Argimon defends controversial face mask contract: "We had to fend for ourselves and it was not a mistake"

Minister justifies advance payment to an unknown supplier due to "extreme difficulties" to make purchases through usual system

3 min
The Minister of Health, Josep Maria Argimon.

Barcelona"It was a risky operation, but we did what we had to do because we needed the material to protect health professionals. We had to fend for ourselves and we did not make a mistake," said Minister of Health Josep Maria Argimon, who appeared on Thursday before Parliament's ordinary health committee at his own request to defend the controversial contract for the purchase of masks and PPE from Basic Devices, signed during the first days of the pandemic. The contract was made through the emergency route for an initial value of €60m and Catalonia's Anti-Fraud Office investigated and qualified the operation as "reckless" due to the lack of solid references about the company – it was the first time it was supplying the health system – and the advance payment made to ensure the acquisition, which was finally carried out and €35m were paid. "It is always more comfortable not to take risks, but in the situation of maximum shortage and pressure on care we were in, we had to do it. We did what we could," reiterated Argimon, who was the director of the Catalan Health Institute (ICS) at the time.

The minister began his appearance by stressing that neither the Anti-fraud Office nor the Audit Office have found any irregularities in this contract for healthcare material. "There is no corruption element. They were very complicated circumstances to find and buy materials, and everything we received was delivered to health centres," he explained. According to Argimon, the main companies that ICS and health centres and institutions routinely contract had "extreme difficulties" in gaining access to the market. The main stumbling block was the rupture of stock, which greatly increased prices, and the speculation and fierce competition between countries – and also between regions – that was created, because it was China, as the main producing country, that provided the material.

"What used to arrive by ship in a week had to arrive by plane in a few days. But even at the foot of the runway the material was auctioned off to the highest bidder," added Argimon, who was flanked by then director of the Catalan Health Service (CatSalut), Adrià Comella, and CatSalut's finance officer Iván Planas.

In fact, the ICS and CatSalut set up a central purchasing office to guarantee supplies for the system, which was unable to stay stocked through usual channels. Then, company Basic Devices presented itself as an intermediary in the Chinese market and undertook to supply 2 million surgical masks and 2 million FFP2 masks for €7.1m, 2 million PPE for €48m, 50 respirators for €1m and 50 non-invasive mechanical ventilation units for €1.5m. The total expenditure was for over €60.5m.

One of the problematic points on which the Anti-fraud Office shone a light was that the Government made an advance payment of over half the planned cost, €35m, as requested by the company, based in Vilafranca del Penedès, to guarantee the acquisition. The agency believes that the amount advanced was "very high" and that, in addition, the company's references "were weak" to trust its access to a market "of maximum scarcity and tension".

"If there is suspicion of fraud, we abort"

"Even if there was a cost overrun, we had to sign the contract because we needed the material. If we had not gone ahead, we would have had more supply problems," said Argimon. As an example, he pointed out that in January 2020, 12,000 masks were being used and during the pandemic the figure was multiplied by 20, reaching peaks of 500,000. However, the suspicion of fraud also hangs over the Government. On March 20, the same day that the contract with Basic Devices was signed, several people in charge of the Economy and Finance Dpt, then led by current Catalan president Pere Aragonès, filed a complaint with the Mossos d'Esquadra over an attempted fraud by this company, aimed at the Generalitat.

Banks with which the administration usually works warned that the company had never had such a high income and that it had no known history of operations of this type. "CatSalut sent an email in my name saying, literally, if there is suspicion of fraud, if things are like this, we abort the operation, we block the funds delivered to the company and we report them," Argimon explained. And this happened: the evidence was presented to the Mossos and the payment was blocked. But three days later, the charges were withdrawn, since the contractor provided "information considered sufficient" to demonstrate its solvency. "And five days later the materials arrived," Argimon concluded. The fact that the material arrived, he said, shows that it was not a mistake to proceed with the contract.

Chronology of events, according to the Health Department

March 17

The Government, through the ICS, contacts Basic Devices S.L. The company proves its solvency and that it owes no money to the Treasury.first contact with Basic Devices S.L. where its solvency is accredited and it is verified that the company has no debts with the Tax Authorities.

March 19

A joint meeting is held between Health and Economy Departments and banks to find the most appropriate formula for contracting the services of Basic Devices and the form of payment.

March 20

The Government signs the contract with the company but at noon the banks warn that the operation could be fraudulent. Argimon talks to the Economy Dpt and 'agrees to file a complaint' with the police.

March 22

Economy and Health Departments meet with the banks and representatives of Basic Devices, which provides evidence and guarantees of its solvency.

March 23

The government withdraws the complaint against Basic Devices and the banks are contacted by the government to release the money and make the advanced payment of €35m requested by the company.

March 28th

Five days later, the first materials arrived, which were 2 million surgical masks and 200,000 FFP type masks, as well as 878,000 individual protection suits.

The first materials, which were 2 million surgical masks and 200,000 units of the FFFP type and 878,000 individual protection frogs.

The parliamentary groups have expressed their understanding of the emergency and the climate of uncertainty which reigned during the first weeks of the pandemic, but have also focused on the lack of foresight and the risk of emergency operations, not only in the case of Basic Devices, but in various contracts that have been coming to light. This includes the €8m the Generalitat paid by mistake paid to a company that made ventilators and which it has not yet recovered.

Ciutadans MP Anna Grau went a step further and accused Argimon of "doing an Ayuso", when he argues that nothing else could be done and thus justifies "strange decisions and lack of transparency" at ICS and CatSalut