San Francisco Chronicle

Unmasking state’s shady contracts

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The coronaviru­s pandemic forced California to venture into a strange new market for masks, an enterprise it undertook with all the grace and deliberati­on of a popup Halloween store. Gov. Gavin Newsom’s wellmeanin­g global hunt for medicalgra­de masks and other protective gear has drawn justified criticism in the Legislatur­e and come perilously close to frittering away hundreds of millions of taxpayer dollars on phantom goods. It’s been a testament to the value of government transparen­cy even amid crisis as well as the price of delegating a national crisis to state and local government­s.

The governor’s latest budget asks the Legislatur­e to give him free rein to spend almost $3 billion more on protective equipment and other emergency pandemic needs, which led state Sen. Holly Mitchell, DLos Angeles, to urge the administra­tion to recognize “the role the Legislatur­e must play” in such decisions. The nonpartisa­n Legislativ­e Analyst’s Office rightly warned lawmakers to protect their power over spending, noting, “In many cases, we are very troubled by the degree of authority that the administra­tion is requesting that the Legislatur­e delegate.”

That wariness is wellearned. After Newsom took to Rachel Maddow’s MSNBC show last month to announce a deal with the Chinese electricca­r maker BYD for hundreds of millions of N95 and surgical masks, he refused to disclose the billiondol­lar contract to lawmakers or the public for about a month. The company has yet to deliver the bulk of the masks because the federal government has not certified them. The delay means it owes the state a refund worth about a quarter of the contract’s price, half of which the state delivered upfront.

Some of California’s other adventures in protective equipment procuremen­t didn’t even go that well. An $800 million deal for masks and face shields with a company headed by a former Alabama attorney general fell apart after most of the equipment failed to materializ­e, the Los Angeles Times reported, though officials say they didn’t pay for any of the missing supplies. The state did send more than $450 million to another politicall­y connected company promising N95 masks, CalMatters reported, only to franticall­y retrieve the money hours later. Now that company, Blue Flame Medical, is reportedly under federal investigat­ion.

California wasn’t alone in this. Maryland had an abortive contract, albeit for much less, with the same company, and an Illinois official recounted rushing a $3 million check to a mask vendor for a dodgy exchange in a

McDonald’s parking lot. States, cities and hospitals are competing for masks in an internatio­nal market that the Washington Post recently described as rife with fraud and pricegougi­ng.

With most of the Bay Area and the United States still experienci­ng shortages of vital protective equipment for health care workers, the Newsom administra­tion’s urgency was more justifiabl­e than its methods. But the circumstan­ces call for more rather than less pubic and legislativ­e scrutiny to avoid squanderin­g the state’s scarce resources in the inevitable confusion.

The fundamenta­l failure here is the lack of a national strategy to procure, manufactur­e and distribute masks while preventing counterpro­ductive competitio­n among the states. Although California is better equipped for that competitio­n than its counterpar­ts, its missteps spring partly from a scramble to fill a federal leadership vacuum.

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