When Washington state sent out an emergency plea for medical supplies in March, hundreds of businesses and individuals replied through the state website. Greater China Industries made its pitch to Gov. Jay Inslee himself.
Mark Inslee, an import consultant for the Bellevue-based company — and the governor’s first cousin — emailed the governor’s personal account, promising to deliver everything from masks to ventilators at “better-than-market” prices. He reminded the governor that Ben Zhang, Greater China’s chief executive, was a supporter.
An hour later, Gov. Inslee forwarded the email to Washington state’s head of emergency management. “This is my cousin who is a reputable business person, even though he bears the name Inslee,” the governor wrote from his personal email account. “Just providing this info to you to use as you deem fit.”
State officials quickly contacted Mark Inslee and, over the following week, discussed buying supplies through Greater China. At least one state procurement official raised the issue of a “conflict,” according to records reviewed by The Seattle Times. Ultimately, no deal was consummated, company and state officials said.
Mark Inslee and senior aides for the governor said they were all trying to save lives. An independent expert in emergency contracting said it didn’t appear Gov. Inslee acted improperly.
The governor’s involvement in connecting his cousin with state buyers is just one example of how the coronavirus pandemic has upended the normal workings of government. Facing a dire shortage of life-saving medical supplies, Washington state has loosened contracting rules and recruited volunteers from the private sector to help with procurement.
Gov. Inslee, who has talked of personally hunting for supplies, also connected people in his network with contracting officials if he thought they could help, according to records and interviews.
David Postman, Gov. Inslee’s chief of staff, acknowledged that it was unusual for the governor to get involved in contracting but that “these were very unusual times that demanded extraordinary aggressiveness.”
“Nobody was ever told, ‘this is somebody I know, please do it for me as a favor,'” said Postman. “This was, ‘everything I can find, I’m going to shove down the pipe and have somebody take a look at it.’ Because we don’t want to miss a deal here.”
The state has ordered more than $400 million in personal protective equipment (PPE) and other medical supplies since March 16, and Postman estimates the state may eventually spend up to $1 billion.
As Washington state became an early epicenter of the COVID-19 outbreak, health care organizations and health officials quickly grasped that there was a looming shortage of protective gear for medical staff and first responders, and of ventilators to help those stricken with the respiratory disease.
The federal government’s Strategic National Stockpile would not meet all of the state’s needs, and President Donald Trump has told Inslee and other governors to hunt for supplies themselves. This has left Washington and other states scrambling to vet and buy supplies, often from China and in competition with each other, with little experience doing so.
On March 6, Washington state’s main buying arm, the Department of Enterprise Services (DES), suspended the competitive bidding requirement to acquire goods and services for the COVID-19 response. Soon after, the agency issued an emergency request for companies that could buy ventilators, N95 masks, goggles, hand sanitizer, surgical gowns and other supplies.
The leads came pouring in the next week through an online portal: a Belltown nightclub with N95 masks, a Kentucky bioscience company, a Beverly Hills medical spa offering COVID-19 tests.
“We are making an all-out effort”
In normal times, and for most products, the state would start a bidding process when millions of dollars were on the line. The process can take weeks or months as DES workers evaluate each company’s bid for price, quality and ability to execute the deal. The slow pace and deliberation are meant to guard against favoritism or other undue influence.
The need for supplies to combat the spread of COVID-19 called for moving much faster, Gov. Inslee said at a March 26 news conference. “We are searching the globe for ventilators literally as we speak.” He had even asked a “local businessman in my neighborhood with extensive ties in China” to help. “We are making an all-out effort,” he said.
Amid the shortage of medical supplies, the governor and his wife, Trudi, heard from many people in their network – friends, relatives and acquaintances – suggesting contacts who might have a line on acquiring everything from N95 masks to test kits. Trudi Inslee forwarded such tips to an assistant or to emergency operations staff, according to emails provided by the governor’s office.
Inslee had in fact consulted with a Bainbridge Island neighbor, Paul Zuckerman, an executive with Seattle-based marketing company Bravo Branding. His company sources an array of products from China, including medical masks and scrubs.
Zuckerman, who donated $1,900 to Inslee’s campaigns between 2011 and 2016, said in an interview that he provided his services to the state during the pandemic because the governor asked him to do so, and offered to place an order without taking a commission. Reed Schuler, a senior Inslee advisor, confirmed this account.
“It was right on my mind from the beginning that there could be a perception of favoritism,” said Zuckerman.
The state typically reimburses contractors after receiving goods, but many Chinese manufacturers have sought payment upfront, posing an obstacle for importers that can’t afford to foot a large bill. Officials working in procurement for the state considered pairing Bravo with philanthropic donors, including former Starbucks CEO Howard Schultz, but a deal never materialized. A representative from the Schultz Family Foundation said Schultz consulted with Gov. Inslee, but instead steered donations to local nonprofits and relief funds.
