Corrupt Contractors in US Hogged Pandemic Relief and Delivered Unusable Goods

In Pandemic, Inc. – Chasing the Capitalists & Thieves Who Made It Rich While We Get Sick, ProPublicaJ. David McSwane is an investigative reporter who tracks federal pandemic relief funds. He finds that many contracts for critical supplies were ensnared in unprecedented fraud schemes, leaving the U.S. government without any useful equipment. He says an array of contractors were “trying to take advantage of our national emergency,” and calls the book “a blueprint of what not to do” during the next pandemic.


This is a rush transcript. Copy may not be final.

AMY GOODMAN:This is Democracy Now!,, The War and Peace Report. I’m Amy Goodman.

We end today’s show with ProPublica investigative reporter J. David McSwane. His new book, “The New Book of ProPublica Investigative Reporters,” is now available. It’s called Pandemic, Inc. – Chasing the Capitalists & Thieves Who Made It Rich While We Get Sick. This week Dave wrote a viral Twitter thread about the book that began, “Let me tell you a crazy story. It’s consumed 2 years of my life. As COVIDAfter -19 closed the world in April 2020 I decided to follow the money. I began with a call to a no-name federal contractor who’d somehow landed a $35M deal for masks. Hours later, I’m on a private jet.” Again, those the words of J. David McSwane.

Welcoming to Democracy Now!Congratulations on the publication today of your book. Let’s move on. Why did you take that private jet?

J. DAVID McSWANE:These are the early days of the pandemic. And this contractor, whom I had found in federal buying data, had really come from nowhere and had a huge deal that stood apart. In addition, he was supplying 6,000,000 masks to Veterans Administration. This agency oversees the largest hospital network in America. He played a vital role in our pandemic response. And just sort of doing the due diligence, I wondered how he got this deal, and called him, and he ended up saying I could tag along on this private jet, and in doing so, over the course of maybe 72 hours, flying first to Georgia and then to Chicago, realized that he didn’t have any masks. He claimed they had been bought from him. Next, he created a new line in masks. It featured some interesting characters. And slowly but surely, as I’m sort of observing this, I began to wonder if the whole thing was made up and if in fact he had conspired to defraud the federal government.

And, you know, we didn’t know everything then, but this was really crucial information that I felt the American public needed to know, so we reported what we knew. This set me on a more than one-year-long journey of reporting. I followed along not only federal contractors, but also people who entered the space. I saw the chaos cascading from the federal government down through the states and into cities. And, you know…just over and over again, I found bizarre characters doing strange things, really trying to take advantage our national emergency.

AMY GOODMAN:What happened to Robert Stewart? I mean, he didn’t get this money, a loan. The U.S. government gave him this money. And what happened with the masks, too?

J. DAVID McSWANE: Well, I should clarify: He hadn’t been given the money outright. The federal government, unlike some states, was under the — working under the idea that, “Well, we’ll just hand out contracts all over the place, and we’ll pay if stuff is delivered,” which they said was, you know, sort of “no harm, no foul.” But what they were doing was they were flooding these big contracts into this market full of brokers and investors and everyone, and they’re seeing, “Well, the federal government is willing to pay $6 for a mask that used to cost $1.” So, while he didn’t collect any money because he ultimately didn’t deliver any masks, and was ultimately charged on three counts of fraud, others did get paid for the delivery of subpar equipment at times.

Here’s an example: Pandemic, Inc.The book of a contractor who had set up a company and had by the end of the week a substantial deal with the Federal Emergency Management Agency to deliver test tube. These test tubes weren’t actually test tubes. They were mini soda cans that had been gathered with literal shovels in a hot, unsterile warehouse near Houston by temp workers. The federal government accepted the test tubes and paid this vendor even though the non-test tube test tubes were unusable. So, there was an array of folks who entered this space, some of whom managed to get paid, some of whom didn’t, and some of whom ended up dealing with law enforcement.

AMY GOODMAN: I want to play short video you recorded and are sharing now for the first time, when you stopped by Fillakit’s warehouse outside of Houston, Texas, on June 10th, 2020 — again, a few months into the pandemic. Later, you reported how this company received $10 million. FEMAContract for test tubes, but instead gave them mini soda bottles. In this video, you approach the warehouse’s loading dock after the garage door opens. Workers can be seen inside, holding small soda bottles and shovels. Paul Wexler, wearing an Astros shirt, shouts at the rest of you to get out. As you answer, Wexler closes the door. This is a clip.

PAUL WEXLER: Can we help you?

J. DAVID McSWANE: Yeah, I’m trying to talk to Mr. Wexler.

PAUL WEXLER: [inaudible] No trespassing. Leave.

J. DAVID McSWANE: I’m not on your property.


J. DAVID McSWANE: I’m not on your property.

PAUL WEXLER: You’re on our property.

J. DAVID McSWANE:These are sterile vials that you have? How do you sterilize these vials sir?

PAUL WEXLER: You’re going to get hit by this [inaudible].

J. DAVID McSWANE:These are sterile?

AMY GOODMAN:Can you describe what happened next, and what was inside?

