Deposition of Richard J. Chivaro — Blue Flame Medical LLC v. Chain Bridge Bank, N.A. (E.D. Va., Dkt. 130-16)
Summary
Exhibit 16, Case 1:20-cv-00658, Document 130-16, filed 05/06/21 (E.D. Va.): excerpts from the remote deposition via Zoom of Richard J. Chivaro, taken Thursday, March 4, 2021, in Blue Flame Medical LLC v. Chain Bridge Bank, N.A., John J. Brough and David M. Evinger. Leslie Esbrook examines, and Ms. Porter objects at points. The witness testifies that the controller's office expected the funds to be electronically transferred in the morning of the 26th and discusses contacts between the controller's office, Ana Matosantos, a CNA representative and Mr. Thomas. Questions concern a March 20th, 2020 text from Mr. Thomas reading "We've almost sold all of this first shipment, but we'll have 100m units every week being delivered to Long Beach".
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“Deposition of Richard J. Chivaro — Blue Flame Medical LLC v. Chain Bridge Bank, N.A. (E.D. Va., Dkt. 130-16).”
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Case 1:20-cv-00658-LMB-IDD Document 130-16 Filed 05/06/21 Page 1 of 12
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EXHIBIT 16
Richard J. Chivaro 30(b)(6) 3/4/2021
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1 IN THE UNITED STATES DISTRICT COURT
2 FOR THE EASTERN DISTRICT OF VIRGINIA
3 (Alexandria Division)
4 - - - - - - - - - - - - - - - X
5 BLUE FLAME MEDICAL LLC, :
6 Plaintiff, :
7 v. : Civil Action No.
8 CHAIN BRIDGE BANK, N.A., : 1:20-cv-00658
9 JOHN J. BROUGH and DAVID M. :
10 EVINGER, :
11 Defendants. :
12 _____________________________ :
13 CHAIN BRIDGE BANK, N.A., :
14 Third-Party Plaintiff, :
15 v. :
16 JPMORGAN CHASE BANK, N.A., :
17 Third-Party Defendant. :
18 - - - - - - - - - - - - - - - X
19 Remote Deposition
20 Thursday, March 4, 2021
21 Deposition via Zoom of RICHARD J. CHIVARO,
22 a 30(b)(6) witness herein, called for examination by
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1 counsel for Defendants/Third-Party Plaintiff in the 1 APPEARANCES (Continued):
2 above-entitled matter, pursuant to notice, the 2
3 witness being duly sworn by MARY GRACE CASTLEBERRY, a 3 On behalf of the Defendants/Third-Party
4 Notary Public in and for the State of Maryland, taken 4 Plaintiff Chain Bridge Bank, N.A.:
5 at 9:39 a.m. PST, Thursday, March 4, 2021, and the 5 GARY A. ORSECK, ESQ.
6 proceedings being taken down by Stenotype by MARY 6 MATTHEW M. MADDEN, ESQ.
7 GRACE CASTLEBERRY, RPR, and transcribed under her 7 DONALD BURKE, ESQ. (Via Streaming Only)
8 direction. 8 LESLIE ESBROOK, ESQ.
9 9 Robbins Russell Englert, Orseck,
10 10 Untereiner & Sauber
11 11 2000 K Street, N.W., 4th Floor
12 12 Washington, D.C. 20006
13 13 (202) 775-4500
14 14 gorseck@robbinsrussell.com
15 15 mmadden@robbinsrussell.com
16 16 dburke@robbinsrussell.com
17 17 lesbrook@robbinsrussell.com
18 18
19 19
20 20
21 21
22 22
Page 3 Page 5
1 1 APPEARANCES (Continued):
APPEARANCES:
2 2
3 3 On behalf of the Third-Party Defendant JPMorgan
On behalf of the Plaintiff Blue Flame Medical
4 4 Chase Bank:
LLC:
5 5 ALAN SCHOENFELD, ESQ.
JASON MITCHELL, ESQ.
6 6 Wilmer Cutler Pickering Hale & Dorr LLP
GREG KETCHAM-COLWILL, ESQ.
7 7 1875 Pennsylvania Avenue, N.W.
KENI UKABIALA, ESQ.
8 8 Washington, D.C. 20006
Schulte Roth & Zabel
9 9 (212) 663-6981
901 15th Street, N.W., Suite 800
10 10 alan.schoenfeld@silmerhale.com
Washington, D.C. 20005
11 11 and
(202) 729-7476
12 12 GABRIEL TORRES, ESQ.
gregory.ketcham-colwill@srz.com
13 13 JPMorgan Chase
jason.mitchell@srz.com
14 14 Assistant General Counsel
ekenedilichukwu@ukabiala@srz.com
15 15 383 Madison Avenue
and
16 16 New York, New York 10179
ETHAN BEARMAN, ESQ.
