LOS ANGELES _ They had seemingly done the impossible. The union that represents healthcare workers in California announced it had arranged the purchase of 39 million N95 masks for hospitals and government agencies that badly need the protective equipment.
Among the intended recipients was Kaiser Permanente, which placed orders for 6 million masks.
A week later, none of those masks have materialized, and Kaiser is cooperating with a federal fraud investigation into the deal, a spokesman for the health plan confirmed.
There is no indication that the union is a target of the investigation, and the exact reasons why the masks didn't come through remain unclear. But the failed arrangement marks the latest in a smoke-and-mirrors marketplace for medical supplies in short supply as hospitals and other healthcare facilities in California and beyond prepare for an onslaught of COVID-19 patients.
Experts in the global supply chain say that dubious middlemen have flooded the market with suspect offers, creating an atmosphere of confusion and distrust just as hospitals are desperate to arm their front-line personnel with the gear they need to protect themselves from the novel coronavirus.
Kaiser spokesman Marc Brown said the mask supplier had been brought to Kaiser's attention by Service Employees International Union _ United Healthcare Workers West. Despite multiple requests, he said, the supplier repeatedly failed to provide reliable information about how Kaiser could verify and inspect the masks.
Kaiser withdrew from the deal and no money ever changed hands, he said.
"We learned shortly afterward that the supplier never had possession of the masks," Brown said in an email. "We are cooperating with federal law enforcement in their investigation of suspected fraud in this case."
Steve Trossman, a spokesman for SEIU-United Healthcare Workers West, said that the organization "was trying to save the lives of healthcare workers and patients" and that union officials "were proud of having made that attempt."
Trossman said the union had turned the name of the supplier over to a federal task force that is investigating suppliers of medical equipment related to COVID-19. He declined to provide the supplier's name to the Los Angeles Times.
A spokesperson with the U.S. attorney general's office declined to comment.
Several other hospital systems and government agencies that the union had listed as buyers of the massive stockpile said they had decided not to pursue the deal. Meanwhile, healthcare workers who are members of the union say they haven't seen the masks and are expressing frustration at the ongoing lack of personal protective equipment.
"We are angry, we are scared, we are mad, disappointed," said Marcie Call, a medical records worker at Kaiser Permanente Santa Rosa.
Counterfeiting is now rampant in global medical supply chains, said Rosemary Coates, executive director of the Reshoring Institute, a nonprofit that helps companies move manufacturing back to the U.S.
"Any time there is an opportunity like this, the counterfeiters will jump on it, and that's what we're seeing right now," Coates said. "Things are mislabeled or the companies don't really have the connection we think they have or they are made of low-quality components."
The chaotic marketplace stems from the federal government's lack of a coordinated strategy to procure protective medical equipment and distribute it equitably, Coates said.
The promise of 39 million masks was announced by Dave Regan, president of SEIU-United Healthcare Workers West, during a Facebook Live town hall on March 25. Regan said that the union had secured the supplies at $5 a mask and that various hospitals would soon be receiving millions of masks, according to a video of the event.
The next day, the union posted an announcement about the discovery.
However, the union has since distanced itself from the arrangement. Trossman said the union only connected the supplier to the hospitals and walked away after that.
"As far as we knew, he had legitimate masks, and the people who were going to purchase those masks were going to fully vet it and check it out and do their due diligence," Trossman said.
The statement the union posted about the stockpile said SEIU-United Healthcare Workers West had no financial interest in the transactions.
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