Thanks for the ‘heads up’ from Jim McCaffery (Ethiopia 1966-68
Tactics of fiery White House trade adviser draw new scrutiny as some of his pandemic moves unravel
Peter Navarro has faced an internal investigation into his treatment of colleagues, and now two of his coronavirus-related actions are under internal scrutiny.
David J. Lynch, Carol D. Leonnig, Jeff Stein and Josh Dawsey
The Washington Post, September 2, 2020
Amid the Trump administration’s troubled response to the coronavirus pandemic, senior White House aide Peter Navarro (Thailand 1972-75) has refashioned himself as a powerful government purchasing chief, operating far beyond his original role as an adviser on trade policy.
But U.S. officials say the abrasive figure’s shortcomings as a manager could influence how well prepared the United States is for a second wave of coronavirus infections expected this fall.
Navarro’s harsh manner and disregard for protocol have alienated numerous colleagues, corporate executives and prominent Republicans. In a previously undisclosed incident, the White House Counsel’s Office in 2018 investigated Navarro’s behavior in response to repeated complaints and found he routinely had been verbally abusive toward others. Navarro narrowly avoided losing his job, but the abuse has continued as the White House has grappled with the pandemic, multiple administration officials said.
On Monday, the administration terminated one contract that Navarro had directly negotiated — for 42,900 Philips ventilators. A Department of Health and Human Services spokesperson said the cancellation was “subject to internal HHS investigation and legal review.” The contract had been criticized by a House oversight subcommittee, which concluded that the government had overpaid for the ventilators by $500 million.
The cancellation came after another transaction Navarro championed, a government loan to fund Kodak’s transformation into a drugmaker, unraveled and became embroiled in a securities investigation. The watchdog panel says it is broadening its inquiry to examine all of Navarro’s deals.
Navarro remains unbowed, scorning critics inside and outside the White House as disloyal and leaning heavily on his one true ally: Donald Trump. The trade specialist’s ascent from economics professor and failed California political candidate to one of the most central figures in the White House is a testament to his tenacity, indifference to bureaucratic formalities and ability to stay in the president’s ear.
For much of Trump’s presidency, Navarro has been an adviser, critiquing existing U.S. trade deals without responsibility for negotiating better ones. But since March, he has been in charge of coordinating the federal government’s purchases of vital medical supplies using the Defense Production Act, a position President Trump says is “more important, probably, than it’s almost ever been in our country.”
This story is based on interviews with 28 current and former administration officials, congressional aides and business executives, along with a review of government statements and securities filings. Many of those interviewed spoke on the condition of anonymity to disclose private conversations or because they feared retaliation by Navarro.
Complaints over Navarro’s combustible demeanor crested in the previously undisclosed 2018 investigation of his workplace conduct ordered by then-Chief of Staff John F. Kelly, according to a former senior Trump adviser.
Kelly, a retired Marine, acted after months of complaints about Navarro’s treatment of his staffers and colleagues. The trade adviser routinely exploded at his assistants while scheming to undermine other senior White House officials, this adviser said.
Young women appeared to suffer the most verbal abuse. Some female White House employees complained that Navarro, 71, was habitually disrespectful, assigning professional women to act as note takers during policy meetings rather than allowing them to participate, another former official said.
Navarro was dismissive when Kelly confronted him, calling the reports exaggerated. After increasingly tense conversations and mounting complaints, Kelly finally told Navarro he would not tolerate the hostile work environment he had created and asked White House Counsel Donald McGahn’s office to investigate.
“If it’s worse than what I’m hearing, you’re gone,” Kelly told Navarro, according to a person familiar with the exchange. “If it’s as bad as what I’m hearing, I don’t know. You may be gone.”
After interviewing White House employees, the counsel’s office concluded that Navarro had been verbally abusive. The probe concluded with Navarro being informally counseled.
“They couldn’t make any real findings because he was hostile to everybody, not just women,” said one former White House official.
