report to MCG 
an attempted suicide by one of the study subjects.
    By notice dated November 26, 2002, FDA proposed to debar Dr. 
Diamond for 10 years from providing services in any capacity to a 
person having an approved or pending drug product application. The 
notice explained that the proposal was based on three separate grounds: 
(1) Dr. Diamond was convicted of felonies under State law for conduct 
relating to the development or approval, including the process for 
development or approval, of any drug product or otherwise relating to 
the regulation of drug products under the FD&C Act, and the type of 
conduct serving as the basis of his convictions undermines the process 
for the regulation of drugs (section 306(b)(2)(B)(i)(I) of the FD&C Act 
(21 U.S.C. 335a(b)(2)(B)(i)(I))); (2) Dr. Diamond was convicted of 
felonies involving bribery, fraud, and false statement, and, on the 
basis of the convictions and other information, demonstrated a pattern 
of conduct sufficient to find that there is reason to believe that he 
may violate requirements under the FD&C Act relating to drug products 
(section 306(b)(2)(B)(ii)(I); and (3) Dr. Diamond materially 
participated in acts that were the basis of Dr. Borison's conviction of 
offenses subjecting Dr. Borison to debarment under section 
306(b)(2)(B)(ii) and Dr. Diamond's participation, and other 
information, demonstrate a pattern of conduct sufficient to find that 
there is reason to believe that he may violate requirements under the 
FD&C Act relating to drug products (section 306(b)(2)(B)(iii)). The 
notice to Dr. Diamond also outlined findings with respect to four 
factors that were considered in determining the appropriateness and 
period of debarment, as provided in section 306(c)(3) of the FD&C Act: 
(1) The nature and seriousness of the offense, (2) the nature and 
extent of management participation in the offense, (3) the nature and 
extent of voluntary steps to mitigate the impact on the public, and (4) 
prior convictions under the FD&C Act or other acts involving matters 
within the jurisdiction of FDA.
    By letter dated January 2, 2003, through counsel, Dr. Diamond 
requested a hearing on the proposal to debar. On February 17, 2004, 
after FDA granted him extensions, Dr. Diamond submitted a ``final 
response'' in support of his request for a hearing on the proposal to 
debar. In his response, Dr. Diamond argues: (1) That his consent 
agreement for disqualification under Sec.  312.70(b) precludes his 
debarment, (2) that he is innocent of the charge of bribery, (3) that 
he is innocent of the charges involving drug prescribing, (4) that 
assertions that he used unqualified personnel to staff clinical trials 
are without justification or support, (5) that research subject safety 
was not compromised under his supervision, and (6) that he did not 
serve in a managerial role for the criminal conduct because Dr. Borison 
exercised control over him at all times.
    Hearings are granted only if there is a genuine and substantial 
issue of fact. Hearings will not be granted on issues of policy or law, 
on mere allegations, denials, or general descriptions of positions and 
contentions, or on data and information insufficient to justify the 
factual determination urged or the action requested (see Sec.  12.24(b) 
(21 CFR 12.24(b))).
    The Chief Scientist has considered Dr. Diamond's arguments and 
concludes that they are unpersuasive and fail to raise a genuine and 
substantial issue of fact requiring a hearing.

II. Arguments

    In support of his hearing request, Dr. Diamond presents six issues 
that we will presume are intended to call into question whether he is 
subject to debarment--and, if so, whether FDA should debar him--on the 
basis of any of the three grounds, section 306(b)(2)(B)(i)(I), 
(b)(2)(B)(ii)(I), and (b)(2)(B)(iii) of the FD&C Act, upon which FDA 
relied. We therefore address each of his arguments as a challenge to 
the grounds for debarment or to FDA's conclusions regarding the 
considerations in section 306(c)(3) of the FD&C Act, as appropriate.

