Unsanitized: How to Do Oversight, With Rep. Raja Krishnamoorthi
Also, another coronavirus bill, and killing the Ruth’s Chris rule. This is The COVID-19 Daily Report for April 20, 2020.
I have made no secret of my views on Donna Shalala, chosen as one of the members of the Congressional Oversight Commission. One of the reasons why the choice is so distressing is that oversight, even with relatively weak authorities, can accomplish a lot, when wielded by creative and persistent individuals who understand the problems they’re trying to solve. You don’t even need the Trump administration’s cooperation to get the necessary information and get things done.
One member of Congress has been proving this model since the outset of the coronavirus crisis. Rep. Raja Krishnamoorthi (D-IL) is the chair of the House Oversight subcommittee on Economic and Consumer Policy, and he has been racking up a series of small but impressive wins. He’s done this through identifying, questioning, and raising attention to various outrages from individual companies, and going to the companies themselves for the information rather than Trump’s obstructionists. “It is part of the strategy to try and figure out what the heck is going on in this situation,” Krishnamoorthi told me in an interview. “It’s hard to get answers from (Treasury Secretary Steven) Mnuchin or HHS Secretary (Alex) Azar, but you can go to those companies, and sometimes you get the same information but from a different source.”
A couple weeks ago, Krishnamoorthi teamed up with one of his power-packed subcommittee members, Rep. Katie Porter of California (Ro Khanna, Rashida Tlaib, and Ayanna Pressley also sit on it), to question Wellness Matrix, a company advertising an “in-home” COVID-19 testing kit that didn’t exist, one of many scammers offering fake tests. The Securities and Exchange Commission responded by delisting Wellness Matrix from the stock exchange. Krishnamoorthi’s subcommittee questioned Alex Jones’ sale of miracle toothpaste infused with silver as a coronavirus cure. The Food and Drug Administration stopped the sales.
These were not Democratic agencies, but Donald Trump’s SEC and FDA. “That’s because of public pressure,” Krishnamoorthi said. Raising awareness of these fraud schemes makes it impossible for even an anti-regulatory executive branch to refrain from regulating.
Krishnamoorthi’s latest crusade is a real doozy. You know the story of Covidien, the big medical supply company that bought out a rival that had a contract to supply cheap ventilators to the federal government, and then cancelled that contract. The company that replaced Covidien and agreed to make cheap ventilators for the national stockpile was called Respironics, a division of Philips North America Corporation.
In 2014, Philips received a $13.8 million grant from the Biomedical Advanced Research and Development Authority (BARDA), part of the Department of Health and Human Services. BARDA gives grants to develop technologies for emergency response for things like pandemics, and the grant helped create the guts of the Philips ventilator. Last September, the company agreed to a contract for 10,000 of these FDA-approved ventilators, known as the Trilogy Evo, at $3,280 a pop.
As ProPublica has reported, the Trilogy Evo did not then go into production, nor did they accelerate operations as the outbreak began. They instead took the underlying technology and built a ventilator to sell overseas at nearly six times the cost. “Taxpayer money funded this technology,” Krishnamoorthi said. “And rather than producing when taxpayers most need it, they’re profiteering by selling it abroad. It bothers me and a lot of people.”
This seems like a tailor-made situation for the Defense Production Act, to force Philips to honor the original contract for the cheap ventilators first. But while the Trump administration did invoke the DPA on Philips on April 2, it was for a new deal to purchase 43,000 ventilators for $15,000 each, still nearly five times as much as the initial quote. Jared Kushner reportedly negotiated the deal. “I have a special interest in all things Jared Kushner touches in our government,” Krishamoorthi said.
In a document request to the parent company, Krishnamoorthi asks for all contracts, communications, and details of negotiations between Philips and the government going back to 2015, as well as all sales of the new “high quality” version of the Trinity Evo being sold abroad.
This is real oversight, using the tools to simultaneously demand information from companies and raise public pressure to receive that information or change behavior. It’s worked in the past for Krishnamoorthi, as well as working for Rep. Bill Pascrell and Porter in getting Live Nation to reverse their decision on blocking some refunds to customers during the crisis. And it doesn’t require running into the brick wall of the Trump administration with requests. “I think it’s a model that unfortunately we have no choice but to use right now,” said Krishnamoorthi.
So if we want to know about this strange “air bridge” program, where FEMA is acting as logistics operator for private distributors, seeking out the information from the distributors. If we want to know about these jacked-up sales to the government of N95 masks, ask the sellers of the masks. If you want to understand bailout terms granted to companies, ask the companies. It sounds simple but it’s not always done, in many cases because the practitioners of oversight don’t want to know too much about what they’re overseeing.
Krishnamoorthi is a mainline loyal Democrat. If Pelosi had a problem with a fire breather, she could have selected someone for bailout oversight who knows how to do oversight. The lack of conflicts of interest would be a bonus too.
Author: David Dayen
PC: Susan Walsh/AP Photo