Justice Department Investigating GOP Fundraisers Trying To Make A Killing Off Coronavirus
Back in March, we noticed a Politico story about a big-deal GOP fundraiser, Mike Gula, who announced he was leaving politics to go where the real money was: buying and selling medical supplies to states and hospitals that desperately needed it. He joined up with a political consultant, Don Sedgwick, and together they launched a company called "Blue Flame Medical LLC," incorporated in Delaware. It was weird and sort of notable, because wow, GOP consultants skipping out on politics during an election year to be disaster profiteers, how predictable is that? It was on our radar for about three minutes before the Next Damn Thing hit, and it never made it into a Wonkette piece, as far as we can tell. Besides, we never got an invite to company's grand opening party at the Delaware post office box where Blue Flame was incorporated.
Well! Guess what bright young startup the Justice Department is investigating after the company failed to deliver on massive orders from the states of Maryland and California? Why yes, it's Blue Flame Medical LLC, which should have raised concerns from the get-go, since that's a name for a gas company anyway.
The Washington Post reports the DOJ's criminal investigation is focused on "at least two" contracts with Maryland and California for medical masks and other personal protective equipment, according to "two people familiar with the matter." Both of the contracts were canceled by the states. The Baltimore Sun reports the Maryland contract was for $12.5 million, and should have delivered 110 ventilators and a million and a half N95 masks on April 14. The equipment never arrived, and last Friday, the state canceled the contract and referred the matter to state Attorney General Brian Frosh for investigation. Maryland had paid half the contract price up front, and is trying to get its money back.
The California contract was even bigger, as nonprofit press outfit CalMatters reported Wednesday. In that deal, California paid nearly half a billion dollars to Blue Flame on March 26, which should have procured 100 million face masks. But the transaction, for $456.9 million, fell apart within just a few hours. California was able to claw its money back, at least, and a few days after the deal with Blue Flame imploded, Gov. Gavin Newsom announced a new agreement between the state, a consortium of nonprofits, and a California company to import a billion dollars' worth of masks from China. (CalMatters reports the first shipments under that deal have started arriving in California.)
Ethan Bearman, an attorney for Blue Flame, told the Washington Post the company had acted in good faith, and in the case of the Maryland contract, insisted this all had to be a big misunderstanding, see?
Bearman said in a statement Tuesday that the complaints from Maryland were puzzling. "Blue Flame Medical is devoted to getting masks and ventilators to the people in Maryland who so desperately need them," he said. The company "fully intends to honor that contract" to supply 1.5 million masks and 110 ventilators by June 30, Bearman said. [...]
The April 1 purchase order, obtained by The Washington Post, identifies June 30 as the delivery deadline — but that is only because June 30 is the end of the current fiscal year, [spokesperson Michael] Ricci said. The agreed-upon shipping date for the masks and ventilators was April 14, according to a Blue Flame invoice obtained by The Post.
Bearman didn't have any comment on the California contract, and likewise had no comment on the federal investigation. We would note that California's flag has a bear on it. Coincidence?
So far, there aren't a lot of details on what exactly the DOJ is looking into in the two deals; Michael Ricci, a spokesperson for Maryland Governor Larry Hogan, confirmed to the Post that federal prosecutors had subpoenaed information on the contract but that the Feds had also "asked us not to disclose" what the investigators were looking for. Probably Rogue Deep State Dirt To Make Donald Trump Look Bad, is our guess.
The Post also details a little bit of how the GOP money man went about drumming up business:
Gula contacted a staffer he knew in Hogan's administration to make a pitch for the sale, according to a Maryland official familiar with the matter who spoke on the condition of anonymity to discuss a sensitive legal matter. Gula started using that staffer's name on a reference sheet to seek contracts with other states, the official said. The staffer referred the matter to the chief legal counsel for Hogan, Mike Pedone, on April 9.
Pedone then referred the matter on Friday to the Maryland attorney general's office, the official said.
Charming! It sure is good to know that in this time of crisis, there are public-spirited folks willing to use their personal connections to make bank for what might have been the public good. And OK, all sarcasm aside, it's at least reassuring that the Hogan staffer took the matter straight to Hogan's lawyer. At least some people still do ethics.
Just imagine — if we'd had a competent federal response to the national crisis instead of an incompetent reality show star telling states they were on their own, states wouldn't be caught up in all this Wild West fuckery.
Gosh, how boring that would be, and please God, let us have some boring competence soon.
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Doktor Zoom's real name is Marty Kelley, and he lives in the wilds of Boise, Idaho. He is not a medical doctor, but does have a real PhD in Rhetoric. You should definitely donate some money to this little mommyblog where he has finally found acceptance and cat pictures. He is on maternity leave until 2033. Here is his Twitter, also. His quest to avoid prolixity is not going so great.