A top official in Maryland Gov. Larry Hogan’s administration on Wednesday defended two problematic business deals that are part of the state’s response to the coronavirus pandemic — a disputed contract for masks and ventilators and the purchase of 500,000 tests from South Korea that have been slow to be put into use.
Ellington Churchill Jr., the state’s secretary of general services, said the state was pressed to quickly buy medical goods in a chaotic world market as the coronavirus spread across the country.
Less than a week after Blue Flame Medical was created by two Republican operatives in March, the company landed a deal to sell $12.5 million worth of ventilators and masks to Maryland. As weeks went by with no deliveries, the state canceled the contract and referred the company to the state attorney general for investigation. The federal government also is investigating the company.
“At that time, it was a matter of life and death for Marylanders entering into our health system, so we were reliant on trying to act quickly to get materials into the system,” Churchill told members of a state Senate committee on Wednesday. “That was our best opportunity at the time, which is why we went to contract with that vendor.”
Churchill said Blue Flame had been recommended to the state through “a member of the governor’s team,” but added that the governor’s office wasn’t directly involved with the deal.
“We were not looking at relationships," he said. “We were looking simply at what could be established as fulfillment for any particular vendor.”
Sen. Paul Pinsky, the Democratic chairman of the Senate Education, Health and Environmental Affairs Committee, questioned how the state could so quickly vet a deal with a company “that had absolutely zero experience” in brokering medical goods.
“I’m just going to speak to the facts of the case,” Churchill responded. “That is, the referral was made. We entered it into the system. We evaluated the offer. We had follow-up conversations to understand capacity to fulfill the order and we moved forward.”
Blue Flame has since delivered 27 ventilators to a state warehouse, out of the 110 ventilators and 1.55 million masks it was contracted to provide. The firm, founded by Republican operatives Mike Gula and John Thomas, filed a legal claim with the state seeking to have the contract honored.
Sen. Clarence Lam, a Howard County Democrat, said it seemed the state did little other than verify the company existed with no “second-level” scrutiny. Lam suggested a basic Google search would have turned up a news article from Politico that detailed Blue Flame’s origins, which may have set off alarms for state officials.
Senators also grilled Churchill about the state’s highly-publicized purchase of 500,000 coronavirus tests from a South Korean company, but got few answers. The state has not been clear on how many of the tests actually have been used.
Churchill acknowledged the tests from LabGenomics are not an “off-the-shelf” product and that other components are needed.
But he would not answer whether the state had sufficient supplies of all the components or whether state health officials have asked his department to purchase any of them. He also wouldn’t say whether he’s been asked to buy more tests.
Churchill repeatedly said those questions should be directed to the state health department.
Lawmakers have been frustrated in recent weeks that they’ve been unable to get answers from the health department. A General Assembly coronavirus work group canceled a meeting planned earlier in the day after the health department pulled out. And some lawmakers began posting questions on Twitter they wanted to ask the health department — including “Where are the 500,000 test kits being used?” — with the hashtag #WhatsHoganHiding.
Hogan has included having ample available testing as one of the precursors to more broadly reopening the state’s economy and relaxing restrictions. He’s set a target of 10,000 tests per day, which the state has not yet reached.
Pinsky said Hogan made the purchase of the tests sound like “Santa Claus had landed in Maryland” bearing thousands of tests “to save our lives,” which didn’t turn out to be the case.
“A lot of people were misled about what we purchased... We’re all wondering: Are we losing lives because of it?" he said.
Pinsky said that most of the emergency deals for supplies appear to have worked out well, but not these two contracts.
“Unfortunately they were mistakes, disasters — and I think you were complicit in this,” he said to Churchill.