How a massive New York hospital secured 130,000 N95 masks from China with help from a senior partner at Goldman Sachs, private jets, and a call to Warren Buffett
- Mount Sinai Health Systems was able to procure 500,00 N95 masks and 1.2 million surgical masks from a hospital in China that had access to the domestic market for medical supplies.
- But the health system couldn't get the supplies out of China because of travel restrictions and limited availability of cargo space.
- Richard Friedman, co-chairman of Mount Sinai and a partner at Goldman Sachs, chartered two Bombardier Global 6000s from NetJets to pick up the supplies. The arrangement started with a call from Goldman CEO David Solomon to Warren Buffett, whose Berkshire Hathaway owns NetJets.
- The two planes brought back 130,000 N95 masks for Mount Sinai, landing at at New Jersey's Teterboro airport in the middle of the night last week.
- The project was known on the Goldman side as MBD ARGO in honor of the Goldman merchant banking division that Friedman chairs and the 2012 film starring Ben Affleck.
- Another shipment, arranged through more traditional shipping means, is expected this week with the remaining supplies.
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On a cloudy night last week, just after 3 a.m. on March 27, two Bombardier Global 6000 private jets touched down at Teterboro airport.
Ordinarily, the landing would be a non-event. The New Jersey airport is a favorite for New York's rich and famous, who rely on the facility for getting to and from private jets like the Bombardier.
But this time the planes weren't carrying any passengers. The two 13-seat aircraft were instead ferrying 130,000 N95 masks, the type that are most effective at preventing coronavirus' transmission, to Mount Sinai Health Systems. The disposable masks are in such short supply that some healthcare workers are reusing them or trying to sterilize them between shifts.
These masks had come from Nanjing, China, sourced and flown out of the country thanks to a network of collaborators that included senior Mount Sinai and Chinese healthcare execs, a senior partner at Goldman Sachs who serves as the chairman of the New York hospital chain, and a timely call to Warren Buffett.
That they had to go through such steps to secure needed protective gear shows just how much the pandemic has disrupted the global supply chain, and how it takes a hospital system as well connected as Mount Sinai - where a Goldman Sachs partner chairs its board and Wall Street investor Carl Icahn's name graces the med school - to get access to critical supplies.
The story of the masks can be traced back years, when Mount Sinai officials struck up a relationship with their counterparts at Taikang Xianlin Drum Tower Hospital in Nanjing, located about 600 kilometers to the northeast of what would become the virus' original epicenter in Wuhan.
Senior managers from the two systems formed a bond over information sharing, personal visits to each other's facilities, and regular conference calls, according to Dr. Szabi Dorotovics, president of a Mount Sinai consulting arm that seeks to foster closer ties to health systems outside the US like the one in Nanjing.
When the Nanjing hospital officials needed supplies for their own fight against the coronavirus in January, Mount Sinai sent them some. When the roles were reversed in March, the Chinese hospital looked to return the favor, he said.
"We're long-term partners," Dorotovics said. "We never thought these partnerships would help us secure supplies."
Ultimately, officials in Nanjing offered to get masks for Mount Sinai using its access to a domestic China supply chain unavailable to many international firms.
At the same time, Goldman Sachs execs in Asia were looking to source medical supplies for a handful of healthcare companies they owned.
Goldman partners including Sean Fan and Stephanie Hui were calling on their contacts, including executives at some of Asia's largest sovereign wealth funds. Coincidentally, Goldman also owns about 8.6% of Taikang Insurance Group, the large financial conglomerate that owns the Nanjing hospital.
The two efforts eventually came together, and the Chinese were able to purchase 500,000 N95 masks and 1.2 million surgical masks for Sinai.
'We needed to go get this stuff'
Getting them out of China would prove more difficult. With the coronavirus pandemic spreading across the world, governments have shut down cross-border travel. China and the US are no different, and on Monday, March 23, Mount Sinai officials learned that while the supplies had been bought, there was no way to get them out of China.
"We were stuck," Dorotovics said.
That's where Goldman Sachs's Rich Friedman came in. Friedman, one of the longest serving partners at the bank and the co-chairman of Mount Sinai, was speaking to Sinai's CEO Ken Davis that morning. Davis told him about the hang up, and how badly the hospital system needed supplies.
