The YouTube video shows Brian Danza chronicling his victory trip to Boston in April, as he pilots a single-engine aircraft to Logan Airport.
He flew in to see the arrival of nearly 1 million medical masks he helped procure for the state from China, delivered on a now-famous flight of the New England Patriots’ jet. On the ground, as the team’s red, white and blue plane pulls up, Danza records himself saying, “My baby is here.”
Danza is part of a vast wave of people and companies finding money-making opportunities in the time of the coronavirus. They are jumping into the loosely regulated business of selling masks and other gear to hospitals and health departments scrambling to keep workers safe amid a shortage of supplies.
It’s a business many of these players knew little about before COVID-19. Some were sought out by local officials for help; others saw a chance to profit in a Wild West of inflated prices for coveted N95 masks and the like.
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Read part two of this two-part series on mask procurement in Massachusetts.
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“Everybody’s trying to make a quick buck. And it’s frankly a little bit disgusting,” Danza, who has worked in government and media, recently told the hosts of a runners’ podcast called Pace The Nation. “I’ve screamed at a few of them. I can’t believe that you’re doing this and that you’re trying to, like, just make half a million dollars in three days for doing no real work.”
Danza said he’s secured better prices for clients than some of his rivals. But he’s not plying his business contacts in China for free. “I would be lying if I said that I’m not, like … making a decent amount of money on it,” he said in the podcast.
Newcomers Pitching Masks
The business of brokering masks has drawn a broad and surprising cast of characters. There’s a Pennsylvania office furniture seller and a California company that touts oxygen therapy as a cure for many ills. And there’s Jarvis Green, a former Patriots defensive end with two Super Bowl rings, who runs a shrimp business called Oceans 97 Inc., in Baton Rouge, La.
Executives of these companies declined to be interviewed or did not return calls seeking comment. Green, who has offered his services to at least one Boston hospital, according to an email reviewed by WBUR, acknowledged he’s pursuing the business, but said he did not want to talk about it at this time.
Hospital supply managers have been barraged with hundreds of email sales pitches for masks, often from companies they’ve never heard of, that have little or no experience in medical supplies. Health care executives have not only had to sort through the clutter, but also navigate a dramatic spike in prices — some of it due purely to the surge in demand, some apparently driven by profiteers.
“Over the past 90 days or so, it’s been really, really challenging,” said Mark Faulkner, chief of supply chain management and sourcing at Partners HealthCare, the parent of Massachusetts General Hospital and Brigham and Women’s Hospital. Some offers turn out to be fake or fraudulent, he said. And, at times, “pricing has just been astronomical, 1,000% more” than typical prices, he said.
Before the coronavirus, hospitals could get N95 masks — considered the safest for frontline workers — from distributors selling for 3M and other large manufacturers. They typically went for 45 to 60 cents a piece, according to buyers and sellers in the industry.
But in April, as the outbreak peaked in many states, some brokers were peddling masks for as much as $10 a piece, according to emails reviewed by WBUR and interviews with hospital managers.
Attorney General Maura Healey said her office has received more than 200 complaints about high prices for masks and other personal protective equipment, or PPE. Her staff is investigating allegations of price gouging, subpar products and orders that never materialized.
“Hospitals shouldn’t have to be dealing with this. They shouldn’t have to navigate offers from suppliers they don’t know and negotiate with possibly dubious distributors,” Healey said in an interview.
She also criticized the federal government for failing to secure enough supplies to sustain states through the pandemic, leaving medical providers and public agencies to fend for themselves, particularly in the early days.
“I’ve never seen anything quite like this,” Healey said. “The games that have been played both by suppliers and distributors, the games that the federal government has played.”
One company under investigation by Healey’s office is IDDC Global Brands, a marketing services business registered in New Jersey, that did a mask deal with the state of Massachusetts. The company’s chairman, Jim Sherlock, said IDDC is cooperating with the inquiry. He said he has regrets about wading into this complex realm.
“It’s a very scary market — not knowing who you are dealing with in China,” Sherlock said. “Wish I had never gotten into it.”
A ‘Free-For-All’ In China
What many brokers have found is a complicated market, many time zones away, where supply couldn’t possibly meet the unprecedented demand and sharp elbows win.
Experience has helped in some cases. Katie Smith, owner of RockFlowerPaper, a clothing and homegoods seller in San Anselmo, Calif., said she’s done business in China for 35 years. So when she heard states needed masks, she reached out first to New York and later ordered masks for Massachusetts.
The preferred N95 masks were impossible to get, she said, because demand had soared so suddenly. She focused instead on KN95 masks, which the Food and Drug Administration began allowing on an emergency basis in early April — though it now lists several that do not meet minimum standards.
Even sourcing KN95s was challenging for a period, Smith said, and it was critical to find producers that would meet FDA standards. She declined to say how much she charged Massachusetts for masks, but said her price was “fair,” and less than others were charging.
“I have a guy in China,” she said in an interview. He goes by the English name Kobe Bryant, and he helped her locate masks, she said, traveling across China to inspect factories; making hundreds of calls to get through to busy shops; handling money transfers and monitoring orders through shipment.
