NY paid Bay Area CEO $69M for ventilators but received none

Image 1 of / 19 Caption Close NY paid Bay Area CEO $69M for ventilators but received none 1 / 19 Back to Gallery

A Silicon Valley CEO is accused of getting more than $69 million from the state of New York for ventilators he never delivered, according to a report by BuzzFeed News.

Yaron Oren-Pines, who is listed as CEO 0f InCommon in San Jose on both Twitter and LinkedIn, responded to a tweet sent by President Donald Trump on March 27 calling for General Motors and Ford to immediately begin making ventilators. Oren-Pines responded to the president's tweet, saying, "We can supply ICU Ventilators, invasive and non-invasive. Have someone call me URGENT." Oren-Pines has not tweeted since.

Three days later, according to BuzzFeed, New York apparently paid Oren-Pines $69,102,000 for 1,450 ventilators, or $47,656 per ventilator. It was the second-largest purchase made by the state of New York for coronavirus-related medical supplies, according to an analysis by the Albany Times-Union.

To date, New York has received no ventilators from Oren-Pines.

A state official, speaking on condition of anonymity, told BuzzFeed that New York made the deal with Oren-Pines on the recommendation of the White House coronavirus task force. The state has since ended the contract, and is attempting to recover the money.

“We are in discussions on a few remaining issues,” Heather Groll, a spokesperson for the New York Office of General Services, told BuzzFeed in regards to getting the money back.

When contacted by BuzzFeed, Oren-Pines said "neither me nor my company is providing any comment on this."

New York Gov. Andrew Cuomo's administration took steps to vet sellers, including requiring evidence of government certifications for products and detailed delivery information. But competitive bidding was suspended for the emergency contracts, which was not ideal: Most of the $686 million N.Y. has spent on medical supplies went to a diverse array of little-known companies that had never done business with the state, according to spending records maintained by state Comptroller Thomas DiNapoli's office.

Online records dating to 2012 indicate that 22 of the 25 largest payees in the past five weeks had not been paid before by New York’s government.

The crisis also prompted Cuomo to issue an executive order last month suspending the normal independent review of state contracts by DiNapoli's office in order to hasten purchases. Before issuing a payment to a contractor, DiNapoli's office would normally demand at least some information that services were being delivered as promised, according to spokeswoman Jennifer Freeman, but that step has also been suspended.

Cuomo senior adviser Richard Azzopardi said states were forced to "fend for themselves" to purchase the life-saving supplies. He also pointed to Centers for Disease Control and White House task force modeling, which predicted a more severe ‎spread of the virus and far more hospitalizations and fatalities than ended up occurring.

"We had no choice but to overturn every rock to find ventilators and other needed equipment," Azzopardi told the Times-Union. "We were able to bend the curve and purchase adequate supplies to meet current needs and amid these extraordinary circumstances, contracts have been continuously re-evaluated. Some shipments we'll be accepting to handle the ongoing public health crisis and prepare for future emergencies and other agreements will be modified or canceled with money refunded to the state."

Chris Bragg of the Albany Times-Union contributed to this report.

MORE CORONAVIRUS COVERAGE:

Sign up for 'The Daily' newsletter for the latest on coronavirus here.

Matthew Tom is a Homepage Editor at SFGATE. Email: mtom@sfgate.com.