In the tradition of Wall Street CEOs using at least $25 billion of their taxpayer-funded bailout during the 2008 financial crisis to pay bonuses to high-ranking employees comes a report detailing how the Pentagon misleadingly spent most of its $1 billion in pandemic emergency funding on non-pandemic supplies.
According to the Washington Post, the Department of Defense was instructed to use $1 billion in CARES Act funding secured via the Defense Production Act to obtain PPE to deliver throughout the nation during the early, supply-scarce days of the pandemic. The billion-dollar plan was to divide the funds so that $750 million would be allocated for medical purchases, while $250 million would go to private contractors for more standard DOD merchandise. But the distribution didn’t quite shake out that way, as the Pentagon informed Congress in June that it ended up sending $688 million toward its preferred military contractors.
Thus, taxpayer money intended to be spent on masks, ventilators, and swabs ultimately went to military equipment:
Among the awards: $183 million to firms including Rolls-Royce and ArcelorMittal to maintain the shipbuilding industry; tens of millions of dollars for satellite, drone, and space surveillance technology; $80 million to a Kansas aircraft parts business suffering from the Boeing 737 Max grounding and the global slowdown in air travel; and $2 million for a domestic manufacturer of Army dress uniform fabric.
Explaining the decision before Congress in June, the undersecretary of Defense for acquisition and sustainment said that contractors had “critical needs as well.” But with at least one solar-power-systems company involved, the Pentagon did not require that the firm halt layoffs as a condition of the deal, despite claiming that the payment would help it “retain critical workforce capabilities throughout the disruption caused by COVID-19 and … restore some jobs lost because of the pandemic.”
The Post report is far from the only account of public funds allocated for pandemic supplies winding up in private hands that did not provide them. In late March, Jared Kushner’s COVID-response team reportedly sidetracked normal supply-chain routes to set up the State of New York with a Silicon Valley engineer who said he could provide more than 1,000 ventilators. None were delivered, despite the $69 million payment.
