According to the Kaiser Family Foundation, the Trump Administration is buying up a lot of the medical supplies being produced in the U.S. right now, but it’s not clear where these supplies are going.
The Trump administration quietly invoked the Defense Production Act to force medical suppliers in Texas and Colorado to sell to it first — ahead of states, hospitals or foreign countries.
It took this action more than a week before it announced Thursday that it would use the little-known aspect of the law to force 3M to fill its contract to the U.S. first. Firms face fines or jail time if they don’t comply.
The Cold War-era law gives federal officials the power to edge out the competition and force contractors to provide supplies to them before filling orders for other customers.
While it’s unclear how many times the power has been used during the coronavirus pandemic, federal contracting records examined by Kaiser Health News show that federal authorities staked first rights to $137 million in medical supplies. The orders in late March flew under the radar, even as dog-eat-dog bidding wars raged among states and nations for desperately needed medical protective gear.
“It’s like ‘Lord of the Flies’ out there for states and hospitals as they bid against each other for critical medical supplies and equipment,” Sen. Chris Murphy (D-Conn.) said in a statement to KHN. “Plus, there’s no transparency about what the federal government is doing with the equipment that they purchase when they outbid states and hospitals.”
The article continues to describe a chaotic situation in which orders are being cancelled because the federal government is claiming first dibs on production, but it’s not clear where all this material is going. FEMA appears to be involved, but exactly what FEMA is doing isn’t clear, either.
There could be a perfectly good explanation for the federal supplies-grab, but this is the Trump Administration we’re talking about, so that’s unlikely. And it’s probably Jared Kushner we’re talking about, since he has inserted himself into this mess and has established a headquarters at FEMA. Kushner’s pronouncement that the federal stockpile of medical supplies is “our stockpile,” not the states’, raised the question of who “our” is. Perhaps he meant he and his team, or the Trump family business. Who knows?
But here’s another odd little story that has been mostly overlooked. On March 27 Politico reported that a prominent DC-based Republican fundraiser had just notified his clients that he would not be working to raise funds for them after April 1. And why not? Because he’s going into the medical supplies business.
The fundraiser, Mike Gula, didn’t specify his new line of work in the email. But in an interview, he said he’d started a new company selling medical equipment that’s been in short supply during the coronavirus pandemic.
The company, Blue Flame Medical LLC, was formed Monday in Delaware, according to state records. Its website says it sells coronavirus testing kits, N95 respirator masks, “a wide selection” of personal protective equipment and other “hard to find medical supplies to beat the outbreak.”
Asked how he’d managed to procure such equipment when there are shortages in hospitals across the country, Gula said, “I have relationships with a lot of people.” …
…“I don’t want to overstate, but we probably represent the largest global supply chain for Covid-19 supplies right now,” he said. “We are getting ready to fill 100 million-unit mask orders.”
Gula is a veteran fundraiser who’s raised money for more than two dozen lawmakers in this cycle alone, including Sens. Steve Daines of Montana, Tim Scott of South Carolina, Pat Toomey of Pennsylvania, Ron Johnson of Wisconsin, Martha McSally of Arizona and Kevin Cramer of North Dakota.
Here’s more about Mike Gula from a New York Times article published March 28:
Neither Mr. Gula nor his partner in the business, a fellow Republican operative named John Thomas, had much experience in the medical supply field.
But Mr. Thomas said in an interview on Saturday that the connections they made through their work in politics helped them find suppliers and connect to customers, including large medical systems and law enforcement agencies around the world, including in the Middle East.
“In politics — especially if you’re at a high enough level — you are one phone call away from anybody in the world,” Mr. Thomas said, adding that his new company had partnered with firms to sell and distribute its products. “It’s not about the financial motivations,” he said of his new venture, which was revealed Friday by Politico. “We’re here to solve a need to help people.”
“Partnered with firms” is as specific as Gula gets about his suppliers. Basically, he jumped into the medical supplies biz because he knows a guy who knows a guy.
But there’s another angle to this. You may have seen the clip on television from a couple of days ago in which an admiral announces that by means of an airbridge of flights from abroad the U.S. had procured tons of masks, gowns, and other supplies. But under questioning by Weijia Jiang of CBS News, the admiral admits that the supplies are not going to the cities, or to hospitals, or even to FEMA.
This is remarkable. The US has set up an airbridge for PPE & med supplies to the US from abroad. But in answer to question from @cbsnews @weijia the Admiral explains that this is going through private companies, which explains why states are having to bid to get the stuff. pic.twitter.com/eO646wAeNF
— Josh Marshall (@joshtpm) April 3, 2020
Josh Marshall writes that it may make sense to use private sector supply chains to distribute the material. However …
But this doesn’t sound like it’s just distribution. The Admiral seems pretty clear that this is being distributed as private sector transactions. As then Admiral put it: “That’s normally how things work, right? I’m not here to disrupt a [commercial] supply chain.”
