The chairman of a House oversight subcommittee is zeroing in on White House adviser Peter Navarro in an investigation over his handling of Health and Human Services contracts, following a Democratic-led probe that found he contributed to the United States vastly overpaying for thousands of ventilators during the coronavirus pandemic, according to a letter provided to CNN.
The Democratic congressman, Raja Krishnamoorthi of Illinois, is also demanding that Navarro be removed from his role as President Donald Trump’s point person in charge of negotiating contracts with the private sector to secure equipment needed for the country’s response to the health crisis.
In the letter sent Friday to HHS Secretary Alex Azar, Krishnamoorthi accused Navarro of failing “to demonstrate a grasp of negotiation fundamentals” with the manufacturer Philips in securing ventilators for patients suffering from Covid-19.
Krishnamoorthi, who chairs the House Oversight’s subcommittee on Economic and Consumer Policy, urged Azar “to block [Navarro’s] involvement in negotiating all future HHS contracts.” And he demanded that Azar turn over all contracts Navarro negotiated during the course of the pandemic and provide the panel with relevant communications that involved Trump’s trade adviser.
The Illinois Democrat wants all documents by September 11.
“Mr. Navarro’s poor performance in negotiations with Philips raises serious concerns about all pandemic-related contracts in which he played a role,” Krishnamoorthi wrote. “We have significant evidence that he has failed to demonstrate a grasp of negotiation fundamentals such as not accepting the counterparty’s opening offer, which illustrates that he cannot serve as a trustworthy steward of U.S. taxpayer money.”
A spokesperson for HHS told CNN Friday, “We have received a number of letters from Congress during the pandemic, and the department is working to respond.”
Navarro could not be reached for comment. But Navarro on Thursday defended the handling of the contract and attacked Democrats for engaging in a “partisan witch hunt.”
The problems over the ventilators could undercut a key White House argument in the run-up to the November elections. Trump has regularly hailed his administration’s procurement of ventilators, heralding it as a major success story even as US cases surpass 6 million and deaths approach 190,000.
“Not a single American who has needed a ventilator has been denied a ventilator,” Trump boasted in his speech last week accepting the GOP presidential nomination at the White House.
But just this week, the administration reportedly canceled a contract with Philips for most of the 43,000 ventilators that Navarro helped secure. A HHS spokesperson told The Washington Post that the termination was now “subject to internal HHS investigation and legal review.”
The canceled contract followed a report released in July by Krishnamoorthi’s staff that blamed the administration for accepting Philips’ first offer in March 2020 and agreeing to a higher price than every other American purchaser negotiating a contract with the company between mid-December 2019 and May 2020.
The report claimed that the Trump administration could have overpaid by as much as $500 million, comparing its contract to one negotiated by the Obama administration in 2014. It cited “thousands of pages of previously non-public documents,” including emails between Philips and the administration. Both the White House and Philips rejected the report’s conclusions at the time.
Speaking on CNN’s “New Day” on Thursday, Navarro pushed back at the criticism and defended his handling of the episode. He noted that HHS “executed” the contracts with Philips and that the federal department is investigating the matter.
“Let’s be honest here,” said Navarro. “When somebody from the Democratic-controlled House does an investigation of this administration, that is a partisan witch hunt.”
The congressional report said that the company and the federal government agreed in 2014 for “the development and purchase” of 10,000 ventilators for $3,280 apiece. After granting Philips multiple deadline extensions on the Obama-era contract, the Trump administration’s HHS agreed to a new contract purchasing 43,000 units of a different ventilator model for $15,000 apiece even though other American purchasers negotiated cheaper contracts with Philips, according to the report.
The panel’s staff wrote that “there is no indication” the ventilators purchased in 2020 provided “any benefit” over the ventilators at the center of the negotiations between Philips and the Obama administration. In the CNN interview on Thursday, Navarro described two versions of Philips ventilators as “the dirt bike versus the BMW.”
Philips has said that the 2014 contract was “chiefly a research and development contract” in which HHS requested ventilators at prices “considerably lower than commercial prices.” The company said the 2020 contract offered the US government a “discount” since the list price for the ventilators chosen by HHS is more than $21,000.
But the report found that HHS paid more for Philips ventilators than more than 90 other purchasers in the United States. The subcommittee claimed that the vast majority of US purchasers were able to negotiate prices to between $9,327 to $12,133 per unit compared to the US government’s agreed upon price of $15,000.
Judd Deere, a spokesman for the White House, called the report at the time “partisan,” “misleading” and “inaccurate.”
“This partisan report is nothing more than a stunt that is only meant to politicize the coronavirus,” wrote Deere. “Because of the President’s leadership, the United States leads the world in the production and acquisition of ventilators. No American who needed a ventilator was denied one, and no American who needs a ventilator in the future will be denied one.”
The report was also harshly critical of Philips, accusing it of profiteering during a crisis. The leader of Philips’ parent company strongly disputed the report’s findings in July.
“We do not recognize the conclusions in the subcommittee’s report, and we believe that not all the information that we provided has been reflected in the report,” said Frans van Houten, CEO of Royal Philips. “I would like to make clear that at no occasion, Philips has raised prices to benefit from the crisis situation.”
“Philips is proud to make its contribution to combatting the pandemic through its acute patient care and diagnostic products,” he added.
Earlier this week, a Philips spokesman told Reuters that he expected the company would now sell the 30,700 excess ventilators to other buyers.