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Revealed: How ‘unfit’ PPE helped former playboy buy two mansions

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Original article by Adam Bychawski republished from Open Democracy under a Creative Commons Attribution-NonCommercial 4.0 International licence.

Glove tycoon Robert Gros splashed millions on luxury homes and planned to build cinema, disco and golf simulator

An estimated £27m worth of gowns supplied by Gros’s company were later deemed “not fit for use”. Image: Katia Ponnampalam, Creative Commons Attribution-Share Alike 4.0 International license.

A former ‘playboy’-turned-businessman made a fortune supplying PPE during the pandemic, even though the NHS may be unable to use millions of the gowns his company delivered, openDemocracy can reveal.

Chemical Intelligence Limited was awarded a £126m contract to supply 21 million medical gowns that were desperately needed to protect NHS workers treating Covid patients in May 2020. But data released to openDemocracy through freedom of information law shows the Department of Health and Social Care later deemed 4.5 million of them – worth an estimated total of £27m – “not fit for use” in the NHS. 

Lawyers acting on behalf of Robert Gros, the sole owner and CEO of Chemical Intelligence, said Gros could not comment because he “did not recognise these figures or amounts”.

The bumper PPE contract allowed Gros, 51, to turn around his business, which had made losses two years running prior. Chemical Intelligence declared profits of £33m for the year up to September 2020 according to accounts filed on Companies House. It had just two employees, including Gros, when it landed the multi-million pound government contract.

Gros personally splashed out on a £4m country pile just four months after he clinched the PPE deal. In 2021, after his company reported a further £31m in profits, he bought a second £2m country home and asked for planning permission to fit a basement bowling alley in the first.

The businessman then paid himself £7m in dividends in January 2022 – after having already loaned himself £6m the year before. Two months later, he transferred £40m in dividends to a holding company that he entirely owns. 

Gros would only answer our questions through his lawyers, who told us that he has paid all the necessary corporation tax and that the £4om would “continue to be reinvested” in his business.

The £126m contract was one of many for which the government apparently paid over the odds as demand for PPE skyrocketed during the pandemic and it did not have enough stockpiled. Gowns cost the government 1,260% more than they did before the pandemic, according to the National Audit Office.

A fifth of gowns supplied by Chemical Intelligence were labelled “not fit for use” because they “failed the technical, clinical or regulatory compliance assessment”, openDemocracy understands. The department would not elaborate on why the gowns failed checks, but according to the data released under FOI their value has been written down to £0.

“The department has processes in place to review the quality of PPE and determine whether products are suitable to be released to the frontline,” said a spokesperson. “Upon receipt, a sample of each product is reviewed by DHSC’s Technical and Regulatory Assurance team.

“A proportion of this stock was classified as ‘do not supply’. Stock in this category has not necessarily fallen short of standards and in many cases these products can be used in other settings.”

Gros’s lawyers insisted that all the PPE the company had supplied was “fit for purpose and use”, suggesting the DHSC may have been mistaken in its record-keeping. The department confirmed that Chemical Intelligence also supplied £35m worth of face masks and disposable surgical aprons under separate contracts also awarded in 2020, none of which was deemed unusable.

Of the £12bn the government spent in total on PPE, £4bn worth cannot be used by the NHS because it doesn’t meet the right standards, according to a 2022 report by the Public Accounts CCommittee of MPs.

Gros’s lawyers said that the sharp rise in profits for Chemical Intelligence was not all down to PPE deals he struck during the pandemic, and threatened openDemocracy with an injunction if we revealed details about his mansions.

The businessman, who had a reputation as a “playboy” in the late 1990s after dating a string of soap stars, appears to have made the most of his new fortune. The Cambridgeshire house he bought a few months after the contract was signed had six bedrooms, four reception rooms, a swimming pool and a gym, all heated by three boilers.

Three months later, he lodged a planning application with Cambridge City Council to more than double the size of the property. The proposed plan included the addition of a basement housing a dance floor, a two-lane bowling alley, a golf simulator, a room for arcade machines and a cinema.

Gros was forced to withdraw the application after it was rejected by planners for being too “modern” in style; neighbours had also raised concerns about the potential noise from the proposed bowling alley and dance floor. He resubmitted a new application in November, which was approved in April.

In June 2021, through another company of which he was the sole owner, Gros bought a second mansion with six bedrooms, three garages and an outdoor pool for £2m in a neighbouring village.

Chemical Intelligence, which Gros founded in 2012, develops medical examination gloves, which have been licensed to and manufactured by Malaysian firm Hartalega since 2017.

Hartalega is one of several Malaysian glove manufacturers that have been accused of using modern slavery. A leaked report by the Home Office in 2019 found there was “strong evidence” to suggest that the majority of Malaysian glove manufacturers that supply the NHS, which include Hartalega, “exhibit forced labour indicators”.

Lawyers acting for Chemical Intelligence said that the company “takes the issue of modern slavery extremely seriously and carried out its own due diligence to seek to satisfy itself that throughout the manufacturing process all of the correct procedures and safeguards are in place”.

Chemical Intelligence was one of 58 suppliers awarded a contract to supply medical gloves to the NHS in January 2022, but no information has been published on whether it has yet done so.

Original article by Adam Bychawski republished from Open Democracy under a Creative Commons Attribution-NonCommercial 4.0 International licence.

