The people who made millions from the UK's £18,000,000,000 PPE fiasco

An investigation has revealed the companies and individuals who profited from the Government’s panicked scramble for PPE during the pandemic.

For example, a Spanish entrepreneur was paid millions to find gowns and gloves, and another £880,000 contract was awarded to a 23-year-old with no relative experience in the field, MailOnline reports.

Gabriel Gonzalez Andersson received £21 million to serve as a middleman in sourcing PPE for the NHS.

The Madrid businessman was drafted in to help with ‘procurement, logistics, product sourcing and quality control’ of the life-saving equipment.

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He was working for Florida jewellery designer Michael Saiger, 31, who set up a business providing PPE across the world at the beginning of the year.

Mr Saiger’s firm was handed a number of contracts providing gloves and gowns to NHS staff, and Mr Andersson’s job was to find manufacturers who could produce it.

Mr Andersson secured more than £21 million for work on two NHS contracts, and three more agreements were signed by his boss in June.

But the pair’s relationship later broke down, leading to a court fight in Miami. Mr Saiger is now suing Mr Andersson for breach of contract and fraud in the inducement.

Another company which landed a lucrative contract was Euthenia Investments, run by Sabia Mokeddem from Lyon in France.

The 23-year-old had set up her company seven months earlier and despite having no experience in supplying medical equipment, she was given £880,000 to supply 55,000 coveralls.

She was paid almost £500,000 upfront to act as a go-between for a wholesaler in Hong Kong – but called this ‘pocket money’.

Miss Mokeddem, who lives in central London, said however the checks had been stringent and she was asked for test reports on the product.

The self-confessed party girl also admitted she attended raves with more than 200 people during the first national lockdown.

Trade Markets Direct was another of the companies awarded a lucrative deal by the Government.

Owner and former bookmaker Garry Morrill admitted protective equipment is ‘not his area’, but he applied for a contract on the Government website as he knows tradespeople in China who export medical supplies.

He claims officials sent £3.8 million to the wrong bank account before he had even confirmed the purchase order – even though he requested it to be paid in instalments.

Mr Morrill returned the money and asked for it to be sent to the correct account, but the order was then suspended.

‘You can’t just dump money in a bank account,’ he said.

Meanwhile, another business, MGP Advisory, was just weeks away from being struck off when it was given a £825,000 contract to supply PPE.

It comes after a report found the Government failed to be transparent about the contract deals it awarded while working to secure £18 billion of PPE during the first wave.

Public spending watchdog the National Audit Office concluded companies recommended by MPs, peer and ministers’ offices were given priority after carrying out an investigation.

The report has emerged amid claims of ‘cronyism’ and accusations about large contracts being given to people and companies linked to the Conservative Party during the coronavirus crisis.

Meg Hillier, chairperson of the Commons Public Accounts committee, said this may be the ‘tip of the iceberg’ and called for the Government to ‘come clean’ about all the deals awarded.

National Audit Office chief Gareth Davies said: ‘At the start of the Covid-19 pandemic in the UK, Government had to procure large volumes of goods and services quickly whilst managing the increased risks this might entail.

‘While we recognise that these were exceptional circumstances, it remains essential that decisions are properly documented and made transparent if Government is to maintain public trust that taxpayers’ money is being spent appropriately and fairly.

‘The evidence set out in our report shows that these standards of transparency and documentation were not consistently met in the first phase of the pandemic.’

The report looked at 8,600 contracts awarded by the Government between January and July, finding the vast majority had been given without any competition process.

It highlighted how 50 million masks purchased could not be used, and also uncovered links with individuals in the Tory party including Michael Gove and Lord Agnew.

Key findings from the National Audit Office report

  • More than 8,600 contracts with a value of £18 billion had been awarded by July 31, including £10.5 billion without any competition process
  • A ‘high-priority lane’ was established for firms referred by connections to the Tories
  • About one in ten companies going through this route was awarded a contract, compared with one in 100 for those in the ‘ordinary lane’
  • There was ‘inadequate documentation’ in a number of cases on how risks were managed – including potential conflicts of interest
  • Contracts were awarded retrospectively after work was carried out
  • Many of the contracts awarded were not published in a timely manner
  • Some companies named in the report have links with individuals within the Tory Party, including Michael Gove and Lord Agnew

Rachel Reeves, Labour’s Cabinet Office spokesperson, said: ‘The country deserves to have confidence their money is being spent effectively by the Government – and to know without doubt that friends and donors to the Conservative Party aren’t profiting from this pandemic.’