17 17 (212) 270-6000
The Bearman Firm
18 18
10250 Constellation Boulevard, Suite 100
19 19
Los Angeles, California 90067
20 20
(747) 344-1004
21 21
22 22
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1 responding a few days later? 1 controller's office learned that Mr. Thomas had spoke
2 A. Yeah, I wasn't sure. I thought it was a 2 with Abby Browning.
3 day later or so, but it must have been -- must have 3 A. Well, I know the controller had contact
4 been that evening, judging by that statement because 4 with CNA herself, so she could have learned from the
5 I know that -- you can see at 5:34, Mr. Thomas says 5 CNA rep because they had contacted the controller
6 that "CNA rep calling me shortly." 6 early on to voice their concerns about the lack of
7 Q. I see that, yeah. And -- 7 protective equipment while they were on the front
8 A. So that had happened. So Matosantos must 8 line. They were feeling very vulnerable at the time.
9 have called the controller sometime after 5:34 that 9 So I do know that the controller reached
10 day because -- or it could have been very early on 10 out to CNA and then we found out that Ana Matosantos
11 the 21st. It's just all blurred together in my mind 11 could put out -- put him in touch with the CNA as
12 right now, but she -- Ana Matosantos did refer him to 12 well.
13 the CNA rep. 13 Q. And is Abby Browning affiliated with CNA?
14 Q. Okay. And -- 14 A. Yeah. I think so, yes.
15 A. Who was Stephanie Roberson. 15 MS. PORTER: Ms. Esbrook, if you're about
16 Q. Do you know if Ana Matosantos ever had 16 to turn to another entry in the text string, perhaps
17 communications with Mr. Thomas himself? 17 now is a good time for a break.
18 MS. PORTER: Objection. Calls for 18 MS. ESBROOK: Yes. I am about to, so that
19 speculation. 19 sounds good to me. Should we take 10?
20 THE WITNESS: I want to say, yes, she did 20 MS. PORTER: Sounds good.
21 speak with him. 21 MR. MITCHELL: Before we go off the
22 BY MS. ESBROOK: 22 record -- apologies, Mr. Chivaro. Before we go off
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1 Q. Do you know anything -- do you when that 1 the record, I'd just like to state for the record
2 occurred or anything more about that communication? 2 that to the extent Ms. Porter or any other attorney
3 MS. PORTER: Objection. Calls for 3 lodges an objection to a question, we would like to
4 speculation. Outside the scope of the topics listed 4 reserve the right to join in that objection. We
5 in the subpoena. 5 discussed this before the deposition began, and I
6 THE WITNESS: No. 6 believe that everybody indicated that they were okay
7 BY MS. ESBROOK: 7 with that, but I would like to put it on the record
8 Q. And you also said, "At some point, 8 now.
9 Mr. Thomas acknowledged that he spoke with Abby 9 MS. PORTER: And I second Mr. Mitchell's
10 Browning in the governor's office who referred him to 10 statement, that we also join in any objections the
11 emergency manager Bill Simonson," correct? 11 other parties make.
12 A. Correct. 12 MS. ESBROOK: Same here.
13 Q. And did Mr. Thomas communicate that he 13 THE VIDEOGRAPHER: Okay. Off the record
14 spoke with Abby Browning to Ms. Yee? 14 at 10:52.
15 A. I think that -- I think that what happened 15 (Discussion off the record.)
16 was Ana Matosantos told the controller that she put 16 THE VIDEOGRAPHER: We are now back on the
17 him in touch with the CNA. The controller later 17 record. The time is 10:53 a.m.
18 confirmed with Mr. Thomas that he was expecting a 18 THE WITNESS: And I just wanted to take a
19 call from CNA rep shortly. And that's reflected in 19 moment to clarify that Abby Robinson works for the
20 the 5:34 note. So there was some movement that was 20 governor, not for CNA.
21 going on. 21 BY MS. ESBROOK:
22 Q. Okay. My question was about how the 22 Q. And just for further clarification, I
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1 believe you said Abby Robinson. Do you mean Abby 1 A. I do.
2 Browning? 2 Q. And that earlier text was, let's see, at
3 A. Abby Browning, yes. 3 1:17 p.m.; is that correct?
4 Q. Thank you. 4 A. That's correct.
5 A. She's with the governor's office. So as 5 Q. So do you understand or did the
6 long as that was clear, I just want to make sure that 6 controller's office understand Mr. Thomas to be
7 we're on the same -- same page. 7 representing that he had sold 100 million masks in
8 Q. Great. I understand. 8 about four hours?
9 MS. ESBROOK: I think we can go off record 9 MR. MITCHELL: Object to the form.
10 now. 10 MS. PORTER: Objection.