We’ve heard different governors complaining that it’s like bidding on eBay, with the different governors have to bid against each other to get access to these live saving products that are in desperately short supply. That only doesn’t distribute them according to need. It also makes the price for everyone higher.
Who is making money from this? If the U.S. gathering these supplies, is it then selling the material to the private sector for resale (at a markup) to hospitals and others who need them? Nobody is saying exactly how this is working. And Josh Marshall also noted Mike Gula —
Possibly unrelated but maybe not, BW flagged this article from a couple days ago which describes a GOP fundraiser and political operative who abruptly shuttered his business and announced he was opening a new firm (Blue Flame) which is in the COVID medical supply business. “Over the last 14 days I have built another business outside politics and will be focusing my full attention there,” he told colleagues in an email.
There’s no evidence the fundraiser/operative Mike Gula is in the mix with these airbridge flights. But it at least hints at the kind of corruption and profiteering that is possible in such a crisis.
And if there is corruption and profiteering going on, does anyone think that the Trump family is not getting a cut?
President Trump intends to nominate White House lawyer Brian D. Miller to serve as the inspector general overseeing the Treasury Department’s implementation of the newly enacted $2 trillion coronavirus law, the White House said Friday night.
If confirmed by the Senate, Miller would become Special Inspector General for Pandemic Recovery for the Department of Treasury, a key post in preventing fraud and abuse in the enormous new program. Miller is a special assistant to Trump and senior associate counsel in the Office of White House Counsel. He played a role in the White House’s response to document requests during the recent impeachment probe.
Inspectors general are supposed to be apolitical and nonpartisan. The Senate will no doubt rubber stamp this appointment, however, because Senate Republicans can’t learn.
Y’all will remember Senator Kelly Loeffler (R-GA) who appeared to trade stock based on information we was getting at Senate briefings about the pandemic. Loeffler is marred to Jeffrey Sprecher, chairman of the New York Stock Exchange. See Loeffler reports more stock sales, denies wrongdoing —
During the same time period reflected on reports filed late Tuesday, the couple also sold shares in retail stores such as Lululemon and T.J. Maxx and invested in a company that makes COVID-19 protective garments.
— and Questions remain about who is handling Kelly Loeffler’s stock transactions —
Loeffler says that financial consultants acting independently conduct all transactions on her behalf.
To this day, however, Loeffler has not provided details about how her portfolio is managed and who does that work. She won’t name her advisers or say what company they work for or disclose what kind of agreement she has with them.
— both in the Atlanta Journal-Constitution.
Josh Marshall should learn how to spell.. it's arbitrage not airbridge. I get the point though.. somewhere and somehow the Trump/ Kushner crime families are going to get a piece of the action. It might be with several degrees of separation. but they'll get their cut.
When Jared mentioned that he has 'all the data', automatically the alarm bells went off in my mind. It's a lot easier to sell data —which can be more valuable —without detection than it is to move physical product like PPE.
The reality is that skimming, grifting, and making money by taking advantage of his position is the reason Trump got into public service in the first place. So why would I wonder if the Trump's are engaging in profiteering? That question answers itself.
Does a bear shit in the woods?
That would be Trumps, not Trump's.
Thank's Pablo.. I'll keep that in mind, but Gulag is the one you should be getting after. He's a worse apostrophe offender than I am. I think both Gulag and I are the products of the New York State educational system ,so don't expect too much from us.
And to think, in prior era's, America's War Profiteer's were hung!
Now, no one's ever accused, is not currently accusing, or ever will accuse tRUMP of being well-hung.
But I will say that for a man with such tiny hands, he's got an awful long reach*, and a great grasp for how tax payer's cash should be spent – and that reach and grasp allow him to steer an immense amount of public money straight into his family's off-shore bank accounts!
Just ask NY State and NY City how firm and unyielding his grasp is, once it gloms onto cash that ain't his!
So, basically, if he and his cronies are saying, "Move along! NOTHING TO SEE HERE!," you can be sure you need to attach a tracking-chip to each and every single bill!!!
*tRUMP's got a long reach for other people's money. But when it comes to his own stash of cash, the man's got such short "alligator arms" that they'd look long on a Ken doll!
I've speculated before that Trump does NOT have reserves of cash. He also doesn't have credit with US banks and can't get an infusion from Russian sources (if that speculation is true.) If Trump raids the 500B (in violation of the law) that will get out. Does Trump think he can get in line to cash in on the emergency supplies as the only way to avoid bankruptcy?
