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Recent Updates –Delaware medical supplier says FEMA seized 400,000 N95 masks, now he’s out millions of dollars

Delaware medical supplier says FEMA seized 400,000 N95 masks, now he’s out millions of dollars

WILMINGTON, Del. – As pleas for protective masks continue amid the coronavirus pandemic, a Delaware supplier of medical equipment is disputing the legality of what he said were federal seizures of hundreds of thousands of N95 respirators.

George Gianforcaro, owner of the small, Newark, Delaware-based Indutex USA, said the Federal Emergency Management Agency did not pay him when it took possession of two imported shipments of masks bound for customers across the United States.

Those customers included Delaware nursing facilities, the state of Michigan and boat captains who steer foreign ships through U.S. bays.

He said he does not know where the seized N95 masks are today, or whether they have been distributed to medical facilities or others.

Experts and medical professionals caution that the general public should not be snapping up all the higher quality N95 masks, as that will create a shortage for the health care workers who need them the most.
Experts and medical professionals caution that the general public should not be snapping up all the higher quality N95 masks, as that will create a shortage for the health care workers who need them the most.

Importer, FEMA clash over what happened to masks

In an emailed statement, FEMA appeared to deny Gianforcaro’s charge without addressing the specific claims. It called reports of its officials commandeering or rerouting supplies of such critical equipment “false.”

Protective equipment “being distributed internally within the United States is not being seized,” FEMA said, while stating also that it is working with U.S. Customs and Border Protection to keep medical equipment from being exported.

The dispute, the latest allegation of a FEMA seizure, occurs as the agency has begun to vigorously counter such claims. On Wednesday, FEMA Administrator Peter Gaynor said his agency needed to “bust myths” about seizures of medical equipment.

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But while FEMA says it targets exporters, Gianforcaro’s customers for the N95 masks are domestic companies or governments, according to a list of purchase orders Gianforcaro shared with The Delaware News Journal, part of the USA TODAY Network.

Among them is Cadia Healthcare, an operator of several long-term care facilities in Delaware. Cadia co-founder Steve Silver said his facilities will need additional masks, as well as medical gowns, as more residents are expected to test positive for the COVID-19 disease caused by the novel coronavirus.

To buttress his argument amid FEMA denials, Gianforcaro shared a written order that he says FEMA sent to his company. The document directed Indutex to sell to the federal government “all filtering facepiece respirators, including the N95 respirators contained within shipment number 8994645378 that arrived at JFK Airport” on April 6.

That early April shipment of 100,000 N95 masks was followed by a subsequent April 19 arrival of 300,000 additional ones, which also were seized, Gianforcaro said.

Citing Defense Production Act authority, the FEMA document further ordered Indutex to “set aside” all N95 or surgical masks it may come to possess during the federal emergency for a potential sale to FEMA.

Gaynor’s signature is written along the bottom of the document.

His agency did not respond to follow-up questions about whether their press statement contradicts the order.

Gianforcaro said FEMA sent the written order only after he repeatedly inquired about whether they would pay him for the face masks or release them back to him.

“I kept screaming about it and I got a lawyer involved,” he said. “Then, that’s when I got the letter from them.”

What is FEMA’s role?

The April shipments of N95 masks into New York’s John F. Kennedy Airport were to be the first of several that ultimately would bring nearly a million in-demand respirators into the country, Gianforcaro said.

But after what he said was a second seizure on Sunday, Gianforcaro canceled the remainder of the order, noting he likely won’t make additional orders before receiving payments for the initial shipment.

“Let’s not forget I paid $4 million for this product on March 18,” Gianforcaro said, referring to the million-mask order. “This is getting very, very expensive. I don’t have any money and I don’t have any product and there’s people that are asking for it.”

Indutex USA President George Gianforcaro speaks to the media about the arrival of nearly 500,000 disposable face masks Tuesday morning at D&S Wharehousing Inc. in Newark, Delaware. The masks are assumed to be heading to COVID-19 hotspots across the United States and possible local hospitals in Delaware.
Indutex USA President George Gianforcaro speaks to the media about the arrival of nearly 500,000 disposable face masks Tuesday morning at D&S Wharehousing Inc. in Newark, Delaware. The masks are assumed to be heading to COVID-19 hotspots across the United States and possible local hospitals in Delaware.

His dispute with FEMA comes as states, hospitals and nursing homes desperately seek out new supplies of equipment to protect against the coronavirus pandemic, which on Tuesday had infected 800,000 people in the United States, according to Johns Hopkins University data.

Among the hardest hit are those who live, and work, in nursing homes. During the past week, seven Delaware long-term care officials pointed to several factors contributing to outbreaks at the facilities, and all but one said they need more gowns and masks to suppress the further spread of the disease.