A. Disqualification Consent Agreement

    Dr. Diamond first argues that the consent agreement for his 
disqualification from receiving investigational drugs under Sec.  
312.70(b) precludes his debarment under section 306 of the FD&C Act. In 
support, he contends that the consent agreement ``should have precluded 
any further administrative action against [him].''
    The consent agreement states that the ``agreement closes FDA's 
administrative proceedings in the present matter'' (emphasis added). A 
debarment action under section 306 of the FD&C Act is an entirely 
separate matter from disqualification proceedings. FDA has the 
authority to disqualify a researcher from conducting clinical testing 
of new drugs when it determines that the researcher has repeatedly or 
deliberately not followed regulations intended to protect study 
subjects and ensure data integrity. (See Sec.  312.70(a).) FDA also may 
debar from the drug industry individuals involved in certain conduct. 
Once an individual has been debarred, he may no longer provide services 
in any capacity for anyone with a drug product application that is 
approved or pending at FDA. (See section 306(a) and (b) of the FD&C 
Act.)
    Furthermore, the consent agreement itself does not foreclose other 
types of administrative actions, such as debarment under section 306 of 
the FD&C Act. Finally, there is no statutory basis for concluding that 
the Agency's decision to disqualify Dr. Diamond from receiving 
investigational drugs under a separate process precludes his debarment. 
Accordingly, we conclude that there is no genuine and substantial issue 
of fact for resolution at a hearing and that the consent agreement 
regarding Dr. Diamond's disqualification does not prevent his 
debarment. (See Sec.  12.24(b)(1).)

[[Page 68457]]

B. Debarment Under Section 306(b)(2)(B)(i)(I) or 306(b)(2)(B)(ii)(I) of 
the FD&C Act

    Dr. Diamond's next two arguments focus on the conduct underlying 
his convictions for bribing an employee not to report an attempted 
suicide by a study subject and unlawfully acquiring and prescribing 
controlled substances and dangerous drugs. Dr. Diamond does not deny 
that he was convicted of those offenses, nor does he dispute that this 
type of conduct subjects him to permissive debarment under the FD&C 
Act. Rather, he argues that he is innocent of the charges and that 
``due to his need to reach a plea agreement with the State of Georgia 
to the charges that he misappropriated money from the State, he entered 
in to a complex and not wholly supported in fact plea agreement'' and 
he ``accepted perhaps too much when he pled guilty.''
    Section 306(b)(2)(B)(i)(I) of the FD&C Act provides FDA with 
authority to debar an individual who has been convicted of certain 
State felonies, if the Agency finds that the type of conduct serving as 
the basis for the conviction undermines the process for the regulation 
of drugs. The relevant factual issues are whether Dr. Diamond was, in 
fact, convicted of a felony under State law for conduct relating to the 
development or approval of a drug product or otherwise relating to the 
regulation of drug products under the FD&C Act and whether that type of 
conduct undermines the process for the regulation of drugs. Dr. Diamond 
does not dispute that he pled guilty to bribery and unlawful 
prescriptions for controlled substances and dangerous drugs or that 
this type of conduct undermines the process for the regulation of 
drugs. Dr. Diamond has therefore failed to show that a genuine and 
substantial factual dispute exists with respect to FDA's finding that 
he is subject to debarment under section 306(b)(2)(B)(i)(I) of the FD&C 
Act.
    In the alternative, section 306(b)(2)(B)(ii)(I) of the FD&C Act 
provides FDA with authority to debar an individual who has been 
convicted of a felony involving, among other things, bribery, false 
statements, or fraud, if the Agency finds that the individual has 
demonstrated a pattern of conduct sufficient to find that there is 
reason to believe he may violate requirements under the FD&C Act 
relating to drug products. The relevant factual issues are whether Dr. 
Diamond was convicted of a felony involving bribery, false statements, 
or fraud and whether he has demonstrated a pattern of conduct 
sufficient to find that there is reason to believe he may violate 
requirements under the FD&C Act relating to drug products. Dr. Diamond 
does not dispute that he pled guilty to felonies involving bribery, 
false statement, and fraud, namely theft of over $10 million from MCG 
by an 8-year pattern of deception, bribing an employee, making written 
false statements, acquiring controlled substances by misrepresentation, 
prescribing dangerous drugs and controlled substances while not being a 
registered practitioner, and practicing medicine without a license. FDA 
further determined that the type of conduct underlying Dr. Diamond's 
felony convictions, which were based on the 8-year conspiracy to 
defraud MCG through a scheme involving clinical studies, demonstrated 
``a pattern of conduct sufficient to find that there is reason to 
believe [Dr. Diamond] may violate requirements relating to drug 
products again.'' This determination was based on the nature of the 
conduct underlying the offenses to which Dr. Diamond pled guilty. Dr. 
Diamond has therefore failed to show that a genuine and substantial 
factual dispute exists with respect to FDA's finding that he is subject 
to debarment under section 306(b)(2)(B)(ii)(I) of the FD&C Act.
    Section 306(l) of the FD&C Act includes in its definition of a 
conviction, a guilty plea. Accordingly, Dr. Diamond's arguments 
regarding the factual circumstances underlying his plea fail to raise a 
genuine and substantial issue of fact as to whether he was convicted of 
a felony under State law for conduct relating to the development or 
approval of a drug product or otherwise relating to the regulation of a 
drug product under the FD&C Act or whether he was convicted of a felony 
involving bribery, false statements, or fraud. Dr. Diamond contends 
that his plea agreement was ``not wholly supported in fact.'' In his 
Written Plea of Guilty, however, Dr. Diamond states that ``of my own 
free will I want to plead guilty today to the offenses [enumerated] . . 
. know and understand that I do not have to say, sign, or do anything 
that will show or tend to show that I am guilty unless I want to . . . 
My decision to plead guilty is freely and voluntarily made . . . I did 
in fact commit the offenses of which I am charged. I am in fact guilty 
as charged in the indictment and am in fact guilty of the charges I am 
pleading guilty to.'' He also stated that he was advised by competent 
counsel regarding his constitutional and due process rights. He was 
examined by the court during a lengthy plea colloquy. Under these 
circumstances, and in light of the court's acceptance of his guilty 
plea, Dr. Diamond's allegations that he was actually innocent of the 
offenses and that he signed a plea agreement that was not wholly 
truthful are insufficient to create a genuine and substantial issue of 
fact for resolution at a hearing. (See Sec.  12.24(b)(1) and (b)(2).) 
Therefore, Dr. Diamond is subject to debarment.

