Maryland Gov. Larry Hogan’s administration has leaned heavily on emergency government spending powers to purchase nearly $1.5 billion in services and supplies during the coronavirus pandemic, covering the cost of everything from gloves to consultants.
It’s an unprecedented reliance on such powers that often save time but also bypass normal government spending rules that ensure competitive bids and public oversight.
Nearly 85% of the nearly 300 pandemic-related contracts the Hogan administration has struck during the 16-month state of emergency — which officially ends July 1 — have been signed without going through normal procurement channels, according to a tally of contracts submitted so far to the state’s Board of Public Works, a three-member oversight panel that reviews contracts.
The Hogan administration routinely violated one of the few disclosure requirements governing emergency spending, a requirement that basic details of all contracts be reported to the Board of Public Works within 45 days. About 20% of contracts were submitted after that deadline, sometimes months later, an issue that prompted repeated complaints from the board’s two other members besides Hogan.
State officials also have not fully responded to a public records request submitted by The Baltimore Sun in February for vaccine-related contracts.
Hogan has repeatedly defended his extensive use of emergency spending powers as essential to fueling the response to a once-in-a-generation pandemic and described the blown deadlines as the unfortunate but inevitable result of overburdened state workers trying to keep up with the strain of the crisis.
“It would certainly be ideal if we could cross every ‘T’ and dot every ‘I’ in the middle of a global emergency, but these were human beings working — and still are working — around the clock to help save lives,” said Michael Ricci, a spokesman for Hogan. “Even with all that, they were able to get the vast majority of their paperwork in on time. The critics could at least find it in themselves to take a breath and say thank you to these public servants before throwing stones.”
The contracts themselves are legally allowed, and even perhaps expected, during what state leaders say has been an uncertain and evolving environment, and one where goods and services were tough to come by initially.
Extensive use, however, is typically frowned upon by government watchdogs and has raised concerns about transparency and how government dollars have been doled out, since there is little comparison shopping or required public scrutiny over such purchases.
Some specific contracts previously made public already have drawn criticism from consumer groups and state Democratic lawmakers, who requested a state audit that is ongoing. Lawmakers also approved tighter rules for emergency purchases during the recently ended legislative session, though Gov. Larry Hogan, a Republican, has vetoed them.
“I think it’s disingenuous for the Hogan administration to say that they are trying to be accountable and welcome transparency, on the one hand, and then on the other hand fail to follow basic public information act disclosures, don’t provide full information on emergency procurements that are going out when requested by legislators and continue to flaunt the basic requirements of reporting these emergency procurements to the Board of Public Works,” said Sen. Clarence Lam, a Democrat representing Baltimore and Howard counties who frequently has criticized the Hogan administration’s handling of the pandemic.
Lam said that bypassing normal spending rules to address the high-stakes crisis was absolutely justified. But in Lam’s view, the lack of scrutiny and competitive bidding in that emergency process means those deals should be subjected to tighter guardrails and more subsequent disclosure so that lawmakers and the public can be sure that state officials didn’t get ripped off or direct money to cronies.
“I think [administration officials] seem to have a sense that they’re above the rule and just because something is an emergency the rules don’t apply to them anymore,” Lam said. “I think it’s actually the opposite, where if you have an emergency and a crisis that requires an emergency procurement then you need to have better guardrails to make sure things like the South Korean tests and the Blue Flame debacle don’t happen.”
A nonpartisan audit released in April found that the state violated emergency purchasing rules on the deal for the tests because there was no proper contract.
At one point last year, the Board of Public Works declined to approve those contracts and others valued at about $200 million. State Comptroller Peter Franchot, a board member, also later called for an audit of emergency contracts. Treasurer Nancy Kopp, another board member, said federal officials likely would follow up since federal dollars would fund many of the contracts.
“The continued parade of late, already paid, emergency procurement reports over the recent months is unacceptable, as it undermines not only the statutory role of the Board of Public Works, but diminishes the public’s faith in the transparency of their government,” Franchot told The Sun in a statement. “We can build the public’s trust by demanding an accessible review process and adhering to the regulations in place for these contracts — many of which are tens of millions of dollars.”
The Board of Public Works provided summaries of the contracts from May 2020 to June 2021 and their dollar amounts.
The largest item approved by the board was a group of 69 contracts worth nearly $684 million for pandemic-related supplies. Other deals costing from $11 million to $79 million were for items including medical tents, inmate health services, contact tracing staff, extra unemployment insurance agents and consulting services.
There were smaller contracts including $72,240 for safety signs at Motor Vehicle Administration offices, $117,415 for meals for the Maryland National Guard at the state’s Rocky Gap Casino Resort, $7 million for mail-in election ballots and almost $2.6 million for warehouse storage space from a local company.
Del. Kirill Reznik, a Montgomery County Democrat who’s called for a criminal investigation into the South Korean test deal, also questioned whether the Hogan administration really needed to skip normal spending rules for many of its pandemic-related purchases, especially for supplies or services that state officials anticipated weeks or even months ahead of time.
“Clearly, something is being hidden by the administration that needs to be revealed,” Reznik said. “They are spending millions of dollars of taxpayer money in ways that are opaque at best and, I fear, illegal at worst.”
The dealmaking was legally allowed once Hogan declared the pandemic an emergency in March 2020. State law gives the governor broad powers to address emergencies that normally included hurricanes and other natural disasters.
The state of emergency is what allowed Hogan to declare mask mandates and forestall evictions, as well as buy products and services “without crossing all the T’s and dotting all the I’s,” said Michael Greenberger, director of the University of Maryland Center for Health and Homeland Security.
The governor of Maryland and all other governors can lean on catastrophic health emergency statutes to ignore any law that interferes with their ability to respond, he said.
After a hurricane or wildfire people tend to forget how the power was used, Greenberger said.
“After COVID, a 16-month nationwide disaster where the consequences of gubernatorial actions play out, people won’t walk away and forget,” he said.
“There will be a lot of legislatures rethinking the power, and some already are,” Greenberger said. “And there is no question that people are entitled to know what happened and how it worked out.”