With U.S. virus response, taxpayers may need to keep demanding: Who benefits?

cashhandle-300x200Cui bono? That query in Latin — Who benefits? — affirms for linguists that sketchy practices date to Ancient Rome and earlier. But who knew the phrase would be so applicable for U.S. taxpayers considering dubious aspects of many of the nation’s pricey Covid-19 pandemic responses.  Herewith a sizable list of conflicts and coziness in the public  funding of pandemic responses.

VP’s chief of staff dealing with health care issues but without giving up stocks

covidmarcshort-150x150While Vice President Pence has headed the White House pandemic task force Marc Short, his chief of staff has served at his side. This has given him full access to the highest-level discussions about strategies and approaches that not only will affect Americans’ health care but also the fortunes of numerous Big Pharma, medical supply, and other major enterprises in the field dealing with the novel coronavirus.

NPR reported that Short also “owns between $506,043 and $1.64 million worth of individual stocks in companies doing work related to the Trump administration’s pandemic response — holdings that could run afoul of conflict of interest laws. Many of the medical, pharmaceutical and manufacturing companies – including 3M, Abbott Laboratories, Gilead Sciences, Procter & Gamble, Medtronic, Bristol Myers Squibb and Johnson & Johnson – in which Short and his wife hold stock have been directly affected by or involved in the work of the coronavirus task force chaired by Pence. Other companies among his holdings, such as CVS, Thermo Fisher Scientific, Walmart and Roche, have been publicly touted by the White House for their work with the federal government on the coronavirus response.

“Short declared at least some of his stock holdings — more than 100 listings of individual stocks across a range of economic sectors — to be potential conflicts of interest after he joined the vice president’s office last year. But he did not divest those holdings after being denied a tax break often granted to government officials who must sell stock to comply with ethics laws.” Problems? Yes, to ethics watchdogs. No, to the Trump Administration.

A one-time White House staffer peddles defective masks to hard-hit Navajo

ProPublica, the Pulitzer Prize-winning investigative web site, dug into Zach Fuentes, Trump’s former deputy chief of staff, finding that he “formed a company in early April and 11 days later won a $3 million contract with the Indian Health Service to provide [the Navajo tribe] specialized respirator masks to the agency for use in Navajo hospitals. The contract was granted with limited competitive bidding.”

fuentes-150x150The problem? The masks Fuentes and his associates provided, the report said, “do not meet Food and Drug Administration standards for ‘use in health care settings by health care providers’ … The masks were purchased as part of a frantic agency push to supply Navajo hospitals with desperately needed protective equipment in the midst of the coronavirus pandemic.”

Furious Democratic representatives from Arizona and New Mexico have demanded answers about Fuentes’ dealings from administration officials. The purchase and supply of faulty personal protective equipment is crushing for the Navajo.

That’s because “Navajo residents have been devastated as the virus has swept through a reservation that spans four states. Already, 4,633 people have tested positive for the coronavirus, and 153 have died as of May 23, a staggering toll in a population of 356,000 — and the highest infection rate of anywhere in the U.S.,” reported Stat, the health and medicine news site. Fuentes already was a lightning rod for controversy in the administration, known for his imperious behavior and weak delivery of requested results. He fell out with the president, but devised a plan to hide on the federal payroll for months until he qualified at age 36 as an active duty officer for early retirement from the U.S. Coast Guard.

Novices and sketchy folk line up to be U.S. health care contractors

The administration — besides its ties to Fuentes — has raced to award federal contracts to a gallery of shady and novice entrepreneurs in the area of medical and other supplies needed in the pandemic response, ProPublica also has reported. Its examination of the contractor lists discovered “345 first-time federal contractors [have been] promised at least $1.8 billion in deals by the Trump administration since March, representing about 13% of total government spending on pandemic-related contracts of $13.8 billion … many of the new contractors have no experience acquiring medical products.”

The site’s scrutiny turned up: “A firm set up by a former telemarketer who once settled federal fraud charges for $2.7 million. A vodka distributor accused in a pending lawsuit of overstating its projected sales. An aspiring weapons dealer operating out of a single-family home. These three privately held companies are part of the new medical supply chain, offered a total of almost $74 million by the federal government to find and rapidly deliver vital protective equipment and Covid-19 testing supplies across the U.S. While there’s no evidence that they obtained their deals through political connections, none of the three had to bid against competing firms. One has already lost its contract for lack of performance; it’s unclear if the other two can fulfill their orders on time, or at all.”

Where did U.S. coronavirus rescue aid go? Billions went to already-wealthy and elite hospitals

A donnybrook has erupted among the nation’s hospitals as information emerges about how the administration has doled out billions of dollars in coronavirus rescue money. As the New York Times headlines alone summed up the issue: Wealthiest Hospitals Got Billions in Bailout for Struggling Health Providers. Twenty large chains received more than $5 billion in federal grants even while sitting on more than $100 billion in cash.

