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All because of the tweet: New York spent $ 69 million on ventilation systems that it never received

'01.05.2020'

Vita Popova

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An engineer from Silicon Valley never delivered any fans without any medical experience. However, the New York authorities, on the recommendation of the White House, entered into a contract with him. The state never received the promised fans, the contract with the businessman was soon terminated. The White House, meanwhile, declares that they know nothing about this contract. The incident wrote in detail about the incident. BuzzFeed News.

Photo: Shutterstock

What happened

On March 27, emergency rooms in New York and across the country began to fill in patients with coronavirus infection who had breathing problems. U.S. President Donald Trump posted a post on Twitter urging Ford and General Motors to begin production of ventilators immediately.

@ realDonaldTrump / Twitter

Among one out of thousands of responses was: “We can supply ICU ventilators, invasive and non-invasive. Let someone contact me urgently. " It was written by Yaron Oren-Pines, an electrical engineer from Silicon Valley with no medical background and 75 followers on Twitter.

However, three days later, New York State paid Oren Pines $ 69,1 million. Payment was made for 1450 fans at a price of $ 47 for one unit, which is at least three times their standard retail price.

Not a single fan was ever provided to New York State.

A state spokesman said New York has contracted with Oren Pines on the direct recommendation of the White House coronavirus task force.

Termination of the contract

A month later, New York terminated the contract with Oren Pines. The state is now trying to recover all the money paid to the Silicon Valley electrical engineer. Officials declined to specify how much money the state was able to return. “We are in talks on a few remaining issues,” said administration spokesman Heather Groll.

Oren Pines himself during a telephone conversation said that neither he nor his company give any comments on this subject, and then hung up. He did not respond to subsequent text messages.

The money he received on March 30 was the largest lump sum payment made by the New York Department of Health at the behest of Governor Andrew Cuomo last month. The funds were used to purchase the necessary medical equipment as soon as possible for delivery to hospitals.

hopeless situation

This case demonstrates how fear of overcrowded hospitals across the country, especially in New York City, has prompted politicians to turn to unverified and sometimes unqualified providers. “We had no choice but to look under every rock to find ventilators and other equipment we needed,” said Rich Azzopardi, senior advisor to Cuomo, talking about the sourcing of critical medical equipment for New York City.

He added that staff was able to meet most of their needs and is currently reviewing some contracts, while canceling others.

As in most states, New York procurement rules prohibit payment for goods or services until an order is completed. But last month, Cuomo suspended these rules to meet the urgent need for fans, N95 masks, bathrobes, and other personal protective equipment. A team of 25 people is now working overtime to check potential suppliers. In some cases, she began to pay for orders before they were completed.

Between March 19 and April 27, the Health Department cut 77 checks by $ 1 million or more to supply medical supplies totaling nearly $ 735 million. Some of the recipients are reputable healthcare providers such as Henry Schein Inc. Is an American distributor of medical products and services with an annual revenue of $ 10 billion, with a presence in 32 countries.

But the vast majority of payments were made by various companies, many of which have virtually no experience in medicine. Among them are fashionable clothing brands, Chinese importers of iron ore and tools, a company selling hair and wrinkle removers, a number of private joint-stock and investment companies, and others.

On the subject: New Yorker stole $ 12 thousand of federal assistance to victims of quarantine

Some states have also tried to make deals to supply the necessary goods. The California Department of Transportation agreed to pay $ 12,74 for N95 masks, which are usually retailed for just $ 1,25, while the Federal Emergency Management Agency has signed up for an order for 2 million respiratory masks for $ 7,25 each, which is more than 10 times the real price.

Meanwhile, New York over the past month hastened to order 214,7 million units. personal protective equipment, including N95 masks, gloves and face shields. At the moment, only 8% (17 million units) of these funds have arrived.

But it is the Albany government that has shown the most tenacity in its efforts to tackle COVID-19. “I need 30 fans,” Cuomo said at a press briefing on March 000. "How can New Yorkers be allowed to die just because they can't get a fan?"

Three days later, the state issued the second of two payments totaling nearly $ 116 million to Domestic, a small Brooklyn company that leases fans and other respiratory devices to hospitals and nursing homes. This company, which does not even have a website, has no records of previous contracts with New York or with the federal government.

