American Consequences - May 2020

emerging black market, called the FGE deal “absolutely” a case of price gouging. “So you have a $4.90 mask before you put it on a truck?” he said. “It’s insanity.” Curley’s company, Raymond Associates LLC, drafted a best practices paper for buyers like local hospitals, pointing out that 3M’s list price for masks like those Stewart was attempting to purchase was $1.27. After shipping costs and overhead, the end price should realistically be around $2 a mask, he said. “So anybody that’s above that number is gouging,” Curley said. “And they know it.” Though several states have clear price gouging laws, those rules don’t apply to federal government purchases. Curley said he’s seen numerous offers for respirators, many of which did not really exist, and turned away brokers working through multiple layers of intermediaries. To avoid this, he recommends “a single line” between the distributor and the government agency buying the product, meaning there’s only one facilitator. Sergio Fernández de Córdova, who chairs a media nonprofit in New York, is working with Curley to help government agencies get reputable masks at better prices. Government agencies are partly to blame, he said, because they’re desperately handing out big contracts to unknown companies and paying exorbitant

prices for whatever comes back. In the FGE deal, for instance, the VA essentially set its high price when it agreed to 6 million units at $34.5 million. “They’re approving it,” he said. “So that’s why people don’t see a problem with it.” Though several states have clear price gouging laws, those rules don’t apply to federal government purchases. “It is the Wild West and a loophole – that’s why so many lawyers are involved,” Fernández de Córdova said. “We’ve seen deals with lawyers making a couple hundred grand.” 3M has filed lawsuits in at least five states against people selling its respirators and masks at obscene markups. The Justice Department is also hunting down alleged scammers, such as two California men who were arrested for selling Chinese versions of the N95 respirators, KN95s, which they didn’t actually possess. Stewart had read about those cases and had been given a copy of Curley’s best practices memo, and it clearly worried him. “I’m just trying to fulfill my obligation and not go to jail,” he said. EMPTY HOTEL, EMPTY PROMISES At 11 a.m. Saturday, Flight N407FX skidded onto warm asphalt in Columbus. Stewart’s mother and father were waiting with luggage, while a few other family members came by to take pictures.


May 2020

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