When the federal government started purchasing medical supplies to combat the coronavirus, President Trump put Peter Navarro in charge. As Trump’s Defense Production Act Coordinator, Mr. Navarro has spent billions of taxpayer dollars. So, how has he been doing? The Administration hasn’t made it easy to find out. The facts surrounding one important government contract, however, should make the taxpayers see red.
Mr. Navarro and the Administration have provided no transparency on how they select companies for contracts or how they arrive at contract terms. Despite their lack of cooperation, Congress has obtained some insight based on a major contract to help victims of Covid-19.
On April 2nd, President Trump invoked the Defense Production Act to boost the nation’s supply of ventilators. “We are moving very swiftly in Trump Time to address a significant shortage of these lifesavers,” Navarro stated at the time. He quickly committed $2.9 billion in federal funds to acquire ventilators. The largest ventilator contract directed $646 million to Philips Respironics just five days after President Trump invoked the Defense Production Act.
How did Mr. Navarro get that deal done so quickly? He saved time by accepting Philips’ very first offer. He never made a counteroffer on price. Navarro completely failed to negotiate with hundreds of millions of tax dollars at stake. While the Trump Administration has refused my congressional subcommittee’s request to explain its actions, Philips provided all the documents and correspondence surrounding the deal. They show that Philips sent a proposal asking $646 million for the ventilators, and Navarro simply took the deal.
The problem is that Peter Navarro drastically overpaid, perhaps by as much as a half-billion dollars. There is a clear frame of reference here. The federal government had purchased 10,000 ventilators from Philips in November 2019, just before the pandemic, paying $3,280 for each. Philips had not yet delivered any of those ventilators, despite the fact that the government had contributed millions of dollars to their development. But instead of demanding those ventilators at the original price, Mr. Navarro allowed Philips to sell him the same ventilators, under a different name, at $15,000 per ventilator—almost five times the initial price.
Last month, after our subcommittee’s investigation went public, the government clawed back more than $400 million by canceling its order for the remaining ventilators that have not yet been delivered. But there is no indication that the Administration is pursuing repayment of the money that Philips already received and overcharged. That ventilator agreement with Philips was just one of many deals Peter Navarro has negotiated. The obvious question is whether other contracts he oversaw were as disadvantageous to taxpayers and, if so, at what cost?
To answer that question, I invited Mr. Navarro to testify at a hearing of the House Oversight Subcommittee on Economic and Consumer Policy on September 16th. But he refuses to testify under oath, despite the fact that he is a frequent spokesperson for the Trump Administration on cable news shows, even regarding the ventilator contract issues. As President Trump’s Director of Trade and Manufacturing Policy, Navarro is responsible for negotiating international trade deals on behalf of U.S. companies and their workers. Can we be confident in his efforts when the ventilator contract he negotiated with Philips, a foreign-based company, gave away the store?
Our democracy is built on a commitment to accountability. Those empowered to act on behalf of the American people must be willing to answer to them. Peter Navarro and the Trump Administration are refusing to fulfill that responsibility. A close look at one government contract for ventilators shows why.