11 THE VIDEOGRAPHER: Off the record at 11 THE WITNESS: Yes.
12 10:53. 12 BY MS. ESBROOK:
13 (Recess.) 13 Q. And was that fact important to the
14 THE VIDEOGRAPHER: We are now back on the 14 controller?
15 record. The time is 11:10 a.m. 15 A. Well, only to the point that, as I stated
16 BY MS. ESBROOK: 16 early on, that she was very concerned that California
17 Q. All right. Welcome back, Mr. Chivaro. 17 was going to lose out on this deal. So, yes. So the
18 I'm going to share my screen again and go back to 18 fact that he sold out 100 million masks in such a
19 that same Defendant's Exhibit 6 text thread that we 19 short period of time did cause her some concern. But
20 were looking at earlier. 20 he later came back and told her that he could get
21 Okay. Are you able to see the exhibit, 21 that much every week, so it was not a -- not a big
22 Mr. Chivaro? 22 thing.
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1 A. Yes, I do. 1 Q. Okay. And was it still Ms. Yee's
2 Q. All right. And I'm going to direct your 2 understanding, at the time the controller's office
3 attention to a text on page 1, this March 20th, 2020 3 signed the warrants for Blue Flame, that Blue Flame
4 5:40 p.m. text. 4 had sold 100 million masks on March 20th?
5 A. Yes. 5 MR. MITCHELL: Object to the form.
6 Q. Mr. Thomas says to Mr. Yee -- 6 THE WITNESS: Yes.
7 A. Ms. Yee. 7 BY MS. ESBROOK:
8 Q. Excuse me, Ms. Yee. "We've almost sold 8 Q. Did Blue Flame ever tell the controller's
9 all of this first shipment, but we'll have 100m units 9 office otherwise?
10 every week being delivered to Long Beach." 10 A. No.
11 Do you see that? 11 Q. Would you have wanted to know if that was
12 A. Yes, I do. 12 not incorrect -- if that was not correct information?
13 Q. And the M refers to a million there, 100M; 13 A. The fact that he -- that he claimed to
14 is that correct? 14 have sold 100 million masks to other entities? Yeah,
15 A. Yes. 15 that would have been good to know.
16 MR. MITCHELL: Object to the form. 16 Q. And why would that have been good to know?
17 BY MS. ESBROOK: 17 A. Because I think that the fact that he was
18 Q. Okay. And so the first half of that, 18 selling so many masks so quickly kind of was putting
19 "We've almost sold all of this first shipment," do 19 pressure on the state to get a deal done as soon as
20 you understand Mr. Thomas to be referring to the 100 20 possible.
21 million mask shipment Yee texted about earlier in 21 Q. Okay. And then the second half of that
22 this chain? 22 5:40 p.m. text message, Mr. Thomas says, "We'll have
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1 100m," million, "units every week being delivered to 1 officer, who in this case was the Office of Emergency
2 Long Beach." 2 Services, to determine whether or not he actually had
3 Do you see that? 3 the quantity of masks that he claimed to have and can
4 A. I do see that. That's consistent with my 4 produce it within the time required by the purchase
5 understanding of the text messages that he sent to 5 order.
6 the controller. 6 So in that -- the controller was only
7 Q. Okay. And again, it was important for the 7 acting on the fact that she had received
8 controller -- was it important for the controller to 8 representation that he had 100 million masks
9 know that Mr. Thomas had 100 million units every week 9 available and that she was interested in the
10 being delivered to Long Beach? 10 protection that they afforded to the front-line
11 A. Yes, that was -- 11 workers, and that's pretty much it. As to whether he
12 MR. MITCHELL: Object to the form. 12 had 100 million masks or 50 million masks or zero
13 THE WITNESS: -- that was important. 13 masks would not have been up to us to verify.
14 BY MS. ESBROOK: 14 BY MS. ESBROOK:
15 Q. Did the controller send Mr. Thomas' 15 Q. Understood. Would the controller, though,
16 information to the governor's office in part based on 16 have wanted to know if Mr. Thomas did not have access
17 his representations that he could secure 100 million 17 to 100 million masks at the Port of Long Beach?
18 units of masks every week? 18 MR. MITCHELL: Object to the form.