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Continue ReadingRevealed: How ‘unfit’ PPE helped former playboy buy two mansions

‘We Are Not Taxing the Very Wealthy Enough’: Runaway Inequality About to Get Worse

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Original article by Jake Johnson republished from Common Dreams under Creative Commons (CC BY-NC-ND 3.0).

People participate in a “march on billionaires” event on July 17, 2020 in New York City.
(Photo: Spencer Platt/Getty Images)

“Americans overwhelmingly prefer raising taxes on the ultra-wealthy and huge corporations to making cuts to critical programs like healthcare, medical research, and infrastructure,” said Sen. Elizabeth Warren.

The United States’ astronomical levels of economic inequality are poised to become further entrenched in the coming years as what The New York Timesdescribed Sunday as “the greatest wealth transfer in history” gets underway, with the richest members of the Baby Boomer generation set to pass trillions of dollars in assets on to their descendants—often paying little or nothing in taxes.

“Most will leave behind thousands of dollars, a home, or not much at all. Others are leaving their heirs hundreds of thousands, or millions, or billions of dollars in various assets,” the Times reported. “Of the $84 trillion projected to be passed down from older Americans to millennial and Gen X heirs through 2045, $16 trillion will be transferred within the next decade.”

The newspaper added that thanks to the loophole-ridden U.S. tax system, “heirs increasingly don’t need to wait for the passing of elders to directly benefit from family money, a result of the bursting popularity of ‘giving while living‘—including property purchases, repeated tax-free cash transfers of estate money, and more—providing millions a head start.”

“The trillions of dollars going to heirs will largely reinforce inequality,” the Times observed. “The wealthiest 10% of households will be giving and receiving a majority of the riches. Within that range, the top 1%—which holds about as much wealth as the bottom 90%, and is predominantly white—will dictate the broadest share of the money flow. The more diverse bottom 50% of households will account for only 8% of the transfers.”

Don Moynihan, a professor at Georgetown University’s McCourt School of Public Policy, argued that the Times analysis further demonstrates that “we are not taxing the very wealthy enough.”

The Times noted that individuals in the U.S. can pass nearly $13 million in assets to heirs without paying the federal estate tax, which only applies to around two of every 1,000 American estates.

“As a result, although high-net-worth and ultrahigh-net-worth individuals could inherit more than $30 trillion by 2045, their prospective taxes on estates and transfers is $4.2 trillion,” the Times observed.

The explosion of wealth inequality in the U.S. over the past several decades has prompted growing calls for systemic reform but little substantive action from lawmakers. In 2017, congressional Republicans and then-President Donald Trump contributed to the inequality boom by ramming through tax legislation that disproportionately benefited the wealthiest Americans.

Now in control of the U.S. House, Republicans are trying to make the Trump tax cuts for individuals permanent and eliminate the estate tax altogether—a move that would give the nation’s wealthiest households another $2 trillion in tax breaks.

In April, Sen. Bernie Sanders (I-Vt.) led several of his colleagues in offering an alternative proposal: Legislation that would impose progressively higher taxes on estates worth between $3.5 million and $1 billion, as well as a 65% levy on estates worth more than $1 billion.

“At a time of massive wealth and income inequality, we need to make sure that people who inherit over $3.5 million pay their fair share of taxes,” Sanders said last month. “We do not need to provide a huge handout to multi-millionaires and billionaires. It is unacceptable that working families across the country today are struggling to file their taxes on time and put food on the table, while the wealthiest among us profit off of enormous tax loopholes and giant tax breaks.”

Sen. Elizabeth Warren (D-Mass.), a co-sponsor of Sanders’ legislation, tweeted Monday that “Americans overwhelmingly prefer raising taxes on the ultra-wealthy and huge corporations to making cuts to critical programs like healthcare, medical research, and infrastructure.”

“Congressional Republicans need to get on board,” the senator added.

Morris Pearl, a former managing director at the asset management behemoth BlackRock and the chair of the Patriotic Millionaires, stressed in an interview with the Times that structural changes to the U.S. tax code—not just a crackdown on wealthy tax cheats—are necessary to slow the rise of inequality.

“People are following the law just fine. I generally don’t pay much taxes,” said Pearl, whose group has warned that democracy “will not survive” unless the rich are taxed much more aggressively.

Stressing the ease with which rich families in U.S. are able to pass assets on to their heirs tax-free, Pearl told the Times that he currently holds stock that his wife’s father, “who died a long time ago, bought in the 1970s,” an investment that “has gone from a few thousand dollars to many hundreds of thousands of dollars”—unrealized capital gains that are not subject to taxation.

University of California, Berkeley economists Emmanuel Saez and Gabriel Zucman have estimated that $2.7 trillion of the $4.25 trillion in wealth held by U.S. billionaires is unrealized.

“I’ve never paid a penny of taxes on all that,” Pearl said of his inherited equities, “and I may not ever, because I might not sell and then my kids are going to have millions of dollars in income that’s never taxed in any way, shape, or form.”

Original article by Jake Johnson republished from Common Dreams under Creative Commons (CC BY-NC-ND 3.0).

Continue Reading‘We Are Not Taxing the Very Wealthy Enough’: Runaway Inequality About to Get Worse