The federal agency, headed by Jared Kushner’s university buddy and which has earmarked $ 100 million to deal with the Covid supply chain crisis, has so far not invested a cent, according to a new government oversight report.
In 2020, the Trump administration ordered the International Development Finance Corporation (DFC) to borrow $ 100 million in Pentagon funds through the CARES Act to “finance the domestic production of strategic resources needed to respond to the COVID-19 epidemic and strengthen all relevant domestic pharmaceutical supply chains.”
Companies were encouraged to apply for financial support to increase the use of ventilators, vaccines, medical test equipment, personal protective equipment (PPE) and other relevant products in the United States. According to a report by the new government’s accountability agency, the agency’s Washington downtown office was flooded with 178 applications, but no money flowed out.
The Agency’s loan application portal has now been suspended and its mandate to issue Covid loans expires on 26 March.
Adam Boehler, son-in-law of President Donald Trump and advisor to fellow Jared Kushner, led the International Development Finance Corporation from the fall of 2019. The DFC was established with the support of two parties in 2018 to direct private investment to the government. funded projects in developing countries.
Boehler had worked in the private sector setting up health care companies. He was appointed by the Trump administration to head the Health and Human Services ’Center for Medicare and Medicaid Innovation, after which he served as a senior advisor at HHS before being appointed to the DFC in 2019.
Following the outbreak of the pandemic in 2020, when public health authorities rushed to find gloves, bathrobes and N-95 masks, the DFC expanded its role to focus on streamlining the domestic supply chain with a Trump executive order.
However, the agency told GAO last month that its loans had been delayed due to significant inter-agency evaluations, that the proposed projects were complex and required environmental assessments, and that it had difficulty hiring staff to evaluate the proposals.
Chelsa Kenney, author of the GAO report, told NBC News that the lack of loans created a “waiting gap” in performance. He said he understood the agency had reduced 175 applications to eight, but had still not provided funding.
DFC spokesman Pooja Jhunjhunwala said: “While we appreciate GAO’s work on this audit, it vaguely describes the special role of the DFC, as the program involves close involvement of the administration and several agencies across the board.… The DFC is not a leader companies. ” Jhunjhunwala said the DFC had accepted the watchdog’s recommendation to monitor the cost of reviewing proposals, but rejected the recommendation that the DFC evaluate the Covid loan program.
The letter from the agency that responded to the draft report indicated that other federal agencies are also responsible for the program. Dev Jagadesan, the agency’s current acting CEO, wrote: “While this report rightly demonstrates that the DFC CEO has authority over some key operational, administrative and program decision-making responsibilities, and technical requirements are approved by the interagency partners of this program: DOD and HHS.
Jagadesan also disagreed with the auditors ’recommendation that his agency should evaluate the effectiveness of the program.
GAO’s Kenney said, “It’s been two years, and without an assessment, we can’t really understand if this tool is to meet those needs in a national emergency.”
The auditors found that the DFC has not tracked how much money it spent on the Covid supply chain program, but agency officials said at least $ 1 million was spent screening the proposals.
The agency’s online materials continue to promote access to funding, but the agency’s estimates of how long it will take to approve funding have reportedly fall from 3-4 months to 9-15 months.
In July 2020, the agency announced a $ 765 million commitment to work with Kodak to make the ingredients for generic drugs needed in a pandemic. Kodak shares rose 570 percent and the company announced plans to expand its existing offices in Rochester, New York and St. Paul, Minnesota.
The contract was immediately reviewed and never went through.
The agency’s chief inspector reviewed the Kodak agreement and found “there was” no evidence of misconduct by DFC officials. “
The loan, which is the most advanced in the process, is an application by a Connecticut-based company called ApiJect, but GAO said the project to build a new facility to create 650 jobs in Covid pre-filled injections has been delayed because the company has “delayed securing necessary ownership of the project. “
ApiJect declined to comment on the report. A person familiar with the project told NBC News that there is a legal dispute with the landowners of the property.
In April, the agency told NBC News that ApiJect was one of its “critical projects” in its “application series”, which was subject to a “rigorous due diligence process.”
Boehler left the DFC on January 20, President Joe Biden’s inauguration day, and was succeeded by Jagadesan. Boehler declined to comment.