A politically connected firm gets an $800-million mask contract with California. Then it falls apart

A nearly $800-million deal California struck with a politically connected vendor of medical masks has collapsed after state officials said the company failed to deliver most of the supply, renewing questions over how the state is vetting vendors during the coronavirus crisis.

The scale of the contract with Bear Mountain Development Co. LLC came to light Friday when state officials, pressed by The Times, confirmed details of the deal, which is one of the largest made by California in its scramble for protective equipment. Former Alabama Atty. Gen. Troy King is listed on Bear Mountain’s formation record as president of the Montgomery, Ala., company.

The state has been notifying federal authorities whenever contractors fail to deliver promised supplies. Among those vendors is Bear Mountain Development, according to two sources familiar with the issue. The state has not publicly accused the firm of wrongdoing.

Under one of its three contracts with California, Bear Mountain was supposed to deliver 400 million three-ply surgical masks and 200 million face shields, according to purchase order records the state provided to The Times.

Those records identify the company’s local contact as Paul Bauer, a Sacramento lobbyist who works for the government relations firm Mercury Public Affairs.

“I was approached by the former attorney general of Alabama and agreed to be his local contact in Sacramento,” Bauer said in a text message. “Bear Mountain is not a client of Mercury.”

Bauer declined to provide details about his financial arrangement with Bear Mountain or why his Mercury email address is listed on the state purchase records.

State officials canceled the agreement May 2. By then, Bear Mountain was supposed to have delivered 60 million face shields and 120 million surgical masks, according to the records. By that point, the company had delivered only 489,000 face shields and fewer than 9.7 million surgical masks, said Monica Hassan, deputy director of the Department of General Services.

State officials did not provide details about why the company didn’t deliver. Calls to Bear Mountain representatives were not returned Friday.

California

Desperate for coronavirus help, California spending billions on no-bid contracts with little accountability

Desperate for coronavirus help, California spending billions on no-bid coronavirus contracts, little accountability

May 7, 2020

Brian Ferguson, a spokesman for the Governor’s Office of Emergency Services, said the state did not pay any money upfront and would reimburse Bear Mountain for the masks that arrived.

“It would be our hope that all suppliers would fully fulfill their commitments,” Ferguson said. “For those that do not, that is why we have strong contracting rules in place to protect taxpayers and so the state gets the commodities desperately needed.”

Ferguson said he could not comment on any communication the state may have had with federal authorities related to the deal.

Some lawmakers called for an investigation into how the deal collapsed.

“This is unacceptable,” said state Sen. Jim Nielsen (R-Gerber), who is asking a legislative committee to demand an audit of purchases of personal protective equipment. “The public needs to know what their money is being spent on, and that in this crisis time that product that is supposed to be lifesaving is effective and that it arrives.”

“We have to figure out what is going on and why it looks so unprofessional,” said state Sen. John Moorlach (R-Costa Mesa).

State governments have been under immense pressure to secure medical supplies during the COVID-19 pandemic, but spending watchdogs have called for greater transparency and accountability in how California decides which businesses to make deals with.

Bear Mountain is one of at least 80 vendors awarded noncompetitive contracts under California’s coronavirus emergency order that had never done business with the state before, according to a Times analysis.

Another was Blue Flame Medical LLC, a company founded recently by two GOP operatives who jumped into the personal protective equipment supply trade. State officials abruptly canceled a deal with Blue Flame after wiring nearly $500 million to the firm, only to have to claw the money back.

A Times analysis of California procurement data found this week that the state has so far committed to spend more than $3.7 billion on no-bid contracts under Gov. Gavin Newsom’s March 4 coronavirus emergency order.

In response, Newsom defended the state’s record on vetting companies, saying “not a dime was lost in the state of California.”

“We were in the wild, Wild West period in the early part of this pandemic,” Newsom said Wednesday.

The state’s biggest contract for masks is a $1-billion agreement with a subsidiary of the Chinese electric-auto manufacturer BYD Co. to provide 200 million N95 respirators a month.

Newsom’s office for weeks refused to release the document, even though government contracts are public under state law, but relented amid mounting pressure for the state to provide more details about the spending.

The contract showed that BYD owed the state $247 million for failing to secure federal certification of its masks in time for a May delivery. To date, BYD has sent the state 10 million surgical masks and none of the coveted N95 respirators.

Despite the issues, Newsom has stood by the BYD deal.

Mark Ghilarducci, director of the Office of Emergency Services, said this week that the worldwide shortage of protective equipment had created a marketplace rife with fraud. The state created a team to vet thousands of offers that poured in, but Ghilarducci said typical scrutiny had to be balanced with an immediate need for large quantities of the supplies.

He said the FBI, Department of Justice and Federal Emergency Management Agency have all been working with the state “to ensure that all of the different commodities that we were obtaining and the people we were dealing with were legitimate.”

It was Ghilarducci who publicly announced the state was working with Bear Mountain at a news conference April 8 when he held up the company as an example of California “working with direct contracts” with large vendors to obtain tens of millions of masks.

Records released Friday detail two other agreements the state made with the firm for face shields and masks, including one for $97,000 and another for $15.6 million. State officials said the firm delivered the promised supplies on those two deals.

Bear Mountain was formed in 2014 by King, who served as Alabama’s attorney general from 2004 to 2011. It’s unclear how and when King, 51, got into the medical supply business. He heads a small personal-injury law firm in Montgomery, Ala.

Bear Mountain’s supplier in the California deal appears to be Mimish PPE, a New York company formed late last month, according to its website and state business filings. Mimish said on its website that it was fulfilling a California order with Bear Mountain for 400 million masks and 200 million face shields. However, that claim was removed from the website after The Times reported on the deal this week.

Mimish PPE shares the same Brooklyn address as Mimish Designs, which sells craft beanbags, throw pillows and other stylish goods. Mimish representatives did not return phone calls and emails.