The tie between Goldman and Mount Sinai dates back 50 years to when Goldman senior partner Gustav Levy served as Sinai's chairman and helped found its medical school.
The situation reminded Friedman of 9/11, when he and Goldman's ex-CEO Hank Paulson were trapped in Japan after most air travel into the US was grounded, he recalled in an interview this week. The execs got back home by using a plane chartered through NetJets, the company that sells fractional ownership of jets for business travel. Why couldn't they try something similar, he thought.
"When we realized that the shortage was really going to hit us, it dawned on me that we needed to go get this stuff," Friedman said.
The exec immediately asked Goldman CEO David Solomon to call Warren Buffett, whose Berkshire Hathaway owns NetJets. (Solomon offered up the use of Goldman's planes if NetJets didn't come through, Friedman said.)
Solomon called Buffett, and less than five minutes later, Friedman was talking to NetJets Chairman Adam Johnson.
Johnson quickly agreed to scramble two planes and sent them to Anchorage, Alaska to await further instructions. A third was readied in Dallas as a backup. A fourth plane was pulled in for a last-minute request from Taikang's chairman to help fly his children home from Tampa, only to have that part of the plan scrapped.
The planes were chartered under Friedman's name, though he expects the cost to be paid by the COVID-19 fund he's raising.
They'd need special permission to fly cargo out of Nanjing, which is mainly a passenger hub, and for putting cargo onto a plane licensed for passenger use. NetJets would also need special permission from the US government to fly back from China, which is prohibited in many cases.
At one point, Goldman execs thought about appealing to China's senior leaders, and maybe asking former Trump administration official and Goldman partner Dina Powell to call the Chinese ambassador. But when Friedman mentioned the possibility to Fan, the younger partner asked him to hold off. The team on the ground in China was working well together and success was within reach, he told his boss. Friedman held off.
Just as they were close to securing the needed approvals, at 12:15 a.m. on Wednesday, March 25, Friedman got an email that threatened to derail the mission.
A charter plane from the United Kingdom was coming into Nanjing with a third of the 39 passengers on board infected with COVID-19, he said. Everyone thought resources would be diverted to that plane, and they hung up, dejected, from a conference call.
Less than two hours later, though, and everything was set. At 1:45 a.m., Fan sent Friedman a message saying that all the approvals had been secured. The pick up was ready to go. In the end, the NetJets flights were one of the last to get approval - once the UK plane came in, the Chinese put further restrictions on charter planes, Friedman said.
On Wednesday, the NetJets flights took off from Anchorage and landed in Nanjing in a cold rain. The planes were quickly loaded, though Friedman would soon get an email that only 130,000 of the N95 masks, weighing 5.5 tons, could fit.
That would have to be enough.
Friedman was coordinating all of this by email, text, and phone calls from his vacation home in Bridgehampton, New York. He's also raised more than $30 million and procured dozens of ventilators.
The project was known on the Goldman side as MBD ARGO in honor of the Goldman merchant banking division that Friedman chairs and the 2012 film starring Ben Affleck about the mission to extract US hostages out of Iran in 1980. Friedman has watched the film at least 25 times. Mount Sinai officials didn't use the moniker.
'The tide on PPE is turning'
The planes got through customs in Anchorage without incident and continued onto Teterboro for unloading. The supplies were distributed by truck to Mount Sinai's facilities in New York City.
Another shipment is scheduled for later this week, which will include the remaining 370,000 N95 masks and 1.2 million surgical masks. For that one, Mount Sinai was able to contract with a cargo shipping company in New York, avoiding the need for another round of string pulling.
Dr. Vicki R. LoPachin, Mount Sinai's chief medical officer, wrote in a March 27 email to staff that the 130,000 masks had roughly doubled the system's supply, and that the entirety of the two shipments was a "monumental" help to the system. Mount Sinai healthcare workers began using the N95 masks this week.
"The tide on PPE is turning," LoPachin wrote. "Thanks to the relentless work of so many of your colleagues and others, our supply lines are opening up, and help is on the way."
