(Peter Navarro, Director of the National Trade Council, looks on as Trump meets with supply chain distributors in reference to the COVID-19 coronavirus pandemic, in the Cabinet Room in the West Wing at the White House on Sunday, March 29, 2020. Photo by Pete Marovich-Pool, via Getty Images.)
In late July, Eastman Kodak was awarded a $765 million government loan under the Defense Production Act. The loan was the first of its kind and sought to marry two struggling entities: a former titan in an industry that was now outdated and the federal government which was in need of a rescue on the Covid-19 front.
Kodak would now shift into drug manufacturing and produce ingredients for a number of generic drugs, including the antimalarial drug hydroxychloroquine that Trump had made a household, albeit difficult to pronounce name.
It would be a win-win. Kodak could attempt to resurrect its former corporate glory and Trump could stand at a White House podium and brag about bringing drug production to the US, and shift America’s dependence away from China and India for our lifesaving medications.
(Trump listens to Kevin Hassett, Chairman of the Council of Economic Advisers (2nd R) and Peter Navarro (R), Assistant to the President for Trade & Manufacturing in the Oval Office on January 31, 2019 in Washington, DC. Photo by Mark Wilson, via Getty Images)
Kodak’s specialty loan had terms similar to a commercial loan and was to be repaid over 25 years, with the intention of bringing the former corporate giant back from the brink, after Kodak was forced to file for bankruptcy in 2012. Kodak would produce “starter materials” and “active pharmaceutical ingredients” used to produce generic medicines and Trump would take credit for it all.
Trump announced the deal and Kodak stock soared. Trump revealed that he had awarded the company a $765 million loan on July 28 and stock for the company jumped 203% that same day. By the next day, Kodak shares jumped again to hit 318% and then stock skyrocketed as much as 570% to $60.00 a share at one point. Trading was even halted 20 times due to volatility the day after the announcement.
Covid. China. Hydroxy-chlory-whatever. Trump’s persistent buzz words that denoted fear and uncertainty were somehow assuaged by one name that represented American values and security: Kodak. But now that the dust has slightly settled and we get more scientific data on the coronavirus daily, such as the Food and Drug Administration issuing formal warnings against the use of hydroxychloroquine, the consumer is catching wise.
(White House Trade Advisor Peter Navarro stands along the Rose Garden colonnade as he listens to a news conference between Trump and Japanese Prime Minister Shinzo Abe at the White House June 7, 2018 in Washington, DC. Photo by Chip Somodevilla, via Getty Images.)
The latest Trump branding attempt involves a co-grift with the My-Pillow guy, Mike Lindell, who has Trump’s ear and has even appeared in press conferences in the Rose Garden in the early days of the pandemic. They are looking to peddle an oleander plant extract as the latest Covid cure, with no scientific proof of efficacy, which is exactly what Trump did with hydroxychloroquine. People who have direct access to Trump, seem to be able to get him to move quickly on reckless deals — enter Peter Navarro and Kodak.
The Wall Street Journal paints a portrait of Peter Navarro, sitting in the White House, dutifully making a list of potential companies that could manufacture pharmaceuticals in the US on his white board — Kodak apparently matched all three of the columns that he had created. “The way Mr. Navarro saw it, he recalled, Kodak could help produce the ingredients to jump-start generic drug production and ease the country’s reliance on foreign supplies.”
I imagine it more like this: Navarro is having drinks in some leather-centric, only men allowed lounge with other titans of industry, and he is accepting drink after drink from all of the desperate CEO’s sending over martinis. They know Navarro points Trump in the direction of his own discretion and they want access to that federal money that the government is throwing out during the pandemic. Peter Navarro is undoubtedly the girl at the party that everyone wants to dance with and have the chance to kiss on the cheek at the end of the night.
(Peter Navarro, a top trade adviser to President Trump, has influenced American trade policy toward China and pressed for stiff tariffs over the objections of other senior advisers. Photo by Chip Somodevilla, via Getty Images.)
This is how the Wall Street Journal describes the genesis of the Kodak deal:
“Every Monday, administration officials convene a meeting with other government agencies to discuss the country’s Strategic National Stockpile, the US repository of vaccines and other critical medical supplies.
At the end of one of the meetings in May, Christopher Abbott, an aide to Mr. Navarro, pitched Kodak to David Glaccum, the United States International Development Finance Corporation’s (DFC) counsel, according to senior administration officials.
Mr. Abbott asked if the DFC would be interested in looking at a pharmaceutical project, one of the officials recalled. Mr. Glaccum responded affirmatively, realizing working with Kodak could be part of an executive order that the president had signed a few weeks earlier.
