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How This Bay Area Nonprofit — Led By A Former Google Nest Executive — Helped Broker California’s $990 Million PPE Deal

  •  Scott Rodd 
Wednesday, September 9, 2020 | Sacramento, CA
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Hector Amez / AP Photo

California Gov. Gavin Newsom visits the Cal Fire McClellan Reload Base in Sacramento, Calif., Thursday, July 9, 2020, to discuss the state's new efforts to protect emergency personnel and evacuees from COVID-19 during wildfires.

Hector Amez / AP Photo

When Gov. Gavin Newsom declared a state of emergency in early March as COVID-19 spread throughout California, state officials began their hunt for a precious commodity: protective masks.

Without a national stockpile, states began competing against each other to get their hands on inordinately expensive protective gear. Amid the free market chaos — or “wild west,” as Newsom called it — the governor inked a mega deal with Chinese manufacturer BYD, agreeing to pay $990 million for hundreds of millions of surgical and N95 respirator masks. 

A nonprofit called Frontline Support, formed by a group of Bay Area elites about two weeks before California finalized the agreement, played match-maker for the deal, according to emails obtained by CapRadio through a public records request. The day after California signed the BYD agreement, Frontline entered into two no-bid contracts with the state worth over $28 million to supply protective masks. The nonprofit delivered on neither of them, and the state canceled the payment. 

But the company did fulfill two later contracts for $16 million worth of safety goggles, according to Jamie Gardner, a Frontline member and partner at the consulting group X Sector Labs.

“We were a group of volunteers who wanted to help address the PPE issue in our state so we made our time and expertise available as needed at no cost,” Gardner wrote in an email to CapRadio. 

She added that Frontline did not mark up protective equipment sold to the state, meaning the company did not profit.

Other Frontline members include Shige Honjo, a former Google Nest executive, and Fan Dai, director of UC Berkeley Law’s California-China Climate Institute. Neither responded to a request for comment.

The state’s work with Frontline is just one example of the Newsom administration tapping a nascent, untested company to help purchase essential protective equipment at the start of the pandemic. 

In late March, California wired about half-a-billion dollars to a three-day-old firm called Blue Flame, in an effort to procure masks. The state then scrambled to get it back when the deal went south. The FBI is currently investigating Blue Flame. California also entered into an $800 million deal for masks in March with a newly-formed company called Bear Mountain. That arrangement also flopped.

By comparison, the deal with BYD was more successful. After a bumpy start, the company to date has delivered over 262 million surgical masks and nearly 170 million N95 masks, according to the Governor’s Office of Emergency Services(CalOES). The state extended the agreement in July for another 420 million masks.

But the deal has raised controversy. Newsom refused to release the contract with BYD for weeks, even when state lawmakers asked for it. In April, legislators returned to the Capitol early from an extended recess, which was caused by the pandemic, for special coronavirus oversight hearings. Lawmakers grilled Newsom administration officials about the deal. 

In early May, BYD had to return $250 million to California, because the company failed to meet a deadline for securing mask safety certifications.

BYD has worked closely with CalOES on the mask deal. CalOES spokesperson Brian Ferguson did not provide comment in response to several emails from CapRadio asking about Frontline’s involvement in the deal.

Multiple emails to BYD senior director Oscar Su, who has worked closely with California on the mask deal, went unanswered.

Origins Of Frontline Support

According to emails obtained by CapRadio, Trevor Houser, a member of Frontline and partner at the research firm Rhodium Group, helped bring the state and BYD to the table.

“Connecting you all on the same thread so everyone has each other’s emails,” Houser wrote in an email to state officials and executives at the manufacturer. “BYD I have shared your proposal with the CalOES team who are looking forward to the call tomorrow at 1pm PST. Some of the core Frontline Support team members are on the CC line and are available to help support as needed.”

But details on Frontline’s connection with BYD — and how the nonprofit came together in the first place — remain somewhat murky. 

CapRadio sent an email to five Frontline members requesting interviews.

Jamie Gardner was the only one to respond. She declined an interview request, but shared some details via email.

She described Frontline as a “nonprofit created with the express purpose of helping source, vet, procure … and distribute PPE at cost,” adding that the team is made up of “volunteers with global manufacturing, procurement, logistics and public health expertise along with philanthropic and government relationships.”

Gardner did not answer CapRadio’s question about who on the Frontline team has public health expertise. She mentioned there are other members of Frontline — beyond the ones noted in this article — but did not provide specific names.

She said that Frontline was “able to raise more than ~$25m to secure and deliver over 10 million PPEs.” She did not specify, in response to questions from CapRadio, the source of the money, or whether it went toward the BYD agreement or a different PPE deal.

Bryson Gardner — Jamie Gardner’s husband and an Apple veteran who currently works as an independent consultant — is listed on incorporation documents as the nonprofit’s chief financial officer and secretary.

