When the government starts doling out money, you can be sure scammers and con artists will make their way to the front of the line. Just look at the disgraceful story involving Gov. Steve Sisolak’s administration and a questionable, well-connected medical lab peddling COVID tests.
This month, ProPublica released a story that highlights the parochial nature of Nevada politics. Northshore Clinical Labs was charged with conducting COVID testing throughout the state at about the time the omicron variant began to take hold late last year. It turned out, however, that its PCR tests had an error rate of 96 percent — !! — when it came to identifying positive cases.
That should be scandal enough. Telling someone who was infected with COVID that they didn’t have the disease may have had deadly consequences and exacerbated virus spread.
It gets worse. Emails show officials at the Washoe County Health District flagged the company’s test results as suspicious. They noticed a pattern of people testing positive on rapid tests, but then turning up negative based on Northshore’s PCR results at its Chicago lab. Yet these concerns were initially ignored, and Northshore inked a new contract in Washoe County. ProPublica found Northshore had testing agreements with several different local governments in Nevada.
“As evidence mounted that Northshore was telling infected people that they had tested negative for the virus,” ProPublica reported, “government managers in Nevada ignored their own scientists’ warnings and expanded the lab’s testing beyond schools to the general public.”
In December, a doctor at UNR’s student health center conducted her own study — sending patient specimens to both the Northshore lab and the Nevada State Public Health Laboratory — and determined that the company’s tests were not working. According to ProPublica, she subsequently raised the alarm, and state officials eventually launched an investigation that led Northshore to cease operations in Nevada early this year.
In the interim, the company pocketed millions from the federal government by filing for reimbursement for tests conducted on the uninsured. The ProPublica piece also raised questions about whether Northshore attempted to skirt federal law by collecting federal funds for tests done on insured individuals. The three men who took over Northshore’s operations in July 2020, ProPublica revealed, have a long history of shady behavior.
They also knew how to gain a foothold in Nevada: juice.
To run its Nevada operations, Northshore worked with two sons of Peter Palivos. He is a frequent and generous donor to powerful Democrats, including Gov. Sisolak. The brothers needed to get their lab licensed by the state. They enlisted Mike Willden, a well-connected lobbyist who used to run the Nevada Department of Health and Human Services.
Mr. Willden helped the lab submit its application. There’s nothing wrong with that. Navigating regulatory hurdles can be confusing. But the brothers weren’t satisfied with how long the process was taking. Mr. Willden then reached out to people in the governor’s office and the laboratory licensing bureau. That started a chain reaction, ProPublica noted, that led to the licensing bureau moving Northshore to the front of the line, despite the internal protests.
“This is why I do not understand why this lab gets preferential treatment,” one state licensing official wrote in an email about Northshore, “while other labs are required to patiently wait.”
To be fair, there was a pressing need during COVID for health officials to move fast. Bureaucratic barriers are not conducive to fighting a public health crisis. Yet the lack of accountability here is troubling — as is the obvious cronyism. “To date,” ProPublica wrote on May 16, “neither state nor county health officials have alerted the public to the inaccurate tests.”
A statement issued by the governor’s office called Northshore’s actions “despicable.” But that isn’t good enough. Gov. Sisolak owes it to Nevadans to explain why his administration sat on this information, cynically hoping that nobody would ever find out. This debacle merits a more thorough independent investigation at the state and national levels.