I left out a significant fact. Trump's empire has been largely shuttered by the virus. Some estimates are one million per day losses for Trump Enterprises. The circumstances may have Trump over a barrel – he needs a transfusion of cash and has no legitimate sources.
Doug, as long as Trump is in the position he is as president there are plenty of people who he can extort to keep his empire afloat. With bans and sanctions and his ability to make perfect phone calls, I'm sure he's not worried about finding someone to bail his fat ass out.
Probably, people will be lining up for a chance to buy his favor. At least until he's still in a position to multiply their generosity through some good ol' fashioned back scratchin'.
Since these are ventilators that he's hoarding, and the sick need ventilators to breathe, that means that, in effect, he has the sick by the throat. Call it strangulation by proxy.
How swift and skilled he was to turn public suffering into personal profit. He's been training for this moment his whole life.
The Senate will no doubt rubber stamp this appointment, however, because Senate Republicans can’t learn.
It’s not that they can’t learn. They’re in on the grift as well. This is perfectly acceptable to Republicans. It’s a good thing, to them.
You may not remember this, but I do: During the Iraq War, the neo-cons actively sought private businesses to come on out to Iraq and help rebuild the country. It was a bonanza, courtesy Uncle Sam.
During World War 2, Harry Truman aggressively pursued war profiteers.
Fast forward to the present, there was no such investigation or calling to account those raking in cash from the Iraq War. For the Republican, this is a feature, not a bug. It’s perfectly fine to get rich off the government. Like Trump said, he doesn’t pay taxes because he’s smart. It’s the same mentality.
I am from Wisconsin, and noted that Ron Johnson refused to sign Trump's tax reform bill until it was modified to include a break for him, and businesses like his. He was a hold out, until he could personally profit.
It was heart warming to hear of how many in the senate were careful to ensure their wealth was safe and healthy, but extended no such courtesy to their constituants.
I wish I believed in Karma
Oh, there will be all manner of pardons and hidden and burned records. Lots of national security excuses, too. Remember when the Republicans were keeping all White House emails on Republican servers and they disappeared and no one got locked up? Same same is coming down the track. Even if Trump is defeated this fall, the money train is leaving the station. I've been called fake news before, and doubtless will be again, but I was right 30 years ago about the Republican move toward privatizing schools, and I will be right about Trump and his ilk making sure they get their cut of Corona money.
I agree with you, Bill. I'm almost certain that Jared's pa is going to score a pardon sometime between November and January. Not to mention that Trump is going to be handing them out candy to all his faithful co- conspirators. It will be Trump's way of issuing a final fuck you to the American public.
I also feel pretty confident that Trump and his cohorts are going to make off with an astonishing amount of corona money. It going to be like Sweden where they refer to their pilfered corona money as kronas
When Jared said "ours" the jig was up. Obviously up to no good. I read trump org was talking to Deutsche Bank again. So maybe they are looking for cash. I keep wondering why trump keeps pushing an antimalarial drug as a magical cure. Surely there's a pay off there as well
The lambs will be fleeced, and every opportunity is a money making opportunity. This is why, to a large extent, money and medicine do not mix, and a significant part of the health care industry must be run for the welfare of the common. The United States is a world outlier on this issue and might I say in this instance dead wrong. The ones that end up dead are the ones with the least, in general, and this is dead wrong too.
Remember that this pandemic is mostly being paid for by a giant credit card that is the common credit card. All will have to pay in one way or another. The tendency is for taxes which effect the poorest hardest, like sales tax, and fees which effect the poorer the most. The richest get tax breaks, and control of the tax system. All the rest will, unless they vote sensibly, get is the bill. Those who exploit the crisis will contend they are heroes and deserve the reward.
Kelly Loeffler, Senator by designation not election, and all elected officials need to be restricted in stock ownership by law. Not a law with loopholes but laws which are as strict and strictly enforced as those imposed on people in the investment industry. They are not allowed to own anything other than Index type funds. This prevents them from using their management power to influence individual companies and their stock prices. One might even think that industry and group specific index funds might need to be out of bounds for Senators and Representatives. It is bad enough having Senators controlled by large public corporations but privately owned ones as well. It does not take much to see which industries own which Senators, and operate in their interests with near total disregard for the average Joe in their state. It is no coincidence that the worst offenders typically have an R by their name. The cause of Citizen's United must also be promoted to rectify the imbalance. The rich will still fleece us plenty, but at least we might have a fighting chance.
Great article Mahablog! Seems like Mr. Gula is basically doing the same thing as that dude in Tennessee who filled his garage with cases of hand sanitizer.
Today's article marred by inadequate editing. Someone was in ahurry
If you have complaints, please be specific. If there is something to be fixed, I’m happy to fix it. Otherwise, STFU. Thanks much.