19 MR. MITCHELL: Object to the form. 19 THE WITNESS: Yes, of course.
20 THE WITNESS: I do not know whether she 20 MS. PORTER: Objection --
21 sent it to the governor or to -- I know she discussed 21 THE WITNESS: As stated earlier, that --
22 it with Daniel Kim, who was the director of General 22 she put in a considerable amount of time in trying to
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1 Services. 1 put Mr. Thomas in connection -- in contact with the
2 BY MS. ESBROOK: 2 correct individuals. She obviously would not have
3 Q. Do you know about what time Ms. Yee spoke 3 spent a moment longer than necessary had she have
4 with Mr. Kim? 4 known that this was a sham in any way, shape or form.
5 A. No. I believe it was in the -- 5 BY MS. ESBROOK:
6 MS. PORTER: Objection. Vague. 6 Q. Okay. I'm going to move on to the next
7 THE WITNESS: It's in the string of emails 7 page on this text thread, March 21st. For the
8 that she mentions talking to Daniel Kim. I think 8 record, this is Bates numbered page BFM200120 and the
9 the -- it was definitely on or about the 24th or 9 text at 3 -- no. Sorry. Just give me a moment to
10 25th. 10 find my place.
11 BY MS. ESBROOK: 11 Okay. This is Bates page BFM200121, March
12 Q. And again, at the time that Ms. Yee signed 12 21st, 3:20 p.m. Mr. Chivaro, can you see this
13 the warrants for Blue Flame, did the controller's 13 message that starts with, "We are delivering"?
14 office still understand that Mr. Thomas could deliver 14 A. I see that.
15 100 million units every week to Long Beach? 15 Q. Okay. And I'll read it. It says --
16 A. Yes. 16 Mr. Thomas says to Ms. Yee, "We are delivering
17 MR. MITCHELL: Object to the form. 17 another 100m units of n95 masks and 500k COVID-19
18 Argumentative. 18 testing kits to Florida. Just came in."
19 THE WITNESS: Just for clarification 19 Do you see that?
20 purposes, again, the controller does not verify 20 A. I do see that.
21 whether the quantity that's supposed to be available 21 Q. And again, 100M is 100 million; is that
22 is actually available. That's for the procurement 22 correct?
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1 A. That's my understanding. 1 THE WITNESS: Never.
2 Q. And do you understand Mr. Thomas to be 2 BY MS. ESBROOK:
3 saying here that Blue Flame was delivering 100 3 Q. In her conversations with the governor's
4 million N95 masks to customers in Florida? 4 office, did Ms. Yee convey that Blue Flame was able
5 A. Yes. 5 to source 100 million masks?
6 MS. PORTER: Objection. The document 6 MR. MITCHELL: Object to the form.
7 speaks for itself. 7 THE WITNESS: Yes.
8 BY MS. ESBROOK: 8 BY MS. ESBROOK:
9 Q. And again, was knowledge of Blue Flame's 9 Q. And did she convey that Blue Flame had
10 successful delivery of masks to other customers 10 access to 100 million masks weekly?
11 important for Ms. Yee? 11 A. Yes.
12 A. It was -- 12 MR. MITCHELL: Object -- pardon me,
13 MR. MITCHELL: Objection to the form. 13 Mr. Chivaro. Object to the form.
14 THE WITNESS: -- important, yes. 14 BY MS. ESBROOK:
15 MS. PORTER: Objection. 15 Q. And did Ms. Yee convey to the governor's
16 THE WITNESS: It goes to the credibility 16 office that Blue Flame had already delivered masks to
17 of the vendor. 17 other customers?
18 BY MS. ESBROOK: 18 MR. MITCHELL: Object to the form.
19 Q. And at the time that the controller's 19 THE WITNESS: I don't know whether she did
20 office signed the warrants for Blue Flame, it still 20 or not. As I said earlier, that information would
21 understood that Blue Flame had delivered 100 million 21 have been important to our procurement people in OES
22 N95 masks to Florida? 22 for purposes of the cost, because I think that,
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1 MR. MITCHELL: Object to the form. 1 obviously, if they perceived that masks were going
2 THE WITNESS: Yes, at that time we were -- 2 out the door to other states, it would put pressure
3 MS. PORTER: Objection. 3 on the supply and demand and impact the cost of the
4 THE WITNESS: At the time the warrant was 4 masks that were being paid for by the state of
5 drawn, we were not concerned with how many they 5 California.