The deal was concluded for 5700 fans, according to a report from the Albany Times-Union, but the devices were never delivered. Call co-owner Dome International David Chait (David Chait) remained unanswered.

White House Position

The Oren Pines contract stands out even among the many motley suppliers that have struck deals with New York over the past month. It is unclear how he came to the attention of the White House Task Force on Coronavirus, which was created in late January and held daily press briefings under the leadership of the president. “This guy was recommended to us by the White House Coronavirus Task Force because they also did business with him,” said a New York state official. "I think everyone was genuinely trying to help each other and get the equipment." He added that he did not know whether Oren Pines received a federal contract; there are no federal records of such transactions either.

A White House spokeswoman asked for comments in the office of Vice President Mike Pence, who heads the task force. Pence's spokeswoman forwarded the request to FEMA. A FEMA spokeswoman said that he cannot speak on behalf of the White House and that he is not sharing information about potential suppliers.

Following the publication of this article, Pence spokeswoman Katie Miller stated that "the White House Coronavirus Task Force has never been informed about this contract and never participated in it."

What is known about the businessman from Silicon Valley

Oren Pines, an Israeli immigrant who graduated from the University of Maryland, has lived in Silicon Valley since the mid-1990s. According to official figures, his name is mentioned in at least 18 different patents. He has held a variety of technology roles, including most recently at Google and several years at Crocus Technology, a VC firm that specializes in computer magnetic memory, according to his LinkedIn profile.

Mike Ritter, who ran Oren-Pines at Google, said that before the pandemic they had planned to meet in Napa, California this week, but those plans were canceled and they hadn't spoken in weeks. Ritter said he was not aware of the contract for the supply of ventilators, but he did know that Oren-Pines had contacts with suppliers in Asia. “He's always up to date. Whenever there was an opportunity, he tried to help and make money, ”Ritter explained.

In 2013, Oren Pines co-founded Legasus Networks, a network solutions company in the Gulf area. Doug Lee, indicated in the registration documents as the company's CEO, said he did not know anything about any deals related to fans. According to Thao Tran, one of the founders, Legasus "has nothing to do with medical or ventilation devices."

LinkedIn's Oren Pines profile indicates that he is the founder and owner of InCommon, described as a consulting and contracting firm for the mobile communications industry. There is no information about InCommon in state registries.

According to information found on Oren Pines social networks, he has been a Twitter user and Trump's follower since 2011. Since the end of January, Oren Pines has posted several tweets related to coronavirus, including one on March 20, in which it published stock index indicators in different countries. The data indicated that only China had a small gain, and described the idea that China could benefit from the pandemic as an “interesting conspiracy theory.” A week later, he commented on the president’s Twitter post about fans.

One of the posts posted less than an hour after the fan post by Oren Pines provides a likely clue about his plans. The Twitter post was made from an account owned by Israeli businessman Segev Binyamin. He has only three subscribers, one of which is Oren Pines. Offering to supply fans to the Israeli Minister of Defense, Binyamin wrote: "I am the owner of a Chinese company and have the ability to supply 1400 units." This is almost the exact number of fans that, according to the contract, the Oren Pines was supposed to deliver to New York.

Benjamin, once again saying that he was not going to comment on this story, stopped the telephone conversation.

Azzopardi said the New York coronavirus contract review team includes officials from the State Inspector General's Office and the ITA Inspector General's Office. These officials are primarily looking at whether potential suppliers can deliver on their promises. Only about 10% of potential suppliers have been approved. Oren Pines, with its $ 47 fan offer, was one of them. By comparison, the Department of Health and Human Services paid $ 600 for the best Philips fans, and Congress is currently examining whether the price was too high. “We chose our contracts based on the best value in a market environment that literally changed every day,” Azzopardi said.

A separate deal for 750 fans in New York, since it was canceled, was valued at $ 74. In the end, the state was able to return the $ 666 million that it paid to a company called Trinity Partners LLC.

Groll, a spokeswoman for the New York Office of General Services, did not answer a number of detailed questions about the Oren Pines deal, although it was said to be “terminated” and “most of the money was returned to the state.”

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