In ‘Pandemic, Inc.’, J. of Propablika. David Maxwan has uncovered fraud in the Covid deal

Facemask box
Facemask box

When the Covid crisis hit in 2020, the federal government needed far more N95 masks and other protective equipment than it needed – so it often began awarding steep mark-up contracts to companies that promised to supply it. J. David McSwane, a ProPublica reporter and author of the new book Epidemic, Inc.: We chase capitalists and thieves who get rich when we are sick, All of these companies did not have the experience to supply a staggering number of medical devices.

In fact, when Maxwen and other journalists began scrutinizing the data, they found that two months after the epidemic, the federal government had already transferred more than বিল 1 billion to companies that had never had a government contract before. “They were just throwing contracts left and right,” he said.

Many were run by people with a history of fraud allegations – they were all found on public records if anyone bothered to check.

“The federal government wanted to keep the recipients of that loan a secret, which is unreasonable … so we, along with some other news outlets, actually had to sue to get it,” Maxwan said. “And, look and see, once we got it and started analyzing it, we found fraud everywhere.”

Maxwen’s new book is a colorful account of the many ways unscrupulous operators have benefited from the country’s health crisis and the way the government has failed to protect its people from financial predators.

Interview highlight

Cover of 'Pandemic Inc.'

Atria / One Signal Publishers

On the scale of fraudulent loan application

We really don’t [know the scale] Still. Like almost every relief program created by the epidemic, speed was a top priority. Money was flying out the door with very little incentive to test people’s demands. So really, we’re playing catch-up. …

There was this kind of bizarre trend in the Paycheck Protection program that my colleagues at Propablika first reported that hundreds of fake farms, such as the orange groves in Minnesota and the dairy farms in Florida, did not exist. That doesn’t mean things. … obviously a fake company sort. My coworkers went through the business filing, found all these things and found these [businesses] Does not exist but the money has been paid, and it is not clear to whom. That’s why federal prosecutors have been pursuing such fraud for many years.

He met a contractor who got a government contract to procure N95 masks when their supply was low.

Robert Stuart Jr. is a contractor I stumbled upon the first week [of the pandemic]. … I noticed he got a really big deal – $ 34.5 million with the Veterans Administration, which oversees the country’s largest hospital network. And he had no footprints. There is no evidence that there was a federal agreement before that. …

At the moment, the Trump administration is trying to catch up after weeks of negligence, and we’ve only seen money fly out the door. And I just had a suspicion that they didn’t actually verify any of these contractors. And we’ve seen some fictional evidence of that, and I’ve decided to call him and ask him what’s going on. And he said, “I’m the real deal. I’ve got a shipment of 6 million masks and I’m delivering them to VA, and I’m going to board a private jet tomorrow. And I said, ‘Well, that’s really interesting. Feel free to tag me? “

The contractor admitted that he did not have the N95 mask

I got on the plane and we literally got on. I say, “Hey, I’m really curious. How did you manage to get the masks when it seemed like no one was able to get them and so much?” And he says, “Actually, I don’t have them. Someone bought them from under me. I’ve been calling all night, trying to find a new shipment.” And to deliver the mask the next day.

About the contractor’s inability to deliver his contract, and how it reflects a widespread failure

He was not paid for the masks that Robert Stuart Jr. did not provide. And that was the federal government’s response, Okay, we can give the contracts as we wish, because we are not paying until it is delivered. However, he was paid a lot through the paycheck protection program.

This is not the first time that a contractor has made extra promises or failed to deliver. It happens all the time. But the bottom line is that the federal government was so unprepared that all the rules were thrown out the window, and our national strategy became: we are only going to hand over the contract to whom. We’re going to throw them all over and we’re going to see what comes back. And that had some pretty devastating effects. … you’ve got state and city and hospital competition for this supply. Brokers know that the federal government has decided to spend $ 6 a mask for this special deal and it raises the price for everyone.

He wonders if fraud was inevitable

You have to think of the government as this giant cookie jar. Everyone is trying to get a part of it. So when it was announced that there was going to be an emergency cost – meaning no verification or traditional competitive bidding – I knew then that it was going to be something. Because it’s huge, and there’s a lot of money, and a lot of people are trying to get it. So instinctively, I knew there would be lots and lots of fraud.

But we were in a jam. And I do not argue that there is no higher morality than federal acquisition control. But I think the real question is: why did we allow ourselves to be in this position where we are largely dependent, our national welfare dependent on tenants … these people had to hire us to get things we didn’t know we needed, didn’t we? And the answer is that it doesn’t have to be this bad.

If we had followed some recommendations from various government agencies and even the private sector to strengthen the strategic national stockpile to make sure we have these things, it would not have been so chaotic, at least in these early weeks. And we may be able to invest our money in smart things. And if anyone hopes that all this madness, all this waste, all this forgery is sewn together, we might rewrite the blueprint and make sure that the next time we face an epidemic we will not be in this position, which scientists say is inevitable.

This interview was created and edited for broadcast by Sam Brigger and Joel Wolfram. Natalie Escobar and Seth Kelly adapted it for the web.

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