At first, the intervention appeared to have succeeded. But after Kelly resigned in December 2018, Navarro returned to form.
In recent weeks, Navarro screamed at a low-level government procurement officer over a purchase of medical supplies under the DPA. When the official refused his order, Navarro grew incensed.
“Are you loyal to China or to the American taxpayer?” he bellowed, according to a person familiar with the exchange. Several other officials recounted similar episodes.
“Peter Navarro’s highest priority during the last six months has been defeating the China virus and working to save lives, while creating thousands of jobs in the process. As Policy Coordinator, he’s helped oversee the use of the Defense Production Act more than 80 times and pushed the interagency to work quicker and smarter. These attacks are without merit,” Sarah Matthews, a deputy White House press secretary, said in response to detailed questions about the events described in this story.
For the past few years, Navarro was on the sidelines as Robert E. Lighthizer, the president’s chief trade negotiator, hammered out commercial deals with several countries. As talks with China proceeded last year, Navarro, who opposed the eventual accord with Beijing, was not even allowed to see the negotiating text.
But today, he occupies a role with greater responsibilities, where his toxic personality and indiscriminate public commentary could have serious consequences.
On March 27, Trump tapped the Harvard-educated economist to coordinate the administration’s emergency contracting for personal protective equipment, medical ventilators and syringes needed to fight the pandemic.
Navarro says the administration has dramatically increased production of protective masks, swabs, test kits and medical ventilators, plugging gaps that crippled the initial response to the novel coronavirus. In a White House report this month, he credited the president with leading “the most rapid mobilization of America’s public health industrial base since World War II.”
But Navarro also has criticized corporations such as General Motors and 3M as failing to move at what he calls “Trump time” and questioned the patriotism of colleagues who oppose his proposals.
“He loves to threaten people, and he’s very good at that,” said one business executive who described Navarro’s criticism as unfair.
Trump administration officials have questioned Navarro when he demanded approval to write a check for “eight- or nine-figure amounts,” explaining he lacked the authority to do so, according to one senior administration official.
Since mid-July, two major government contracts that Navarro lauded have become enmeshed in controversy.
The Securities and Exchange Commission is investigating the circumstances surrounding Eastman Kodak’s disclosure of a $765 million federal loan Trump awarded to fund the launch of the company’s new pharmaceutical division, the company said in a securities filing.
And Democrats on a House oversight subcommittee, after reviewing thousands of pages of emails and documents, concluded that Navarro was responsible for wasting more than $500 million by overpaying for ventilators manufactured by Philips. Navarro agreed to pay Philips almost five times as much per ventilator as the Obama administration had, accepting the manufacturer’s opening bid without bargaining, the panel said.
“There’s this public bravado,” said one congressional investigator. “But in private they roll over and just get pushed around by these companies.”
On Monday, the Department of Health and Human Services terminated the Philips contract and two others, saying the United States now has “enough ventilators to meet maximum national capacity in a crisis.”
Of the three, only the Philips contract is being investigated, an HHS spokesperson said.
Navarro also has been weighing in on policy issues far beyond his professional qualifications. A former economics professor at the University of California at Irvine with no known medical expertise, he publicly opines on coronavirus treatments.
Last month, he criticized the Food and Drug Administration for its delay in approving the emergency use of convalescent plasma, claiming that some experts “would rather have 100,000 people die from the virus” than take a chance on one person dying from a hastily approved medical treatment.
He also has tweeted that there is “blood on the hands” of media outlets questioning his advocacy of hydroxychloroquine, an unproven treatment for covid-19 — the illness caused by the novel coronavirus — that the president has championed. Within the White House, Navarro has harshly criticized the FDA and Anthony S. Fauci, a member of the president’s coronavirus task force and the nation’s leading expert on infectious diseases, telling the president that they are dragging their feet in advancing potential treatments and are insufficiently sensitive to the economic costs of the coronavirus fight. He has angered a number of senior public health officials, who complain that he doesn’t know what he is talking about.
