By Daniel Wilson

Law360 (January 28, 2021, 6:47 PM EST) -- The House Oversight Committee will investigate the award of nearly $79 million in COVID-19 ventilator contracts amid allegations that the ventilators aren't effective and that the deals may have been tainted by the manufacturer's connection to the Trump administration.

Rep. Raja Krishnamoorthi, R-Ill., sent letters asking Safeguard Medical and AutoMedx Inc. to explain how their deals for the SAVe II and SAVe II+ ventilators came about, including any communications they had with senior Trump administration officials, he said Wednesday. AutoMedx manufactured the ventilators, while Safeguard held the contracts to supply them to the government.

"Reports and independent studies have indicated that the ventilators purchased by the federal government may not be appropriate for their intended purpose of treating coronavirus patients, which raises serious questions about whether their purchase … constitutes waste, fraud, or abuse," Krishnamoorthi said.

The initial $16.2 million deal with Safeguard unit Combat Medical Systems, covering SAVe II ventilators made by AutoMedx, came as part of a surge of contracts with 11 different manufacturers in March and April, meant to secure roughly 200,000 ventilators to help treat COVID-19 patients, according to the letters.

But officials at the U.S. Department of Health and Human Services reportedly found that the SAVe II, intended for military use in combat situations and not for hospital use on critically ill patients, wasn't sufficient for treating COVID-19 patients, Krishnamoorthi said. HHS asked for the development of an improved ventilator, which became the SAVe II+, and signed a related $62.5 million contract with Combat Medical Systems in June, he said.

But despite the claims that the newer model had increased air volume and pressure, federal medical workers have reportedly found that the "hastily designed" SAVe II+ is still inadequate for treating COVID-19, meaning the deal may have wasted government funds and put patient lives at risk, according to Krishnamoorthi.

AutoMedx in particular may have benefited from a "potentially tainted" acquisition process, Krishnamoorthi said. Its co-founder and current shareholder Adrian Urias was reportedly a ventilator procurement adviser to the Trump administration, and the company seemed to have benefited from a "concerning coincidence" that the government's initial specifications neatly matched those of the SAVe II, according to the lawmaker.

Krishnamoorthi asked both Safeguard and AutoMedx to cough up documents related to their ventilator contracts with each other and with the government or related negotiations, and copies of any communications with Urias and with seven senior Trump administration officials, giving them until Feb. 9 to comply.

Representatives for Safeguard Medical and AutoMedx did not immediately respond to requests for comment Thursday.

The officials listed in Krishnamoorthi's letter include former HHS Secretary Alex Azar; the former director of the White House's Office of Trade and Manufacturing Policy, Peter Navarro; and Trump's senior adviser and son-in-law Jared Kushner.

Navarro and Kushner were criticized by Oversight Committee staff in a July report for their allegedly "gullible" and "incompetent" behavior in negotiations with Philips North America Corp. as part of another ventilator deal.

The pair had "conceded to Philips on all significant matters, including price," only calling in professional contracting officers to formalize the deal they had negotiated, meaning the government paid more than any other U.S. buyer for the same ventilators, overspending by as much as $500 million, the staff report said.

The White House had argued at the time that the report was "misleading and inaccurate" and a "stunt that is only meant to politicize the coronavirus."

--Editing by Aaron Pelc.

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