Lawmakers call for inquiry into California controller’s role in failed mask deal
SACRAMENTO — California lawmakers say they are troubled by state Controller Betty Yee’s behindthe-scenes advice to a politically connected company seeking a $600 million nobid government contract to provide COVID-19 masks, prompting some to call for a second legislative hearing into the failed deal.
Yee’s role in California’s scuttled state contract with Blue Flame Medical LLC went undisclosed for two years, despite a lengthy legislative inquiry and federal investigation. Documents from a civil lawsuit reviewed by the Los Angeles Times detail how the twoterm Democrat — with no formal role in the state contracting process — sought inroads for Blue Flame with the administration of Gov. Gavin Newsom, suggested language on how to ask the state for a large upfront payment and then worked to expedite the agreement.
After California officials were forced to claw back the state’s $457 million cash advance to Blue Flame amid fraud concerns, lawmakers demanded transparency and accountability during a hearing in May 2020. But Yee’s name was never mentioned.
“The bottom line is the Blue Flame fiasco was a near miss for the state,” said Democratic Assembly member Cottie Petrie-Norris of Irvine, who chaired the legislative hearing.
In one text message included in the court documents, Yee discouraged
Blue Flame’s co-founder John Thomas, a Republican political fundraiser, from disclosing how much the company stood to make from the deal because it may “become a matter of public record and make headlines.”
Blue Flame’s internal records, disclosed as part of an ongoing lawsuit, showed the company stood to turn a profit of $134 million by charging the state 20% to 30% markups in price.
Following the revelation of Yee’s role in the deal, Petrie-Norris said she is calling for a follow-up hearing and asking the state’s Legislative Analyst’s Office to provide recommendations “so we can strengthen our vetting and approval processes during a protracted emergency situation.”
“I wish we knew at the time of the hearing what we know now,” said Assembly member Jim Patterson, a Fresno Republican and vice chair of the Assembly Committee on Accountability and Administrative Review that conducted the 2020 oversight hearing. “I am absolutely flabbergasted. This is the controller. She is the last bulwark from sending a lot of taxpayer money to organizations.”
Democratic Assembly member Jose Medina of Riverside, also a member of the accountability panel, said lawmakers should have been offered more information. “The fact that we were not made aware of the full scope of this situation during such hearings hinders our job.”