Howard Sherman had no idea on March 1 that he would soon be selling $3.5 million worth of masks to the state of Mississippi.
The entrepreneur and husband of actress Sela Ward was preparing to launch a new medical device that keeps patients warm during surgery without using any air flow.
Mississippi wouldn't have its first confirmed case for another 10 days, and coronavirus still appeared to a distant threat.
Then a tidal wave of cases in metropolitan areas sent states scrambling to get gowns, gloves and masks. Following government recommendations, doctors postponed surgeries and other elective procedures.
Hospitals suddenly had little need for Sherman's new medical device.
So the onetime U.S. Senate hopeful decided to pivot. One of his companies, Magnolias, LLC, is now the second-biggest recipient of the state's emergency spending on supplies to fight coronavirus. Along the way, Sherman said he encountered frustration, dysfunction and uncertainty, but he also has optimism for his adopted state.
Sherman told the Clarion Ledger on Tuesday that he’s opening a factory in Corinth that will employ 700 to 1,000 people who will work day and night to produce 30 million masks a month.
“I never on March 1 dreamed I would open a mask factory for the state of Mississippi," Sherman said. "... The state can lead the charge in doing this."
How it came together
Neither the national stockpile nor the Mississippi emergency stockpile was prepared for the global pandemic wrought by coronavirus. Much of the personal protective equipment used by medical professionals was made in China. States were competing against each other and the federal government to get gowns, masks and gloves.
Greg Michel, executive director of the Mississippi Emergency Management Agency, told the Clarion Ledger previously that it was an extremely stressful time. A multi-agency team of purchasers sorted through thousands of potential vendors.
Around the same time that team was looking for someone who could actually deliver masks from China to Mississippi, Sherman said he was calling up hospitals asking how he could help.
“I started working the phones," he said.
One hospital representative directed Sherman to MEMA, which eventually led to a phone call with Michel. According to Sherman, Michel said Mississippi was struggling to get equipment at a fair price.
Sherman turned to the Young President's Organization, an international organization of CEOs. He's been a member for decades and reached out to anyone who could help.
"I kissed a few frogs," Sherman said, "meaning a few people were dead ends."
After going through five or six people, Sherman said he found a person that could deliver masks from China. Sherman was no stranger to doing business in Asia. He said early in his career he had done business with factories in Asia to make CD cases and cooler bags.
"I developed a relationship with these two factories that was like family," Sherman said, but he knew little about the person he was about to do business with.
He was nervous.
The state of Mississippi was not fronting money for companies that promised they could deliver medical equipment. It was a decision that Michel said protected Mississippi from making bad deals, but it meant Sherman was on the hook.
"Now I'm wiring money to people that I don't know through people that I don't know," Sherman said. "... You start small. You order a hundred thousand (masks), but it's a big leap of faith."
About the deal
Altogether, Sherman said he has provided Mississippi with 700,000 N95 masks from China.
According to state finance records, MEMA has made seven payments to Magnolias, LLC, between April 16 and May 14, totaling $3,495,909, or roughly $5 a mask.
The company was originally formed in Delaware on April 6 and registered with the state of Mississippi on May 21, according to state records. Sherman said the company is based principally in Meridian.
According to Sherman, politics never played a role in landing the deal with the state. He noted that he belongs to a different political party than Gov. Tate Reeves. He said he's never met Michel and mispronounced the MEMA director's name.
Sherman ran for U.S. Senate in 2018, but lost in the Democratic primary to then state lawmaker David Baria. Sherman and and his wife recently served as state co-chairs for Mike Bloomberg's failed campaign for president. According to Sherman, 2018 was his first and only foray into politics as a candidate.
The Clarion Ledger has requested a copy of the contract with Magnolias, LLC, from MEMA, but the agency currently isn't processing records requests because of the pandemic. When asked if he would provide a copy of the contract, Sherman declined.
MEMA has spent about $21.5 million to respond to the coronavirus pandemic, according to state finance records. Magnolias, LLC, is the second largest recipient of that money. The biggest recipient, LiteFighter, is a Georgia-based company that makes military equipment such as tents. It has received nearly $7.3 million.
LiteFighter has not responded to interview requests.
MEMA spending: Mississippi emergency agency spent $20M on coronavirus supplies. Here's what we bought.
Factory coming to Corinth
As Sherman worked to bring much-needed masks from China to Mississippi, he said he felt embarrassed about the country's ability to acquire protective equipment.
While not wanting to disparage globalization, Sherman said America has to be able to take care of itself during a global pandemic.
Sherman said he is working with some partners to open the factory in Corinth using a contract manufacturer before a possible resurgence of the disease in the fall. The masks are not N95s, Sherman said, but Level 2 masks.
“The dream would be that Mississippi would have almost a PPE campus," Sherman said. “... These are 700 jobs that we are bringing back from China to America”
Contact Giacomo "Jack" Bologna at 601-961-7282 or gbologna@gannett.com. Follow him on Twitter @gbolognaCL.
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Howard Sherman, husband of Sela Ward, sold $3.5M of masks to Mississippi. Now he's opening a factory. - Jackson Clarion Ledger
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