6 delivered to other states, only whether they could 6 So it's definitely important to know
7 provide the 100 million to California. 7 whether they were selling masks to other states or
8 BY MS. ESBROOK: 8 not. And again, the controller was just going on the
9 Q. Okay. And did Blue Flame's ability to 9 representations made to her by Mr. Thomas.
10 provide masks to other states influence whether Blue 10 BY MS. ESBROOK:
11 Flame could provide masks to California? 11 Q. Okay. I'm going to keep moving forward in
12 MR. MITCHELL: Object to the form. 12 this text chain to the page Bates stamped BFM200124,
13 MS. PORTER: Objection. Lack of 13 a text sent March 23rd at 1:54 p.m. from Ms. Yee to
14 foundation. 14 Mr. Thomas in which Ms. Yee says, "Prepayment process
15 THE WITNESS: It would have mattered to 15 in place. Out of curiosity, where did your stock on
16 our procurement people, yes. Not necessarily to the 16 Friday go in FL? Hospitals? State of FL? Thank
17 controller. 17 you, John."
18 BY MS. ESBROOK: 18 Do you see that?
19 Q. And did Blue Flame ever say that it did 19 A. Yes.
20 not deliver 100 million N95 masks to Florida? 20 Q. And Ms. Yee's question refers to the 100
21 MR. MITCHELL: Object to the form. 21 million masks and COVID testing kits sent to Florida
22 MS. PORTER: Objection. Vague. 22 that we were just discussing, correct?
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1 A. That's correct. 1 A. I do, yes.
2 Q. And Mr. Thomas replies at 4:13 p.m. and he 2 Q. And do you understand the US to be
3 says, "Hi Betty. Sorry for the delay. They went to 3 referring to United States-based?
4 hospitals and a private buyer. I can't go into any 4 A. Yes.
5 more detail as I have NDAs with all of them." 5 Q. Okay. And is Mr. Thomas here telling
6 Do you see that? 6 Ms. Yee that he can supply her with masks that are
7 A. I do. 7 made in America?
8 Q. And NDAs there refers to nondisclosure 8 MS. PORTER: Objection. The document --
9 agreements; is that -- is that your understanding? 9 MR. MITCHELL: Object to form.
10 A. That's my understanding, correct. 10 MS. PORTER: -- speaks for itself.
11 Q. Okay. And Mr. Thomas is saying he can't 11 THE WITNESS: Yes.
12 give additional names of the hospital and the private 12 BY MS. ESBROOK:
13 buyer in Florida because he has nondisclosure 13 Q. And was that fact important to the
14 agreements with them? 14 controller's office?
15 MS. PORTER: Objection. 15 A. The only thing that was important to the
16 THE WITNESS: That's correct. 16 controller's office was whether or not he could
17 MS. PORTER: The document speaks for 17 perform and provide what he promised to provide, the
18 itself. 18 100 million 3M masks.
19 THE WITNESS: That's correct. 19 Q. Did Mr. Thomas ever tell the controller's
20 BY MS. ESBROOK: 20 office that he did not have suppliers making masks in
21 Q. Would -- let me rephrase. 21 America?
22 Did Blue Flame ever inform the 22 A. No.
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1 controller's office that it did not sell masks to a 1 MS. PORTER: Objection. Vague as to time.
2 hospital or a private buyer in Florida? 2 BY MS. ESBROOK:
3 MS. PORTER: Objection. Vague as to time. 3 Q. And would you have wanted to know if he
4 THE WITNESS: No. 4 did not have suppliers making masks in the
5 BY MS. ESBROOK: 5 United States?
6 Q. Would the controller's office have wanted 6 MR. MITCHELL: Object to the form.
7 to learn if Blue Flame had not sold any masks in 7 THE WITNESS: It didn't matter to the
8 Florida? 8 controller.
9 MR. MITCHELL: Object to the form. 9 THE REPORTER: I'm sorry, did you say "did
10 THE WITNESS: Yes. As I said, it would 10 not matter"?
11 definitely impact the price that was being paid. 11 THE WITNESS: Correct.
12 BY MS. ESBROOK: 12 THE VIDEOGRAPHER: Also, Mr. Chivaro, can
13 Q. Okay. I'm going to have a similar set of 13 you adjust your webcam down, please?
14 questions for you on one more text. I just need to 14 THE WITNESS: Am I losing you? How about
15 find it so give me a moment. Okay. I'm just going 15 that?
16 to jump back in the chain. Sorry for the confusion. 16 THE VIDEOGRAPHER: Yeah. That's great.
17 We're on page Bates stamped BFM200121, so 17 Thank you.
18 March 21st, 7:03 p.m., and Mr. Thomas says to 18 THE WITNESS: Okay.
19 Ms. Yee, "Thanks Betty. I'm about to unlock a bunch 19 BY MS. ESBROOK:
20 of" -- I believe it's "US-based manufacturers, too, 20 Q. I think we talked earlier, you said you
21 so if we need made in America goods too." 21 recalled a few calls that Mr. Thomas had with Ms. Yee
22 Do you see that text? 22 during the course of this March 20th to March 27th
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1 A. No. 1 that was.