Mr. Navarro’s office connected Kodak’s leadership with the DFC in early June. Mr. Glaccum conducted pre-screening calls with Kodak and told the company to formally apply to the DFC’s newly announced program, according to a senior administration official.”
What is clear is that Navarro “spearheaded the idea” and then used his influence with Trump to deliver Kodak to the front of the line. He assisted with navigating the bureaucracy and even tapping an obscure government agency to help push the loan through the final stages.
The deal came together in “Trump time,” Mr. Navarro said, a phrase he purportedly uses when he wants to denote speed. According to a person familiar with Kodak, the company submitted a 17-page financial model code named “Project Tiger,” along with and a 96-page business plan in June. There were no other applicants, and the deal appeared to be approved in record time — it was almost as if the business proposal was a formality for a decision that was already made.
(Trump speaks during a news briefing to announce that Eastman Kodak will receive a loan to manufacture ingredients used in pharmaceuticals at the Briefing Room of the White House July 28, 2020 in Washington, DC. Photo by Alex Wong, via Getty Images.)
The White House planned to announce the loan July 28, but the loan would not be finalized for months and might not be completed until after the November election. Kodak apparently could not keep up and botched the roll out. Kodak officials felt rushed and harbored concerns about the timetable, but ultimately determined they had little choice in the matter as they tried to match pace.
When Kodak tried to communicate their concerns with the DFC, officials there were adamant the event take place as planned. Senior administration officials deny the DFC pressured Kodak to announce the loan and say that Kodak was supportive of the announcement. A DFC spokeswoman says the agency “followed its standard process, under its standard timeline, driven by career finance professionals.” Navarro backed up the DFC confirming that no one from Kodak told him the process was rushed.
Ultimately, Trump got the public relations announcement he wanted at the exact time he wanted it and everyone else scurried to make it happen after the fact. On the day the deal was announced by Trump, he called the proposed loan “one of the most important deals in the history of U.S. pharmaceutical industries.” Trump went on to say, “My administration has reached a historic agreement with a great American company.”
(Kodak executives ringing the opening bell on the floor of the New York Stock Exchange on January 8, 2014. Photo by Lucas Jackson, via Reuters.)
But everything that followed showed that nothing had really been figured out or finalized, including how to handle the promotional aspects. Kodak sent a news advisory of the deal to media outlets after Trump’s announcement, but they failed to specify that the information wasn’t intended to be released publicly. What resulted was a Kodak stock roller-coaster ride that saw the price rise from around $2 on July 27 to $60 just a few days after. Once investors realized the deal was not done, something they might have just assumed from Trump’s involvement, the stock prices dropped the next week.
Now, the White House and DFC have put the Kodak deal on hold, and thanks to the major publicity from Trump’s announcement, the SEC and congressional committees are investigating what happened. According to The Wall Street Journal, the SEC is looking at how Kodak disclosed the loan and stock-option grants to executives. Lawmakers are examining the loan process and the options grants awarded some executives, including Mr. Continenza, Kodak’s executive chairman.
The plan that Peter Navarro once touted on Fox News as a “blockbuster deal that the president engineered,” has already collapsed just weeks after it was announced. Mr. Navarro has alluded to the deal being tarnished by “allegations” on social media, as he seemingly continues to overlook his own role in the failure.
(Peter Navarro, White House Trade Advisor and National Defense Production Act Policy Coordinator, speaks to press in the White House Briefing Room about the coronavirus pandemic on March 27, 2020. Photo by Alex Brandon, via Associated Press.)
As Navarro continues to spin the fall-out and defend the DFC and Trump’s business prowess, many who understand the cycle of Trump’s business dealings and the probability of their failures are not surprised. Regardless, Peter Navarro is at the center of the failure for pushing two incompatible entities together in a rush to gain some more political traction for Trump.
This is not likely a new role for Navarro, but his failures are becoming more apparent due to his pandemic prominence. The timing of the whole project, from picking Kodak, to making the announcement creates speculation about the legitimacy of the deal entirely. Kodak may have just been the desperate corporate patsy who trusted Navarro and wanted to believe that the deal was legitimate. The real question will be whether Navarro, the DFC and the rest of the Trump administration can stave off the investigations past November.
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Amee Vanderpool writes the SHERO Newsletter and is an attorney, published author, contributor to newspapers and magazines and analyst for BBC radio. She can be reached at email@example.com or follow her on Twitter @girlsreallyrule.