Honjo is listed as the CEO of Frontline. He was Nest’s second-ever employee and later became its hardware chief, according to VOX. He left Nest in 2016. (Incorporation documents list the name “Shigefume Honjo”; Jamie Gardner confirmed it is the Nest alumnus.)

Dai of UC Berkeley and Houser of the Rhodium Group, who were included in email exchanges between BYD and CalOES, both have expertise in China policy and climate change. 

Prior to leading UC Berkeley Law’s California-China Climate Institute, Dai chaired California’s China Interagency Working Group under former-Gov. Jerry Brown. It positioned her as the liaison between California and China on economic and environmental policy. She also organized Brown’s 2017 trip to China, which featured a meeting with executives from Chinese auto manufacturers, including BYD. 

In addition to working at Rhodium, Houser has served on the National Committee on United States–China Relations and the Advisory Board of the Center on U.S.–China Relations at the Asia Society.

On incorporation documents, Frontline’s address is the same as the Rhodium Group’s west coast office, located in Oakland.

On April 8, the day after the Newsom administration inked the $990 million deal with BYD, Frontline entered into two contracts, both no-bid, for over $28 million worth of masks. They were supposed to come from Chinese manufacturer Shanghai Dasheng, and shipments were supposed to arrive by April 28.

On April 27, the state canceled both contracts, without payment or delivery of goods.

"The state cancelled the two Frontline Support mask purchase orders due to [their] inability to deliver the products,” wrote Monica Hassan, spokeswoman for the Department of General Services, in an email.

Hassan added that Frontline went through a multi-step vetting process before the department awarded the contracts.

Jamie Gardner says the masks were “intended as a stop-gap until the BYD masks arrived,” but the orders were canceled when it became clear delivery would take too long.

Frontline delivered on two other contracts with California, for about $16 million worth of safety goggles from multiple Chinese manufacturers.

She emphasized that the goggles were sold at cost with no markup.

The BYD Pitch

The idea of tapping BYD for protective equipment was first pitched to state officials as early as March 28, according to emails obtained by CapRadio.

But not by Frontline.

Members of the San Francisco Employees’ Retirement System connected CalOES with Paul Teng, managing director of the investment firm Himalaya Capital.

Teng boasted of a “deep relationship with BYD” in an email to CalOES officials.

Joseph Grady with CalOES responded to Teng in an email: “We would love to chat soonest on making this connection and purchase! We greatly appreciate all the help here!”

About a week earlier, Teng had facilitated a $227.5 million deal between Washington state and BYD, mostly for masks.

In the email exchange with CalOES officials, the hedge fund manager roped in Oscar Su from BYD, who began emailing CalOES officials about the company’s mask output and potential delivery timelines.

On April 2, Frontline entered the picture, sharing BYD’s proposal with CalOES. The email included Su and other leaders from the Chinese manufacturer.

But there doesn’t appear to be any connection between Teng and Frontline.

“I am not involved with Frontline Support and this is the first time that I have heard of the group,” Teng wrote in an email in response to questions from CapRadio. “I did connect Oscar Su from BYD to CalOES at the request of San Francisco city government, but was not involved in any discussions or correspondence going forward. I learned about the deal later through the press.” 

Jamie Gardner said she believed the state was already working with BYD when Frontline entered the picture, and that the nonprofit was “just a sounding board.” 

The state finalized the $990 million deal five days after Frontline sent BYD’s proposal to CalOES officials. While the agreement came together behind the scenes, state lawmakers were none-the-wiser. Many first found out about the deal when Newsom announced it on The Rachel Maddow Show.

Frontline members were included on emails between the state and BYD through at least late-April and occasionally played an active role in working with BYD on logistics and quality assurance.

In one exchange, CalOES officials asked BYD for information about mask production and certification from the National Institute for Occupational Health and Safety. Su provided some details, but the state needed more.

So Frontline CEO Shige Honjo stepped in.

“This is a good start,” he wrote in an email to Su, CC’ing CalOES officials. “However … BYD must have more of a complete document that specifies everything.”

Honjo asked for information on product reliability and packaging specifications, among other things.

Public records obtained byCapRadio do not show where the conversation went from there.

About two weeks later, BYD would have to return $250 million to California for failing to secure NIOSH certification for N95 masks in the time frame specified under the deal.

In early June, BYD received the certification and began delivering mask shipments to California.

“Securing a reliable supply chain of PPE allows us to distribute millions of protective masks to our essential workforce while preserving millions more in our state’s stockpile for future use,” Newsom said in a July press release, announcing the state’s extension of the BYD deal.

The company continues to deliver masks on a rolling basis.


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Scott Rodd

Former State Government Reporter

Scott Rodd previously covered government and legal affairs for the Sacramento Business Journal. Prior to the Business Journal, Scott worked as a freelance reporter in Los Angeles and Washington, D.C.  Read Full Bio 

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