2 Q. Is that information something you would 2 Q. And did Ms. Yee later come to learn
3 have liked to know? 3 whether or not Ms. Matosantos had vetted Mr. Thomas
4 MR. MITCHELL: Object to the form. 4 to her satisfaction?
5 THE WITNESS: Yeah. I think early on it 5 MR. MITCHELL: Object to the form.
6 would have been important to know that, as I said, 6 THE WITNESS: I don't think she did. I
7 questions surfaced both in the governor's office 7 don't know the answer to that question.
8 early on by Ms. Matosantos as to whether this guy was 8 BY MS. ESBROOK:
9 legit. So this was something that we would have 9 Q. Did Ms. Yee share with Ms. Matosantos how
10 appreciated knowing in advance, yes. 10 she came to learn about Blue Flame?
11 BY MS. ESBROOK: 11 MS. PORTER: Objection. Asked and
12 Q. And what questions did Ms. Matosantos have 12 answered.
13 about this transaction? 13 THE WITNESS: Yes, she did.
14 MS. PORTER: Objection. Vague. 14 BY MS. ESBROOK:
15 BY MS. ESBROOK: 15 Q. Did Ms. Yee say that her fundraiser had
16 Q. Let me rephrase that. 16 told her about Blue Flame?
17 A. She was -- okay. 17 A. Well, again, the fundraiser -- let's be
18 Q. Sorry. I think you know where I'm going. 18 very clear. The fundraiser just passed on the
19 But you just said, I believe, that questions surfaced 19 information to the controller that she had received
20 both in the governor's office early on by 20 in a contact that was made by John Thomas, who was
21 Ms. Matosantos as to whether this guy was legit. 21 reaching out to the controller to let her know that
22 What were you referring to? 22 he had these masks that he was going to make
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1 A. Ms. Matosantos' conversation with the 1 available to California. That's the only information
2 controller over that, she asked, as did Daniel Kim, 2 that was passed along to the controller other than
3 how well the controller knew Mr. Thomas and whether 3 Mr. Thomas' contact information.
4 or not this was a legit offer. The controller only 4 Q. Okay. Then would I be correct in
5 forwarded the information that she had received from 5 characterizing that Ms. Yee did not mention to
6 Mr. Thompson -- Thomas and she told Ana Matosantos 6 Ms. Matosantos that her fundraiser told her about
7 like she told Daniel Kim, vet -- vet him. Go ahead 7 John Thomas?
8 and find out whether -- whether he's doing what he's 8 MR. MITCHELL: Object to the form.
9 supposed to be doing or not. That's not something 9 MS. PORTER: Asked and answered.
10 that I'm doing. 10 THE WITNESS: Again, I think that she told
11 The controller was merely trying to ensure 11 Ana Matosantos that her fundraiser had received the
12 that we had the face masks that we needed and other 12 call that was directed to the controller, wanted
13 PPE to protect the nurses and the doctors that were 13 to -- Mr. Thomas wanted to speak to the controller
14 handling these COVID cases. Her job was not to vet 14 and she told her that -- told Ana Matosantos that
15 Mr. Thomas in any way, shape or form. Her job was to 15 here's his contact information, somebody needs to
16 communicate to the people that had that 16 contact him and find out what the deal is here and
17 responsibility for procurement to get them the 17 whether or not this is something that would be useful
18 information and let them act on it. 18 for California.
19 Q. The conversation with Ms. Matosantos that 19 And Ana Matosantos ultimately referred
20 you just referred to, when did that take place? 20 Mr. Thompson to -- Mr. Thomas to both the California
21 A. It was when the -- she finally got back to 21 Nursing Association and to Mr. Simonson to work out
22 the controller on the 23rd, I think it was, whenever 22 some arrangement. Presumably, in that process, they
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1 would get to the bottom of whether or not Mr. Thomas 1 controller's office that Blue Flame, by March 26th,
2 was a legitimate operator. 2 had not delivered any N95 masks to any customers?
3 BY MS. ESBROOK: 3 MR. MITCHELL: Object to the form.
4 Q. Okay. And just to be clear, I think 4 THE WITNESS: That was not --
5 earlier we were talking about an Abby Browning 5 MS. PORTER: Objection.
6 putting Blue Flame in touch with Bill Simonson. 6 THE WITNESS: -- not communicated.
7 A. Yes. 7 BY MS. ESBROOK:
8 Q. Are you now saying that it was Ana 8 Q. Would that have been something the
9 Matosantos that -- 9 controller's office wanted to know?
10 A. No, it was Ana Matosantos that referred it 10 MR. MITCHELL: Object to the form.
11 to her for handling. She's the one that actually put 11 THE WITNESS: Yes. As I indicated early
12 them in contact. 12 on, if the controller had thought that he was not
13 Q. Thank you. 13 legit, she would not have spent a moment further on
14 MR. MITCHELL: For clarity of the record, 14 this matter. She just would have thanked him for his
15 excuse me, is the testimony that Abby Browning is the 15 call and hung up on him.