C. Debarment Under Section 306(b)(2)(B)(iii) of the FD&C Act

    Finally, FDA found that Dr. Diamond is subject to debarment under 
section 306(b)(2)(B)(iii) of the FD&C Act for his material 
participation in the acts that resulted in another's conviction for an 
offense described in section 306(b)(2)(B)(ii)(I) and that on that 
basis, Dr. Diamond had demonstrated a pattern of conduct sufficient to 
support a belief that he would violate requirements under the FD&C Act 
relating to drug products. On September 30, 2003, FDA debarred Dr. 
Diamond's co-conspirator, Dr. Borison, under section 
306(b)(2)(B)(ii)(I) of the FD&C Act, for his conviction of felonies 
under State law for racketeering, theft, and false statements and 
representations. (See Richard L. Borison; Debarment Order, 68 FR 56298 
(September 30, 2003).) Dr. Diamond does not deny his material 
participation in the conduct that led to Dr. Borison's conviction. In 
particular, he does not deny participating with Dr. Borison in the 
theft of over $10 million from MCG via an 8-year pattern of deception 
involving clinical trials. Furthermore, he does not dispute that his 
behavior demonstrates a pattern of conduct sufficient to support a 
finding that he would violate requirements under the FD&C Act relating 
to drug products. Dr. Diamond has therefore failed to show that a 
genuine and substantial factual dispute exists with respect to FDA's 
finding that he is subject to debarment under section 306(b)(2)(B)(iii) 
of the FD&C Act.

D. Debarment Considerations

    Next, we construe Dr. Diamond's arguments regarding his innocence 
of the charges of bribery and unlawful prescriptions to be challenges 
to FDA's findings with respect to the debarment considerations of 
section 306(c)(3) of the FD&C Act. Dr. Diamond's arguments regarding 
the training and qualifications of the staff he oversaw as part of his 
criminal scheme and the safety of the subjects who participated in the 
clinical studies also seem to be directed at those findings. As noted 
previously, he also challenges FDA's finding that he participated as a 
manager in the offenses involved because, he claims, Dr. Borison

