PPE middleman didn't deliver, paid anyway
The state Health Department paid a $56,000 “finder's fee” last week to a middleman for 2.8 million gloves even though he was unable to secure delivery himself as promised, according to information obtained by The Oklahoman.
The governor's PPE “czar,”
Gino DeMarco, ordered the payment — 2 cents a glove — to Torque Capital LLC, an Oklahoma City- based company that has been in existence less than a year.
The state ended up dealing directly with the glove supplier, Clean Safety, to arrange for the “must-have” delivery of personal protective equipment. The change was made
because Torque Capital executive Lewis Wang could not come up with an advance payment himself, the records show.
The Health Department did not directly answer questions Thursday about why Torque Capital LLC was paid anyway.
“Through the CARES Act, the federal government gave states like Oklahoma the resources to compete in the global market place for critical, FDA-approved PPE for front-line workers,” spokeswoman Shelley Zumwalt said.
“States across the nation are battling supply chain issues fraught by middleman vendors, and it is why the Governor's team created a rigorous and vigilant vetting process for procurement and why the State was able to save $154,000 from this specific, original contract while still procuring the same amount of critical PPE,” she said.
The state originally was going to pay Clean Safety $ 770,000 for the gloves but the company dropped the price, records show. “The state got the same goods for $ 616,000,” Zumwalt said.
DeMarco complained Wang caused a “headache.” DeMarco directed that Wang be paid part of the “sales commission” that would have been his part of the deal if he had been able to pay for the goods, according to the records.
DeMarco also directed that Wang be paid another $ 24,000 for “consulting services” on the purchase of gowns. The Health Department said that additional payment has not been made yet because the goods have not arrived.
Wang did not immediately respond to emails or a text message. A phone call to a number listed for Wang was answered by an automatic message that said “the person you have dialed is not able to receive calls at this time.”
Torque Capital is described on its website as a global food export company sending “chicken, pork, beef and other agricultural products from the Americas to Asia.”
The state auditor plans to begin an investigative audit of the Health Department next week because of concerns about PPE spending decisions like the one to Torque Capital. State Attorney General Mike Hunter requested the audit.
Gov. Kevin Stitt has repeatedly praised DeMarco's efforts to find personal protective equipment for the state during the coronavirus crisis. The deputy tourism director was asked in March to head the state's PPE hunt.
At a news briefing Thursday, the governor said those efforts have allowed the state to ship personal protective equipment to all 150 hospitals and all 308 nursing homes in Oklahoma “as well as EMTs, law enforcement, firefighters, funeral home employees and many others on the front lines fighting COVID-19.”
Stitt also said at the briefing that “every dollar we spend fighting this virus is 100% reimbursable” from the $1.2 billion in federal emergency funding provided the state. He also said the Health Department has only spent 1% “of our total federal dollars available to fight COVID up to this point.”
He said a special team of public employees was formed to monitor and maximize “every penny.” He said that team has been doing a fantastic job.
“I'm going to continue to turn over every rock and run down every lead as we compete against other states and other countries around the world for PPE,” Stitt said.
“Because my job as governor is to protect the health and lives of Oklahomans first and foremost.”