“That’s Their Problem”: How Jared Kushner Let the Markets Decide America’s COVID-19 Fate

https://www.vanityfair.com/news/2020/09/jared-kushner-let-the-markets-decide-covid-19-fate

First-person accounts of a tense meeting at the White House in late March suggest that President Trump’s son-in-law resisted taking federal action to alleviate shortages and help Democratic-led New York. Instead, he enlisted a former roommate to lead a Consultant State to take on the Deep State, with results ranging from the Eastman Kodak fiasco to a mysterious deal to send ventilators to Russia. 

More than seven weeks after the federal government first learned that a new and lethal coronavirus was barreling toward U.S. shores, hospitals were pleading for masks, gloves, and other personal protective equipment to safeguard their medical staff. Intensive care nurses had been photographed wearing garbage bags instead of gowns. More than 19,600 Americans had been diagnosed with the disease, and at least 260 had died.

They had secured commitments from dozens of major corporations, including General Motors, to manufacture ventilators, map supply needs, create a system for contact tracing, and much more.

On Friday, March 20, they met with a large group of officials at the Federal Emergency Management Agency—people one attendee described as “the doers”—to strategize how best to replenish the nation’s depleted reserves of PPE. The attendees had gotten a significant pledge from, among many others, Mary Barra, the CEO of General Motors. Her company could reconfigure a production line to make ventilators, so long as the federal government would commit to purchasing them. To accomplish that, the private sector attendees and the FEMA officials discussed the need for President Donald Trump to invoke a federal law called the Defense Production Act, which would unleash the government’s procurement powers.

 

As one attendee recounted, certain government officials there had “implored” the group to return the next day to the White House for a follow-up with President Trump’s son-in-law and senior adviser, Jared Kushner, to make the case for the Defense Production Act. Earlier in the month Kushner had formed a coronavirus “shadow task force” running parallel to the official one helmed by Vice President Mike Pence.

Those representing the private sector expected to learn about a sweeping government plan to procure supplies and direct them to the places they were needed most. New York, home to more than a third of the nation’s coronavirus cases, seemed like an obvious candidate. In turn they came armed with specific commitments of support, a memo on the merits of the Defense Production Act, a document outlining impediments to the private-sector response, and two key questions: How could they best help? And how could they best support the government’s strategy?

What actually transpired in the room stunned a number of those in attendance. Vanity Fair has reconstructed the details of the meeting for the first time, based on recollections, notes, and calendar entries from three people who attended the meeting. All quotations are based on the recollections of one or more individual attendees.

Kushner, seated at the head of the conference table, in a chair taller than all the others, was quick to strike a confrontational tone. “The federal government is not going to lead this response,” he announced. “It’s up to the states to figure out what they want to do.”

One attendee explained to Kushner that due to the finite supply of PPE, Americans were bidding against each other and driving prices up. To solve that, businesses eager to help were looking to the federal government for leadership and direction.

“Free markets will solve this,” Kushner said dismissively. “That is not the role of government.”

The same attendee explained that although he believed in open markets, he feared that the system was breaking. As evidence, he pointed to a CNN report about New York governor Andrew Cuomo and his desperate call for supplies.

“That’s the CNN bullshit,” Kushner snapped. “They lie.”

 

According to another attendee, Kushner then began to rail against the governor: “Cuomo didn’t pound the phones hard enough to get PPE for his state…. His people are going to suffer and that’s their problem.” 

“That’s when I was like, We’re screwed,” the shocked attendee told Vanity Fair.

The group argued for invoking the Defense Production Act. “We were all saying, ‘Mr. Kushner, if you want to fix this problem for PPE and ventilators, there’s a path to do it, but you have to make a policy change,’” one person who attended the meeting recounted.

In response Kushner got “very aggressive,” the attendee recalled. “He kept invoking the markets” and told the group they “only understood how entrepreneurship works, but didn’t understand how government worked.”

Though Kushner’s arguments “made no sense,” said the attendee, there seemed to be little hope of changing his mind. “It felt like Kushner was the president. He sat in the chair and he was clearly making the decisions.”

Kushner was accompanied by Navy Rear Admiral John Polowczyk, who had just been posted to FEMA to lead supply-chain efforts. He heaped flattery on Kushner, calling his ideas “brilliant,” and expressed skepticism concerning the motives of those in the room and on the phone. “Are you trying to hawk your wares on us?” he asked one participant.

That attendee said he remains “angry” over the federal government’s intransigence in stockpiling supplies and feels certain that people died because of it. “At the time I just thought of it as blind capitalism and extreme libertarian ideals gone wrong,” he said. “In hindsight it’s not crazy to think it was some purposeful belief that it was okay if Cuomo had a tough go of it because [New York] was a blue state.”