Congress wanted to get lots of aid out the door fast to ensure that critic medical services did not collapse when hospitals responded to the pandemic and shut off lucrative procedures deemed non-essential. But that left the administration to determine how to allocate sizable sums with haste and without consultation or transparency. Hospitals that had heavy Covid-19 caseloads griped that facilities nearby that had few may have gotten equal or greater U.S. aid. The newspaper found that, in brief, already rich and elite institutions also got hefty support, even if their finances already would allow them to hold up better than their poorer and weaker brethren.

The concern is great because rural hospitals and those that serve communities of color and the poor not only may not get sustaining help now but Senate Majority Leader Mitch McConnell and his GOP colleagues are balking at further federal aid for businesses and individuals affected by the coronavirus. By the way, credit is due to the organization Good Jobs First for its watchdog work, collecting and making public information on U.S. coronavirus aid payments. For those with the time to roll through the list of hospitals and other aid recipients, it is eyebrow-raising as a catalog of big, respected, and well-known institutions with hefty budgets.

Viral attention and big money raising concerns with vaccine developer

covidmoderna-300x157Moderna, a Cambridge, Mass., biotechnology firm has made public the barest results of testing on just eight volunteers. But the firm has become both a darling and a demon for investors and medical scientists, both unsure how to respond to the big money that has washed in and out of the company stock in hopes Moderna pioneers a Covid-19 vaccine.

Will the painstaking science needed to develop a safe and effective tool against the coronavirus be corrupted with harms resulting? Or will the possibility of big profits — the handful of Moderna executives already have raked in $89 million from stock sales — get investors and Big Pharma to pay attention to a much neglected area?

The New York Times already did an excellent public service by reporting on Trump’s hand-picked leader for “warp speed” vaccine development and his “vast” and “intricate” connections in Big Pharma. Critics say these uncut ties create big conflict-of-interest issues. Moncef Slaoui is a venture capitalist, a former and longtime executive at GlaxoSmithKline, and until recently a board member of Moderna. His Moderna stock rose by nearly $2.4 million, to $12.4 million. He has resigned from the company and vowed to donate his Moderna windfall to charity. But the administration has allowed him to be a contractor, meaning he will not divest of his other, sizable holdings. That has exasperated ethics experts.

Anti-viral drug dogged by questions on price and distribution problems

Remdesivir — a drug that was a flop in its planned use against the deadly hemorrhagic disease Ebola — then turned and seemed to offer a rare bright spot in the campaign against the novel coronavirus. Administration officials took the rare step of announcing with few details that clinical trials of the anti-viral medication showed “modest” results in lessening the time patients suffered with Covid-19. The stock market soared, even as Gilead, the drug’s maker, and Dr. Anthony Fauci, the seasoned and respected U.S. medical expert on virus fighting, took a lot of heat about his statements and the next steps for remdesivir.

The data on the drug has been disclosed, and experts are tearing into it. It seems to be holding up to Fauci’s description.

Gilead, though, still has not said what it plans to charge for its hot product. That’s angering experts and patient advocates because they point to the hefty investment taxpayers made to help Gilead develop remdesivir, arguing that should give the public big sway to ensure the med stays affordable. To its credit, the company has donated significant supplies to widen use of a drug with the now rare claim to have some medical science to help treat Covid-19.

Distribution of the available supplies has been rocky at best, bungled many hospitals would say. Federal officials first tried to send the donated remidisivir to hospitals across the country. That didn’t make sense, because many institutions aren’t caring for coronavirus patients who might benefit from the drug, or they have just a few individuals with low need for the therapy. Hospitals that need the drug most howled.

Officials reconsidered and turned to state health departments, finally, for advice and assistance. A better distribution system seems to have fallen in place, but not before some hospitals also expressed consternation with the administration for another reason: They were surprised when remdesivir supplies showed up, unannounced, at their door. That posed significant headaches because the medication requires refrigeration that the hospitals lacked (their fridges were full with other important meds). The supplies were returned and without reports of hospitals needing to discard any of the drug.

The episode gave public health officials the shivers: Was this a taste of how the administration might bollix up a coronavirus vaccine, if it finally can be developed in record time? The remdesivir doses were much smaller in quantity than the hundreds of millions of inoculations that will be required to provide a greater safeguard to Americans.

In my practice, I see not only the harms that patients suffer while seeking medical care, but also their struggles to access and afford safe, efficient, and excellent medical care. This has become an ordeal due to the skyrocketing cost, uncertainty, and complexity of therapies and prescription drugs, too many of which turn out to be dangerous drugs. The novel coronavirus has laid bare for Americas the inequities and disparities of the U.S. health care system. It needs and deserves the public’s support in these unprecedented times.

But we also have work to do to improve a system on which we spend more than $3.7 trillion annually (~18% of our GDP) and get poorer health outcomes than other western industrialized nations. In a system so vast it is hard to adhere to a journalistic adage — to “follow the money.” But taxpayers and voters will need to track back when the pandemic is behind us more to hold accountable those who took and received sums from the federal treasuries. Was our hard-earned cash carefully spent and used wisely? Cui bono?

Patrick Malone & Associates, P.C. listed in Best Lawyers Rated by Super Lawyers Patrick A. Malone
Washingtonian Top Lawyer 2011
Avvo Rating 10.0 Superb Top Attorney Best Lawyers Firm
Contact Information