On July 14, he published without authorization an op-ed in USA TODAY attacking Fauci.
“He has been wrong about everything I have interacted with him on,” Navarro wrote of Fauci.
The White House later disavowed the extraordinary broadside, saying Navarro had acted without authorization. And USA TODAY published an editor’s note, labeling the op-ed misleading. Amid the furor, Navarro called White House communications director Alyssa Farah to apologize, White House officials said. Navarro had proposed the op-ed, was told no and decided to write it anyway. Farah was infuriated, as was Chief of Staff Mark Meadows. Yet Navarro went unpunished, these officials said.
In a statement, Farah said Navarro is a “valued voice on the airwaves articulating the Administration’s viewpoint to the American people on a range of topics, including trade, manufacturing and rebuilding our economy.”
He also has been harshly critical of prominent Democrats, including former vice president Joe Biden, the Democratic presidential nominee, and House Speaker Nancy Pelosi (D-Calif.) in a manner that would have been unusual for White House staffers in previous administrations. On Aug. 23, Navarro told Fox Business that the Chinese government favored Biden in the presidential race because “they know he can be bought; he’s compromised.”
Despite his serial controversies, Navarro enjoys strong support from Trump, who affectionately refers to him as “my Peter.” During the Republican National Convention last week, Navarro appeared at Trump’s D.C. hotel to headline an event for top donors called “The Art of the Deal.”
“He’s been able to channel the vision of the one person who matters: the president,” said Tony Fratto, principal deputy White House press secretary in the Bush administration. “He speaks the president’s language.”
Still, even the president has had to clean up after his trade adviser. In June, Navarro triggered a fall in stock futures when he was quoted as saying the Phase 1 deal with China was “over.” The president within hours responded with a tweet that described the agreement as “fully intact.”
Trump has acknowledged Navarro’s prickly persona. In an East Room ceremony in January to mark the signing of the deal with China, the president listed Navarro among several top officials. The mention of the aide’s name provoked a slight tittering in the audience of politicians and business executives.
“He’s a little different. We have all types,” the president said in a good-natured gibe.
Navarro stays in frequent touch with people close to the president in “MAGA land,” according to a senior administration official, and the president’s son Donald Trump Jr. has praised him publicly.
“Peter is untouchable,” this person said.
As head of the White House Office of Trade and Manufacturing Policy, a unit the president established in April 2017, Navarro oversees a handful of inexperienced aides. His deputy director, Christopher Abbott, graduated from American University only last year.
Even allies have felt Navarro’s lash. In April, Michael Pillsbury of the Hudson Institute was startled to answer the phone and hear Navarro snarl: “I’m going to rip your f—ing throat out.”
Pillsbury, a China expert at the Hudson Institute and occasional adviser to the president, told friends Navarro was irked by a headline on the Fox News website — “China expert Pillsbury scolds Navarro over rhetorical shots at Beijing” — which summarized some mild criticism he had offered in an on-air interview.
In May, the normally supportive Fox Business anchor Lou Dobbs grew visibly angry with Navarro during a televised interview, accusing him of “peddling pablum and B.S.”
Navarro is often hostile and overbearing in arguments, prone to attack anyone who disagrees with him as a representative of the “deep state.” One former ally cut off contact with Navarro this year over his penchant for taking on battles outside of his trade expertise.
“He’s gone off the rails,” the individual said.
Navarro’s history of constantly sounding alarms, especially over China’s actions, has at times backfired. Earlier this year, he warned in two prescient memos that the coronavirus circulating in China could become a dire threat to the United States. But he was ignored, with many White House colleagues rolling their eyes at what was seen as just the latest Navarro broadside against China.
At the Senate GOP lunch on June 23, lawmakers asked Treasury Secretary Steven Mnuchin about Navarro’s statement 10 days earlier that the White House was seeking a $2 trillion economic rescue package. Mnuchin replied that Navarro had spoken without White House authorization, according to one person familiar with the exchange.