According to another attendee, it seemed “very clear” Kushner was less interested in finding a solution because, at the time, the virus was primarily ravaging cities in blue states: “We were flabbergasted. I basically had an out-of-body experience: Where am I, and what happened to America?”

At the end of July, writing for Vanity Fair, I revealed that Kushner had commissioned a robust federal COVID-19 testing plan, only to abandon it before it could be implemented. One public health expert in frequent contact with the White House’s official coronavirus task force said a national plan likely fell out of favor in part because of a disturbingly cynical calculation: “The political folks believed that because [the virus] was going to be relegated to Democratic states, that they could blame those governors, and that would be an effective political strategy.”

The story struck a nerve, partly because it painted a picture of what might have been: The administration could have invested in a national testing system at a scale that could have greatly limited the number of cases and deaths. Instead the U.S. is on track to pass the grim milestone of 200,000 official COVID-19 deaths this month. With just 4% of the world’s population, we now account for 20% of global deaths from the virus.

Part of the answer almost certainly lies in the deep-seated belief, held by Kushner, President Trump, and their loyalists, that the federal government not only should not, but cannot play an effective leading role in responding to the pandemic, owing to its lumbering bureaucracy and onerous rules. At almost each step they have ignored the expertise of career officials and dismissed those with relevant experience as counterproductive meddlers. Trump famously calls them the Deep State. (A senior administration official denied this, saying, “The administration worked diligently to combine the best of the federal government and the private sector.”)

Kushner set out to reinvent what a response might look like, countering the Deep State with what you might call a Consultant State of his own creation. This might have been a worthwhile experiment had it not taken place in the context of a once-in-a-century public health catastrophe. As it is, it has led to organizational chaos, futile misadventures, and, most tellingly, a steadily climbing death rate. Often communicating using the encrypted platform WhatsApp, with little adherence to public records laws or federal contracting guidelines, Kushner and a tight-knit group of allies he’s recruited have overseen a response riddled with special favors and political calculation. When they managed to procure lifesaving equipment, they used the surplus to shore up the president’s relationship with Russia, hijacking a foreign aid agency in the process. And when they made a deal to bring drug manufacturing home to the United States, it blew up amid accusations of financial fraud.

“What you have going on here is smoke and mirrors,” said Larry Hall, who retired last year as director of the Defense Production Act program division at FEMA. “You do not have a national strategy.”

rom the beginning of his involvement in the pandemic, Kushner set about sidelining government experts in favor of young, untested volunteers drawn from consulting firms and investment banks like McKinsey and Goldman Sachs. Using personal emails and working under nondisclosure agreements, the volunteers were supposed to use their private sector savvy to source leads on protective equipment, then turn those leads over to the Federal Emergency Management Agency.

But to some of the besieged health care officials who began fielding his directives, Boehler was a government neophyte and an unaccountable agent of chaos. They felt the same way about Baitel, who became his deputy chief of staff at the DFC. Boehler approached the pandemic response like a management consultant looking to slash red tape. He shared Trump and Kushner’s quasi messianic belief in the private sector’s ability to respond effectively to the crisis and their contempt for government capabilities. On April 30, Boehler appeared as a guest on the podcast run by Michael Milken, the American financier who pleaded guilty to securities and tax violations in 1990 and was pardoned by Trump three decades later. “My job has been to bring public and private together and to work to drive very quick action,” Boehler said.

Boehler described public–private partnerships as “a big focus of the president, Jared, and me.” He added, “We get asked all the time: How come we’re not throwing Defense Production Act orders all over the place? … It’s not necessary when you have the private market taking all the right actions to support Americans.”

In reality the private sector not only needed, but wanted federal leadership. “Everyone involved was begging for the federal government to figure out the needs, make a very big order at a very fair price, and scientifically figure out how to distribute PPE,” said a software company CEO who worked on the pandemic response. Those in private industry trying to procure supplies did not want to bid against fellow Americans in need or act as distributors. “We don’t want to decide who lives and who dies,” the CEO said. In a bidding war without federal guidance, “everyone is going to overbuy and overpay. That is the definition of the tragedy of the commons. Everyone accidentally creates a worse outcome for everybody.”

 

Boehler made it clear that he viewed agencies like FEMA, with their deep reserves of experience, as too slow and cumbersome to respond to the pandemic. “FEMA is set up to respond to hurricanes,” as he told Milken. But the coronavirus is like “hurricanes in every one of the 50 states and the two territories at the same time.”

For all his talents, however, Boehler’s track record leaves much to be desired. A survey of initiatives bearing his fingerprints reveals that, at a time when Americans desperately needed a large-scale intervention to protect the health of the most vulnerable among us, he and Kushner expended valuable time on political favors and blame-shifting exercises.