16 one that put Blue Flame in contact? I'm just 16 But I think the fact that she thought that
17 confused by who the "she" is in that answer. 17 he was legitimate and actually had 100 million masks
18 THE WITNESS: It's -- it is Amy, yes, that 18 available, that that was worth pursuing from her
19 put Blue Flame in contact with Bill Simonson. 19 perspective.
20 MR. MITCHELL: Thank you. 20 BY MS. ESBROOK:
21 BY MS. ESBROOK: 21 Q. Did Mr. Thomas, in communications with the
22 Q. Did Mr. Thomas tell Ms. Yee about his 22 controller's office, disclose that Blue Flame was
Page 127 Page 129
1 experience in the political consulting business? 1 incorporated on March 23rd?
2 MR. MITCHELL: Objection to form. 2 A. No.
3 THE WITNESS: No. As I said, she knew him 3 Q. Did Mr. Thomas, in discussions with the
4 by name. She knew him to be a lobbyist of some sort. 4 controller's office, disclose that Blue Flame did not
5 That's all she really knew about him. 5 have a bank account until March 25th?
6 BY MS. ESBROOK: 6 MR. MITCHELL: Object to the form.
7 Q. Did Mr. Thomas, in discussions with the 7 THE WITNESS: No.
8 controller's office, discuss his partner, Mike Gula? 8 BY MS. ESBROOK:
9 A. No, he never discussed the partner with 9 Q. Did Mr. Thomas, in communications with the
10 the controller. 10 controller's office, disclose that Blue Flame did not
11 Q. Did Mr. Thomas ever disclose to the state 11 have any supplier agreements in place until March
12 controller's office his experience in procurement? 12 25th?
13 A. No. 13 MR. MITCHELL: Object to the form.
14 Q. Did Mr. Thomas ever disclose to the 14 THE WITNESS: No.
15 controller whether Blue Flame owned N95 inventory? 15 BY MS. ESBROOK:
16 MR. MITCHELL: Object to the form. 16 Q. Are those facts that the state
17 THE WITNESS: Yeah, I think that was 17 controller's office would expect a vendor to
18 implied in their conversation when he told her that 18 disclose?
19 he had 100 million masks available at the Port of 19 MS. PORTER: Objection. Foundation.
20 Long Beach. 20 THE WITNESS: Again, she was not handling
21 BY MS. ESBROOK: 21 the procurement. That would have been something that
22 Q. And did Mr. Thomas ever communicate to the 22 would have been important to OES, yes.
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1 BY MS. ESBROOK: 1 Exceeds the scope.
2 Q. Would those facts have been important to 2 THE WITNESS: Yes, in this situation, it
3 the controller's office to learn? 3 didn't matter where she was -- where the company was
4 MR. MITCHELL: Object to the form. 4 located. What was important was getting the PPE here
5 THE WITNESS: I think it would have been 5 in California where it was needed.
6 important to go to his legitimacy, yes. 6 BY MS. ESBROOK:
7 BY MS. ESBROOK: 7 Q. Okay. I'm about to pull up another
8 Q. Did Mr. Thomas ever tell the controller's 8 exhibit. I don't know if, Mr. Chivaro, you'd like to
9 office where Blue Flame's offices were located? 9 take a break before we go on to the next exhibit.
10 A. I think he said he was in California, yes. 10 MS. PORTER: Is this a good time to break
11 Q. Did Mr. Thomas tell the controller's 11 for lunch?
12 office that Blue Flame was registered to do business 12 MS. ESBROOK: Oh, didn't even think about
13 in California? 13 that.
14 MR. MITCHELL: Object to the form. 14 THE WITNESS: Yeah, it'd be good.
15 THE WITNESS: I think that it was based on 15 MS. ESBROOK: Okay. How much time would
16 implication that if he was located in California, 16 you need for lunch?
17 that he was licensed to do business here. 17 MS. PORTER: Forty-five minutes.
18 BY MS. ESBROOK: 18 THE WITNESS: I need about, yeah, 30
19 Q. And again, were those important pieces of 19 minutes, 45 minutes. That's fine.
20 information for the controller? 20 MS. ESBROOK: Okay. I think that works.
