State Auditor Nicole Galloway is asking for a lot of information about the way the state purchased substandard masks to protect public safety workers from COVID-19 and the vendors who took large advance payments to obtain them.
In letters to three state agencies, Galloway asked for documentation of how state bidding rules were waived, how money was transferred and the discussions with one vendor who would not immediately refund $9 million paid by the state. The letters set a Friday deadline for delivering the requested documents.
The letters went to the Department of Public Safety, which ordered the masks, the Office of Administration, which handles state purchasing and accounting, and State Treasurer Scott Fitzpatrick, who made payment for the masks.
"Missourians, especially first responders on our front lines, deserve clarity on how their government is handling this public health crisis," Galloway said in a news release. "The response from the governor's administration and the slow drip of information being released publicly has created more questions than answers."
On April 13, Director Sandy Karsten of the Department of Public Safety reported during one of Gov. Mike Parson's daily briefings that the State Emergency Management Agency had recalled 48,000 KN95 masks being delivered to law enforcement and emergency medical agencies. The masks were part of three large orders for masks that the Department of Health and Senior Services had determined did not fit as expected and could expose wearers to infection.
On April 15 and again on April 17, Karsten provided additional details. On April 15, she said some masks had been sent to a lab for analysis and that one vendor had picked up their goods and made a refund.
She described the deals in detail on April 17, but did not name the vendors.
The state made three deals for N95 or KN95 masks, she said.
One was for 360,000 masks for $1.1 million. The state received 88,630 masks and the vendor picked the masks up and made a refund. Another vendor, identified by the Tribune as Eclat Commerce of Hacienda Heights, California, promised 5 million masks for about $16.5 million. The state paid half in advance.
The company was unable to deliver the masks on a timely basis and made a refund, a company representative told the Tribune.
A third vendor, identified by the Tribune as NMS LLC of St. Louis, promised to deliver 3.9 million masks, also for about $16.5 million The first 101,000 masks were being distributed when the state was forced to recall them. When she described the deal, Karsten said the company was refusing to refund a $9 million advance.
At a news conference later that day, Parson said the vendor had cheated the state.
After talks over the weekend, on Monday Karsten reported that the state would receive a refund from NMS LLC.
In the letter to Karsten, Galloway asked for the purchase orders and contracts for the masks, and details about meetings with NMS LLC and others to obtain refunds. The letter asks for the date, time, participants, notes and agendas.
The Tribune found that NMS LLC was created March 20 by an attorney in a politically connected St. Louis law firm and was represented by another, Dowd Bennett, and that former Gov. Jay Nixon had participated in at least one meeting. It is unknown who the true owners of NMS LLC are.
Public Safety Mike O'Connell responded to a request for comment with an email stating "the department is reviewing the State Auditor’s letter."
From the Office of Administration, Galloway is seeking documentation of the payments, the way bidding rules were waived and records of the wire transfers reported by the Tribune.
The Office of Administration did not respond to a request for comment on the letter.
In the letter to Fitzpatrick, Galloway asked for records of the wire transfers Fitzpatrick told the Tribune were completed on a "condensed time frame."
Fitzpatrick's spokeswoman, Mary Compton, said Galloway will receive what she asked for.
"The office will comply with the Auditor’s request," Compton wrote.
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