The U.S. Agency for International Development, known as USAID, is headquartered two blocks south of the White House, at 1300 Pennsylvania Avenue. Traditionally, USAID has focused on such humanitarian pursuits as battling starvation, protecting vulnerable populations from deadly diseases, and supporting democratic transitions. In 2016 alone, according to its website, the agency helped feed more than 53 million people in 47 different countries. In late May 2020, its staffers were busy aiding Uzbekistan after a dam collapse and helping governments in Africa manage COVID-19 outbreaks.

So it came as a surprise when, without explanation, USAID got a new and urgent mission at the direction of the White House’s National Security Council. On May 20, an exasperated USAID official, Peter Mamacos, shared the news in a Skype meeting of government officials: The agency had been instructed to ship more than 200 ventilators to Russia, according to notes taken by a participant on the call, which Vanity Fair has obtained. Furthermore, the delivery had to be prioritized over any of the agency’s other work.

The order had been relayed from President Trump to his chief of staff, Mark Meadows, who then routed it through the National Security Council. The directive came just days after a May 7 phone call between Trump and Vladimir Putin. “USAID was given no discretion in any of this,” said one government official with knowledge of the directive. “It was deemed a priority to give vents to Russia.”

 

Over the following weeks officials at USAID scrambled to fulfill the mysterious order. Doing so pulled resources and staff hours away from the agency’s core humanitarian mission, and came at the expense of poorer countries with far more limited resources.

This was especially hard to swallow when the ask itself looked like a political favor. When USAID officials objected, they were told by NSC staffers, “These decisions are being made at the White House,” according to the official with knowledge of the demand. More specifically, they were told that Boehler was “the one calling the shots.”

The urgent order disrupted USAID’s detailed plans to ship ventilators to dozens of other countries. Russia “seemed to be first in line” and “got prioritized ahead of a lot of other countries,” said the government official with knowledge of the demand.

This was no simple mail drop either. The ventilators, a number of which had proprietary parts, had to be reconfigured to work with Russian power sources. That expensive and time-consuming extra step was doubly ironic to those who recalled that, on April 1, Russia had delivered 45 ventilators to the United States without bothering to refit them for American power sources. They were the same type of faulty ventilator believed to have sparked fires in Russian hospitals.

The total cost of sending the ventilators to Russia was $3.46 million, but that doesn’t account for the impact on morale at an agency whose staff signed up to help the poor, not to perform a favor for a strategic rival flush with oil money. (In response to a request for comment, a senior administration official said, “At the time, the COVID-19 outbreak was worsening in Russia, which had the second-highest number of cases in the world and the highest number of cases in Europe. In response to President Putin’s request for assistance, President Trump offered to donate and deliver 200 ventilators to the Russian people.” A second senior administration official, who was involved in the efforts, said, “All international ventilator efforts, to dozens of countries, were decided by an interagency group that included NSC, State, and USAID.”)

Both Democratic and Republican members of a Senate Appropriations subcommittee that oversees USAID’s spending reportedly objected to the ventilator shipment. As one Democratic congressional aide put it, “It was inexplicable and a bad idea for the administration to do this as a favor to Putin, but USAID was forced to by the White House.”

There is more great information at the link above.   Like how bungled and badly the Eastman Kodak affair blew up.   Please give it a read.    Notice what was really important and happening during this time.    The tRumpies / WH was only interested in making money of this for the private sector, disregarded any function of government, and all of them were full time trying to make sure they were the ones not left at fault or to blame.   They were ready to turn on each other, eat their own young, or blame everything on hard working government workers who had no authority and no input in any of this.    Hugs

Jared Kushner On Dying NYers: “That’s Their Problem”

2 thoughts on ““That’s Their Problem”: How Jared Kushner Let the Markets Decide America’s COVID-19 Fate

  1. Nan September 18, 2020 / 12:39

    “Free markets will solve this,” Kushner said dismissively. “That is not the role of government.”
    Again, the shirking of responsibility … EXCEPT when it works to the advantage of certain individuals.

    This comment describes the entire Trump administration: What you have going on here is smoke and mirrors.

    Liked by 1 person

    • Scottie September 19, 2020 / 03:36

      Hello Nan. Yes very true. Government exists to serve the wealthy, to funnel public money to private businesses according to the wealthy. It is not there to provide services to the poor or lower class again according to the wealthy.

      But I think what this shows more clearly was the bias of incompetent people thinking civil servants with experience in their jobs couldn’t do what inexperience wealthy private sector people did manage to screw up. It shows clearly the politicization of government services, with the government not helping states that tRump disfavored. It is clear that these people do not see the presidency as a job of running the entire country, but a position to enrich themselves. tRump cares only about his base, the rest of the country could burn down. It is like the confederacy won the civil war. Hugs

      Like

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