[[Page 68458]]

controlled him and masterminded the entire criminal operation.
    Section 306(c)(3) of the FD&C Act requires that FDA consider, 
``where applicable,'' certain factors ``[i]n determining the 
appropriateness and the period of debarment'' for any permissive 
debarment. The proposal to debar Dr. Diamond set forth four applicable 
considerations under section 306(c)(3) of the FD&C Act: (1) The nature 
and seriousness of his offense under section 306(c)(3)(A), (2) the 
nature and extent of management participation in the offense under 
section 306(c)(3)(B), (3) the nature and extent of voluntary steps 
taken to mitigate the impact on the public under section 306(c)(3)(C), 
and (4) prior convictions involving matters within the jurisdiction of 
FDA under section 306(c)(3)(F).
    In its proposal to debar, FDA presented factual findings relevant 
to each of the considerations. FDA determined, under section 
306(c)(3)(A) of the FD&C Act, that the nature and seriousness of Dr. 
Diamond's offenses weighed in favor of debarment because of the scope 
of his criminal conduct, his prescription of drugs without a 
practitioner's license, and his direction of inadequately trained staff 
to perform medical procedures, creating a risk of injury. The Agency 
found, under section 306(c)(3)(B) of the FD&C Act, that Dr. Diamond's 
management participation in the offenses weighed in favor of debarment. 
The Agency found that Dr. Diamond was a manager in that he ``plann[ed] 
. . ., directed, and initiated the conduct underlying [his] 
conviction'' and ``directed other MCG employees to recruit subjects and 
participate in the conduct of the clinical studies.'' Under section 
306(c)(3)(C) of the FD&C Act, the Agency determined that, although Dr. 
Diamond cooperated with the authorities once they discovered his 
criminal scheme, he did not ``promptly disclose to authorities all 
wrongdoing'' and exhibited a wanton disregard for the public health by 
bribing an employee to remain silent about a suicide attempt. This 
factor also was found to weigh in favor of disbarment. Finally, 
relating to section 306(c)(3)(F) of the FD&C Act, FDA noted that the 
Agency is unaware of any prior convictions under the FD&C Act, a 
favorable factor.
    Dr. Diamond first appears to challenge these findings by arguing 
that he is actually innocent of the bribery and unlawful prescriptions 
charges. As noted previously, however, his claims of actual innocence 
do not create a genuine and substantial issue of fact, as they must to 
justify a hearing under Sec.  12.24(b). Dr. Diamond pled guilty to 
those offenses in Federal Court, and he is bound by his guilty pleas, 
notwithstanding his current arguments that he pled guilty to those 
offenses only for strategic reasons.
    Dr. Diamond also contests the Agency's characterization of the 
conduct underlying his criminal convictions, as well as his material 
participation in the offenses committed by Dr. Borison. However, in 
pleading guilty to 52 criminal offenses, Dr. Diamond admitted to 
certain conduct. The conduct to which he admitted during the plea 
colloquy included overseeing a staff of nine employees to assist in 
running the clinical trials, bribing an employee not to report an 
adverse event, and prescribing controlled substances without a medical 
license. The offenses to which Dr. Diamond pled guilty stemmed from an 
8-year scheme to deceive a medical college and his concurrent disregard 
for the protection of patients afforded by State laws.
    By contending that the employees he oversaw did, in fact, have 
adequate training in drawing blood and that his conduct did not 
compromise the safety of any patients, Dr. Diamond is challenging FDA's 
proposed findings regarding the nature and seriousness of any offenses 
involved under section 306(c)(3)(A) of the FD&C Act and the nature and 
extent of voluntary steps taken to mitigate the effect on the public 
under section 306(c)(3)(C). Even assuming, as Dr. Diamond now argues, 
that the nine employees he oversaw had received adequate training in 
drawing blood and that no patient was actually harmed by Dr. Diamond's 
conduct, the 8-year scheme in which he participated still evinces both 
a clear disregard for the laws designed to protect patients and the 
public at large and a willingness to commit fraud in furtherance of his 
own financial gain. Dr. Diamond had 8 years to voluntarily mitigate the 
effects of his wrongdoing but failed even to modify his behavior to 
protect the public. Furthermore, Dr. Diamond's arguments that he did 
not compromise the safety of his patients are belied by his convictions 
for violating numerous State criminal statutes clearly aimed at 
protecting patients, such as practicing medicine without a license and 
unlawfully acquiring and prescribing controlled or dangerous drugs. In 
short, given the scope of Dr. Diamond's conduct, his current claims 
regarding the training of his employees and the safety of his patients 
are inadequate to create a genuine and substantial issue of fact with 
respect to the considerations in sections 306(c)(3)(A) and (c)(3)(C) 
or, more generally, the appropriateness or period of his proposed 
debarment.
    Finally, Dr. Diamond challenges the Agency's findings under section 
306(c)(3)(B) of the FD&C Act that he participated as a manager in his 
offenses by arguing that Dr. Borison exercised control over him and 
masterminded the criminal scheme. As noted previously and as outlined 
in the indictment to which he pled guilty, however, Dr. Diamond served 
a managerial role in the offenses. Even assuming, as Dr. Diamond now 
alleges, that he was at all times second in command to Dr. Borison, Dr. 
Diamond admitted during his criminal proceedings that he oversaw a 
staff of a least nine employees in implementing the criminal scheme of 
which he was convicted. Furthermore, he does not dispute the findings 
in the proposal to debar that he, along with Dr. Borison, was involved 
in planning and initiating the criminal scheme. Dr. Diamond's claim 
that he was ``at all times subservient to Dr. Borison'' fails to 
present a genuine and substantial issue of fact with respect to the 
consideration in section 306(c)(3)(B) of the FD&C Act or, more 
generally, the appropriateness or period of his proposed debarment.
    Consistent with the findings in the proposal to debar, the Chief 
Scientist finds, based on the undisputed record before the Agency, that 
debarment of Dr. Diamond for two consecutive terms of 5 years is 
appropriate. The considerations in section 306(c)(3)(A), (c)(3)(B), and 
(c)(3)(C) of the FD&C Act weigh in favor of debarring Dr. Diamond for 
at least 10 years. Although Dr. Diamond appears to have no previous 
criminal convictions related to matters within the jurisdiction of FDA 
(see section 306(c)(3)(F) of the FD&C Act), that consideration does not 
counter to a sufficient degree the remaining considerations to warrant 
decreasing the periods of debarment. Of particular note are the nature 
and seriousness of Dr. Diamond's offenses. As detailed previously, Dr. 
Diamond pled guilty to an 8-year criminal scheme reflecting not only, 
as found in the proposal to debar, ``a wanton disregard for the public 
health,'' but also a willingness to defraud a government body over a 
sustained period of time. Reducing the period of debarment from 10 
years to some lesser amount of time based on Dr. Diamond's lack of 
prior criminal convictions would be inconsistent with protecting the 
public health and thus the remedial purpose of the Agency's debarment 
authority under section 306 of the FD&C Act.

