#BTColumn – The curious case of radically inept vs bad vibes

The views and opinions expressed by the author(s) do not represent the official position of Barbados TODAY.

by Garth Patterson Q.C

The first exhibit to the Complaint filed in the US District Court, in the matter of Radical Investments Ltd. v Good Vibrations Entertainment LLC, is a Letter of Intent dated April 6, 2021, which was prepared on the letterhead of the Ministry of Health and Wellness and signed by the Permanent Secretary of that Ministry.

The letter was addressed to AstraZeneca and states that its purpose was “to set forth the urgent and imminent interest of our Government for the Country of Barbados, to contract and authorise Radical Investments Limited … to procure the supply of 1,000,000 doses” of AstraZeneca’s vaccine “for the exclusive use of vaccinating our population against COVID-19, and that this product will not be resold under any circumstance.”

The letter requests AstraZeneca to provide Radical with a full offer along with the requisite information to enable the Ministry to conduct due diligence. If satisfied with the documentation, the Ministry said that it would expeditiously move forward with the order placement, signing of the sale and purchase agreement and payment.

It concludes that upon receipt of the requisite commercial documents, including Certificate of Authentication, testing reports and Bill of Lading, “Radical Investments agrees to make all payments directly to the Allocation Holder.”

There is no mention of St Lucia or Bahamas, and presumably the Barbados Government was fronting the transaction on their behalf. From a legal perspective, this letter raises several concerns, questions, and issues, including issues about the potential financial exposure of the Barbados Government arising from this ill-fated enterprise. To start, exactly what did the Mister of Health know and when did he know it?  As the letter emanated from his Ministry, it is curious that he had publicly proclaimed ignorance of the matter.

Also, the letter appears to confirm that Radical was acting as the agent of the Barbados Government for the purposes of the transaction. Under ordinary agency law principles, an agent, as the representative of his principal, is entitled to reimbursement of all expenses and to be indemnified for such liabilities incurred and losses suffered as were in contemplation when the agency was undertaken, or as were stipulated by the contract of agency. It is the principal, not the agent, who bears the risk of loss in a transaction conducted by the agent on the principal’s behalf.

Since Barbados was the principal, it may reasonably be assumed that Radical’s lawsuit against Good Vibrations is being brought on behalf of the Barbados Government; and if Radical ultimately fails in its bid to recover the monies it paid to Good Vibrations and others, will Radical be seeking recourse against the Barbados Government for an indemnity and/or reimbursement of the nearly US$6.7 million that was allegedly swindled?

Why was Radical interjected in the transaction in the first place? Why didn’t the Government go directly to the source, AstraZeneca? What special skills or connections did Radical possess, or represent that it possessed, to impress the Government that it was the right intermediary for the job?

The genesis of the deal, as explained by Radical in its Complaint, and when distilled to its essence, was that Radical’s principal, Mark Maloney, was basically told by his contact: “Hey, I know a guy, who knows another guy, who knows another guy, who can get the vaccine.” (not the actual words) Hardly the stuff that good procurement policy for the purchase of sensitive, vital, life-saving medication for public consumption is made of.

Referring to the Letter of Intent in its Complaint, Radical confirms that it was “authorized by the Barbadian Government’s Ministry of Health and Wellness to procure vaccines on its behalf.” This is the typical language of agency.

If Radical was the Government’s agent, then what were the terms and conditions of that agency? How much did Radical stand to gain?

The Government has reportedly asserted that the transaction between Radical and Good Vibrations was a private commercial transaction between private parties, from which it distances itself, at least commercially. But if the transaction was conducted on its behalf, then Radical was the Government’s agent; and, as a matter of law, the transaction was the Government’s transaction. What, then, does the agency contract between the Government and Radical provide regarding the question of indemnity or recourse?

Also, if the reports in the press are accurate, then the Barbados Government only ever intended to keep 300,000 doses of the target vaccine, and was, therefore, procuring 700,000 doses as agent for and on behalf of St Lucia and Bahamas.

Why then, did the Ministry falsely represent in official communication to AstraZeneca that the vaccines “will not be resold under any circumstance”?  Should we expect a greater level of probity, candor, and veracity from our officials when they are engaged in official business on our behalf?  Reportedly, St Lucia advanced millions of dollars to Radical, and faces the real potential of loss if those funds are not recovered.