She described watching via Skype as Bryant went to pick up orders. There would be a line of trucks outside a factory, waiting for it to open in the morning. “One day we thought we had this deal with this factory that we love. And then the Italian government came in and said, we need 20 million masks, and we got pushed to the side,” Smith said. “It was a lot of jostling, basically to get position. And money talks.”
Danza, who was part of the Patriots’ mask delivery, in the podcast also described an order snatched from his grasp at a Chinese factory, when “the Serbian government shows up at their doorstep with a briefcase filled with cash.”
That, Danza said, sent his people on the ground in China running from factory to factory in the middle of the night to find other masks.
Danza Connects With The State
His entry into the business was almost by chance.
Danza, 39, worked in the George W. Bush administration before going on to work for the conservative news site, the Daily Caller. A marathoner who ran a Washington D.C. running club, his LinkedIn page says he gets “cool products into the hands of people who want them.” He’s co-founder of a company called Foxbat Media, whose website touts having imported 5 million pieces of PPE since the start of April.
When contacted, Danza tried to explain certain aspects of the Patriots deal to WBUR, but refused to be interviewed. He described the saga in detail on the runners’ podcast.
He said he was “dabbling around on whether or not I could buy masks and whether or not I could put them on Amazon or bring them into stores.” He then serendipitously got a text message from a person linked to a grocery chain, asking if he had connections for masks in China.
He said he did.
At first, he raised more than $250,000 by tapping wealthy contacts, he said. Then, he learned that the state had emergency funds available — and a dire need for masks.
“I was able to get them to send me a decent amount of money to get the process started,” he said.
It was an escapade that would involve the Patriots and the Kraft family’s international business contacts; the assistance of internet giant Tencent on the ground in China; and negotiations to allow the team jet to land, quickly load the masks and depart.
“I was on the hook for $3 million,” he said on the podcast, and it wasn’t his money. “I was trusting my contacts in China.”
The total deal was for $4 million — half of it the state’s money, the other half funded by the Kraft family.
In the end, a large portion of Danza’s masks (in two shipments) turned out to be KN95s. And some of the varieties he obtained did not meet the 95% filtration standard.
Sorting Out Pitches, Prices
Millions of other masks brought into Massachusetts by different means also haven’t measured up. About one-third of 100 different masks tested by Lincoln Labs were substandard, according to MIT Professor Gregory Rutledge.
Jonathan Kraft, whose family owns the Patriots and who is chairman of the Massachusetts General Hospital board of trustees, addressed the free-for-all in the market on the sports radio show Toucher & Rich: “You know there’s a lot of people out hustling the masks. But are they from an FDA-certified facility? Is it just, you know, some guy that was making T-shirts yesterday?”
Many sales pitches come from fly-by-night entities that sprang up in March. Others come from more established companies, offering masks just during the emergency. Often they suggest their offer is time-sensitive.
“These masks will be available on a first-come basis. Warehoused in Chattanooga, TN,” said one email pitch. It came from Garnett Component Sales, of Wake Forest, N.C., offering a Boston hospital KN95 masks — for $8.63 a piece.
Representatives of the company declined to be interviewed.
Frank Barrett, owner of Contech Medical Inc. in Providence, R.I., said his company, which does contract manufacturing for large medical firms, got into procuring masks at the request of Rhode Island officials. Contech charged about a 10% markup for the work and the financial risk, he said.
“It’s supply and demand,” Barrett said in an interview. “Every time we get a quote from most of the stuff coming from China, they’ll tell you that the price is subject to change daily — which it does.”
The logistics of dealing with China have been more complicated than Barrett said he’d imagined. He and other distributors describe long days, and all-nighters on the phone with Chinese businesspeople, because of the time difference. The financial payoff, he said, has been “a little better than break-even.”
It’s hard to verify how much money brokers make. They typically don’t say how much they’ve charged a hospital or a state agency. And as private companies, there’s no requirement for them to do so. The state disclosed total sums it has paid to various vendors after WBUR sought them in a public records request, but not the price per mask.
Before the pandemic, Massachusetts had a price-gouging law only relative to oil and gas. A new regulation prohibits charging unfair prices on goods and services necessary for public health during an emergency. But what constitutes gouging can be in the eye of the beholder, and challenging to prove.
“I suppose you’ll know it when you see it,” explained David Thomas, co-chair of the Boston Litigation Group at the law firm Greenberg Traurig. “If you see prices getting increased 1,000% but the cost of goods sold hasn’t increased at all,” he said, expect to see the attorney general raising red flags.
However, some hospitals have been reluctant to report brokers peddling sky-high prices — because, they say, they don’t want to burn any bridges, just in case. That makes it harder for the attorney general to police.
“Hospitals shouldn’t be exploited,” Healey said. “Consumers shouldn’t be exploited during this crisis by those who are looking to unfairly profit.”
This article was originally published on WBUR.org.
Copyright 2020 WBUR
