Lee says lab exploited Nevada with faulty COVID-19 tests

Rep. Susie Lee demanded accountability for Northshore Clinical Labs, a company that contracted with local governments in Nevada for COVID-19 testing but whose results were almost entirely wrong.

“This lab exploited Nevada and other states for its own gain when we were at our most vulnerable,” said Lee, D-Nev., in a statement to the Review-Journal.

“Through its reprehensible actions, it encouraged the spread of COVID-19 and put an even heavier burden on our already strained hospitals,” Lee said. “These bad actors must be held accountable.”

Lee and other Nevada lawmakers reacted this week to a ProPublica report that found a former longtime state official helped Northshore get licensed in the state, where it provided COVID testing in Clark and Washoe counties. Nevada officials have said the U.S. Department of Health and Human Services’ inspector general is investigating, but the department said it could not confirm or deny an investigation.

Another agency — the Health Resources and Services Administration in Bethesda, Maryland — also declined to confirm a probe, but a spokeswoman said the agency does look into alleged malfeasance.

“While we do not comment on specific cases, HRSA takes corrective action against providers who are out of compliance with the terms and conditions of the Uninsured Program including with law enforcement as appropriate,” a spokeswoman said in a statement.

Gov. Steve Sisolak, in a statement, said the state was “assessing its legal options and working with the federal government in their investigation into Northshore’s operations across the country.”

Others join call

U.S. Sen. Jacky Rosen and U.S. Rep. Dina Titus, both Nevada Democrats, said through aides that they supported efforts to determine what happened and to hold those accountable for wrongdoing.

There was no response to a request for comment to the office of Rep. Steven Horsford, D-Nev. And Rep. Mark Amodei, whose congressional district includes entities that contracted with the testing lab, including Washoe County and Reno, did not respond to several requests for an interview.

U.S. Sen. Catherine Cortez Masto, D-Nev., has raised the case with the inspector general of the Department of Health and Human Services to ensure it is taking proper action, a spokeswoman for the senator said.

Cortez Masto, a former Nevada attorney general, specifically asked the inspector general last year about fraud in COVID-19 and other relief programs that were part of bills passed by Congress, noting that the large amount of federal money involved attracted those seeking to take advantage of the system.

During a Senate confirmation hearing in September, Inspector General Christi Grimm told Cortez Masto under questioning that fraud in programs created by COVID-19 relief bills was being tracked.

Grimm said Congress could help the investigations into fraud by approving budget requests and adopting legislation to provide accountability and program integrity.

“Unfortunately, we have seen the best and worst of humanity during the COVID pandemic,” Grimm told Cortez Masto during the Senate Finance Committee hearing.

Political connections

In Nevada, Northshore partnered with a family that has a long record of making political contributions. Angelo and Greg Palivos were the company’s representatives in Nevada.

Since 2012, Peter Palivos, the father of Angelo and Greg Palivos, has contributed nearly $122,000 to the campaigns of both Republicans and Democrats between himself and his wife, Vicky Palivos, a Henderson real estate agent.

That includes $37,000 to Sisolak since 2016, and $2,675 to former Lt. Gov. Kate Marshall in 2014, according to state records. Peter Palivos met with Sisolak multiple times during the early weeks of his term as governor.

Sisolak denies ever having a conversation with Peter Palivos about Northshore.

Peter and Vicky Palivos also gave $7,500 to Henderson Mayor Debra March. Northshore made an agreement to use a city of Henderson parking lot as a COVID testing center after the company was licensed by the state.

March is running for lieutenant governor against Sisolak’s handpicked appointee, Lisa Cano Burkhead, in the June 14 primary election.

Peter and Vicky Palivos have also donated $10,500 to Nevada Attorney General Aaron Ford since 2016.

Contact Gary Martin at GMartin@reviewjournal.com. Follow @garymartindc on Twitter. Contact Nick Robertson at NRobertson@reviewjournal.com. Follow @NickRobertsonSU.