Will the Governments of St Lucia and Bahamas look to Barbados to make them whole if they sustained losses because of this bungled deal? Will Radical indemnify Barbados against any such claims, since ordinarily an agent is responsible to his principal for any loss occasioned by his want of proper care, skill, or diligence, in the carrying out of his undertaking?

As to the sequence of events that precipitated the lawsuit, the undeniable truth that emerges from the telling of the story in the Complaint is that Mr. Maloney and his team were untrained and inexperienced in the policies and ways of public health procurement and were entirely unqualified and unsuited to the solemn task of procuring the critically needed COVID-19 vaccines for the country.

The events chronicled in the Complaint reveal the complete failure by Radical (acting on behalf the Barbados Government) to adhere to sound due diligence practices and naïveté of unprecedented levels. The exhibits to the Complaint show that on April 27, 2021, Radical inexplicably released payment for the vaccines without any or any proper verification that the promised vaccines had in fact been secured from AstraZeneca, were authentic and were being shipped.

These were the Government-stipulated pre-conditions to payment, which Radical seemingly ignored. These pre-conditions were also stipulated in the contract between Radical and Good Vibrations, which provided that the US$10.2 million would be released to AstraZeneca’s account upon receipt of an invoice from AstraZeneca.

No valid invoice from AstraZeneca was ever produced, nor was any credible explanation proffered; but the funds were nevertheless released to Good Vibrations and its cohorts, not to AstraZeneca. This, despite the obvious red flags and alarms that were being triggered by the alleged sketchy behaviour of Alex Moore, who was the principal of Good Vibrations, and his alleged accomplices.  This represented ineptitude on a massive scale and, inevitably, Radical gullibly fell victim to an alleged fraud in circumstances where, had there been greater diligence, it would have been avoided.

To compound matters, when Radical eventually determined that Good Vibrations was bad news, Radical cancelled the sale transaction, alleging fraud; but then, inexplicably, agreed to do a new deal with Serum Pharma Ltd., which Moore had introduced to Radical, for the purchase of the vaccines, and to pay Good Vibrations/Moore a commission on completion of that deal.

When matters ultimately stalled with Serum Pharma, Radical finally contacted the British authorities to verify the provenance of the AstraZeneca vaccines that it was seeking to procure on behalf of the Barbados Government and the authenticity of the parties with whom it was dealing.  In an email dated July 11, 2021, Radical wrote to the British High Commission to Barbados, saying: “We are authorised by the Government of Barbados to represent them in the purchase of AstraZeneca vaccines.  . . . We have been unable to obtain any comfort as to … whether Astra Zeneca have in fact allocated the 1,000,000 does (sic) of the AstraZeneca COVID vaccines to Barbados.”

By letter dated July 14, 2021, the High Commissioner replied: “Thank you for your email of 11 July regarding the potential purchase of Astra Zeneca vaccine by the Government of Barbados. Unfortunately, Astra Zeneca have confirmed that they do not have any relationship with Serum Pharma Limited.  It should therefore be assumed that this is not a legitimate enquiry or opportunity.

In line with their commitment to supply COVID-19 vaccine broadly and equitably at no profit during the pandemic, AstraZeneca is focused on delivering supply agreements through governments and COVAX and presently do not work with private sector distributors or intermediaries. Therefore, any similar private offers such as this would also likely be counterfeit.”

This begs several additional questions:

(i) In performing due diligence, why wasn’t this the very first step taken by Radical/Government of Barbados?  It would certainly have saved a lot of angst and brought the whole convoluted affair to a screeching halt from inception.  Instead, they put the cart before the horse, and the result was predictable.

(ii) Why was Radical reaching out to the British High Commission, instead of the Government of Barbados? On a sensitive, important matter of this nature, we have bureaucrats whose job it is to deal with foreign governments.  Why cede that responsibility to a private firm?

(iii) Doubtless the Government was aware that, as confirmed by the High Commissioner, AstraZeneca had committed to supplying COVID-19 vaccine broadly and equitably at no profit and was doing so only through governments and COVAX.  Why did it, therefore, seek to by-pass that process by interjecting civilian intermediaries?  Why had it committed to paying Radical US$24 per vaccine dose, when AstraZeneca was supplying it to governments at between US$3 and $5?

There is certainly more in this mortar than the pestle.  We wait with bated breath for the answers to these pressing questions and the next episode of this fascinating saga.

Garth Patterson Q.C. is the Regional Managing Partner of Lex Caribbean. He was called to the Bars of Jamaica and Barbados in 1987 and the Bars of New York and St. Lucia in 1990 and 2011 respectively.