It was not the first time that Navarro had complicated the administration’s relations with powerful figures in Congress.
In the spring of 2019, a handful of GOP senators met with Trump and Navarro in the Oval Office to discuss the president’s tariffs, which were hurting Midwestern farmers. The meeting quickly grew contentious, according to two people familiar with the exchange.
Seated alongside the president and gesturing to charts used to illustrate his case, Navarro repeatedly spoke over the lawmakers. A frustrated Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) finally told Navarro he did not appreciate being interrupted, before telling the president he needed to hire new advisers, the people said.
Under Kelly, Navarro was often kept off the airwaves and confined to manufacturing issues. But the pandemic’s focus on supply chain resilience and Chinese government behavior provided an opening.
As Trump struggled to recover from his sluggish initial response to the crisis, he tapped Navarro to oversee use of the DPA, a 1950 law that gives the president broad authority to require private companies to prioritize government orders.
In making the appointment, Trump praised Navarro “as a very trusted person” who had done an “incredible” job for him. But the aide’s brusque approach to the by-the-book world of government contracting has drawn criticism.
“He just started behaving like a czar on something he knows very little about, calling and ordering people to do things,” said one business executive familiar with his approach.
One controversy surrounds a decision by the U.S. International Development Finance Corp. to approve a government loan to support Eastman Kodak’s launch of a pharmaceuticals unit.
Appearing on Fox Business, Navarro hailed the July 28 loan announcement as a “great day here in Trump-land,” saying it posed “minimal risk to the taxpayer” and had been executed with “the greatest of due diligence.”
Navarro said the deal had originated with Abbott, a 2019 graduate of American University, who had identified Kodak as a vehicle for the government to increase domestic production of generic drug ingredients.
Almost immediately, questions were raised about unusual activity involving the company’s stock.
On July 27, one day before the announcement, Kodak gave its chairman and chief executive, James Continenza, and three other top executives, options to buy the stock for as little as $3.03 per share.
At the time, Kodak shares were trading for less than that amount, rendering the options worthless. But when the loan was announced one day later, the stock soared to $60 before closing around $33, leaving each of the executives sitting on paper profits worth millions of dollars.
The DFC said in an Aug. 7 tweet that it was putting the deal on hold while “serious concerns” about it were addressed. Navarro responded by blaming the company.
“What happened at Kodak was probably the dumbest decisions made by executives in corporate history,” he told CNBC. “You can’t fix ‘stupid.’ ”
Just one week earlier, Democrats on the House subcommittee on economic and consumer policy had called Navarro’s negotiating “inept” and “incompetent” in a report on his handling of a ventilator contract with Philips.
Starting in mid-March, Abbott coordinated in-person and telephone meetings between his boss and the manufacturer, according to copies of emails between Philips and the White House cited in the report.
Philips’s March 25 invoice for 42,900 ventilators was addressed to “Dr. Peter Navarro,” almost two weeks before the formal agreement was signed. All of the key details of the contract with HHS, including price and quantity, were agreed by Navarro and the company before professional government contracting officials were involved, the report said.
“HHS professional contract officers were excluded until the last moment. By then, the generous terms of the contract had already been agreed to by the White House,” the report said.
The Democrats’ report said Navarro blundered by paying $15,000 per ventilator rather than the $3,280 for what it calls a “functionally identical” Philips unit ordered by the Obama administration.
Navarro agreed to pay Philips 50 percent of the $646.7 million contract value before any units were delivered, a down payment that HHS later trimmed by 80 percent, the report said.
“We do not recognize the conclusions in the subcommittee’s report, and we believe that not all the information that we provided has been reflected in the report. We would like to reiterate that on no occasion has Philips raised prices to benefit from the crisis situation,” said Steve Klink, a Philips spokesman.
Republicans blasted the report as “highly politicized” and “slipshod,” saying Trump deserved credit for swiftly accelerating ventilator deliveries amid the crisis.