“We were looking for ways to be as accommodating as possible,” Zuckerman said in an interview. “I felt like, ‘Hey maybe we can be part of the solution here.’”
The work of chasing the governor’s leads and others fell to procurement expert Michelle McCormick. In another unusual feature of the pandemic response, McCormick is a Microsoft employee on temporary loan to the state to advise on global supply-chain logistics, and is one of several private-sector workers who joined the effort at the state’s request, but who does not have direct purchasing power, state officials said.
McCormick referred a request for comment to Microsoft. In a statement, the company said it has made McCormick available full time to the state at no cost. “We’re proud of the work that our employee is doing to respond to the state’s request and help meet this critical need,” the company said, adding that it has obtained and donated supplies to the state worth $1.5 million.
“As trustworthy as family”
Greater China Industries also responded through the official procurement channel, but Mark Inslee had a more direct approach in mind.
Inslee, who had worked with Greater China Industries off and on for more than 18 years before leaving in November, emailed CEO Ben Zhang on the morning of March 25. The governor “will be very interested to work with us,” he wrote, asking to help in the effort. Zhang, who has contributed $6,800 to Gov. Inslee’s political campaigns since 2016, agreed to bring Mark Inslee back on as a contractor.
“Very glad Governor Jay Inslee is interested in buying some of these products from us,” Zhang replied, records show.
Half an hour later, Mark Inslee wrote to the governor and his wife on their personal email accounts. “We are appalled at Trumps lack of leadership now,” he wrote. “We truly consider Ben as trustworthy as family.”
The company had immediate access to masks, gloves, gowns, goggles and ventilators, he wrote, adding one request: that Greater China Industries not be disclosed as the direct supplier.
“Even in this emergency mode, we’d appreciate the stealth,” he wrote. In an interview, Mark Inslee said he did not want the company’s usual distributors to know Greater China, a wholesaler, was directly selling to an organization.
Mark Inslee is not normally in contact with his cousin the governor, an Inslee spokeswoman said, but his pitch was well-timed. The governor passed it along to Robert Ezelle, head of the state’s Emergency Management Division, who in turn asked McCormick to contact Mark Inslee immediately.
McCormick followed up the next day with senior DES officials, writing of a Greater China subsidiary, “we need to get his company onboarded ASAP.” She also requested that Zuckerman’s company be “enabled” in the state procurement system. She asked, could someone “help expedite these two?”
A spokeswoman for the Joint Information Center said McCormick was taking steps to set up the companies “in case the state placed an order with them” and offered no guarantee of business.
“The email from Mark Inslee came at a time when the state was (and still is, for that matter…) incredibly desperate to locate and procure PPE,” Washington Military Department spokeswoman Karina Shagren said in an email. “Robert urged staff to explore every possible avenue as quickly as we could – regardless of who the tip came from.”
Ben Brunjes, an assistant professor at the University of Washington who is an expert in emergency response and contracting, said it didn’t appear that the governor had acted improperly. An ethical conflict would occur “if there were actual pressure from Inslee to let a contract to his cousin,” he said.
“Mark Inslee was treated like anybody else that would have gotten to the governor,” said Postman. “There was nothing hidden about this, there was no back door that his friends went through, it was the same thing he did with any idea that came to him,” he said, referring to Gov. Inslee.
Optics and conflict
Mark Inslee could only find five ventilators from his factory sources in China. In a price quote to the state, he said his company’s margin would be 10%.
But the ventilators didn’t meet the state’s standards and were more expensive than those made by competitors, according to emails between Inslee and state workers. After learning that the machines would require assembly, Carrie Corder, a state logistics official, wrote to Mark Inslee, “to be told that I would need to piece them together, was shocking. Ventilators without batteries, supplies or compressors are no use for Washington. For the price on the quote below (which is double) the ventilators should come complete.”
A few days later, Mark Inslee proposed a deal for surgical gowns that came closer to fruition. Inslee’s price sheet said that an order of 200,000 gowns would cost $1.7 million, or $8.35 each, including shipping and other costs. Elena McGrew, a procurement team member, told a colleague she was considering placing an order with Greater China but she wanted to hold off because of a “conflict” concerning Mark Inslee, according to an internal chat record.
“In cases where there may have been appearance of a conflict, that certainly would be raised,” DES spokeswoman Linda Kent wrote in an email.
Mark Inslee said in an interview that someone from the state told him the political “optics” wouldn’t look good if the state placed an order through him, because he is related to the governor.
“I thought maybe I could help the state,” Mark Inslee said. “But the product wasn’t there, the pricing wasn’t right. There was no business, there was no nepotism. There was no nothing.”
Zhang, in an interview, said he also grew concerned about a conflict of interest as the deal progressed, so he called it off.
“There are no favors here,” Zhang said in an interview. “We did not do a penny of business with the state of Washington. We had some communications.”
“Mark was hungry,” Zhang said. “He was aggressive.”