How profit and incompetence delayed N95 masks while people died at the VA
This story was originally published by ProPublica.
Before embarking on a 36-hour tour through an underground of contractors and middlemen trying to make a buck on the nation’s desperate need for masks, entrepreneur Robert Stewart Jr. offered an unusual caveat.
“I’m talking with you against the advice of my attorney,” the man in the shiny gray suit, an American Flag button with the word “VETERAN” pinned to his blazer, said as we boarded a private jet Saturday from the executive wing at Dulles International Airport.
It remains a mystery why the CEO of Federal Government Experts LLC let me observe his frantic effort to find 6 million N95 respirators and the ultimate unraveling of his $34.5 million deal to supply them to the Department of Veterans Affairs hospitals, where 20 VA staff have died of COVID-19 while the agency waits for masks.
It’s also unclear why the VA gave Stewart’s fledgling business — which had no experience selling medical equipment, no supply chain expertise and very little credit — an important contract. Or why the VA agreed to pay nearly $5.75 per mask, a 350% markup from the manufacturer’s list price. In the end, after ProPublica asked questions about the deal this week, the VA quickly terminated it and referred the case to its inspector general for investigation.
Stewart maintained he was trying to do a public service and plans to tell investigators how he was taken for a ride by “buccaneers and pirates,” the multiple layers of intermediaries, fixers and lawyers standing between respirator mask producers and front-line workers who are dying without them.
I had first contacted Stewart last Friday after a ProPublica analysis of federal contracting data showed this sizable deal was his company’s first — and had been awarded without the usual bidding meant to weed out companies that can’t deliver.
Stewart wasn’t alone. The coronavirus pandemic had unleashed a bonanza for untested contractors riding a wave of unprecedented demand and scarcity of everything from hand sanitizer to ICU beds. So far, the administration of President Donald Trump has handed out at least $5.1 billion in no-bid contracts to address the pandemic, federal purchasing data shows. The VA, far more than any other agency, appeared to be awarding large contracts to little-known vendors in search of the personal protective equipment that’s pitted local, state and federal agencies against one another.
I wanted to know how a company the 34-year-old Stewart had formed two years earlier had gotten one of the largest no-bid contracts. And, more importantly, could it fulfill it?
There was reason to wonder. A quick Google search showed large portions of the text on FGE’s company website had been lifted verbatim from a 1982 Harvard Business Review article. The company primarily advertised IT consulting and advertised a “block chain” A.I. solution to government procurement, whatever that means. But I found nothing suggesting the company could buy and ship life-saving medical equipment — and fast.
In a phone call, Stewart was defensive about an article on federal contracts in The Wall Street Journal that he believed unfairly painted him as a crook. His mother was so upset she wrote a letter to the editor. “My mom and dad raised me to be a man of integrity,” he said.
That’s when the first inconsistency arose. The Journal quoted Stewart as saying he was at the Port of Los Angeles “looking at a few million masks” and “getting ready to step on a Boeing 737 to bring the masks to the VA.”
He told me, however, that he had been in self-quarantine and hadn’t traveled anywhere since Christmas.
But he said he did have 6 million N95 respirators masks lined up in Los Angeles and would be getting a “proof of life video,” in the form of cellphone footage of scores of boxes with 3M labels, sent from an unidentified sender. The next day, he planned to take a private plane to the VA distribution center outside of Chicago to witness the delivery. I asked to tag along.
So here we were, aboard a whirring Legacy 450 Flexjet replete with leather captains’ chairs, dozens of liquor shooters, snacks and two pilots curious as to why we were stopping in Columbus, Georgia, en route to Chicago. It was a pit stop to pick up Stewart’s parents to bring them along for what was supposed to be a proud moment.
“This is about helping folks, about being able to say to my mom and dad, ‘Thank you,’” he said. “All the work you did, now we are about to help 6 million people — well, 6 million masks.”
“Kind of a Faith Thing”
For a man who said he had spent weeks of sleepless nights in search of masks and learning shipping logistics, Stewart exuded the confidence of a magician about to perform his career-defining trick. But his next act was already falling apart.
We were midair when Stewart revealed that the 6 million masks that were supposedly in LA had slipped from his grasp and been sold to another buyer when he didn’t produce the money fast enough. So, he had no masks.
This was the second time Stewart said he had lost a mask supply before he could get his hands on it. He had tried earlier in April to procure masks from China, but that failed when the Chinese government took control of its mask-producing companies and limited exports.
I asked why on earth we were flying to Chicago to try to meet the VA’s midnight delivery deadline if he didn’t already have the N95s.
“It was kind of a faith thing,” he said.
For 24 hours, Stewart had frantically reached out to contacts he had made as a former contract officer for the Pentagon. And early Friday, just one day before his shipment was due to the VA, Stewart said he got connected to a fixer in the U.S.
The fixer was Troy King, a former attorney general of Alabama who had just lost a run for Congress in that state’s 2nd District. Stewart said King connected him to an unidentified distributor, who could then connect him with 3M, the manufacturer of N95s, which block 95% of small particles such as those carrying COVID-19. Stewart said King also promised to arrange financing so FGE could get the deal done fast.