Labour MP Ms Hillier added: ‘The Government overlooked a serious conflict of interest, paid consultants for months before giving them contracts and purchased masks it knew weren’t up to scratch.

‘It’s bad enough that it set up a ‘high-priority lane’ to fast-track companies with the right connections.

‘But the failure to track how half the companies had ended up on it made it impossible to ensure proper safeguards were in place.

‘The Government needs to come clean and immediately publish all the contracts it’s awarded so far.’

The investigation focused on 20 contracts in particular, including Public First, which was given a £840,000 deal retrospectively for focus groups and communications.

The owners have ‘previously advised or worked with’ Cabinet minister Michael Gove, although the report said there is ‘no evidence’ Mr Gove was involved with the award.

Artificial intelligence company Faculty – which Cabinet Office minister Lord Agnew owned £90,000 of shares in – was awarded contracts worth almost £3 million, although he has since ceased his interest in the firm.

MailOnline also claimed both of these companies were linked with the Prime Minister’s former chief advisor Dominic Cummings, who left Downing Street last week, but the report did not mention this. There is no evidence he had any involvement in helping them secure the contracts.

The report did however conclude that ‘in the examples we examined where there were potential conflicts of interest involving ministers, we found that the ministers had properly declared their interests and we found no evidence of their involvement in procurement decisions or contract management’.

Two companies given contracts for masks – Ayanda Capital received £253 million and PestFix got £250 million – resulted in more than 650,000 pieces of PPE being produced which cannot be used for their original purpose. PestFix was also mistakenly added to the ‘high priority lane’.

The masks produced did comply with the BS EN149 standard and were in line with the contracts agreed, but did not meet the Government’s published PPE specifications at the time.

The spending watchdog acknowledged the pandemic required acting with ‘extreme urgency’ and the Public Contracts Regulations allowed an emergency response, including awarding deals directly without a formal competition.

But the report criticised how the Cabinet Office ‘did not specifically set out the risks that should be considered’ including ‘perceived or actual bias in awarding contracts or conflicts of interest, that may become more prominent when no competition is involved’.

The cross-Government PPE team had an eight-stage process for evaluating offers of help, but £1.5 billion worth of contracts had already been handed out before controls were put into place.

The watchdog also found a lack of record-keeping within the ‘high-priority lane’, which involved 493 suppliers and 47 were given contracts.

Fewer than 250 sources out of the 493 were recorded – including 144 which came through the private offices of ministers, 64 directly from backbench MPs or peers and 21 from officials.

Cabinet Office Minister Julia Lopez responded: ‘We have been dealing with an unprecedented global pandemic that has posed the biggest challenge to the UK in a generation.

‘As this report rightly recognises, we needed to procure contracts with extreme urgency to secure the vital supplies required to protect frontline NHS workers and the public and we make no apology for that.

‘We have robust processes in place for spending public money to ensure we get critical equipment to where it needs to go as quickly as possible, whilst also ensuring value for money for the taxpayer.

‘It is important to maintain the public’s confidence in how we manage their money, and we welcome the NAO’s scrutiny of our processes and recommendations on how they can be improved.’

A Public First spokesperson said: ‘We agreed a pay-as-you-go deal where we could be terminated at any point if they weren’t happy with our work.’

A Faculty spokesperson said: ‘The NAO found no evidence that Lord Agnew was involved in these procurements, which were contracted under delegated authority in different departments, none of them his own.

‘It also found that the minister had disclosed his interests. Lord Agnew retains ownership of his shares through a blind trust.’

An Ayanda spokesperson said: ‘Suggestions that the masks are not fit for purpose or are somehow unsafe to use by frontline NHS workers are simply untrue and we are advised defamatory.’ 

A spokesperson for PestFix said: ‘After delivery of a tiny percentage of the masks, the Government changed its requirements such that the masks required head straps rather than ear-loops.

‘The Government is currently looking at ways to repurpose the small number of FFP2 masks delivered and, at the Government’s agreement, the remaining 97.6% of the contract value was changed to a different type of mask, providing a value-for-money solution to the taxpayer.

‘Any “fast-tracking” of PestFix was not the result of any false information provided by us, rather the Government simply recognised we were able to procure equipment at a speed that other firms could not at a time of need, and when worldwide supply was rapidly diminishing.’

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