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One of the stars of the television show “Shark Tank” reportedly tried to sell desperately needed protective masks to the state of Florida at a price more than three times that on the market.
Daymond John, CEO of the Shark Group, reportedly approached Florida officials in March about providing one million of the N95 protective masks at $7 apiece, though they typically sell for under $2 each. The asking price was one of the highest that the state was willing to pay, but the shortage of supplies for healthcare workers battling COVID-19 left the state little choice, the Miami Herald reported.
Jared Moskowitz, director of the Florida Department of Emergency Management, agreed to the price asked by John as other deals to secure the masks had fallen through and the state was dealing with coronavirus hotspots that were emerging.
“This was not somebody off the street, this was Daymond John,’’ Moskowitz told the Miami Herald. “He came to me and said, ‘I’ve been in the clothing business. I have connections with factories in China.’”
The state’s Division of Emergency Management was enabled to make purchasing deals as Gov. Ron DeSantis issued an emergency order temporarily lifting the normal competitive bidding rules. Florida agreed to pay $7 million to the Shark Group for the masks in March but did not pay the vendor directly, opting instead to go with an unusual arrangement of using the law firm Foley & Lardner to hold the funds in an escrow account.
“The reason we decided to go through an escrow agent is more and more vendors wanted money upfront because we were identifying potential fraud in the marketplace,’’ Moskowitz said. “We used the legal escrow process to protect the state. It has worked in every case. If the vendor didn’t deliver the product, the money was returned through the escrow agent.”
According to the Miami Herald:
It’s another example of how, in the frenzied rush to feed the demand for the supplies the state never expected it would need, Florida officials waived all the contracting rules and opened an unlimited checkbook to line up middlemen and unconventional vendors.
Also named on the deal, which was signed by Moskowitz and John, was Jared Rosenstein, Moskowitz’s legislative affairs director and former legislative aide, Morri Chowaiki, executive vice president for the Shark Group, Larry Fox of the Shark Group, and Kevin Hyde of Foley & Lardner.
But some of the deals inked with unconventional vendors, many of whom weren’t authorized by mask manufacturer 3M to sell the product, fell through in the end, including the one with the “Shark Tank” investor which failed to go through on April 13.
Attorneys are now reportedly looking at filing lawsuits after 3M began to scrutinize deals for fraud and price gouging of its masks. But as state government officials and hospitals scrambled to find N95 protective masks for healthcare workers on the frontlines of the pandemic, Moskowitz had accused 3M of prioritizing the selling masks to foreign countries.
“They’re specifically saying, ‘Listen, we are sorry your order got pushed down, but … there are foreign countries who do business differently and they’re showing up with cash,'” Moskowitz told “Tucker Carlson Tonight” earlier this month.
President Trump vowed the company would “have a big price to pay” for the move.
Trump vows 3M will pay ‘big price’ after Fla. officials report masks being sold to highest foreign bidder https://t.co/SKBzSDiZha
— Conservative News (@BIZPACReview) April 3, 2020
Another deal that had fallen through was brokered by the son of the Miami commissioner, Manolo Reyes for 30 million masks at $7.50 apiece, for a total of $225 million. Many vendors who signed the no-bid purchase orders with Florida’s Division of Emergency Management were not even authorized to sell the N95 masks by 3M.
“Many people were duped,” Moskowitz noted.
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