Lawmakers want answers on Newsom’s mask deals

Good morning, California. It’s Monday, May 11.

State’s vetting process under scrutiny

Who could have predicted face masks would become such a hot topic in California?

They’re the subject of a state Assembly hearing this afternoon, as lawmakers investigate why California on March 26 sent $456.9 million to a 3-day-old company, Blue Flame Medical, before clawing the money back hours later, as CalMatters’ Laurel Rosenhall first reported.

Lawmakers will probe Gov. Gavin Newsom’s administration about its pandemic vetting process, as other failed or incomplete deals for personal protective equipment emerge:

• The $1 billion deal with Chinese company BYD for 200 million N95 respirators per month. So far, BYD hasn’t sent any N95 respirators, because they’re still awaiting federal certification. It will reimburse the state $247.5 million, the Los Angeles Times reported.
• A failed $800 million mask deal with Bear Mountain Development Co. LLC, run by former Alabama Attorney General Troy King. The deal disintegrated after the company failed to deliver most of the state’s order for 400 million surgical masks and 200 million face shields. A state spokesman told the Los Angeles Times California paid no upfront money.
• A failed $8.75 million deal with Brazilian company Hichens, Harrison and Co. It’s unclear why this one collapsed. But the state got its money back within a week, company president Peter Leite told the Sacramento Bee.

Newsom said Thursday the state improved vendor vetting after the Blue Flame fiasco.

• Newsom: “We were in the Wild, Wild West period in the early part of this pandemic. Those dollars were protected and protocols were put into place that are much strengthened after that specific incident.”

Still, lawmakers want specifics.

• Assemblywoman Cottie Petrie-Norris, a Laguna Beach Democrat who will chair today’s hearing: “I think it would be very productive for both the Legislature and also for the public at large to understand what happened.”

Also today: The Senate returns to the state Capitol. (The Assembly returned May 4.) There are new procedures to minimize virus spread and a new schedule for the year to reflect the shortened timeframe.

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The Bottom Line: As of 7 p.m. Sunday night, California had 67,599 confirmed coronavirus cases and 2,716 deaths from the virus, according to a Los Angeles Times tracker. (These numbers are different from those of the state Department of Public Health, which are updated less often.)

Also: CalMatters regularly updates this pandemic timeline tracking the state’s daily actions. And we’re tracking the state’s coronavirus hospitalizations by county.

Other stories you should know

1. CA first state to shift to all-mail voting for November election

Each of California’s more than 20 million registered voters will receive a ballot in the mail for the November general election, following an executive order Newsom issued Friday citing the public health threat of COVID-19. California is the first state to temporarily shift to all-mail voting as a result of the pandemic, a move largely applauded by Democrats and opposed by Republicans. A spokesperson for President Trump’s campaign lambasted Newsom on Friday, arguing the order was “a thinly veiled political tactic” that would “undermine election security” and promote voter fraud. The Republican National Committee is also considering suing Newsom.

• In-person voting options will still be available in November. For more on the logistics of in-person voting in the age of COVID-19, check out this piece from CalMatters’ Ben Christopher.
• An additional challenge: the increased cost of mailing each registered voter a ballot and prepaid return envelope. “Elections have been an unfunded mandate, and this is going to be an even bigger expense for counties,” said Kim Alexander, president of the California Voter Foundation.

2. How big is California’s budget shortfall? Big

Just how big is California’s budget deficit? Between $18 billion and $31 billion, according to a report released Friday from the Legislative Analyst’s Office — a significantly lower number than the $54 billion the state Department of Finance predicted Thursday. (The LAO made its estimate using the current budget, which is lower than the proposed January budget the finance department used for its estimate.) But any way you slice it, California’s budget hole will be massive for years to come. The LAO report predicts California could face budget deficits totaling as much as $126 billion through 2024. One way to stop the fiscal bleeding? More federal aid, which “would reduce the hardship felt by Californians but also help reduce the budgetary problem,” legislative analyst Gabe Petek said in a recent Zoom call with reporters.

3. CA’s new child care website lacks essential information

The state’s new child care website, launched to help essential workers find a provider for their kids amid the pandemic, lacks key information, CalMatters’ Elizabeth Aguilera reports. In many cases, child care centers’ hours of operation are missing and the number of open slots is marked “unknown.” In addition, complaints and citations aren’t listed directly on the site. Ironically, a comprehensive multimillion-dollar state child care website was already in the works and is set to launch in July.

• Keisha Nzwei, director of public policy for the California Child Care Resource and Referral Network, which is building the site: “I wish people could see how beautiful and user-friendly this site is going to be.”

4. Black Californians dying from COVID-19 at disproportionately high rates

African Americans are dying from COVID-19 at disproportionately high rates across California. In Los Angeles, which has by far the state’s highest COVID-19 death toll, 12.5% of deaths have been black residents, though they make up only 8% of the population, CalMatters’ Nigel Duara reports. And in the Bay Area’s three largest counties, black residents are dying at nearly twice the rate of any other race, while Latinos are testing positive for coronavirus at disproportionately high levels, the San Francisco Chronicle reports. Experts say the disparity is due to the fact that blacks and Latinos are more likely to have underlying health conditions, be frontline workers, live in multigenerational housing and have poorer access to coronavirus testing and health care.

• Dr. Stephen Lockhart, Sutter Health chief medical officer: “The COVID-19 pandemic has ripped a Band-Aid off the structural inequities that exist within our society. We must address these disparities right away, because the cost of not addressing them is measured in human life.”

CalMatters commentary

CalMatters columnist Dan Walters: Gov. Newsom often uses the term “nation-state” to describe California. Could California make it as a separate nation? And should it try?

Does California have the chutzpah to pass much-needed legislation to open the doors to recovery from the coronavirus pandemic? Here are six issues the Legislature needs to deal with, argues John Moorlach, a Republican state senator from Costa Mesa.

Hospitals need help: If hospitals don’t get the financial support they need, health care in our state could change for the worse for years to come, writes Carmela Coyle, president and CEO of the California Hospital Association.

New protections needed: Newsom’s proposal to refocus the state’s response to deceptive financial offerings would catapult California to the forefront of consumer protection, writes Monique Limòn, a Democratic assemblymember from Santa Barbara, and Richard Cordray, first director of the U.S. Consumer Financial Protection Bureau.

Future of higher ed: As the world grapples with remote learning, now is the time to embrace new ways of reaching students, writes Lark Park, director of the California Education Learning Lab at the Governor’s Office of Planning and Research and a University of California regent.

“Insurer of last resort” not designed for primary insurance market: California’s insurance commissioner recently expanded the state’s “insurer of last resort” plan, forcing it to offer comprehensive homeowners coverage. It was a bad idea, argues Ronald Cassesso, president of the Property Insurance Plans Service Office Inc.

Other things worth your time

California prisons are selling face masks to the state. But at what cost? // The Sacramento Bee

Does California need a state Defense Production Act to make medical supplies? // KQED

California’s tourist destinations cautiously prepare for reopening and the new normal. // The Los Angeles Times

Elon Musk threatens to move Tesla out of California. // The New York Times

Will reopening for curbside pickup be enough to keep businesses afloat? // The Los Angeles Times

President Trump attacks decision to add in-person voting center to a California congressional special election race. // The Washington Post

Did California’s coronavirus spread really start in a nail salon? // The San Francisco Chronicle

Newsom endorses Joe Biden for president. // Politico

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See you tomorrow.

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Correction: An earlier version of this newsletter misidentified Assemblywoman Cottie Petrie-Norris’ district. She represents Laguna Beach, not Long Beach.