J. DAVID McSWANE: Sure, yeah. That wasn’t exactly how I wanted to approach that story. You know, I’m not in TV and don’t love the theatrics. I realized I needed evidence to back up the information we were hearing from sources so I turned on my phone. I accidentally turned it upside down. I’m holding my notepad and my pen and putting on my mask, so it was a little bit chaotic.

But I was able observe and document that this was a warehouse, notdescript. One sign that the company was present was a piece of low-stock paper with clip art. And these workers — some of them wearing masks, some not — were rounding up these soda bottles with literal shovels, moving them from one bin to another. Some were squirting in saline, which was sort of — it’s not the buffer you’d like to see in this sort of test kit, which is the PCRtest, the real deal test we needed at that time. I am referring to the fact that our national response was extremely behind. Testing was a big part of this. And seeing that none of the protocols you need for those sort of tests, including a refrigerated truck — instead, they had a rented Enterprise truck — none of those things were being followed, so these were highly suspect tubes, and they were being sent to FEMA, which forwards them to all 50 US states and territories. This video was important to me. I had to clarify that these tubes were the product being shipped, and that they were consistent with what we were seeing from public officials in different states.

AMY GOODMAN:So, what did it all end up looking like?

J. DAVID McSWANE:The federal government was ultimately responsible for what happened. FEMA, accepted those soda bottles filled with saline, as per their contract, and delivered them to states, contract experts we talked to said it would be hard to make a case that the federal government didn’t get what they paid for, because they accepted them, and they were forwarded to many states. I spoke to public health officials, who stated that this had rescheduled their testing plan. It caused them to delay their testing plan by several weeks. The tubes, in addition to probably being unsterile, they didn’t fit standard lab equipment. This would have been easy for any public health official to spot, since the states saw it immediately. These items were not desired by anyone. But the company was paid. And to my knowledge, there’s been no law enforcement action in response to that particular deal, though the owner is facing some lawsuits related to other allegations of fraud.

AMY GOODMAN:Let’s talk about the respirator deal with AirBoss Defense Group which was directly ordered and approved by the White House. You learned that Peter Navarro was a key Trump adviser and was referred to the committee for criminal prosecution. AirBoss awarded the deal to AirBoss shortly after it hired John Keane, a retired four-star Army officer, to reach out to Keane shortly after Trump had given him the Medal of Freedom.

J. DAVID McSWANE: Right. Peter Navarro was a tragic figure in the book. He was one among few in the administration that took the threat seriously at the beginning. And, you know, he’s got bravado. He’s brusque and kind of a no-BS kind of guy in the White House. He wanted to take charge in what he called “Trump time.” At the same time, the administration was trying to ignore the pandemic altogether. He does something truly remarkable behind the scenes. He takes control of federal government purchasing. And for obvious reasons, you can’t have political appointees in a political office, the White House, deciding who gets multimillion-dollar deals and who doesn’t. And this was sort of the first indication that I found — and found it in just like an obscure entry in federal data — that the White House was ordering these deals.

This company is Canadian-controlled and is actually a real company. They make rubber products. These were for high-end respirators like Dustin Hoffman wore in Outbreak. And they got a pretty big deal. We noticed that the White House had ordered it. This was our first indication that we believe the federal response right now to this problem is to just dump money all over. It helps if you have political connections. But I found, weeks later, that you didn’t even need that. It was all you needed was an LLCYou can send an email to the federal government and they will offer you a deal on things you might not have.

AMY GOODMAN: And again, to clarify, we’re talking about AirBoss, not Airbus.


AMY GOODMAN: But, David, finally, if you can talk about what this all means — I mean, we’re not done with this pandemic yet — and also the billions of dollars that were spent?

J. DAVID McSWANE: Right. I mean, it’s fair to assume, from the outset, that we were going to spend a lot of money. We weren’t prepared. We had to get supplies. Healthcare workers were in danger and were dying. Some of that is to be expected. I was shocked at how chaotic it was. You know, even though this was the Trump administration, I expected there to be some inertia, just within the government bureaucracy, to ensure that we were buying real things and we were getting a decent deal and we weren’t wasting our time with conmen, and found that we were so flat-footed, so ill-prepared. The national stockpile contained only 1% of the items we needed to deal with the first pandemic wave. That’s how bad it was, that our national well-being really rested in the hands of these mercenaries, who smelled blood in the water and really sought riches.

So, I view the book as a blueprint of exactly what not to do, and sort of a call to better prepare so that we’re not in this situation again. But more than that, you know, I’m conscious that we’re all feeling pandemic fatigue, and we’d love to move on. In writing the book and reporting, I tried to see through the lens to answer the question: What does all this tell us about ourselves? And at the end of the day, while the book is an artifact of the pandemic, I think it’s really a story about who we are, our worst impulses, what happens when we just sort of have this religious adherence to free markets, when experts say we really should have had a very visible hand on this and directed supplies, figured out who needed things, and made sure that our money was being used wisely.

AMY GOODMAN:J. David McSwane: I want to say thank you for being here, investigative reporter at ProPublica. New book out today. Pandemic, Inc. – Chasing the Capitalists & Thieves Who Made It Rich While We Get Sick. I’m Amy Goodman. We appreciate you joining us.