II. Findings and Order

    Therefore, the Chief Scientist, under section 306(b)(2)(B)(i)(I) of 
the FD&C

[[Page 68459]]

Act, or in the alternative section 306(b)(2)(B)(ii)(I) and 
(b)(2)(B)(iii) and under authority delegated to him, finds that Dr. 
Diamond is subject to debarment. The Chief Scientist has considered the 
relevant factors listed in section 306(c)(3) of the FD&C Act and 
determined that debarment for 10 years is appropriate.
    As a result of the foregoing findings, Dr. Diamond is debarred for 
10 years from providing services in any capacity to a person with an 
approved or pending drug product application under section 505, 512, or 
802 of the FD&C Act (21 U.S.C. 355, 360b, or 382), or under section 351 
of the Public Health Service Act (42 U.S.C. 262), effective (see DATES) 
(21 U.S.C. 335a(c)(1)(B) and (c)(2)(A)(iii) and 21 U.S.C. 321(dd)). Any 
person with an approved or pending drug product application who 
knowingly uses the services of Dr. Diamond, in any capacity during his 
period of debarment, will be subject to civil money penalties. If Dr. 
Diamond, during his period of debarment, provides services in any 
capacity to a person with an approved or pending drug product 
application, he will be subject to civil money penalties. In addition, 
FDA will not accept or review any abbreviated new drug applications 
submitted by or with the assistance of Dr. Diamond during his period of 
debarment.
    Any application by Dr. Diamond for termination of debarment under 
section 306(d) of the FD&C Act should be identified with Docket No. 
FDA-2000-N-0110 and sent to the Division of Dockets Management (see 
ADDRESSES). All such submissions are to be filed in four copies. The 
public availability of information in these submissions is governed by 
21 CFR 10.20(j).
    Publicly available submissions may be seen in the Division of 
Dockets Management between 9 a.m. and 4 p.m., Monday through Friday. 
Persons with access to the Internet may obtain documents in the Docket 
at https://www.regulations.gov/.

    Dated: November 4, 2013.
Jesse L. Goodman,
Chief Scientist.
[FR Doc. 2013-27186 Filed 11-13-13; 8:45 am]
BILLING CODE 4160-01-P