Some are making their own by sewing pieces of cloth into masks or wearing large button-up shirts backward as gowns.

Meanwhile, bidding wars have erupted among states, medical companies and others for the sought-after equipment, particularly the tight-fitting N95 masks, which filter out at least 95% of airborne particles.

President Donald Trump has said the federal government’s role is to serve as a backup to the state’s efforts, but it is not entirely clear what that means for FEMA.

In the order to Gianforcaro, the agency said the shipment of masks would be sent to the Strategic National Stockpile.

Operated by the U.S. Department of Health and Human Services, the stockpile has supplied ventilators, masks and other equipment to states, but not always in the quantities requested.

Last month, Delaware requested 10 million masks and more than 100 million gloves for what it expected to be a monthslong fight against the coronavirus. Days later, the federal government asked the state to pare back the request and submit what it would need for a two-week surge.

As of early April, Delaware had been granted less than 1 percent of what it initially requested, according to leaked federal documents.

On April 1, the Trump administration said the national stockpile had nearly been depleted.

A national supply chain?

As Trump has called on the states to take the lead in procuring masks and ventilators, others have said the federal government should direct the flow of medical equipment nationally.

Standing next to Gianforcaro at a press conference March 31, U.S. Sen. Chris Coons, D-Delaware, said he had become “enormously” frustrated that the federal government had not coordinated a centralized medical supply chain.

Coons had spoken with other senators about the possibility of creating “one logistics point of contact,” he said.

Sen. Chris Coons speaks to the media about the arrival of nearly 500,000 disposable face masks Tuesday morning at D&S Wharehousing Inc. in Newark, Delaware.
Sen. Chris Coons speaks to the media about the arrival of nearly 500,000 disposable face masks Tuesday morning at D&S Wharehousing Inc. in Newark, Delaware.

Gianforcaro, a longtime friend to Coons, said he would welcome being FEMA’s partner within a national network. The key, he said, is for them to pay for the equipment he supplies.

In discussions with FEMA officials, he said he proposed a solution in which he could deliver masks to health facilities in the United States as directed by FEMA, rather than federal officials carrying out the logistics themselves. FEMA did not appear to accept the proposal, he said.

During a recent caucus call with Vice President Mike Pence and others in the Trump administration, Senate Democrats were told that such FEMA seizures were not happening, Coons said.

Rather than contact Coons, Gianforcaro said he elicited help from another U.S. Senator, Rand Paul of Kentucky. In an email following an apparent phone call with Gianforcaro, Paul staffer Rob Givens said the office will “check with FEMA.”

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Nearly 500,000 disposable face masks are unloaded at D&S Wharehousing Inc Tuesday morning in Newark. The masks are assumed to be heading to COVID-19 hotspots across the United States and possible local hospitals in Delaware.
Nearly 500,000 disposable face masks are unloaded at D&S Wharehousing Inc Tuesday morning in Newark. The masks are assumed to be heading to COVID-19 hotspots across the United States and possible local hospitals in Delaware.

‘Bad karma’

Gianforcaro is not the only person to report that federal officials had laid claim to shipments of medical equipment.

NPR reported last week that Massachusetts Gov. Charlie Baker said his state’s order of millions of N95 masks was confiscated at a port in New York.

FEMA regional administrator Captain W. Russell Webster told a local NPR affiliate that he did not have information on the state’s order but said “There is a priority of distribution based on health care workers and other first-line people involved in the COVID-19 response.”

Separately, the Chicago Sun Times reported last week that Illinois Gov. J.B. Pritzker was keeping secret details of a plan to obtain millions of masks and gloves from China out of fear of a federal seizure.

Yet, in recent guidance to local emergency managers, FEMA chief Gaynor said there is a need to correct what he called “misinformation” after fielding questions from members of Congress and governors about reports of FEMA seizing medical equipment.

Like in the agency’s statement to The Delaware News Journal as well as comments to Senate Democrats, Gaynor said FEMA is not seizing masks or other equipment from governments “or any commercial entity lawfully engaged in the PPE distribution.”

But, he said, the United States Department of Justice formed a “hoarding and price-gouging task force” to ferret out “bad actors,” and seize their supplies.

FEMA did not allege in its order to Gianforcaro, nor in its statement to The Delaware News Journal that the importer had been selling equipment at too high a price.

In March, Gianforcaro rebuffed any suggestion to sell masks to the highest bidder amid a pandemic, saying it would bring “bad karma.”

Follow reporter Karl Baker on Twitter @kbaker6.

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This article originally appeared on Delaware News Journal: Indutex USA says FEMA seized N95 respirators for national stockpile

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