You get a lucrative contract! And you get a lucrative contract!
Gov. Greg Abbott’s border crackdown is producing a private contractor bonanza, showering tens of millions of dollars on staffing companies, technology firms and builders, including one business that sold Texas hundreds of millions of dollars worth of unreliable COVID tests.
None of the contractors are going through a formal solicitation process, potentially raising costs for a border security program that is already eating up more tax dollars than advertised.
Gothams, LLC, led by a soldier-turned-Silicon Valley entrepreneur, in January got a $43 million “emergency” purchase order to build and staff a state-run migrant detention center in Hebbronville in Jim Hogg County, just east of Laredo near the U.S.-Mexico border, records obtained by the Houston Chronicle show.
Beginning early in the coronavirus pandemic, Gothams sold Texas over $400 million worth of COVID testing services using a controversial test from Curative Inc. In January 2021, the U.S. Food and Drug Administration flagged the test for producing a “risk of false results, particularly false negative results.” The FDA stopped short of recommending the test be discontinued but six months later the agency revoked its emergency use authorization at Curative’s request.
Curative Inc. is still providing tests and testing services, including in Texas, but not with the discontinued test it developed at the outset of the pandemic, the company says.
The Gothams CEO, Matt Michelsen — who described himself as an early investor in and “operator” of Curative — defended the start-up company’s original oral fluids tests as better than invasive nasal swab tests. He said the FDA action was motivated by nothing more than “political nonsense.”
“The test was superior but we caved to the FDA,” Michelsen said in a brief phone interview with the Chronicle. “It should have been a scientific test, not a political test.”
As with the COVID deals, the border purchases are being awarded without the burden of formal bidding by the Texas Division of Emergency Management, or TDEM, which falls under the management of the Texas A&M University System.
There were no formal contracts for the hundreds of millions spent on COVID tests, and there aren’t any for the border outlays either, according to TDEM. Officials are purchasing millions of dollars at a time in goods and services, sometimes tens of millions, using simple 30-day purchase orders.
Making it all possible: Abbott’s monthly renewal of his disaster declaration along parts of the southern border, allowing him to suspend normal contracting procedures that officials say slow the response but that critics say drive up costs and promote cronyism. Same goes for the COVID-related purchases.
“He’s just abusing emergency powers at this point,” said state Rep. Mary Gonzalez, D-Clint, who represents a border district and is vice-chair of the House Appropriations Committee. “When we’re spending this amount of taxpayer dollars, it’s important for us to honor our constituents with transparency and accountability.”
TDEM acknowledged Abbott’s ongoing emergency border security orders allow the agency to “go direct to vendors without a formal solicitation or bid process,” but in answers to written questions from the Chronicle, officials said they informally reached out to eight companies for the Hebbronville facility. Only Gothams “met the full requirements of the bid,” the agency said.
The Chronicle asked to see all its border security proposals from private companies but the agency has so far declined to release them — including building plans and “professional resumes” that were submitted to the agency.
Surely the next story in this series will be about the millions of dollars these vendors have donated to Abbott’s campaign. And after that, about the criminal investigation into all the resulting graft that has been launched. Right?