21 MR. MITCHELL: Object to the form. 21 So we'll be back on the record at 4:15 Eastern, 1:15
22 MS. PORTER: Asked and answered. 22 Pacific.
Page 131 Page 133
1 THE WITNESS: Yes. 1 THE WITNESS: Okay. Thank you.
2 BY MS. ESBROOK: 2 MS. PORTER: Very good.
3 Q. Does a vendor need to be registered to do 3 THE VIDEOGRAPHER: Off the record at
4 business in California to contract with the state? 4 12:30.
5 MS. PORTER: Objection. 5 (Whereupon, at 12:30 p.m. PST, the
6 THE WITNESS: No. 6 deposition in the above-entitled matter was recessed,
7 MS. PORTER: Lack of foundation. Exceeds 7 to reconvene at 1:15 p.m. PST p.m., this same day.)
8 the scope. 8
9 THE WITNESS: No. 9
10 BY MS. ESBROOK: 10
11 Q. Are there advantages for a business that 11
12 is a resident of California if it contracts with the 12
13 state? 13
14 A. No. 14
15 MS. PORTER: Objection to form. 15
16 BY MS. ESBROOK: 16
17 Q. All else equal -- excuse me. All else 17
18 equal, would the controller's office prefer to do 18
19 business with a California resident over a 19
20 nonresident? 20
21 A. It depends on the context. 21
22 MS. PORTER: Objection to the form. 22
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1 AFTERNOON SESSION 1 this deposition, in kind of giving you a nutshell
2 (1:15 p.m. PST) 2 view as to how the process works, there has to be
3 THE VIDEOGRAPHER: We are now back on the 3 some funding available from which the payment can be
4 record. The time is 1:15 p.m. 4 made and that comes from the claim schedule. The
5 EXAMINATION BY COUNSEL FOR 5 claim schedule identifies an appropriation that's
6 DEFENDANT/THIRD-PARTY PLAINTIFF (RESUMED) 6 available for the account for the controller to make
7 BY MS. ESBROOK: 7 payment from, and that information would be put on
8 Q. All right. Welcome back, Mr. Chivaro. 8 the claim schedule by OES or General Services,
9 A. Thank you. 9 whoever procured the services.
10 Q. So before we were talking a little bit 10 And on there, that would go to our
11 about March 25th and how California missed the wire 11 accounting office who works with the department of
12 cutoff for the day and had to send the wire March 12 finance. The department of finance issues an
13 26th. 13 executive order to our state accounting and reporting
14 Do you recall that? 14 division telling them where to move the funds from,
15 A. I do. 15 and that's what that's in reference to.
16 Q. So I just have a few more questions about 16 Apparently, finance had not done that at
17 the events of March 25th. And I'm going to pull up 17 the time that the warrant was drawn.
18 the -- Plaintiff's Exhibit 61 that we have been 18 Q. Okay. Thank you. And this email is sent
19 looking at earlier. 19 at 5:11 p.m.?
20 A. Okay. 20 A. Yes.
21 Q. Okay. Hopefully you can see that on my 21 Q. And so the process for funding approval
22 screen. 22 was to occur the evening of March 25th; is that
Page 135 Page 137
1 A. I see it. 1 correct?
2 Q. All right. I'm just going to read a 2 A. Yes.
3 portion of a message spanning pages SCO0139 to 0140 3 Q. And I think we already talked about that
4 from Allan Watson in the controller's office to many 4 evening, the controller's office, Ms. Yee, speaks
5 other individuals in the controller's office and 5 with Mr. Kim from Department of General Services
6 other agency offices. 6 twice as well; is that correct?
7 And Mr. Watson writes, "Unfortunately, we 7 A. That's correct.
8 missed the GSL pickup for overnight delivery. Can we 8 Q. All right. And apart from those
9 prepare warrants for wire transfer for both vendors 9 occurrences, did the controller's office have any
10 tomorrow morning? Also, we still need funding 10 additional communications about the Blue Flame wire
11 approval prior to release, which we expect will come 11 the evening of March 25th?
12 from SCO state accounting and reporting division per 12 A. No, other than the expectation was going
13 our usual process." 13 to be that the funds would be electronically
14 Do you see that? 14 transferred in the morning of the 26th.
15 A. Yes. 15 Q. Okay. And I think you also spoke about
16 Q. Okay. And both vendors here is Blue Flame 16 looking at the purchase order as part of the review
17 and the other vendor that we were talking about 17 process; is that right?
18 earlier, right? 18 A. Yes.
19 A. Right. 19 Q. Okay. I'm going to pull up the purchase
20 Q. And can you explain what funding approval 20 order here. It's been previously marked as
21 prior to release means? 21 Plaintiff's Exhibit 109 and I'll drop it into the
22 A. As I indicated at the very beginning of 22 chat as well.
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