Did You Know About This Trump Administration Shocking Scandal Being Investigated?

[AdSense-A]

By Jim “Giacomo” Gatto

With the current news focused on the sacking of the United States Postal Service, there is an investigation underway by the House Oversight Committee into Philips Respironics for possible illegal contracts costing US taxpayers in excess of 500 million dollars.

On July 31, 2020…

The Subcommittee on Economic and Consumer Policy-Committee on Oversight and Reform-US House of Representatives issued a staff report entitled “The Trump Administration’s Failures in Contract Management and Inept Negotiation by Senior White House Officials Denied Americans Ventilators During the Coronavirus Pandemic and Squandered Up to $504 Million in Taxpayer Funds.”

During the early stages of the pandemic, the subcommittee began an investigation into why there was a shortage of ventilators for an adequate response to the Coronavirus. Where are the ventilators?! “On April 15, 2020 the Subcommittee sent a letter requesting documents and information from Phillips Respironics (Philips), a leading manufacturer of ventilators…Philips has substantially complied with the Subcommittee’s requests.” The documents provided by Phillips, including emails and invoices, painted a picture of a bungled deal, which slowed the process and delivery of the ventilators, and ended up costing American taxpayers an additional $504 million. In the “Executive Summary” on page two of the report, it states:

These documents indicate that before and during the pandemic, inept contract management and incompetent negotiating by the trump administration denied the country the ventilators it needed. The administration effectively disabled an Obama era contract with Phillips for ventilators and then struck a second contract with the company in which the administration overpaid for nearly identical ventilators by as much as 500 million dollars. These are funds that could have been used for personal protective equipment (PPE) and critical medical supplies that were in short supply across the country.

Phillips was awarded the contract in September 2014 by the Obama administration, in anticipation of the possibility of a pandemic. That contract was for 10,000 ventilators at $3,280 per unit, to be delivered by June 2019. Had that contract have been honored the US would have had enough ventilators available to, theoretically, prevent many deaths. Before leaving office, The Obama Administration had awarded Phillips an extension that would require the electronics company to deliver the 10,000 ventilators in question by November 2019. Since President Obama left office there have been delays in development, and therefore manufacture and, ultimately, delays in delivery of ventilators throughout 2017 and 2018, during which time the Trump Administration had awarded Phillips three additional extensions culminating in a final delivery date of June 2021. Then, in mid-January of 2020, after the first Coronavirus case was reported in the US, the Phillips Corporation reached out to the Trump Administration asking if they would like Phillips to accelerate the delivery of the ventilators under the existing contract. “The Trump Administration ignored this opportunity. For six weeks it did not respond to Philips’ offer.” It gets worse. Despite Philips’ offer to accelerate production, the Trump Administration responded by granting an additional extension, “removing all delivery deadlines until September 2022.” Furthermore, the Trump Administration, represented by Peter Navarro, never demanded that Phillips produce more ventilators at the original contract price per unit. “The trump negotiators appeared gullible and conceded to Phillips on all significant matters including price. The documents show that the administration accepted Phillips first offer without even trying to negotiate a lower price.” Not only was there a delay in development and manufacture, the price per unit was increased to $15,000 and an additional 33,000 ventilators were added to the contract at the highly inflated price—over four times the original price agreed to with the Obama Administration! The numbers are staggering:

As a result, the federal government overpaid for ventilators–no American purchaser paid more than the US government. Between December 2019 and May 2020, Phillips took orders for 5,399 other… ventilators from 92 different purchasers in the United States. While the Trump Administration paid $15,000 per ventilator, some small purchasers, buying as few as one unit, were able to negotiate prices as low as $9,327 per unit. The waste of taxpayer funds caused by the Trump Administration’s incompetent procurement efforts for ventilators could be as much as 500 million dollars or more.

The House Oversight committee is careful here not to make inferences or accusations as to “intent,” regarding possible fraud. But based on the evidence provided in the report one can’t help but make their own inferences regarding embezzlement and possible money laundering, as the only alternative explanation would be that the agents in charge of the contract negotiations are a bunch of ignorant rubes who were duped by the professional salespeople at Phillips. I must note here that this is all they can be accused of without further evidence of intent; and, as we know intent is very difficult to prove without a good amount of supporting evidence–tape or text, for example. But this is simply a report about an investigation, which will continue until its natural conclusion, i.e. a formal charge or not. At this point, we are miles away from that. However, it is important that the American people are made aware of what happened behind the scenes in just one, single, amongst many, shady deals undertaken by the Trump Administration. This one to the tune of $504 million. The Committee is seeking to recover the funds:

To remedy this apparent profiteering, the Trump Administration now should engage competent contract officers at federal agencies to determine whether any of these funds can be clawed back under the provisions of the contract signed during the Obama Administration or the modifications entered into by the Trump Administration.

As stated earlier, strong evidence is needed to prove intent. On the Federal Government side, the principles are, Peter Navarro, Jared Kushner, and Kushner’s former college roommate, Adam Boehler. A few HHS, NSC, and NEC officers were also involved in negotiations. In my opinion, the findings in the report do, in fact, contain the criteria for the basis of a further criminal investigation into both the Federal Government employees, and the Philips corporation and its employees involved in the contract negotiations. The Oversight Committee seems to believe, in part, the same.

On Aug 6, 2020, Chairman Of The Subcommittee On Economic And Consumer Policy, Rep. Raja Krishnamoorthi (D. IL) sent a letter to acting Department of Health and Human Services Inspector General, Christy Grimm asking for an investigation into Phillips and its role in misleading government officials, by persuading them to purchase the most expensive of three available models of ventilators, all of which appear to be functionally identical:

For Phillips’ part, the company appears to have misled HHS into granting it a lengthy delay in delivering the cheaper model to pave the way to sell HHS the much more expensive one. Documents show that Phillips employees suggested to White House negotiators that they should buy the more expensive model because of it’s more “clinician friendly” screens when its screens are identical to the cheaper models. Company employers also directed negotiators to its most expensive of the three functionally identical models and overcharged for the model it sold.

Although no formal charges have been filed against Philips—which is to be expected so early in the investigation–the evidence suggests there will be. But, again, there has been no explicit suggestion of any wrongdoing by any of the Trump Administration officials, neither in the Oversight Committee’s report, nor in the letter to the IG. However, Rep. Krishnamoorthi, in his letter’s summary, certainly implies it: “The subcommittee requests that you immediately open an investigation into the apparent waste of taxpayer funds, how it was able to happen unchecked…” In other words, how is it possible that a contract, which under the Obama Administration agreement should have cost $142 million have been inflated to $646 million?

Peter Navarro, Assistant to the President, and Director of Trade and Manufacturing Policy, was chief negotiator. Jared Kushner, Assistant to the President was also involved in the negotiations. Navarro earned a PhD in Economics from Harvard University, and Kushner earned a JD and MBA from New York University (NYU), and a BA from Harvard University. So, yes, how was it able to happen “unchecked?” How was it that “Adam Boehler, Jared Kushner’s former college roommate and current CEO of the U.S. International Development Finance Corporation,” was “assigned an HHS contract officer to formalize a deal already negotiated by the White House[?]” The deal that had already been negotiated by the Obama White House. How could three Harvard graduates be so incompetent? Are we to believe that these three men were duped out of $504 million in taxpayer funds? A half billion-dollar windfall for the Philips Corporation? I don’t buy it, and apparently, neither does the oversight committee. So, where did that money end up? The investigation is underway. It will be interesting…

[si-contact-form form=’2′]