When the Trump administration gave a well-connected Republican donor seed money to test a possible COVID-19-fighting blood plasma technology, it noted the company’s “manufacturing facilities” in Charleston, South Carolina.
Plasma Technologies LLC is indeed based in the stately waterfront city. But there are no manufacturing facilities. Instead, the company exists within the luxury condo of its majority owner, Eugene Zurlo.
Zurlo’s company may be in line for as much as $65 million in taxpayer dollars; enough to start building an actual production plant, according to internal government records and other documents obtained by The Associated Press.
The story of how a tiny business that exists only on paper has managed to snare attention from the highest reaches of the U.S. military and government is emblematic of the Trump administration’s frenetic response to the coronavirus pandemic.
It’s also another in a series of contracts awarded to people with close political ties to key officials despite concerns voiced by government scientists. Among the others: an ill-conceived $21 million study of Pepcid as a COVID therapy and more than a half billion dollars to ApiJect Systems America, a startup with an unapproved medicine injection technology and no factory to manufacture the devices.
In addition, a government whistleblower claimed that a $1.6 billion vaccine contract to Novavax Inc. was made over objections of scientific staff.
At the center of these deals is Dr. Robert Kadlec, a senior Trump appointee at the Department of the Health and Human Services who backed the Pepcid, Novavax and ApiJect projects. Records obtained by the AP also describe Kadlec as a key supporter of Zurlo’s company.
In one government email obtained by the AP, an official said Kadlec, whose job as assistant secretary for preparedness and response is to help guide the nation through public health emergencies, was “all in” on Plasma Technologies.
This was the case despite misgivings from the scientists he oversees. One of them said the company would be just another “mouth to feed” that would distract from other important work on the pandemic. An HHS spokesperson said Kadlec “does not have a role in technical review of proposals nor in negotiating contracts.”
Kadlec has come under pressure from the White House to act with more urgency and not be bound by lower-level officials whom Trump has castigated as the “deep state” and accused of politically motivated delays in fielding COVID-19 vaccines and remedies. This pressure has led to investments in numerous untested companies.
The AP reached out to more than a dozen blood plasma industry leaders and medical experts. Few had heard of Zurlo’s company or its technology, and would not comment.
Zurlo, the company’s founder and a former pharmaceutical industry executive, told the AP in an email that the renewed interest in his company is being driven by COVID and other diseases.
“It is increasingly clear that the collection of adequate supplies of plasma is not possible; the answer being the adoption of new process technology that fully utilizes the scarce plasma currently available,” he said.
But whether Zurlo’s technology, which claims to increase the amount of disease-fighting plasma harvested from human blood, will be an improvement over other methods is still anyone’s guess.
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A FORMER SENATOR ON BOARD
Top government officials began to take notice of Plasma Technologies after Rick Santorum, a former Republican senator from Pennsylvania and two-time presidential candidate, became part-owner, according to the records and AP interviews.
After Congress supplied hundreds of billions of dollars to combat the pandemic, Santorum stepped up his sales pitch for the company’s method of turning human plasma into a therapeutic product — a process the company has described as a game changer. In mid-August, the federal government awarded Plasma Technologies a $750,000 grant to demonstrate that it could deliver on its promises.
Santorum, who’s held no elective office since 2007, remains influential among social conservatives, a key part of President Donald Trump’s political base. Santorum has extolled the president’s handling of the pandemic on national television in his job as a CNN commentator, arguing that the nation’s response would have been worse under a Democratic administration.
Trump “didn’t botch it,” Santorum said recently in response to charges that the president had done a poor job leading the country through COVID-19. “I mean you guys keep blaming Trump. This is a local decision.”
HHS would not comment when asked whether Santorum’s public backing of the president led to a company he has a financial stake in getting a government contract.
Zurlo has deep ties to the Republican Party. He has contributed thousands of dollars to Santorum’s campaigns and to other GOP campaigns and political action committees. He entertained Santorum and his family at the mansion Zurlo used to own on Kiawah Island, an exclusive golf resort in South Carolina. They would play golf during the day and enjoy evenings overlooking the Atlantic, according to Michel “Mitch” LaPlante, a former business associate of Zurlo’s who attended several dinners with Santorum and Zurlo.
The business relationship between Zurlo and LaPlante turned ugly after those days of hobnobbing on Kiawah. A real estate deal they had invested in together fell into foreclosure, leading to a suit seeking more than $700 million by their mortgage lender. Each man sued the other for fraud and severed their business ties acrimoniously.
Zurlo founded Plasma Technologies in 2003, according to articles of organization and other records filed with South Carolina’s secretary of state. The company’s most recently listed address is Zurlo’s condominium in Charleston’s French Quarter.
The company has no other presence in South Carolina — or any other state — even though a U.S. government spokeswoman told the AP that Plasma Technologies has “manufacturing facilities” in Charleston.
“Fairy tale,” LaPlante said when asked if Plasma Technologies operates any commercial space in South Carolina’s most populous city.
