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In late March, a Silicon Valley engineer tweeted an offer to sell ventilators to President Donald Trump, and within days New York state, facing soaring coronavirus infection rates, paid the man $69 million for devices he never delivered. More than six months later, the state has been unable to recover $10 million of that sum and is pursuing legal action against the man, Yaron Oren-Pines.
The revelation that New York is still out such a large sum so long after the fiasco first came to light comes in a new book written by Gov. Andrew Cuomo about his response to the pandemic set to publish on Tuesday.
In the book, American Crisis: Leadership Lessons From the COVID-19 Pandemic, Cuomo places much of the blame for the debacle on FEMA, saying the agency offered New York assistance, “only to make the situation worse by involving us in a scam.” The governor acknowledges that New York knew at the time that the price Oren-Pines “was charging for the ventilators was outrageous,” but agreed to the contract because “we believed lives were on the line and understood we had few alternatives.”
The deal with Oren-Pines came as New York was engaged in a frenzied, unvetted, and highly politicized spending spree that took place as the pandemic swept through the state, quickly overwhelming hospitals short on critical equipment and protective supplies and spurring widespread panic as the death toll mounted.
Despite having no experience with medical device distribution or government contracting, Oren-Pines won the lucrative contract soon after tweeting at President Trump on March 27 that he could provide the lifesaving devices, imploring the commander-in-chief to “have someone call me URGENT.” Within days, FEMA, working closely with the White House, referred Oren-Pines to Cuomo.
Oren-Pines signed a contract for 1,450 ventilators at $59,000 apiece, and state records show that on March 30 the state wired $69 million of the $86 million total value of the deal to him. The engineer, who lives in San Jose, refused to allow inspections of the ventilators, however, and, as BuzzFeed News first reported in April, ultimately never delivered a single machine.
After the money was wired, banks in the US and China detected “possible fraud” and froze the funds. Soon thereafter, Oren-Pines “began to warn of delivery complications,” according to Cuomo’s book, leading the state to cancel the contract. New York ultimately recovered $59 million.
“Not a single ventilator was delivered, Cuomo writes. “We are in the midst of legal action to recoup the remaining $10 million, and law enforcement is reviewing the matter for possible prosecution.” Cuomo’s book provides no additional detail on what law enforcement agency is investigating the contract or which laws might have been broken.
Oren-Pines, who holds both US and Israeli citizenship and shares numerous patents for wireless technology, did not return a telephone message seeking comment on the matter. In May, BuzzFeed News revealed that someone with an account in the name of Yaron Oren-Pines attempted to sell 18 million N95 respirator masks to the state of California on social media, although no deal appears to have been struck.
In excerpts of emails sent to New York officials and published by the New York Times, Oren-Pines claimed BuzzFeed News’ reporting was a “fictional/fake story” and that that the entire experience was “worse than death itself” and that he had “done Nothing wrong!”
Although Cuomo admits to some failings in his handling of the virus, he is quick to point fingers at the White House, writing that Trump “just wanted positive public relations about his COVID response.” Elsewhere in his book, for example, Cuomo relates an anecdote about Trump taking credit for a successful donation to the state that he had nothing to do with.
According to Cuomo, Jack Ma, the billionaire owner of Chinese e-commerce giant Ali Baba, arranged the donation of 2,000 ventilators through the New York state government. But when Cuomo announced the gift publicly, Trump claimed he had made it happen.
“The gift highlighted the public failure, and he couldn’t bear the idea that he wasn’t included,” Cuomo writes of Trump. Then Cuomo, a Democrat who has at times clashed with Trump, said he went along with the president claiming credit because “the president’s ego was fragile, and it wasn’t worth the risk of angering him." New York was desperate for all the help fighting coronavirus it could get.
Nonetheless, the state’s decision to pay $69 million to a man with no apparent bona fides other than his tweet and a few emails to FEMA does not reflect particularly positively on New York’s procurement process. The wire was the largest single payment issued by the state to any vendor during the peak of the crisis, and state records show that many other large orders were canceled after companies could not deliver on their promises.
But Cuomo said his pursuit of the remaining $10 million shows his commitment to protecting the state’s finances. Concluding his account of the Oren-Pines saga in his book, he notes:
“I have a top-flight team to protect every tax dollar. We wear a lapel pin I designed that has three hallmark principles: Performance, Integrity, Pride.”